No. L-24238.
 November 28, 1980.* Appeal from the order of the Court of First Instance of Manila, dated October 17,
JOSE SANTOS, plaintiff-appellant, vs. LORENZO J. LIWAG, defendant-
appellee.
Remedial Law; Civil Procedure; Appeals; Bill of Particulars;Allowance of
bill of particulars discretionary upon the court.—The allowance of a motion for a
more definite statement or bill of particulars rests within the sound judicial discretion
of the court and, as usual in matters of a discretionary nature, the ruling of the trial
court in that regard will not be reversed unless there has been a palpable abuse of
discretion or a clearly erroneous order. In the instant case, the complaint is without
doubt imperfectly drawn and suffers from vagueness and generalization to enable the
defendant properly to prepare a responsive pleading and to clarify issues and aid the
court in an orderly and expeditious disposition of the case.
Same; Same; Same; Same; Need for a bill of particulars due to a vague
complaint; Failure of plaintiff to comply with a court order to file a bill of
particulars results in dismissal of complaint.—The present action is one for the
annulment of documents which have been allegedly executed by reason of deceit,
machination, false pretenses, misrepresentation, threats, and other fraudulent means.
Deceit, machination, false pretenses, misrepresentation, and threats, however, are
largely conclusions of law and mere allegations thereof without a statement of the
facts to which such terms have reference are not sufficient. The allegations must state
the facts and circumstances from which the fraud, deceit, machination, false
pretenses, misrepresentation, and threats may be inferred as a conclusion. In his
complaint, the appellant merely averred that all the documents sought to be annulled
were all executed through the use of deceits, machination, false pretenses,
misrepresentations, threats, and other fraudulent means without the particular facts
on which the alleged fraud, deceit, machination, or misrepresentations are predicated.
It was proper for the trial court to grant the defendant’s motion for a bill of
particulars, and when the plaintiff failed to comply with the order, the trial court
correctly dismissed the complaint.
_______________
*
 SECOND DIVISION
328
328  SUPREME COURT REPORTS ANNOTATED  and, as usual in matters of a discretionary nature, the ruling of the trial court in that
Santos vs. Liwag
APPEAL from the order of the Court of First Instance of Manila.
The facts are stated in the opinion of the court.
CONCEPCION, JR., J.:
1964, which dismissed the, complaint filed in Civil Case No. 57282, for failure of the
plaintiff to submit a bill of particulars within 10 days from notice thereof. 
The record shows that on June 8, 1964 the appellant -Jose Santos filed a complaint
against Lorenzo J. Liwag with the Court of First Instance of Manila, docketed therein
as Civil Case No. 57282, seeking the annulment of certain documents, attached to the
complaint and marked as Annexes "A", "B", and "C", as having been executed by
means of misrepresentations, machination, false pretenses, threats, and other
fraudulent means, as well as for damages and costs. 1
Claiming that the allegations in the complaint are indefinite and uncertain, as well as
conflicting, the defendant filed a motion tion on July 4, 1964, asking the trial court
that the plaintiff be ordered to submit a more definite statement or bill of particulars
on certain allegations of the complaint, as well as the facts constituting the
misrepresentations, machinations, and frauds employed by the defendant in the
execution of the documents in question in order that he could be well informed of the
charges filed against him, for him to prepare an intelligent and proper pleading
necessary and appropriate in the premises. 2
The plaintiff opposed the motion saying that the allegations in his complaint are
sufficient and contain ultimate facts con- constituting his causes of action and that
the subject of the defendant's motion is evidentiary in nature. 3
The trial court, however, granted the motion and directed the plaintiff "to submit a
bill of particulars with respect to the paragraphs specified in defendant's
motion", 4 and when the plaintiff failed to comply with the order, the court, acting
upon previous motion of the defendant, 5 dismissed the complaint with costs against
the plaintiff. 6 Hence, the present appeal. 
We find no merit in the appeal. The allowance of a motion for a more definite
statement or bill of particulars rests within the sound judicial discretion of the court
regard will not be reversed unless there has been a palpable abuse of discretion or a
clearly erroneous order. In the instant case, the complaint is without doubt
imperfectly drawn and suffers from vagueness and generalization to enable the
defendant properly to prepare a responsive pleading and to clarify issues and aid the
court In an orderly and expeditious disposition tion in the case. 
The present action is one for the annulment of documents which have been allegedly
executed by reason of deceit, machination, false pretenses, misrepresentation, threats,
and other fraudulent means. Deceit, machination, false pretenses, misrepresentation,
and threats, however, are largely conclusions of law and mere allegations thereof
without a statement of the facts to which such terms have reference are not sufficient
1
The allegations must state the facts and circumstances from which the fraud, deceit,
machination, false pretenses, misrepresentation, and threats may be inferred as a
conclusions In his complaint, the appellant merely averred that all the documents
sought to be annulled were all executed through the use of deceits, machination, false
pretenses, misrepresentations, threats, and other fraudulent means without the
particular-facts on which alleged fraud, deceit, machination, or misrepresentations
are predicated. Hence, it was proper for the trial court to grant the defendant's motion
for a bill of particulars, and when the plaintiff failed to comply with the order, the
trial court correctly dismissed the complaint. 7

WHEREFORE, the judgment appealed from should be, as it is hereby, affirmed.

Without pronouncement as to costs in this instance.

SO ORDERED.

No. L-15808. April 23, 1963.

FAUSTA AGCANAS, JUAN MIGUEL, JUANITA MIGUEL, assisted by her
husband ULPIANO PASION, assisted by her husband JUAN PASCUAL,
plaintiffs-appellees, vs.BRUNO MERCADO and ANTONIO DASALLA,
defendants-appellants.
Pleading and practice; Denial of motion to dismiss while motion for bill of
particulars remained pending; Filing of answer suspended.—Upon denial of a
defendant’s motion to dismiss, the reglementary period within which to file an
answer remains suspended until the motion for a bill of particulars previously filed
by the same defendant is denied or, if it is granted, until the bill is served on him.
APPEAL from an order and decision of the Court of First Instance of Isabela.
The facts are stated in the opinion of the Court.
Melanio T. Singson for plaintiffs-appellees.
Adriano D. Dasalla and Antonio F. Dasalla for defendants-appellants.
689
VOL. 7, APRIL 23, 1963 689
2
 Agcanas vs. Mercado
MAKALINTAL, J.:
Appeal by defendants from the Court of First Instance of Isabela on a question of
law.
On November 25, 1956 plaintiffs filed this action to recover portions of a parcel
of land in Isabela, and damages. Under date of December 4, 1956 defendants filed a
motion for a bill of particulars, with notice of hearing on December 8, but since the
motion was actually received in court only on December 12 the court set it for
hearing on December 22. On December 17, however, defendants filed a motion to
dismiss the complaint, with a prayer that consideration of their motion for a bill of
particulars be held in abeyance pending resolution of their motion to dismiss. On
December 22, 1956, the date set by the court for the hearing of the motion for a bill
of particulars and by defendants for the hearing of their motion to dismiss, the court
issued an order postponing “consideration” of both motions to December 29. On
March 7, 1957 the court denied the motion to dismiss and ordered defendants “to
answer the complaint within the reglementary period provided for by the Rules of
Court.” Hearing of the case on the merits was set for October 29, 1957, notice of
which was duly received by defendants. Defendants not having filed their answer,
plaintiffs, on October 17, 1957, moved to have them declared in default. On the same
day the court issued the order of default together with another order commissioning
the clerk of court to receive plaintiff’s evidence. On October 21, 1957 defendants
moved to cancel the hearing scheduled for October 29, on two grounds one of which
was that their motion for a bill of particulars had not yet been resolved. The motion
to cancel was set for hearing on October 26, 1957. When defendants arrived in court
on that day they learned that an order of default had been issued, so they immediately
filed a motion asking that the same be set aside that their pending motion for a bill of
particulars be resolved and that they be given a reasonable period thereafter within
which to file their answer to the complaint. On December 13, 1957 the court denied
the motion and rendered its decision in favor of plaintiffs and against defendants. On  to dismiss. Appellants did set the motion for hearing on December 8, 1956, although
690
690 SUPREME COURT REPORTS ANNOTATED
Agcanas vs. Mercado
January 4, 1958 it denied defendants’ motion for reconsideration of the order of
denial. On January 24, defendants filed their record on appeal (to this Court from the
order of December 13, 1957), but as they subsequently filed a petition for relief from
the judgment by default, they asked that consideration and approval of their record
on appeal be held in abeyance until said petition had been resolved. The request was
granted. Defendant’s petition for relief, which was filed on January 28, 1958, was
denied on March 21, as was also, on September 20, 1958 their motion for
reconsideration of the order of denial. On October 4, 1958 the court denied likewise
their motion for a writ of preliminary injunction to restrain execution of the judgment
by default. Hence, this appeal.
Appellants’ eighteen assignments of error may be reduced to a single
proposition: Whether or not upon denial of a defendants’ motion to dismiss the
reglementary period within which to file an answer resumes running even though the
motion for a bill of particulars of the same defendants is still pending and
unresolved.
Both a motion to dismiss and a motion for a bill of particulars interrupt the time
to file a responsive pleading. In the case of a motion to dismiss, the period starts
running against as soon as the movant receives a copy of the order of denial. 1 In the
case of a motion for a bill of particulars, the suspended period shall continue to run
upon service on the movant of the bill of particulars, if the motion is granted, or of
the notice of its denial, but in any event he shall have not less than five days within
which to file his responsive pleading.2
When appellants filed a motion to dismiss they requested that resolution of their
previous motion for a bill of particulars be held in abeyance. This was but practical
because if the court had granted the motion to dismiss, there would have been no
need for a bill of particulars. Resolution of the motion for the purpose was necessary
only in the event that court should deny, as it did, the motion to dismiss, in which
case the period to file an answer re-
_______________
1 Sec. 4, Rule 8, Rules of Court.
2 Sec. 2, Rule 16, Rules of Court.
691
VOL. 7, APRIL 23, 1963 691
Agcanas vs. Mercado
mained suspended until the motion for a bill of particulars is denied or, if it is
granted, until the bill is served on the moving party.
The lower court deemed appellants to have “tacitly waived their right to push
through the hearing of the motion for bill of particulars,” because of their failure to
set it for hearing or to ask the clerk of court to calendar it after denial of the motion
it was not heard on that day because it arrived in court only on December 12.
Thereafter they did not have to reset it, as the clerk of court scheduled it for hearing
on December 22, 1956. And on that day the court issued an order that “the
consideration of the motion to dismiss, as well as the bill of particulars, is hereby
postponed to December 29, 1956.” As to whether or not both motions were actually
heard on December 29, does not appear of record. But heard or not, the motions
should be considered submitted, and it was the clear duty of the court to resolve the
motion for a bill of particulars, as it did the motion to dismiss. No action having been
taken thereon until the present, the period to answer has not yet expired. The lower
court, therefore, erred in declaring appellants in defaults and in taking all the
subsequent actions it did in the case.
The order of default issued and the decision rendered by the trial court are set
aside and the case is remanded for further proceedings, pursuant to the Rules. Costs
against plaintiffs-appellees.
 
