Rules Part 3

RULE 14
SUMMONS

Definition and purpose
Summons is the writ by which the defendant is notified of the action brought against him.
§ The issuance of summons is mandatory on the part of the court.
§ In an action in personam, the purpose of summons is not only to notify the defendant of
the action, but also to acquire jurisdiction over his person.
§ Service of summons is required even if the defendant is aware of the filing of the action
against him.
§ In an action in rem or quasi in rem, the purpose of summons is mainly to satisfy the
constitutional requirements of due process.

Duty to issue
The clerk of court shall issue the corresponding summons to the defendants
(1) upon the filing of the complaint and
(2) payment of the requisite legal fees. (Sec. 1, Rule 14)

Issuance of alias summons—
If a summons is returned without being served on any or all of the defendants, the server:
(1) shall also serve a copy of the return on the plaintiff’s counsel,
(2) stating the reasons for the failure of service,
(3) within five (5) days from such failure.

The clerk may issue an alias summons
(1) on demand of the plaintiff,
(2) if the summons has been lost, or
(3) if the summons has been returned without being served (Sec. 5, Rule 14)

Form

Content
The summons shall be
(1) directed to the defendant,
(2) signed by the clerk of court, and
(3) under seal.

The summons shall contain:
(a) the name of the court and the names of the parties to the action;
(b) a direction that the defendant answer within the time fixed by these Rules; and
(c) a notice that unless the defendant so answers, plaintiff will take judgment by
default and may be granted the relief applied for.

A copy of the complaint and order for appointment of guardian ad litem, if any, shall be
attached to the original and each copy of the summons. (3a)

If with leave of court
It shall be made
(1) by motion,
(2) in writing,
(3) supported by affidavit of the plaintiff or some person on his behalf, and
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(4) setting forth the grounds for the application. (Sec. 17, Rule 14)

Who serves
The summons may be served by
(1) the sheriff,
(2) his deputy,
(3) other proper court officer, or
(4) any suitable person authorized by the court issuing the summons, for justifiable reasons.
(Sec. 3, Rule 14)

On whom

In general
The clerk of court shall issue the corresponding summons to the defendants. (Sec. 1,
Rule 14)

Service in person on defendant—
Whenever practicable, the summons shall be served
(1) by handing a copy thereof to the defendant in person, or
(2) by tendering it to him, if he refuses to receive and sign for it. (Sec. 6, Rule 14)

Entity without juridical personality
When persons associated in an entity without juridical personality are sued under the
name by which they are generally or commonly known, service may be effected
(1) upon all the defendants by serving upon any one of them, or
(2) upon the person in charge of the office or place of business maintained in such
name.

BUT such service shall not bind individually any person whose connection with the
entity has, upon due notice, been severed before the action was brought. (Sec. 8, Rule 14)

Associations

Domestic
Service upon domestic private juridical entity—
Service may be made on
(1) the president,
(2) managing partner,
(3) general manager,
(4) corporate secretary,
(5) treasurer, or
(6) in-‐‑house counsel. (Sec. 11, Rule 14)

List exclusive

E.B. VILLAROSA & PARTNER CO., LTD. V. BENITO
(312 SCRA 65, 1999)

FACTS: Petitioner E.B. Villarosa, a limited partnership,
and private respondent Benita executed a deed of sale with
development agreement wherein Villarosa agreed to develop
certain parcels of land belonging to Benito into a housing
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subdivision for the construction of low cost housing units. They

further agreed that in case of litigation arising from any dispute,
the venue shall be in the proper courts of Makati.

The private respondent subsequently filed a Complaint for
Breach of Contract and Damages against the petitioner before the
Trial Court of Makati for lack of developments within the
aforesaid properties. The Service of Summons as well as the
complaint was served upon the branch manager in Cagayan de
Oro. Plaintiff filed a Special Motion to Dismiss alleging that the
summons was improperly served and for lack of jurisdiction over
the person of the defendant. Respondent says that the Service was
improperly served since it was given to an employee in its branch
office and not to one of the persons enunciated in Rule 14 section
11 of the ROC.

The trial court ruled in favor of respondent hence this
petition.

ISSUE: Whether the service of summons on the branch manager was
proper

NO. Section 11, Rule 14 allows service to the general
manager, not the branch manager. The maxim expression unios est
exclusion alterius applies in this case. The enumeration of persons
whom summons may be served is restricted, limited and
exclusive. The new rule specifically changed the proper recipient
of a service from a mere manager to a general manager in order to
prevent ambiguous and illogical interpretations in the future. The
court therefore acquires no jurisdiction over the person of the
defendant.
In the case at bar, since the service was given to a mere
branch manager in one of petitioner’s branches instead of the
general manager in its main office in Davao, such service is
deemed insufficient. The courts therefore did not acquire
jurisdiction over the person of the petitioner.

Foreign Juridical Entity (Rule 14, Sec. 12, as amended by