3
 Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera,
Paredes, Dizon and Regala, JJ., concur.
Labrador, J., took no part.
Order and decision set aside and case remanded to lower court for further
proceedings.
Notes.—After the service of the bill of particulars (if one is submitted) the
moving party shall have the same time to serve his responsive pleading, if any is
permitted by the Rules, as that to which he was entitled at the time of serving his
motion, but not less than five (5) days in 
692
692 SUPREME COURT REPORTS ANNOTATED
Agcanas vs. Mercado
any event (Section 2, Rule 16; now Section 1[b], Rule 12). If the order of the court to
make a pleading more definite and certain, or for a bill of particulars is not obeyed
within ten days after notice thereof or within such striking out of the pleading to
which the motion was directed or make such other order as it deems just; it may also,
upon motion, set aside the order, or modify it in the interest of justice ( Itchon v.
Baligod, et al., L-20962, May 27, 1966, 17 SCRA 268, 270-271).
_______________
G.R. No. 58986. April 17, 1989.*
DANTE Y. GO, petitioner, vs. HON. FERNANDO CRUZ, Judge, etc., CITY
SHERIFF OF CALOOCAN CITY, and CALIFORNIA MANUFACTURING
CO., INC., respondents.
Remedial Law; Civil Procedure; Dismissal of actions; Loss by plaintiff of the
right to cause dismissal of the action by mere notice is not the filing of defendant’s
answer with the court but the service on the plaintiff of the answer or of a motion for
summary judgment; What the filing of pleadings, appearances, motions, notices,
orders and other papers with the court means; Service, meaning of.–––The petitioner
is in error. What marks the loss by a plaintiff of the right to cause dismissal of the
action by mere notice is not the filing of the defendant’s answer with the Court
(either personally or by mail) but the service on the plaintiff of said answer or of a
motion for summary judgment. This is the plain and explicit message of the Rules.
“The filing of pleadings, appearances, motions, notices, orders and other papers with
the court,” according to Section 1, Rule 13 of the Rules of Court, means the delivery
thereof to the clerk of the court either personally or by registered mail. Service, on
the other hand, signifies delivery of the pleading or other paper to the parties affected
thereby through their counsel of record, unless delivery to the party himself is
ordered by the court, by any of the modes set forth in the Rules, i.e., by personal
service, service by mail, or substituted service.
Same; Same; Same; Same; In case at bar, respondent filed its notice of
dismissal of its action in the Manila court after the filing of plaintiff’s answer but
before service thereof.–––Here, California filed its notice of dismissal of its action in
the Manila Court after the filing of Dante Go’s answer but before service
thereof. Thus having acted well within the letter and contemplation of the afore-
quoted Section 1 of Rule 17 of the Rules of Court, its notice ipso factobrought about
the dismissal of the action then pending in the Manila Court, without need of any
order or other action by the Presiding Judge. The dismissal was effected without
regard to whatever reasons or motives California might have had for bringing it
about, and was, as the same Section 1, Rule 17 points out, “without prejudice,” the
contrary not being otherwise “stated in the notice” and it being the first time the
action was being so dismissed.
________________
4
 *
 FIRST DECISION.
248
248  SUPREME COURT REPORTS ANNOTATED 
Go vs. Cruz
Same; Same; Same; Same; No legal obstacle to the institution of the second
action in the Caloocan court based on the same claim;Filing of the complaint
invested the Caloocan court with jurisdiction of the subject matter or nature of the
action; Pendency of the first action gives the defendant the right to move for
dismissal of the second action on the ground of litis pendentia.–––There was
therefore no legal obstacle to the institution of the second action in the Caloocan
Court of First Instance based on the same claim. The filing of the complaint invested
it with jurisdiction of the subject matter or nature of the action. In truth, and contrary
to what petitioner Dante Go obviously believes, even if the first action were still
pending in the Manila Court, this circumstance would not affect the jurisdiction of
the Caloocan Court over the second suit. The pendency of the first action would
merely give the defendant the right to move to dismiss the second action on the
ground of auter action pendant, or litis pendentia.
PETITION for certiorari to review the restraining order issued by the Court of First
Instance of Rizal, Br. 12. Cruz, J.
The facts are stated in the opinion of the Court.
     De Santos, Balgos & Perez for petitioner.
     Francisco N. Carreon, Jr. for respondents.
NARVASA, J.:
The dismissal of civil actions is always addressed to the sound judgment and
discretion of the court; this, whether the dismissal is sought after a trial has been
completed or otherwise, 1 or whether it is prayed for by a defending party 2 or by a
plaintiff or claimant. 3 There is one instance however where the dismissal of an
action rests exclusively on the will of a plaintiff or claimant, to prevent which the
defending party and even the court itself is powerless, requiring in fact no action
whatever on the part of the court except the acceptance and recording of the
causative document. This is dealt with in Section 1, Rule 17 of the Rules of Court,
which reads as follows:  filed by California against Dante Go. 8
SECTION 1. Dismissal by the plaintiff. — An action may be
dismissed by the plaintiff without order of court by filing a notice
of dismissal at any time before service of the answer or of a motion
for summary judgment. Unless otherwise stated in the notice, the
dismissal is without prejudice, except that a notice operates as an
adjudication upon the merits when filed by a plaintiff who has once
dismissed in a competent court an action based on or including the
same claim. A class suit shall not be dismissed or compromised
without approval of the court. 
It is this provision with which the proceedings at bar are chiefly concerned. 
On October 26, 1981, California Manufacturing Co., Inc. (hereinafter, simply,
California) brought an action in the Court of First Instance of Manila against Dante
Go, accusing him of unfair competition. 4 The gravamen of California's complaint
was that Dante Go, doing business under the name and style of "Sugarland
International Products," and engaged like California in the manufacture of spaghetti,
macaroni, and other pasta was selling his products in the open market under the
brand name, "Great Italian," in packages which were in colorable and deceitful
limitation of California's containers bearing its own brand, "Royal." Its complaint
contained an application for preliminary injunction commanding Dante Go to
immediately cease and desist from the further manufacture, sale and distribution of
said products, and to retrieve those already being offered for sale. 5 
About two weeks later, however, or on November 12, 1981, California filed a notice
of dismissal with the Court reading as follows: 6 
COMES NOW the plaintiff in the above-entitled case, through
undersigned counsel, and unto this Honorable Court most
respectfully gives notice of dismissal without prejudice pursuant to
Sec. 1, Rule 17 of the Rules of Court. 
WHEREFORE, it is respectfully prayed that the above-entitled
case be considered dismissed without prejudice conformably with
Sec. 1, Rule 17 of the Rules of Court. 
Four days afterwards, or on November 16, 1981, California received by registered
mail a copy of Dante Go's answer with counterclaim dated November 6, 1981, which
had been filed with the Court on November 9, 1981. 7 
On November 19, 1981 a fire broke out at the Manila City Hall destroying among
others the sala of Judge Tengco and the records of cases therein kept, including that
 
On December 1, 1981, California filed another complaint asserting the same cause of
action against Dante Go, this time with the Court of First Instance at Caloocan
City. 9 This second suit was docketed as Civil Case No. C-9702 and was assigned to
the branch presided over by Judge Fernando A. Cruz. 
5
On December 3, 1981, Judge Cruz issued an ex parte restraining order directing "the pending in the Manila Court, without need of any order or other action by the
defendant ... to immediately cease and desist from the further manufacture, sale, Presiding Judge. The dismissal was effected without regard to whatever reasons or
promotion and distribution of spaghetti, macaroni and other pasta products contained motives California might have had for bringing it about, and was, as the same
in packaging boxes and labels under the name 'GREAT ITALIAN,' which are similar Section 1, Rule 17 points out, "without prejudice," the contrary not being otherwise
to or copies of those of the plaintiff, and ... recall ... all his spaghetti, macaroni and "stated in the notice" and it being the first time the action was being so dismissed. 
other pasta products using the brand, 'GREAT ITALIAN.'" 10 
There was therefore no legal obstacle to the institution of the second action in the
On the day following the rendition of the restraining order, Dante Go filed the Caloocan Court of First Instance based on the same claim. The filing of the
present petition for certiorari, etc. with this Court praying for its nullification and complaint invested it with jurisdiction of the subject matter or nature of the action. In
perpetual inhibition. On December 11, 1981, this Court, in turn issued a writ of truth, and contrary to what petitioner Dante Go obviously believes, even if the first
preliminary injunction restraining California, Judge Cruz and the City Sheriff from action were still pending in the Manila Court, this circumstance would not affect the
enforcing or implementing the restraining order of December 3, 1981, and from jurisdiction of the Caloocan Court over the second suit. The pendency of the first
continuing with the hearing on the application for preliminary injunction in said Civil action would merely give the defendant the right to move to dismiss the second
Case No. C-9702. The scope of the injunction was subsequently enlarged by this action on the ground of auter action pendant or litis pendentia. 18 
Court's Resolution of April 14,1982 to include the City Fiscal of Manila, who was
thereby restrained from proceeding with the case of unfair competition filed in his WHEREFORE, the petition is DISMISSED, with costs against petitioner. The
office by California against Dante Go. 11  temporary restraining order of December 11, 1981, and the amendatory Resolution
of April 14, 1982 are SET ASIDE.
Dante Go's thesis is that the case filed against him by California in the Manila Court
remained pending despite California's notice of dismissal. According to him, since he
had already filed his answer to the complaint before California sought dismissal of
the action three (3) days afterwards, such dismissal was no longer a matter of right
and could no longer be effected by mere notice in accordance with Section 1, Rule
17 of the Rules of Court, but only on plaintiff s motion, and by order of the Court;
hence, the Caloocan Court acted without jurisdiction over the second action based on
the same cause. He also accused California of forum shopping, of selecting a
sympathetic court for a relief which it had failed to obtain from another. 12 

The petitioner is in error. What marks the loss by a plaintiff of the right to cause
dismissal of the action by mere notice is not the filing of the defendant's answer with
the Court (either personally or by mail) but the service on the plaintiff of said answer
or of a motion for summary judgment. This is the plain and explicit message of the
Rules. 13 "The filing of pleadings, appearances, motions, notices, orders and other
papers with the court," according to Section 1, Rule 13 of the Rules of Court, means
the delivery thereof to the clerk of the court either personally or by registered mail.
Service, on the other hand, signifies delivery of the pleading or other paper to the
parties affected thereby through their counsel of record, unless delivery to the party
himself is ordered by the court, 14 by any of the modes set forth in the Rules, i.e., by
personal service, 15 service by mail, 16 or substituted service. 17 

Here, California filed its notice of dismissal of its action in the Manila Court after
the filing of Dante Go's answer but before service thereof. Thus having acted well
within the letter and contemplation of the afore-quoted Section 1 of Rule 17 of the
Rules of Court, its notice ipso facto brought about the dismissal of the action then

6

No. L-17828. August 31, 1963.
LIGAYA MlNA, JAIME MlNA, SlLVINA MlNA, FAUSTA MlNA, PABLO
MINA and MIGUEL MINA, the minors represented by PILAR LAZO as
guardian-ad-litem, plaintiffs-appellants, vs. ANTONIA PACSON, CRISPINO
MEDINA and CRESENCIA MINA, defendants-appellees,
Dismissal of actions; Failure to prosecute; Failure to coma ply with order to
implead indispensable party.—Appellants' contention that the dismissal of the
complaint in the previous action was "at the indirect instance of the plaintiffs through
inaction or omission," is not supported by the facts of the case, because the order of
the court dismissing the complaint in the first first case contained the warning that
should the plaintiffs fail to comply with its order to implead the surviving -widow of
the deceased and other necessary parties, the case would be dismissed, and it was
because of plaintiff s refusal to comply with this express mandate that the dismissal
was ordered. This dismissal was, therefore, justified under Rule 30, Section 3 of the
Rules of  municipality of Muñoz, Nueva Ecija, in favor of the defendants Crispino Medina and
775
VOL. 8, AUGUST 31, 1963  775 
Mina vs. Pacson
Court (Garchitorena, et al. vs. De los Santos, et al., L-17045, June 30, 1962.)
Same; Same; Negligence of client and counsel.—The argument of appellants
that the dismissal of the previous case was due to the negligence of plaintiffs': lawyer
for which the plaintiffs-appellants should not be made to suffer, is not correct, it was
not due to the negligence of their counsel alone but that of themselves also that the
required amendment was not made. Besides, even if the failure was due to the lawyer
alone, such failure would not relieve them of the responsibility resulting from the
neglect of their lawyer, for the client is bound by the action of his counsel. (Valerio
as. Sec. of Agriculture, L-18587, April 23, 1963, and other cases cited.)
Judgments; Res judicata; Complete identity necessary; Parties not included
and matters not raised, in previous case not barred.—The previous order of
dismissal bars the present complaint only as to matters already presented in the
pevious case, like the action for annulment of the deeds of sale as regards the
defendants fendants named therein, but matters not raised and parties not included in
the previous case are not barred, like the action for the recognition of the filiation of
the plaintiffs against the defendant widow of the deceased alleged father.
APPEAL from an order of the Court of First Instance of Nueva Ecija. Makasiar, J.
The facts are-stated in the opinion of the Court,
     F.A. Pelmoka for plaintiffs-appellants.
     Castelo Law Office for defendants-appellees.
LABRADOR, J.:
This is an appeal from an order of the Court of First Instance of Nueva Ecija, Hon.
Felix Makasiar, presiding, in its Civil Case No. 3296, entitled "Ligaya Mina, et al.,
plaintiffs vs. Crispino Medina, et al., defendants," dismissing the complaint filed in
this case. The appellant also appeals against the order denying the motion for
reconsideration of the order of dismissal.
The facts necessary to understand the nature of the issues presented in this appeal, as
gleaned from the pleadings, may be briefly stated as follows: Plaintiffs Ligaya,
Jaime, Silvina, Fausta, Pablo and Miguel, all surnamed Mina, are alleged to be the
illegitimate children of the deceased Joaquin Mina with plaintiff Pilar Lazo from
1933-1958, while married to Antonia Pacson. Joaquin Mina died in August, 1958,
leaving no descendants norascendants except his widow, the defendant herein
Antonia Pacson. On April 9, 1958, Joaquin Mina, then still living, executed a deed of
absolute sale (Annex "B" to Complaint) of three parcels of land situated in the
Cresencia Mina for the sum of P12,000. On April 15, 1958 again he executed
another deed of sale (Annex "C" to Complaint) of 13 parcels of land covered by 12
transfer certificates of title to the same spouses Crispino Medina and Cresencia
Mina. Both deeds of sale bear the conformity of his wife Antonia Pacson.
7
In the complaint filed in the Court of First Instance of Nueva Ecija in the case which
originated this appeal, it is alleged that plaintiffs are illegitimate children of the
deceased Joaquin Mina begotten by him with Pilar Lazo during the period from 1933
to 1958 while Joaquin Mina was lawfully married to Antonia Pacson; that the
plaintiff Pablo Mina is a recognized illegitimate child of the deceased Joaquin Mina;
that Joaquin Mina died intestate leaving no ascendants or descendants, except his
widow Antonia Pacson; that he left various parcels of land enumerated in the
complaint but that on April 9, 1950 the defendants connived and secured from
Joaquin Mina, who was ill and did not know what he was doing, the execution of the
two deeds of sale without consideration, fictitiously and fraudulently, transferring his
propertiesto the spouses Crispino Medina and Cresencia Mina; and that by reason of
said acts, defendants have caused moral anguish, anxiety and embarrassment to
plaintiffs, causing them damages amounting to P10,000; that plaintiffs pray that they
be declared recognized illegitimate children of the deceased Joaquin Mina, entitled to
share in the properties left by him as such illegitimate children; that the deeds of sale,
Annexes "B" and "C" be declared fictitious, fraudulent and therefore, null and void;
and that defendants be required to deliver to plaintiffs' possession one-fourth of said
properties together with P10,000 for moral damages.
Upon the filing of the complaint the defendants presented a motion to dismiss the
complaint on the ground of res judicata, alleging that a similar action had previously
been presented as Civil Case No. 3015 in the same court, and by the same parties
against Crispino Medina and Cresencia Mina, in which the same allegations of
plaintiffs' status and fraudulent conveyance of the properties to defendants are
alleged, together with a prayer for moral damages in the sum of P20,000. It appears,
however, that in the complaint filed in said Civil Case No. 3015, no prayer is made
for the declaration of the filiation of the plaintiffs in relation or with respect to the
deceased Joaquin Mina.
The motion to dismiss also copied an order of the court issued in said Civil Case No.
3015 which reads as follows:
Acting on the Motion filed by the defendants on December 22, 1958 for the
reconsideration of the order dated December 8, 1958, and considering that
the present action is not only for annulment of deeds of sale but also for
partition (paragraphs 8 and 11 of the complaint and paragraph 4 of the
prayer thereof); that to avoid multiplicity of suits, the complex action to
establish filiation andfor partition or for recovery of inheritance may be
brought in the same case (Lopez v. Lopez, 68 Phil. 227; Escoval vs.
Escoval, 48 O.G. 615; Edades vs. Edades, L-8964, July 31, 1956); and that
Antonia Pacson, the surviving widow and the other intestate heirs of the
deceased Joaquin Mina, or necessary parties are not made a party in this
case (Briz v. Briz, 43 Phil. 763), the plaintiffs are hereby directed to amend
their complaint within fifteen (15) days from receipt hereof by including as
party defendant the surviving widow of the deceased Joaquin Mina and
other necessary parties.
Should the plaintiffs fail to comply with this order, this case will be
dismissed.
Lastly, another order of the same court dated February 9, 1959 was quoted, the
dispositive part of which reads:
The fifteen-day period granted to the plaintiffs having elapsed without said
order having been complied with, the Court hereby dismisses this case,
without pronouncement aa to costs.
Opposition to the motion to dismiss was presented on behalf of the plaintiffs by their
attorney to which a reply was filed on behalf of the defendants. A rejoinder was also
filed after which Judge Genaro Tan Torres, then presiding over the court, sustained
the motion to dismiss in an order which reads as follows:
After a careful consideration of the joint motion to dismiss of defendants
Antonia Pacson and the spouses Crispino Medina and Cresencia Mina,
dated November 11, 1959, the opposition thereto dated November 24, 1959,
and the reply of the defendants to the opposition, dated December 7, 1959,
the Court is of the opinion that said motion to dismiss is well taken; hence
this case is hereby dismissed without costs.
Plaintiffs' motion for time to submit rejoinder, dated December 10, 1959, is
hereby denied because it will only unnecessarily delay the termination of
this case.
So ordered.
Cabanatuan City, December 18, 1959.
A motion for the reconsideration of the order of the court dismissing the action
having been denied, the plaintiffs in the present case prosecuted this appeal directly
to this Court.1äwphï1.ñët
As shown above the question to be resolved is whether or not the order dismissing
the previous Civil Case No. 3015 bars the present civil action No. 3296 of the Court
of First Instance of Nueva Ecija.
In the first error assigned by the appellants in their brief it is argued that the dismissal
of the complaint in the previous action was in fact "at the indirect instance of the
8
plaintiffs through inaction or omission." We do not find this claim justified by the
facts of the case. The order of the court dismissing the complaint in the first case
contains the following warning: "Should the plaintiffs fail to comply with this order,
this case will be dismissed." In the face of this express warning given in the court's
order the dismissal can not be said to have been "at the indirect instance of the
plaintiffs; it was in fact caused by plaintiffs' refusal to comply with the express
mandate contained in the order of dismissal. The dismissal, therefore, was justified
under Rule 30, Section 3 of the Rules of Court, which reads:
SEC. 3. Failure to prosecute. — When plaintiff fails to appear at the time
of the trial, or to prosecute his action for an unreasonable length of time, or
to comply with these rules of any order of the court, the action may be
dismissed upon motion of the defendant or upon the court's own motion.
This dismissal shall have the effect of an adjudication upon the merits,
unless otherwise provided by court.
The above provision of the Rules was invoked in the case, of Garchitorena, et al. vs.
De los Santos, et al., G.R. No. L-17045, June 30, 1962, wherein this Court held:
To order an amendment to a complaint within a certain period in order to
implead as party plaintiff or defendant one who is not a party to the case lies
within the discretion of the Court. And where it appears that the person to
be impleaded is an indispensable party, the party to whom such order is
directed has no other choice but to comply with it. His refusal or failure to
comply with the order is a ground for the dismissal of his complaint
pursuant to Section 3, Rule, 30, of the Rules of Court. . . . 
Under the second assignment of error it is argued that the dismissal of the previous
case was brought about by the negligence, gross or criminal, of plaintiffs' lawyer for
which the plaintiffs-appellants should not be made to suffer. The argument is not true
to fact. The failure to amend was a result not of the neglect of the lawyer alone but
also of the plaintiffs-appellants themselves. Had the plaintiffs taken even an ordinary
interest in the result of the action that they had filed, they would have been able to
secure information from their lawyer that the case had been dismissed for failure to
amend. Upon receipt of such information, plaintiffs could have applied to the court
for relief under Rule 38 of the Rules of Court and could have had the complaint
amended as directed in the order of dismissal. It is not alone negligence of their
counsel, therefore, but of themselves also that the required amendment was not
made. But assuming for the sake of argument that the failure was due to the lawyer
alone, such failure would not relieve them of the responsibility resulting from the
neglect of their lawyer, for the client is bound by the action of his counsel. (Isaac v.
Mendoza, G. R. No. L-2830, June 21, 1951; Vivero v. Santos, et al., G. R. No. L-
8105, Feb. 28, 1956; Fernandez v. Tan Tiong Tick, G.R. No. L-15877, April 28,
1961; Gordulan v. Gordulan, G.R. No. L-17722, Oct. 9, 1962; Valerio v. Sec. of
Agriculture, G.R. No. L-18587, April 23, 1963.)
In the third assigiament of error it is claimed that there is no complete identity
between the parties in the first case and those in the case at bar. The statement is true
because in the previous case Antonia Pacson was not included as party-defendlant.
As a matter of fact the order decided that Pacson was to be included as party-
defendant. As to the latter, therefore, the previous order of dismissal does not bar the
present complaint, not only because she was not made a party but also because the
issue of filiation of the parties-plaintiffs was not raised in the previous case, although
such issue was necessary for the plaintiffs to be able to maintain their right of action.
In view of this fact, the present action should be considered barred in respect to the
action for the annulment of the deeds of sale and as regards the defendants spouses
Crispino Medina and Cresencia Mina; but as to the case for the declaration of the
plaintiffs as illegitimate children and heirs of the deceased Joaquin Mina this latter
case is not barred by the previous action as above explained and may still be
prosecuted.
WHEREFORE, the order of dismissal is hereby modified in the sense that the action
for the recognition of the filiation of the plaintiffs should be allowed to continue
against the defendant Antonia Pacson; but the dismissal of the action for the
annulment of the deeds of sale is affirmed. Without costs.
Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera,
Paredes, Dizon, Regala and Makalintal, JJ., concur.
No. L-54287. September 28, 1988.*
REPUBLIC PLANTERS BANK, petitioner, vs. HON. CONRADO M.
MOLINA, as Presiding Judge, Court of First Instance of Manila, Branch XX,
SARMIENTO EXPORT CORPORATION, SARMIENTO SECURITIES
CORPORATION and FELICIANO SARMIENTO, JR., respondents.
Civil Procedure; Res judicata; 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; A judgment to be considered res judicata, must be binding and must
be rendered by a Court of competent jurisdiction.—In the very order of dismissal of
Civil Case No. 116028, the trial court admitted that it did not acquire jurisdiction
9
over the persons of private respondents and yet, it held that it was of no moment as to
the dismissal of the case. We disagree. 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. If it did not acquire jurisdiction over the private respondents as parties to
Civil Case No. 116028, it cannot render any binding decision, favorable or adverse to
them, or dismiss the case with prejudice which, in effect, is an adjudication on the
merits. The controverted orders in Civil Case No. 116028 disregarded the
fundamental principles of remedial law and the meaning and the effect of
jurisdiction. A judgment, to be considered res judicata, must be binding, and must be
rendered by a court of competent jurisdiction. Otherwise, the judgment is a nullity.
Same; Same; Same; The order of dismissal in Civil Case No. 116028 does not
have the effect of an adjudication on the merits.—The order of dismissal in Civil
Case No. 116028 does not have the effect of an adjudication on the merits of the case
because the court that rendered the same did not have the requisite jurisdiction over
the persons of the defendants therein. This being so, it cannot be the basis of res
judicata and it cannot be a bar to a lawful claim. If at all, such a dismissal may be
considered as one without prejudice.
Same; Same; Same; Same; Court finding the two questioned orders to be
irregular, improper and were issued with grave abuse of discretion amounting to
excess of jurisdiction.—Trial Courts have the duty to dispose of controversies after
trial on the merits whenever  When Civil Case No. 129829 was filed by petitioner, a motion to dismiss was
_______________
*
 FIRST DIVISION.
40
40  SUPREME COURT REPORTS ANNOTATED 
Republic Planters Bank vs. Molina
possible. In this case, there are no indications that petitioner intentionally failed
to prosecute the case. The delay could not be attributed to its fault. Petitioner pursued
the case with diligence, but jurisdiction could not be acquired over defendants-
private respondents. The sheriff had not yet submitted his return of the alias
summons when the action was precipitately dismissed by the trial court. These are
proven circumstances that negate the action of respondent judge that the dismissal of
Civil Case No. 116028 has the effect of an adjudication upon the merits and
constitutes a bar to the prosecution of Civil Case No. 129829. The court finds that
the two questioned orders of the trial court are irregular, improper, and were issued
with grave abuse of discretion amounting to excess of jurisdiction.
PETITION for certiorari to review the orders of the Court of First Instance of
Manila, Br. 20. Molina, J.
The facts are stated in the opinion of the Court.
     Paco, Gutierrez, Dorado, Asia & Associates for petitioner.
     Benjamin M. Reyes for respondents.
GANCAYCO, J.:
The principal issue raised in this case is whether the trial court committed a grave
abuse of discretion when it ordered Civil Case No. 129829 dismissed on the ground
of resjudicata it appearing that Civil Case No. 116028 was dismissed on May 21,
1979, for failure of petitioner to prosecute within a reasonable length of time,
although in the said case, the trial court never acquired jurisdiction over the persons
of private respondents. 
It is not disputed that both complaints in Civil Case No. 116028 (Branch XXXVI,
Manila, Judge Alfredo C. Florendo) and in Civil Case No. 129829 (Branch XX,
Manila, Judge Conrado M. Molina) were filed by petitioner Republic Planters Bank
against private respondent, for the collection of a sum of money based on a
promissory note dated January 26, 1970, in the amount of P100,000.00. 
On May 21, 1979, Judge Alfredo C. Florendo dismissed Civil Case No. 116028 for
failure of the petitioner "to prosecute its case within a reasonable length of time. 1 A
motion for reconsideration of that order was denied on January 15, 1979.2
submitted by private respondents on the ground that the cause of action is barred by a
prior judgment (res judicata) in Civil Case No. 116028. Private respondents opined
that said order was an adjudication upon the merits. Petitioner opposed the motion to
dismiss, claiming that res judicata does not apply because the summons and
complaint in Civil Case No. 116028 were never served upon private respondents and,
as such, the trial court never acquired jurisdiction over private respondents and,
consequently, over the case. Petitioner maintains that the order of dismissal in Civil
Case No. 11 6028 never became final as against private respondents. 
The trial court (Branch XX), in its order dated May 8, 1980, dismissed the complaint
in Civil Case No. 129829 on the ground that the orders dated May 21, 1979 and June
15, 1979 issued by Judge Alfredo C. Florendo, dismissing Civil Case No. 116028,
had become final. The trial court ruled that the dismissal of Civil Case No. 116028
had the effect of an adjudication upon the merits, that the dismissal was with
prejudice since the order was unconditional, and that the lack of jurisdiction over
defendants (private respondents) in Civil Case No. 116028 was of no moment. 3
In a motion for reconsideration of the order of May 8, 1980, petitioner reiterated its
allegation that in Civil Case No. 116028, the court did not acquire jurisdiction over
private respondents and that at the time the court ordered its dismissal, a motion for
an alias writ of summons was pending resolution inasmuch as the sheriff had not
acted on the same. 4 The motion for reconsideration was denied by the trial court on
June 26, 1980 in Civil Case No. 129829. 5
10
Petitioner appealed to the Court of Appeals both questioned orders of respondent
court in Civil Case No. 129829. 6But then, petitioner sought a more speedy remedy
in questioning said orders by filing this petition for certiorari before this Court.  dismissal of Civil Case No. 116028 has the effect of an adjudication upon the merits
Under the foregoing undisputed facts, the Court finds this petition to be impressed
with merit.  issued with grave abuse of discretion amounting to excess of jurisdiction.
The questioned orders of the trial court in Civil Case No. 129829 supporting private
respondent's motion to dismiss on the ground of res judicata are without cogent
basis. We sustain petitioner's claim that respondent trial judge acted without or in
excess of jurisdiction when he issued said orders because he thereby traversed the
constitutional precept that "no person shall be deprived of property without due
process of law" and that jurisdiction is vitally essential for any order or adjudication
to be binding. Justice cannot be sacrificed for technicality. Originally, the action for
collection of the loan, evidenced by a promissory note, was only for P100,000.00 but
petitioner claims that as of March 5, 1981, the obligation was already P429,219.74. It
is a cardinal rule that no one must be allowed to enrich himself at the expense of
another without just cause. 
In the very order of dismissal of Civil Case No. 116028, the trial court admitted that
it did not acquire jurisdiction over the persons of private respondents and yet, it held
that it was of no moment as to the dismissal of the case. We disagree. 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. If it did not acquire jurisdiction over the private
respondents as parties to Civil Case No. 116028, it cannot render any binding
decision, favorable or adverse to them, or dismiss the case with prejudice which, in
effect, is an adjudication on the merits.7 The controverted orders in Civil Case No.
116028 disregarded the fundamental principles of remedial law and the meaning and
the effect of jurisdiction. A judgment, to be considered res judicata, must be binding,
and must be rendered by a court of competent jurisdiction. Otherwise, the judgment
is a nullity. 
The order of dismissal in Civil Case No. 116028 does not have the effect of an
adjudication on the merits of the case because the court that rendered the same did
not have the requisite jurisdiction over the persons of the defendants therein.  Same; Same; Same; Provisions of rules on dismissal not applicable; Reasons.
This being so, it cannot be the basis of res judicata and it cannot be a bar to a lawful
claim. If at all, such a dismissal may be considered as one without prejudice. 8
Trial courts have the duty to dispose of controversies after trial on the merits
whenever possible. In this case, there are no indications that petitioner intentionally
failed to prosecute the case. The delay could not be attributed to its fault. Petitioner
pursued the case with diligence, but jurisdiction could not be acquired over
defendants-private respondents. The sheriff had not yet submitted his return of the
alias summons when the action was precipitately dismissed by the trial court. These
are proven circumstances that negate the action of respondent judge that the
and constitutes a bar to the prosecution of Civil Case No. 129829. The court finds
that the two questioned orders of the trial court are irregular, improper, and, were
 
Petitioner correctly states that its appeal to the Court of Appeals in CA-G.R. No.
67288 pertaining to the questioned orders of the trial court is not an adequate
remedy, because petitioner was not able to present evidence in the trial court. The
sole issue involved in this case is one of jurisdiction, which is appropriate for
resolution by the instant petition. 
WHEREFORE, and by reason of the foregoing, the questioned orders dated May 8,
1980 and June 26, 1980 issued in Civil Case No. 129829 are hereby REVERSED
and SET ASIDE. The records of the case are ordered returned to the trial court for
trial and disposition on the merits. No costs. This decision is immediately executory. 
SO ORDERED.
No. L-15814. February 28, 1962.
IN THE MATTER OF THE ESTATE OF CANDELARIA BENGUAN,
deceased. SUSANA ABAY DE ARROYO, petitioner-appellant, vs. FRANCISCO
ABAY, CONRADO ABAY, JR., JOSE ABAY and NORMA ABAY, opponents-
appellees.
Dismissal of petition for probate of will for failure to appear; Not adjudication
on merits.—The dismissal of a petition for probate of a will and last testament in a
previous special proceedings due to the failure of the then petitioner and his 
556
556  SUPREME COURT REPORTS ANNOTATED 
De Arroyo vs. Abay
counsel to appear on the date and time set for the hearing thereof is not an
adjudication on the merits.
—The provisions of Sections 3 ? a nd 4, R 30, and Section 2, Rule 73 of the Rules of
Court cannot be made to apply to proceedings for the probate of wills, because
parties interested in the probate of a will for transmission of property rights to them
should not be prejudiced by the act or fault of another and because it is the policy of
the state to have such last wills and testaments submitted to Court for their probate or
legalization as shown or indicated by or in the punishment provided for persons who
are in possession of last wills and testaments of deceased persons and fail or neglect
to deliver or present them to Court for probate or to deliver them to the executor
named in the will within twenty days after they know of the death of the testators or
11
within the same period of time after they know that they were named executors of
the will (Sections 2 to 5, Rule 76).
APPEAL from an order of dismissal of the Court of First Instance of Negros
Occidental.
The facts are stated in the opinion of the Court.
PADILLA, J.:
On 5 January 1956 Susana Abay de Arroyo filed in the Court of First Instance of
Negros Occidental a petition for the probate of the will of her deceased first-degree
cousin Candelaria Benguan (special proceedings No. 3883). On 28 May, the Court
ordered that the petition be published once a week for three consecutive weeks
in Civismo, a newspaper of general circulation in Negros Occidental, setting the date
of hearing thereof for the 23rd day of June 1956. On the date and time set for the
hearing of the petition attorney Rolando Medalla, representing some of the heirs
hereinafter referred to as opponents, moved for the postponement of the hearing to
give him time and opportunity to file a written objection to the petition. Whereupon,
the hearing was postponed to 30 June 1956. On 28 June, the opponents filed a
motion to dismiss on the ground that a petition for the probate of the same last will
and testament had been dismissed by the same Court in a previous special
proceedings No. 3628 and constitutes a bar to the present proceedings (No. 3883).
On 7 July, the petitioner answered the motion to dismiss. By an order entered on 14
July, the Court dismissed the petition. After considering the motion for
reconsideration filed by the petitioner on 31 July 1956 and the answer thereto filed
by the opponents on 3 August 1956, the Court denied the motion for reconsideration.
The petitioner appealed to the Court of Appeals which certified the appeal to this
Court for only questions of law are raised. .1äwphï1.ñët
The previous proceedings invoked by the opponents to bar the present is special
proceedings No. 3623 filed in the Court of First Instance of Negros Occidental on 27
September 1955 by one Felix Abay, a brother of Susana Abay de Arroyo, the herein
petitioner and appellant. The last will and testament involved therein is the same
involved herein. However, upon failure of Felix Abay and his counsel Pio B.
Japitana to appear at the hearing on 5 November 1955, despite due notice, the Court
there dismissed the petition, without stating that it was a dismissal with prejudice.
Two motions for reconsideration were filed, the first on 15 November 1955 and the
second on 28 November 1955, but both were denied, the last for lack of merit. .
The issue now hinges on whether or not the petition for the probate of a will filed in
this special proceedings is barred by a previous special proceedings No. 3628, the
petition of which was dismissed for failure of the petitioner and his counsel to appear
on the date set for the hearing thereof. .
The appellant contends that the dismissal of the petition in the previous case (spec.
proc. No. 3628) does not bar the present (spec. proc. No. 3883), both for the probate
of the same last will and testament of the late Candelaria Benguan, because the
dismissal for failure of the petitioner and his counsel to appear at the hearing set by
the Court was not an adjudication on the merits of the case and is not res judicata,
because the parties in the previous and present proceedings are not the same. .
The appellant's contention that the dismissal of the petition for probate in the
previous special proceedings due to failure of the then petitioner and his counsel to
appear on the date and time set for the hearing thereof is not an adjudication on the
merits must be upheld. In arriving at this conclusion the Court has not overlooked the
provisions of sections 3 and 4, Rule 30, and section 2, Rule 73, of the Rules of Court.
The probate of a will may be the concern of one person or several persons as usually
is the case. The fault of one such person may be imputed to him alone who must
suffer the consequences of his act. Such fault cannot be imputed to other persons.
Hence, the failure of Felix Abay and his counsel to appear on the date and time set
for the hearing of the petition for the probate of a will claimed to have been executed
by the late Candelaria Benguan during her lifetime which brought about the
dismissal of the petition filed in that special proceedings (No. 3628) cannot prejudice
the right of Susana Abay de Arroyo, the petitioner, in a subsequent petition filed for
the probate of the same will and last testament. So the provisions of the Rules cited
and invoked by the opponents-appellees cannot be made to apply to proceedings for
the probate of wills, because as already stated other parties interested in the probate
of a will for transmission of property rights to them should not be prejudiced by the
act or fault of another and because it is the policy of the State to have such last wills
and testaments submitted to Court for their probate or legalization, as shown or
indicated or evidenced by or in the punishment provided for persons who are in
possession of last wills and testaments of deceased persons and fail or neglect to
deliver or present them to Court for probate or to deliver them to the executor named
in the will within twenty days after they know of the death of the testators or within
the same period of time after they know that they were named executors of the will
(sections 2 to 5, Rule 76). The underlying reason for the rule that a dismissal of an
action or complaint in a civil case may be a bar to a subsequent action unless the
dismissal is without prejudice is lack of interest or inaction of the one who brought
the action in court by his complaint and for such lack of interest or inaction he should
be made to suffer. .
The order of dismissal appealed from is set aside and the petition for probate of a
will filed in special proceedings No. 3883 remanded to the Court of First Instance of
Negros Occidental for further proceedings as provided for in the Rules of Court,
without special pronouncement as to costs. 
Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera,
Paredes, Dizon and De Leon, JJ., concur. .
12

G.R. No. 160727. June 26, 2007.*
UNION BANK OF THE PHILIPPINES, petitioner, vs. DANILO L.
CONCEPCION, respondent.
Corporation Law; Insolvency; Securities and Exchange Commission;
Jurisdictions; Albeit jurisdiction over a petition to declare a corporation in a state of
insolvency strictly lies with regular courts, the Securities and Exchange Commission
(SEC) possessed, during the period material, ample power under P.D. No. 902-A, as
amended, to declare a corporation insolvent as an incident of and in continuation of
its already acquired jurisdiction over the petition to be declared in the state of
suspension of payments in the two instances provided in Section 5(d) thereof.—The
underlying petition EYCO filed with and over which the SEC assumed jurisdiction
was one for declaration of suspension of payment, appointment of a rehabilitation
receiver/committee, approval of rehabilitation plan with alternative prayer for
liquidation and dissolution. That the SEC, along the way, ordained EYCO’s
liquidation and dissolution did not, without more, strip the SEC of jurisdiction over
the liquidation process. Albeit jurisdiction over a petition to declare a corporation in
a state of insolvency strictly lies with regular courts, the SEC possessed, during the
period material, ample power under P.D. No. 902-A, as amended, to declare a
corporation insolvent as an incident of and in continuation of its already acquired
jurisdiction over the petition to be declared in the state of suspension of payments in
the two instances provided in Section 5(d) thereof. Said Section 5(d) vests the SEC
with exclusive and original jurisdiction over petitions for suspension of payments
which may either be: (a) a simple petition for suspension of payments based on the
provisions of the Insolvency Law,i.e., the petitioning corporation has sufficient assets
to cover all its debts, but foresees the impossibility of meeting the obligations as they
fall due, or (b) a similar petition filed by an insolvent corporation accompanied by a
prayer for the creation of a management committee and/or rehabilitation receiver
based on the provisions of P.D. No. 902-A, as amended by P.D. No. 1758.
_______________
*
 FIRST DIVISION.
673
VOL. 525, JUNE 26, 2007  673 
Union Bank of the Philippines vs. Concepcion
Same; Same; Same; R.A. No. 8799; The transfer, effected by R.A. No. 8799, to
the Regional Trial Court of SEC’s jurisdiction defined under Section 5(d) of P.D.
902-A did not divest the SEC of its jurisdiction over a Petition for Suspension of
Payment, given that the SEC had already issued, as early as September 19,
1998, the suspension order after it found the petition for suspension filed
on September 16, 1998 to be sufficient in form and substance.—The Court is
certainly aware of the transfer, effected by R.A. No. 8799, to the RTC of the SEC’s
jurisdiction defined under Section 5(d) of P.D. No. 902-A. Such transfer, however,
did not, as the petitioner and the RTC posit, divest the SEC of its jurisdiction over
SEC Case No. 0997-5764, given that it had already issued, as early as September 19,
1998, the suspension order after it found the petition for suspension filed
on September 16, 1998 to be sufficient in form and substance. Subsection 5.2 of R.A.
No. 8799 prescribing the jurisdiction transfer and the rules on transition provides as
follows: 5.2. The [Securities and Exchange] Commission’s jurisdiction over all cases
enumerated under Section 5 of [P.D.] No. 902-A is hereby transferred to the
appropriate [RTC]: Provided that the Supreme Court . . . may designate the [RTC]
branches that shall exercise jurisdiction over these cases. x x x The Commission
shall retain jurisdiction over pending suspension of payments/rehabilitation
cases filed as of 30 June 2000 until finally disposed. (Words in bracket and
emphasis added.)
Same; Same; Same; Same; Words and Phrases; When the law speaks of
“until finally disposed,” the reference should include the final disposition of the
liquidation and dissolution processes since it is within the power of the SEC by law,
or as incident of or in continuation of its already acquired jurisdiction over the
petition for suspension of payment, to order the dissolution/liquidation of a
corporation and accordingly appoint a liquidator; Once jurisdiction attaches, the
court cannot be ousted from the case by any subsequent events, such as a new
legislation placing such proceedings under the jurisdiction of another body—the
only recognized exceptions to the rule arise when the statute expressly so provides or
13
when the statute is clearly intended to apply to actions pending before its enactment.
— When the law speaks of “until finally disposed,” the reference should include the
final disposition of the liquidation and dissolution processes since it is within the
power of the SEC by law, or as incident of or in continuation of its already acquired
jurisdiction over the peti-
674
674  SUPREME COURT REPORTS ANNOTATED  similarly situated. Under the SEC Rules of Procedure on Corporate
Union Bank of the Philippines vs. Concepcion
tion for suspension of payment, to order the dissolution/liquidation of a
corporation and accordingly appoint a liquidator. In fine, the continuing exercise of
jurisdiction by the SEC over the liquidation and dissolution of the EYCO Group is
warranted. Once jurisdiction attaches, the court cannot be ousted from the case by
any subsequent events, such as a new legislation placing such proceedings under the
jurisdiction of another body. The only recognized exceptions to the rule, which find
no sway in the present case, arise when the statute expressly so provides or when the
statute is clearly intended to apply to actions pending before its enactment.
Actions; Parties; Intervention; Requisites; Words and Phrases;Intervention is
a procedure by which a third person, not originally party to the suit, but claiming an
interest in the subject matter, comes into the case, in order to protect his right or
interpose his claim.— Intervention is a procedure by which a third person, not
originally party to the suit, but claiming an interest in the subject matter, comes into
the case, in order to protect his right or interpose his claim. Its main purpose is to
settle in one action and by a single judgment all conflicting claims of or the whole
controversy among the persons involved.To warrant intervention under Rule 19,
Section 1 of the Rules of Court, two requisites must concur: (a) the movant has a
legal interest in the matter in litigation, and (b) intervention must not unduly delay or
prejudice the adjudication of the rights of the parties, nor should the claim of the
intervenor be capable of being properly decided in a separate proceeding. The
interest, which entitles one to intervene, must involve the matter in litigation and of
such direct and immediate character that the intervenor will either gain or lose by the
direct legal operation and effect of the judgment.
Same; Same; Same; Liquidation; The liquidator is empowered and duty
bound to represent the debtor in any case filed by or against the debtor in any
tribunal and bring any action on behalf of the debtor to collect, recover or preserve
any of its assets, or to resist or defend against any claim.—Just like the CA, the
Court has no doubt about the respondent, as the duly-appointed liquidator of
EYCO’s remaining assets, having a legal interest in the matter litigated in Civil Case
No. 97-2184. This is particularly true with respect to the parcels of land covered by
the writ of attachment which, in the implementation of the SEC-approved
Liquidation Plan for EYCO, had been conveyed to the respondent in trust for the
benefit of creditors,  Decision1 dated July 22, 2003 of the Court of Appeals (CA) in CA-G.R. SP No.
675
VOL. 525, JUNE 26, 2007  675  petitioner’s motion for reconsideration.
Union Bank of the Philippines vs. Concepcion
EYCO’s stockholders and other persons in interest. At the very least, the
respondent, as liquidator-trustee, is so situated as to be affected by the distribution or
disposition of the attached properties which were under threat of being levied on
execution and sold at public auction. Respondent would be unfaithful to his trust if
he does take a bona fide effort to intervene in Civil Case No. 97-2184 to thwart the
attempt of the petitioner to collect unpaid loans ahead of other legitimate creditors
Recovery pursuant to which the SEC appointed the respondent to liquidate the
remaining assets of EYCO, the liquidator is empowered and duty bound
to “[R]epresent the debtor . . . in any case filed by or against the debtor in any
tribunal” and “[B]ring any action on behalf of the debtor to collect, recover or
preserve any of its assets, or to resist or defend against any claim.”
Same; Certiorari; While certiorari may not be resorted to when appeal is
available as a remedy, the Supreme Court has allowed the issuance of a writ of
certiorari when appeal does not afford a speedy and adequate remedy in the
ordinary course of law.—It is true that certiorari may not be resorted to when appeal
is available as a remedy. However, it is also true that the Court has allowed the
issuance of a writ of certiorari when appeal does not afford a speedy and adequate
remedy in the ordinary course of law. As in the past, the Court has ruled that the
availability of an appeal does not foreclose recourse to the ordinary remedies or
certiorari or prohibition where appeal is not adequate, equally beneficial, expeditious
and sufficient. Stated a bit differently, certiorari may be availed of where an appeal
would be slow, inadequate and insufficient. The determination as to what exactly
constitutes plain, speedy and adequate remedy rests on judicial discretion and
depends on the particular circumstances of each case.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
     Fe B. Macalino and Associates for petitioner.
     Tan and Concepcion for respondent. 
676
676  SUPREME COURT REPORTS ANNOTATED 
Union Bank of the Philippines vs. Concepcion
     Manuel Joseph R. Bretaña III and Aissa V. Encarnacionfor respondent.
     Bernas Law Offices for intervenor.
GARCIA, J.:
In this petition for review under Rule 45 of the Rules of Court, petitioner Union
Bank of the Philippines (Union Bank) assails and seeks the setting aside of the
75355, as effectively reiterated in its Resolution2 of November 7, 2003 denying the
14
The records, which include a copy of this Court’s Decision dated May 19, 1998 in
G.R. No. 131729 entitled "Union Bank of the Philippines v. Court of Appeals et al.,
respondents,"3 yield the following material facts:
On September 16, 1997, the EYCO Group of Companies4 (EYCO or EYCO Group)
filed with the Securities and Exchange Commission (SEC) a PETITION5 for the
declaration of suspension of payment, appointment of a rehabilitation
receiver/committee and approval of rehabilitation plan with an alternative prayer for
liquidation and dissolution of corporations (Petition for Suspension of Payment,
hereinafter). In it, EYCO depicted the Group’s composite corporations as having a
combined assets that are more than enough to pay off all their debts, but nonetheless
unable to pay them as they fall due. Joining EYCO as co-petitioners were Eulogio
Yutingco and two other individuals holding controlling interests in the composite
corporations (collectively, the Yutingcos).
Finding the petition, docketed as SEC Case No. 09-97-5764, to be sufficient in form
and substance, the SEC Hearing Panel, by an order of September 19, 1997, directed
the suspension of all actions, claims and proceedings against EYCO, et al. pending
before any court, tribunal, board or office6 (the Suspension Order). At the same time,
the Panel set the petition for hearing.
Meanwhile, a consortium of private banks which had granted credit facilities to
EYCO, among them, Union Bank, convened to map out their collective collection
options. The formation of a management committee (ManCom) to represent the
creditor banks was agreed upon in that meeting.
Subsequently, Union Bank decided to break away from the consortium and, without
notifying its members, filed a slew of civil cases against EYCO, et al. Of relevance is
the first, a complaint for a sum of money instituted on September 23, 1997 before the
Regional Trial Court (RTC) of Makati City, against four (4) members of the EYCO
Group and spouses Eulogio and Bee Kuan Yutingco, as sureties of the corporate
obligations, with application for preliminary attachment. This complaint,7 docketed
as Civil Case No. 97-2184, eventually ended up in Branch 148 of the court. The next
day, the Makati RTC issued the desired writ of preliminary attachment, 8 pursuant to
which levy on attachment was annotated on the titles, i.e., TCT Nos. V-481929 and
V-4819310 of the Registry of Deeds of Valenzuela City, of two parcels of land under
the name of Nikon Plaza, Inc. and EYCO Properties, Inc., respectively. Also
attached, per herein respondent Danilo L. Concepcion (Concepcion, for brevity),
without denial from the petitioner, is a parcel of land covered by TCT No. V-49678
of the same registry allegedly held by the Yutingcos in trust for Nikon Industrial
Corporation.11
On October 22, 1997, Union Bank moved, on jurisdictional ground, for the dismissal
of SEC Case No. 09-97-5764. On the same date, EYCO submitted its rehabilitation
plan.
In January 1998, the SEC Hearing Panel appointed the regular members of the newly
created ManCom for EYCO.
Meanwhile, Union Bank, without awaiting for the SEC’s ruling on its motion to
dismiss SEC Case No. 09-97-5764, filed with the CA a petition for certiorari to
nullify what it tagged as the precipitate September 19, 1997 SEC suspension
order12 and its creation of the ManCom. In the same petition, docketed as CA-G.R.
SP No. 45774, Union Bank alleged that the jurisdiction over the basic petition for
declaration of suspension of payment pertains to the RTC under Act No. 1956, as
amended, or the Insolvency Law.
On December 22, 1997, in CA-G.R. SP No. 45774, the CA rendered judgment
declaring Union Bank guilty of forum shopping and accordingly dismissed its
petition for certiorari. This Court, in its Decision13 dated May 19, 1998 in G.R. No.
131729, in turn affirmed that of the CA, but proceeded further to declare the SEC as
possessed of jurisdiction over EYCO’s petition for suspension of payments filed
pursuant to Section 5(d) of Presidential Decree (P.D.) No. 902-A, but not insofar as
the Yutingcos’ petition was concerned. With respect to the Yutingcos, the Court held
that the SEC’s jurisdiction on matters of suspension of payments is confined only to
those initiated by corporate entities, as the aforecited section does not allow an
individual to file, or join in, the corresponding petition. In line with the rule on
misjoinder of parties, the Court directed the SEC to drop the individual petitioners
from the petition for suspension of payment.
Conformably with this Court’s Decision aforementioned, the Makati RTC issued, in
Civil Case No. 97-2184, an Order14 dated August 17, 1998 thereunder indefinitely
suspending the proceedings in that collection suit until further orders. The fallo of the
RTC’s order reads:
WHEREFORE, … the complaint filed by the plaintiff [Union Bank] against
defendant-corporation [EYCO 4] … is hereby INDEFINITELY SUSPENDED until
further Orders from this Court in view of the existing petition for Suspension of
Payment before the [SEC]. On the other hand, the defendant’s motion to dismiss
complaint against the individual-defendants, namely: Spouses Eulogio and Bee Kuan
Yutingco, is hereby DENIED for lack of merit.
Consequently, in order to give defendant-Spouses [Yutingcos] ample time to prepare
for whatever defense they may raise, they are hereby given a new fifteen (15) days
period from receipt of this Order within which to file their answer to the complaint
against them.
15
SO ORDERED. (Words in brackets and emphasis supplied.)
In a related development, the SEC Hearing Panel, over the objection of the
consortium of EYCO’s creditor banks, approved, on December 18, 1998, the
rehabilitation plan prepared by the Strategies and Alliance Corporation for EYCO.
The consortium lost no time in appealing to the SEC en banc the Hearing Panel’s
approval order and prayed for the liquidation and dissolution of EYCO, the appellate
recourse docketed as SEC AC No. 649.
On September 14, 1999, the SEC en banc issued in SEC AC No. 649 an order
finding for the consortium, disposing as follows:
WHEREFORE, … the appeal is, as it is hereby granted and the Order dated 18
December 1998 is set aside. The Petition to be Declared in State of Suspension of
Payment is hereby disapproved and the SAC Plan terminated. Consequently, all
committees, conservator/receivers created pursuant to said Order are dissolved. xxx
The Commission, likewise, orders the liquidation and dissolution of the [EYCO
Group]. The case is hereby remanded to the hearing panel below for that purpose.
xxx (Words in brackets and emphasis supplied.)
Another en banc order15 of March 31, 2001 followed, with the SEC this time
appointing respondent Concepcion to act, vice the dissolved Liquidation Committee,
as EYCO Liquidator. Among Concepcion’s first act as such liquidator was to file, on
March 8, 2002, in Civil Case No. 97-2184, a Motion to Intervene and To Admit
Motion to Set Aside Order of Attachment16 (Motion to Intervene, for brevity). Three
days later, Concepcion submitted before the SEC a Liquidation Plan17 for the EYCO
Group.
After due proceedings, the SEC approved, on April 11, 2002, the Concepcion-
submitted Liquidation Plan.18Concepcion’s motion to intervene, however, met a
different fate. For, by Order19 of August 8, 2002, the Makati RTC denied
Concepcion’s motion to intervene in Civil Case No. 97-2184 on the ground of lack
of standing to intervene, his appointment as Liquidator being, according to the court,
of doubtful validity. The order, in addition, granted Union Bank’s earlier motion to
declare EYCO in default, and set a date for the ex-parte reception of Union Bank’s
evidence.
Concepcion then moved for reconsideration questioning the basis of the denial of his
motion to intervene. Questioned, too, was the default aspect of the order, Concepcion
arguing in this regard that the collection proceedings were suspended "until further
Orders from this Court" 20 and the RTC of Makati has yet to issue the suspension-
lifting order. The Makati RTC denied the motion on December 16, 2002.
Earlier, however, Union Bank presented evidence ex parte, on the basis of which the
Makati RTC rendered, on December 27, 2002, partial judgment21 ordering EYCO to
pay the bank ₱400 million plus interests and attorney’s fees.
Via a petition for certiorari and prohibition before the CA, Concepcion challenged
the RTC’s partial judgment aforementioned and its earlier order denying the motion
to intervene. His recourse was docketed as CA-G.R. SP No. 75355.
The appellate court eventually issued the herein assailed Decision 22 reversing the
Makati RTC’s impugned issuances and allowing Concepcion to intervene, thus:
WHEREFORE, foregoing premises considered, the petition is GRANTED. The
assailed orders and partial judgment are hereby ANNULLED and SET ASIDE.
Public respondent [RTC Judge Oscar Pimentel, Branch 148, Makati City] is ordered
to allow petitioner [Concepcion] to intervene in Civil Case No. 97-2184.
SO ORDERED.
Following the denial of its motion for reconsideration,23 Union Bank has interposed
this petition ascribing to the CA the following errors:
1. In ruling in favor of respondent Concepcion’s right to intervene in Civil Case No.
97-2184 pending in the lower court despite his lack of legal interest in the matter in
litigation.
2. In ruling in favor of respondent Concepcion’s right to intervene in said Civil Case
No. 97-2184 despite his lack of legal personality, his appointment by the SEC as
liquidator of EYCO being null and void for lack of jurisdiction; and
3. In giving due course to respondent Concepcion’s petition for certiorari under Rule
65 of the 1997 Rules of Civil Procedure despite its being the improper remedy.
We DENY.
As the Court distinctly notes, the petitioner does not assail the CA’s judgment insofar
as it nullified the RTC’s partial judgment or its default order. As thus couched, the
petition particularly sets its sight on that part of the appellate court’s ruling allowing
respondent Concepcion to intervene in Civil Case No. 97-2184. Of the three errors
assigned, the more critical relates to the challenged validity of the respondent’s
appointment by the SEC as liquidator of the EYCO Group, his right to intervene
predicated as it is on his being such liquidator.
16
It is the petitioner’s posture, following the Makati RTC’s line, that the respondent’s
appointment as liquidator of EYCO was invalid for lack of jurisdiction on the part of
SEC to preside, in first place, over EYCO’s liquidation and dissolution. Pressing on,
the petitioner states that EYCO is already insolvent and insolvency proceedings fall
under the jurisdiction of regular courts under the Insolvency Law (Act No. 1956, as
amended) in relation to the pertinent provision of R.A. No. 8799, otherwise known
as the Securities Regulation Code.
We are not persuaded.
As it were, the underlying petition24 EYCO filed with and over which the SEC
assumed jurisdiction was one for declaration of suspension of payment, appointment
of a rehabilitation receiver/committee, approval of rehabilitation plan with alternative
prayer for liquidation and dissolution. That the SEC, along the way, ordained
EYCO’s liquidation and dissolution did not, without more, strip the SEC of
jurisdiction over the liquidation process. Albeit jurisdiction over a petition to declare
a corporation in a state of insolvency strictly lies with regular courts, the SEC
possessed, during the period material, ample power under P.D. No. 902-A,25 as
amended, to declare a corporation insolvent as an incident of and in continuation of
its already acquired jurisdiction over the petition to be declared in the state of
suspension of payments in the two instances provided in Section 5(d) thereof. 26 Said
Section 5(d)27 vests the SEC with exclusive and original jurisdiction over petitions
for suspension of payments which may either be: (a) a simple petition for suspension
of payments based on the provisions of the Insolvency Law, i.e., the petitioning
corporation has sufficient assets to cover all its debts, but foresees the impossibility
of meeting the obligations as they fall due, or (b) a similar petition filed by an
insolvent corporation accompanied by a prayer for the creation of a management
committee and/or rehabilitation receiver based on the provisions of P.D. No. 902-A,
as amended by P.D. No. 1758.28
In the case at bench, EYCO’s petition for suspension of payment was, at bottom, a
mix of both situations adverted to above. For, while EYCO, in the said petition,
alleged being solvent but illiquid, it nonetheless pleaded for the constitution of a
rehabilitation receiver/committee, with an alternative prayer for liquidation, if
warranted. Clearly then, the SEC has, from the start, jurisdiction over EYCO’s
petition for suspension of payment, such jurisdiction, following Ching,29 continuing
for purposes of liquidation after it (SEC) declared EYCO insolvent. The SEC
appeared to be aware of the continuity angle as it even ordered the remand to the
SEC Hearing Panel of SEC Case No. 09-97-5764 for purposes of liquidating and
dissolving the EYCO Group.
If the SEC contextually retained jurisdiction over the liquidation of EYCO, is it not
but logical then that it has competence to appoint the respondent – or any qualified
individual for that matter – as liquidator?
And lest it be overlooked, the Court had, in G.R. No. 131729, already rejected the
petitioner’s thesis about the SEC’s purported lack of jurisdiction over EYCO’s
suspension of payment case owing to its supervening insolvency. Therein, the Court
stated:
We are of course aware of the argument [of] … petitioner [Union Bank] that the
petition of [EYCO] should be entirely dismissed and taken out of the SEC’s
jurisdiction on account of the alleged insolvency of [the latter]. In this regard,
petitioner theorizes that [EYCO has] already become insolvent when [the composite
corporations] allegedly disposed of a substantial portion of their properties … hence
suspension of payments with the SEC is not the proper remedy.
Such argument does not persuade us. Petitioner’s allegations of … [EYCO’s] …
supposed insolvency … are hardly of any consequence to the assumption of
jurisdiction by the SEC over the nature or subject matter of the petition for
suspension of payments. Aside from the fact that these allegations are evidentiary in
nature …, we have likewise consistently ruled that what determines the nature of an
action, as well as which court or body has jurisdiction over it, are the allegations of
the complaint, or a petition as in this case, and the character of the relief sought. That
the merits of the case after due proceedings are later found to veer away from the
claims asserted by EYCO in its petition, as when it is shown later that it is actually
insolvent and may not be entitled to suspension of payments, does not divest the SEC
at all of its jurisdiction already acquired as its inception …. (Words in brackets and
emphasis added.)
The Court is certainly aware of the transfer, effected by R.A. No. 8799, to the RTC
of the SEC’s jurisdiction defined under Section 5(d) of P.D. No. 902-A.30 Such
transfer, however, did not, as the petitioner and the RTC posit, divest the SEC of its
jurisdiction over SEC Case No. 09-97-5764, given that it had already issued, as early
as September 19, 1998, the suspension order after it found the petition for suspension
filed on September 16, 1998 to be sufficient in form and substance. Subsection 5.2 of
R.A. No. 8799 prescribing the jurisdiction transfer and the rules on transition
provides as follows:
5.2. The [Securities and Exchange] Commission’s jurisdiction over all cases
enumerated under Section 5 of [P.D.] No. 902-A is hereby transferred to the
appropriate [RTC]: Provided that the Supreme Court … may designate the [RTC]
branches that shall exercise jurisdiction over these cases. xxx The Commission shall
retain jurisdiction over pending suspension of payments/rehabilitation cases filed as
of 30 June 2000 until finally disposed. (Words in bracket and emphasis added.)
EYCO’s petition for suspension for payment was, for all intents and purposes, still
pending with the SEC as of June 30, 2000. Accordingly, the SEC’s jurisdiction
17
thereon, by the express terms of R.A. No. 8999, still subsists "until [the suspension
of payment case and its incidents are] finally disposed." In the words of the CA:
As held by this Court … Section 5.2 of RA 8799 specifically provided that the SEC
shall retain jurisdiction over pending suspension of payments/rehabilitation cases
filed as of June 30, 2000 until finally disposed. The records are clear that the
suspension of payment was filed on September 7, 1998. As such, the petition is still
pending with the SEC as of the cut-off date set in the rules. xxx31
When the law speaks of "until finally disposed," the reference should include the
final disposition of the liquidation and dissolution processes since it is within the
power of the SEC by law,32 or as incident of or in continuation of its already acquired
jurisdiction over the petition for suspension of payment,33 to order the
dissolution/liquidation of a corporation and accordingly appoint a liquidator. In fine,
the continuing exercise of jurisdiction by the SEC over the liquidation and
dissolution of the EYCO Group is warranted. Once jurisdiction attaches, the court
cannot be ousted from the case by any subsequent events, such as a new legislation
placing such proceedings under the jurisdiction of another body. The only recognized
exceptions to the rule, which find no sway in the present case, arise when the statute
expressly so provides or when the statute is clearly intended to apply to actions
pending before its enactment.34
Given the above perspective, the Court is at a loss to understand petitioner’s
challenge against the right of the respondent to intervene in Civil Case No. 97-2184,
on the postulate that the latter lacks legal interest in the matter in litigation.
Intervention is a procedure by which a third person, not originally party to the suit,
but claiming an interest in the subject matter, comes into the case, in order to protect
his right or interpose his claim.35 Its main purpose is to settle in one action and by a
single judgment all conflicting claims of or the whole controversy among the persons
involved.36 To warrant intervention under Rule 19, Section 1 of the Rules of
Court,37 two requisites must concur: (a) the movant has a legal interest in the matter
in litigation, and (b) intervention must not unduly delay or prejudice the adjudication
of the rights of the parties, nor should the claim of the intervenor be capable of being
properly decided in a separate proceeding. The interest, which entitles one to
intervene, must involve the matter in litigation and of such direct and immediate
character38 that the intervenor will either gain or lose by the direct legal operation
and effect of the judgment.39
Just like the CA, the Court has no doubt about the respondent, as the duly-appointed
liquidator of EYCO’s remaining assets, having a legal interest in the matter litigated
in Civil Case No. 97-2184. This is particularly true with respect to the parcels of land
covered by the writ of attachment which, in the implementation of the SEC-approved
Liquidation Plan for EYCO, had been conveyed to the respondent40 in trust for the
benefit of creditors, EYCO’s stockholders and other persons in interest. At the very
least, the respondent, as liquidator-trustee, is so situated as to be affected by the
distribution or disposition of the attached properties which were under threat of being
levied on execution and sold at public auction. Respondent would be unfaithful to his
trust if he does take a bona fide effort to intervene in Civil Case No. 97-2184 to
thwart the attempt of the petitioner to collect unpaid loans ahead of other legitimate
creditors similarly situated. Under the SEC Rules of Procedure on Corporate
Recovery pursuant to which the SEC appointed the respondent to liquidate the
remaining assets of EYCO, the liquidator is empowered and duty bound to
"[R]epresent the debtor … in any case filed by or against the debtor in any tribunal"
and "[B]ring any action on behalf of the debtor to collect, recover or preserve any of
its assets, or to resist or defend against any claim."41
Any suggestion that allowing intervention would unduly delay the final closure of
the collection case cannot be accepted. Far from unnecessarily prolonging or
complicating the case, the desired intervention, if allowed, would possibly enable the
court in one single action and judgment to protect the collective interests of the
creditors of the EYCO Group that are seriously threatened by the imminent exclusion
of certain properties from the pool of assets that should legally, if not ideally, be
equitably distributed among them. Disallowing intervention would pave the way for
the petitioner to seize the proceedings before the Makati RTC to work entirely in its
favor. Such course of action trifles with the entire liquidation process. And any
decision rendered therein would unlikely be left undisturbed by other legitimate but
unpaid creditors whose interest in the attached properties can hardly be disputed.
Moreover, the claim of the respondent over the attached properties could not
possibly be better threshed out in a separate but subsequent proceedings given that he
had already secured titles over them.
The third and last issue turns on the propriety of certiorari as a recourse to the denial
of a motion for intervention. The correct remedy, according to the petitioner, is an
appeal under Rule 45 of the Rules of Court, an order denying intervention being final
in character, not merely interlocutory. Petitioner thus faults the CA for allowing
respondent Concepcion’s petition for certiorari under Rule 65 of the Rules as a
vehicle to impugn the denial of his motion for intervention. It stresses that the
availability of appeal proscribes recourse to the special civil action of certiorari.
We are not convinced.
Petitioner’s statement of the rule on the availability of the extraordinary writ of
certiorari under the premises is impeccable. So too is its citation of supporting
jurisprudence. Petitioner conveniently forgot, however, to include in its formulation
settled exceptions to and qualifications of the rule, even as it glossed over another
18
holding that intervention is merely accessory to the principal action and, as such, is
an interlocutory proceeding dependent on the case between the original parties.42
It is true that certiorari may not be resorted to when appeal is available as a remedy.
However, it is also true that the Court has allowed the issuance of a writ of certiorari
when appeal does not afford a speedy and adequate remedy in the ordinary course of
law. As in the past, the Court has ruled that the availability of an appeal does not
foreclose recourse to the ordinary remedies or certiorari or prohibition where appeal
is not adequate, equally beneficial, expeditious and sufficient.43 Stated a bit
differently, certiorari may be availed of where an appeal would be slow, inadequate
and insufficient. The determination as to what exactly constitutes plain, speedy and
adequate remedy rests on judicial discretion and depends on the particular
circumstances of each case.
In the case at bar, the CA did not commit any reversible error in allowing the petition
for certiorari filed by the respondent. As it were, the respondent was able to convince
the CA of the urgency of his cause and that an appeal from the denial of the motion
for intervention would not constitute speedy and adequate remedy, thus necessitating
the resort to the extraordinary remedy of certiorari. And in an instance justifying the
invocation of the remedy of certiorari, it would appear too that the CA found the
RTC to have exercised its judicial authority in an oppressive manner, 44 so much so
that the CA stated the apt observation that: "In the first place, it [RTC] should not
have taken cognizance of the case when it was notified of the pending petition [for
suspension of payments] before the SEC at the time the complaint was filed."45
Certainly not lost on the Court is an obvious reality: the Makati RTC virtually
interfered with and invalidated the appointment made by the SEC when it has no
jurisdiction over the latter.
WHEREFORE, the instant petition is DENIED and the impugned Decision and
Resolution of the Court of Appeals dated July 22, 2003 and November 7, 2003,
respectively, are AFFIRMED.
Costs against the petitioner.
SO ORDERED.
G.R. No. 182902. October 5, 2011.*
VIRRA MALL TENANTS ASSOCIATION, INC., petitioner, vs. VIRRA
MALL GREENHILLS ASSOCIATION, INC., LOLITA C. REGALADO,
ANNIE L. TRIAS, WILSON GO, PABLO OCHOA, JR., BILL OBAG and
GEORGE V. WINTERNITZ, respondents.
Actions; Intervention; What qualifies a person to intervene is his possession of
a legal interest in the matter in litigation or in the success of either of the parties, or
an interest against both, or when he is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court or an officer
thereof.—In Executive Secretary v. Northeast Freight, 581 SCRA 736 (2009), this
Court explained intervention in this wise: Intervention is not a matter of absolute
right but may be permitted by the court when the applicant shows facts which satisfy
the requirements of the statute authorizing intervention. Under our Rules of
Court, what qualifies a person to intervene is his possession of a legal interest in
the matter in litigation or in the success of either of the parties, or an interest
against both; or when he is so situated as to be adversely affected by a distribution
or other disposition of property in the custody of the court or an officer thereof. As
regards the legal interest as qualifying factor, this Court has ruled that such interest
must be of a direct and immediate character so that the intervenor will either gain or
lose by the direct legal operation of the judgment. The interest must be actual and
material, a concern which is more than mere curiosity, or academic or sentimental
desire; it must not be indirect and contingent, indirect and remote, conjectural,
consequential or collateral. However, notwithstanding the presence of a legal
interest, permission to intervene is subject to the sound discretion of the court, the
exercise of which is limited by considering “whether or not the intervention will
unduly delay or prejudice the adjudication of the rights of the original parties and
whether or not the intervenor’s rights may be fully protected in a separate
proceeding.”
_______________
* SECOND DIVISION.
729
VOL. 658, OCTOBER 5, 2011 729
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills
Association, Inc.
 
Same; Same; Cause of Action; Elements; Words and Phrases; A cause of
action is the wrongful act or omission committed by the defendant in violation of the
primary rights of the plaintiff.—A cause of action is defined as “the act or omission
by which a party violates a right of another.” In Shell Philippines v. Jalos, 630 SCRA
399 (2010), this Court expounded on what constitutes a cause of action, to wit: “A
cause of action is the wrongful act or omission committed by the defendant in
violation of the primary rights of the plaintiff. Its elements consist of: (1) a right
existing in favor of the plaintiff, (2) a duty on the part of the defendant to respect the
plaintiff’s right, and (3) an act or omission of the defendant in violation of such right.
To sustain a motion to dismiss for lack of cause of action, however, the complaint
must show that the claim for relief does not exist and not only that the claim was
defectively stated or is ambiguous, indefinite or uncertain.”
19
 Same; Same; Intervention is allowed to avoid multiplicity of suits more than on
due process considerations.—Allowing VMTA to intervene in Civil Case No. 69312
finds support in Heirs of Medrano v. De Vera, 627 SCRA 109 (2010), to wit: “The
purpose of intervention is to enable a stranger to an action to become a party in order
for him to protect his interest and for the court to settle all conflicting claims.
Intervention is allowed to avoid multiplicity of suits more than on due process
considerations.” Thus, although the CA was correct in stating that VMTA could
always file a separate case against Ortigas, allowing VMTA to intervene will
facilitate the orderly administration of justice and avoid a multiplicity of suits. We do
not see how delay will be inordinately occasioned by the intervention of VMTA,
contrary to the fear of the CA.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
   The facts are stated in the opinion of the Court.
  Macam, Raro, Ulep & Partners for petitioner.
  Domingo, Dizon, Leonardo & Rodillas for respondents VMGA, et al.
  Guevarra Law Office for respondent G. Winternitz.
  Jorge Roito N. Hirang, Jr. for respondent P. Ochoa, Jr.730
730 SUPREME COURT REPORTS ANNOTATED
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
 
  Herrera, Teehankee & Cabrera for respondent L. Yaranon.
SERENO, J.:
Before us is a Petition for Review of the 21 May 2007 Decision 1 and 14 May
2008 Resolution2 of the Court of Appeals (CA) dismissing the Complaint-in-
Intervention and denying the Motion for Reconsideration both filed by petitioner.
Ortigas & Company, Limited Partnership (Ortigas) is the owner of the Greenhills
Shopping Center (GSC). On 5 November 1975, Ortigas and Virra Realty
Development Corporation (Virra Realty) entered into a Contract of Lease (First
Contract of Lease) over a portion of the GSC. The 25-year lease was to expire on 15
November 2000. Pursuant thereto, Virra Realty constructed a commercial building,
the Virra Mall Shopping Center (Virra Mall), which was divided into either units for
lease or units whose leasehold rights were sold.3
Thereafter, Virra Realty organized respondent Virra Mall Greenhills Association
(VMGA), an association of all the tenants and leasehold right holders, who managed
and operated Virra Mall. In the First Contract of Lease, VMGA assumed and was
subrogated to all the rights, obligations and liabilities of Virra Realty.4
On 22 November 2000, VMGA, through its president, William Uy (Uy),
requested from Ortigas the renewal of the First Contract of Lease.5
VGMA secured two insurance policies to protect Virra Mall against damage by
fire and other causes. However, these
_______________
1 Rollo, pp. 104-143; Penned by former Court of Appeals Associate Justice, now
Supreme Court Associate Justice, Bienvenido L. Reyes, concurred in by Court of
Appeals Associate Justices Santiago Lagman and Bruselas, Jr.
2 Rollo, pp. 16-23.
3 CA Decision p. 2; Rollo, p. 105.
4 Id.
5 Id.
731
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Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
insurance coverages expired simultaneously with the First Contract of Lease on 15
November 2000.6 Subsequently, on 13 March 2001, VGMA acquired new sets of
insurance policies effective 10 January 2001 to 31 December 2001.7
On 5 May 2001, Virra Mall was gutted by fire, requiring substantial repair and
restoration. VMGA thus filed an insurance claim through the insurance broker,
respondent Winternitz Associates Insurance Company, Inc. (Winternitz). Thereafter,
the proceeds of the insurance were released to VMGA.8
On 3 September 2001, Ortigas entered into a Contract of Lease (Second Contract
of Lease) with Uy effective 2 November 2001 to 31 December 2004. On 11
September 2001, the latter assigned and transferred to petitioner Virra Mall Tenants
Association (VMTA) all his rights and interests over the property.9
On 7 February 2003, Ortigas filed a Complaint for Specific Performance with
Damages and Prayer for Issuance of a Writ of Preliminary Attachment against
several defendants, including herein respondents. It accused them of fraud,
misappropriation and conversion of substantial portions of the insurance proceeds for
their own personal use unrelated to the repair and restoration of Virra Mall. To
secure the subject insurance proceeds, Ortigas also sought the issuance of a writ of
preliminary attachment against herein respondents. The case was docketed as Civil
Case No. 69312, and raffled to the Regional Trial Court, National Capital Judicial
Region, Pasig City, Branch 67 (RTC
_______________
6 CA Decision pp. 2-3; Rollo, pp. 105-106.
7 Comment/Opposition pp. 9-10; Rollo, pp. 219-220; Complaint p. 6; Rollo, p.
300.
8 CA Decision p. 3; Rollo, p. 106.
9 Petition, p. 9; Rollo, p. 75; Decision, p. 4; Rollo, p. 107; Agreement (To
Assignment of Right to, and Interest in, Contract of Lease), Rollo, pp. 180-183.
732
732 SUPREME COURT REPORTS ANNOTATED
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
Br. 67), which issued a Writ of Preliminary Attachment on 12 February 2003.10
On 17 February 2003, VMTA filed a Complaint-in-Intervention. 11 It claimed that
as the assignee or transferee of the rights and obligations of Uy in the Second
Contract of Lease, and upon the order of Ortigas, it had engaged the services of
20
various contractors. These contractors undertook the restoration of the damaged area
of Virra Mall amounting to P18,902,497.75. Thus, VMTA sought the reimbursement
of the expenses it had incurred in relation thereto. 12 RTC Br. 67 admitted the
Complaint-in-Intervention in its Order dated 8 January 2004.13
On 5 March 2004, herein respondents moved for the dismissal of the Complaint-
in-Intervention on the ground that it stated no cause of action. 14 In its Omnibus Order
dated 2 August 2005, RTC Br. 67 denied this Motion to Dismiss. 15 The trial court
based its Decision on the grounds that (a) by filing the said motion, herein
respondents hypothetically admitted the truth of the facts alleged in the Complaint-
in-Intervention, and (b) the test of sufficiency of the facts alleged was whether or not
the court could render a valid judgment as prayed for, accepting as true the exclusive
facts set forth in the Complaint.16 Thus, RTC Br. 67 held that if there are doubts as to
the truth of the facts averred, then the court must not dismiss the Complaint, but
instead require an answer and proceed to trial on the merits.17
_______________
10 CA Decision p. 3; Rollo, p. 106.
11 Petition, p. 8; Rollo, p. 74.
12 Petition, pp. 20-21; Rollo, pp. 86-87; Complaint-in-Intervention, pp. 2-
3, Rollo, pp. 162-163.
13 Rollo, p. 184.
14 Petition, p. 9; Rollo, p. 75.
15 Rollo, pp. 185-188; Petition, p. 10; Rollo, p. 76.
16 Petition, p. 12; Rollo, p. 78.
17 Id.
733
VOL. 658, OCTOBER 5, 2011 733
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
On a Rule 65 Petition for Certiorari alleging grave abuse of discretion, the CA
reversed the ruling of RTC Br. 67 and dismissed the Complaint-in-Intervention on
the following grounds: (a) VMTA failed to state a cause of action; (b) VMTA has no
legal interest in the matter in litigation; and (c) the Complaint-in-Intervention would
cause a delay in the trial of the action, make the issues more complicated, prejudice
the adjudication of the rights of the parties, stretch the issues, and increase the
breadth of the remedies and relief.18 The relevant portions of the Decision read:
“Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or
omission by which a party violates the right of another. Its essential elements are as
follows:
1. A right in favor of the plaintiff by whatever means and under
whatever law it arises or is created;
2. An obligation on the part of the named defendant to respect or not to
violate such right; and
3.  Act or omission on the part of such defendant in violation of the
right of the plaintiff or constituting a breach of the obligation of the defendant
to the plaintiff for which the latter may maintain an action for recovery of
damages or other appropriate relief.
It is, thus, only upon the occurrence of the last element that a cause of action
arises, giving the plaintiff the right to maintain an action in court for recovery of
damages or other appropriate relief. (Swagman Hotels and Travel, Inc. v. Court of
Appeals, G.R. No. 161135, April 8, 2005, 455 SCRA 175, 183). If these elements are
absent, the complaint is dismissible on the ground of failure to state a cause of
action.
What VMTA actually seeks in filing a complaint-in-intervention is the
reimbursement of the cost of the restoration and rehabilitation of the burned area of
the Virra Mall building. And VMTA believes that such reimbursement must be made
from the fire insurance proceeds released to VMGA. Such position cannot be
sustained.
…   …   …
_______________
18 Decision pp. 37-38; Rollo, pp. 140-141.
734
734 SUPREME COURT REPORTS ANNOTATED
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
 
Firstly, We find that the complaint-in-intervention fails to state a cause of action
against the petitioners. The material averments of the complaint-in-intervention belie
any correlative obligation on the part of herein petitioners vis-à-vis the legal right of
VMTA for reimbursement. The petitioners are not the proper parties against whom
the subject action for reimbursement must be directed to. On the contrary, since
“x x x plaintiff Ortigas, as owner of the building, has ordered intervenor VMTA to
undertake with dispatch the restoration and rehabilitation of the burned area or
section of the Virra Mall buiding x x x” (par. 7 of Complaint-in-Intervention),
VMTA’s recourse would be to file and direct its claim against ORTIGAS who has
the obligation to pay for the same. The complaint-in-intervention is not the proper
action for VMTA to enforce its right of reimbursement. At any rate, VMTA’s rights,
if any, can be ventilated and protected in a separate action. The complaint-in-
intervention is therefore dismissible for failure to state a cause of action against the
petitioners.
Secondly, VMTA has no legal interest in the matter in litigation. It is not privy to
the Contract of Lease between ORTIGAS and VMGA. It came into the picture only
after the expiration of the said contract.
Finally, Section 1, Rule 19 of the 1997 Rules of Civil Procedure provides:
Section 1. Who may intervene.—A person who has a legal interest in
the matter in litigation, or in the success of either of the parties, or an interest
against both, or is so situated as to be adversely affected by a distribution or
other disposition of the property in the custody of the court or of an offices
thereof may, with leave of court, be allowed to intervene in the action. The
court shall consider whether or not the intervention will unduly delay or
21
 prejudice the adjudication of the rights of the original parties, and whether or
not the intervenor’s rights may be fully protected in a separate proceeding.
As a general guide in determining whether a party may intervene, the court shall
consider whether or not the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties, and whether or not the intervenor’s
rights may be fully protected in a separate proceeding (Sec. 2(b), Rule 12; Balane, et
al. vs. De Guzman, et al., 20 SCRA 177 [1967]).735
VOL. 658, OCTOBER 5, 2011 735
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
 
The complaint below is primarily on the issue of specific performance. The relief
being sought by the VMTA in its complaint-in-intervention is the reimbursement of
expenses incurred by it for the repair/restoration of the Virra Mall Building.
VMTA’s cause of action has a standpoint which is unique to itself. New, unrelated,
and conflicting issues would be raised which do not concern the petitioners herein, or
VMTA as intervenor. Inevitably, the allowance of the intervention will not only
cause delay in the trial of the action, make the issues even more complicated, and
stretch the issues in the action as well as amplify the breadth of the remedies and
relief.”
Thereafter, VMTA filed a Motion for Reconsideration, which the CA denied in
the assailed Resolution dated 14 May 2008.19 Hence, the instant Petition raising the
following issues:
I.
With due respect, the Honorable Court of Appeals committed grave error in
declaring that the complaint in intervention failed to state a cause of action against
private respondents when it declared that the complaint in intervention belies any
correlative obligation on the part of private respondents vis-à-vis the legal right of
petitioner for reimbursement.
II.
With due respect, the Honorable Court of Appeals committed grave error in holding
that private respondents are not the proper parties against whom the subject action
for reimbursement must be directed to but recourse would be for petitioner VMTA to
file and direct its claim against OCLP who has the obligation to pay petitioner
VMTA since it was OCLP who has (sic) ordered to undertake the restoration and
rehabilitation of the burned area or section of the Virra Mall Building.
III.
With due respect, the Honorable Court of Appeals similarly committed grave error
when it ruled that the complaint-in-intervention is not the proper action to enforce its
right in the controversy between
_______________
19 Rollo, pp. 16-23.
736
736 SUPREME COURT REPORTS ANNOTATED
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
OCLP and private respondents since the proper remedy is for petitioner VMTA to
ventilate and protect its right in a separate action.20
The determination of whether the CA committed reversible error in dismissing
the Complaint-in-Intervention filed by VMTA boils down to the sole issue of the
propriety of this remedy in enforcing the latter’s rights.
According to VMTA, it has a legal interest in Civil Case No. 69312, which is
rooted in the alleged failure of VMGA to turn over the insurance proceeds for the
restoration and rehabilitation of Virra Mall, in breach of the latter’s contractual
obligation to Ortigas. However, the CA ruled against this position taken by VMTA
not only because, in the CA’s view, VMTA’s Complaint-in-Intervention failed to
state a cause of action, but also because it has no legal interest in the matter in
litigation. We rule in favor of VMTA.
Section 1, Rule 19 of the Rules of Court provides:
“Who may intervene.—A person who has a legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other disposition of property
in the custody of the court or of an officer thereof may, with leave of court, be
allowed to intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the
original parties, and whether or not the intervenor’s rights may be fully protected in a
separate proceeding.”
In Executive Secretary v. Northeast Freight,21 this Court explained intervention
in this wise:
“Intervention is not a matter of absolute right but may be permitted by the court
when the applicant shows facts which satisfy the requirements of the statute
authorizing intervention. Under our Rules of Court, what qualifies a person to
intervene is his possession of a legal interest in the matter in litigation or in the
_______________
20 Petition, p. 18; Rollo, p. 84.
21 G.R. No. 179516, 17 March 2009, 581 SCRA 736.
737
VOL. 658, OCTOBER 5, 2011 737
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
success of either of the parties, or an interest against both; or when he is so
situated as to be adversely affected by a distribution or other disposition of
property in the custody of the court or an officer thereof. As regards the legal
interest as qualifying factor, this Court has ruled that such interest must be of a direct
and immediate character so that the intervenor will either gain or lose by the direct
legal operation of the judgment. The interest must be actual and material, a concern
which is more than mere curiosity, or academic or sentimental desire; it must not be
indirect and contingent, indirect and remote, conjectural, consequential or collateral.
However, notwithstanding the presence of a legal interest, permission to intervene is
subject to the sound discretion of the court, the exercise of which is limited by
considering “whether or not the intervention will unduly delay or prejudice the
22
adjudication of the rights of the original parties and whether or not the intervenor’s
rights may be fully protected in a separate proceeding.”22 (Emphasis supplied.)
Applying the foregoing points to the case at bar, VMTA may be allowed to
intervene, and the ruling of RTC Br. 67 allowing intervention was wrongly reversed
by the CA because such a ruling does not constitute grave abuse of discretion.
VMTA has a cause of action
A cause of action is defined as “the act or omission by which a party violates a
right of another.”23 In Shell Philippines v. Jalos,24 this Court expounded on what
constitutes a cause of action, to wit:
“A cause of action is the wrongful act or omission committed by the defendant in
violation of the primary rights of the plaintiff. Its elements consist of: (1) a right
existing in favor of the plaintiff, (2) a duty on the part of the defendant to respect the
plaintiff’s right, and (3) an act or omission of the defendant in violation of such right.
To
_______________
22 Id., at p. 743.
23 Section 2, Rule 2 of the Rules of Court.
24 G.R. No. 179918, 8 September 2010, 630 SCRA 399.
738
738 SUPREME COURT REPORTS ANNOTATED
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
sustain a motion to dismiss for lack of cause of action, however, the complaint must
show that the claim for relief does not exist and not only that the claim was
defectively stated or is ambiguous, indefinite or uncertain.” 25
In the case at bar, VMTA, in its Complaint-in-Intervention, explicitly laid down
its cause of action as follows:26
“Pursuant to and by virtue of such claim, defendant VMGA and defendant
VMGA Board Members, impleaded as party defendants herein, received, at various
times, from their insurance broker, and it is in their custody, the insurance proceeds
arising out of such claim which, as of January 8, 2003, aggregated P48.6-
Million. Having failed to deliver the said proceeds to the real beneficiary inspite of
due notice and demand, plaintiff Ortigas herein instituted the present action
against all the defendants to compel delivery of the said insurance proceeds which
are being unlawfully and illegally withheld by all the defendant VMGA and
defendant VMGA Board Members inspite of written demands made
therefor. Worse, a portion of said insurance proceeds, aggregating P8.6-Million had
already been disbursed and misappropriated in breach of trust and fiduciary duty.”
(Emphasis supplied.)
It is clear from the foregoing allegations that VMTA’s purported right is rooted
in its claim that it is the real beneficiary of the insurance proceeds, on the grounds
that it had (a) facilitated the repair and restoration of the insured infrastructure upon
the orders of Ortigas, and (b) advanced the costs thereof. Corollarily, respondents
have a duty to reimburse it for its expenses since the insurance proceeds had already
been issued in favor of respondent VMGA, even if the latter was not rightfully
entitled thereto. Finally, the imputed act or omission on the part of respondents that
supposedly violated the right of VMTA was respondent VMGA’s refusal, despite
demand, to release the insurance proceeds it received to re-
_______________
25 Id., at p. 408.
26 Complaint-in-Intervention, p. 4; Rollo, p. 164.
739
VOL. 658, OCTOBER 5, 2011 739
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
imburse the former for the expenses it had incurred in relation to the restoration and
repair of Virra Mall. Clearly, then, VMTA was able to establish its cause of action.
VMTA has a legal interest
in the matter in litigation
VMTA was also able to show its legal interest in the matter in litigation—
VMGA’s insurance proceeds—considering that it had already advanced the
substantial amount of P18,902,497.75 for the repair and restoration of Virra Mall.
That VMTA seeks reimbursement from Ortigas is precisely the reason why
intervention is proper. The main issue in Civil Case No. 69312 is whether Ortigas
has a contractual right to the insurance proceeds received by VMGA. Thus, the
recoupment by VMTA of the expenses it incurred in the repair of Virra Mall depends
on the success of either party in the main case. VMTA therefore has an undeniable
stake in Civil Case No. 69312 that would warrant its intervention therein.
Further, the issuance to Ortigas of a Writ of Preliminary Attachment against
VMGA puts VMTA in a situation in which it will be adversely affected by a
distribution or other disposition of the property in the custody of the court, pursuant
to the said writ. The prospect of any distribution or disposition of the attached
property will likewise affect VMTA’s claim for reimbursement.
VMTA’s intervention in Civil 
Case No. 69312 will avoid a
multiplicity of suits
Lastly, allowing VMTA to intervene in Civil Case No. 69312 finds support
in Heirs of Medrano v. De Vera,27 to wit:
“The purpose of intervention is to enable a stranger to an action to become a
party in order for him to protect his interest and for
_______________
27 G.R. No. 165770, 9 August 2010, 627 SCRA 109.
740
740 SUPREME COURT REPORTS ANNOTATED
Virra Mall Tenants Association, Inc. vs. Virra Mall Greenhills Association, Inc.
the court to settle all conflicting claims. Intervention is allowed to avoid multiplicity
of suits more than on due process considerations.”28
Thus, although the CA was correct in stating that VMTA could always file a
separate case against Ortigas, allowing VMTA to intervene will facilitate the orderly
administration of justice and avoid a multiplicity of suits. We do not see how delay
23
will be inordinately occasioned by the intervention of VMTA, contrary to the fear of
the CA.
WHEREFORE, the instant petition is GRANTED. The Decision dated 21 May
2007 and Resolution dated 14 May 2008 of the CA are hereby REVERSED and SET
ASIDE insofar as the dismissal of the Complaint-in-Intervention filed by VMTA is
concerned. The Complaint-in-Intervention of VMTA in Civil Case No. 69312 is
allowed to proceed before RTC Br. 67.
SO ORDERED.
Carpio (Chairperson), Brion, Perez and Mendoza,** JJ.,concur.
Petition granted, judgment and resolution reversed and set aside.
Note.—Where a party voluntarily submitted itself to the jurisdiction of the trial
court through the process of intervention, it would be too late in the day for it to turn
its back and disclaim that jurisdiction, more so where an adverse judgment has
already been rendered against it. (Gregorio Araneta University Foundation vs. The
Regional Trial Court of Kalookan City, Branch 120, 580 SCRA 532 [2009])
——o0o—— 

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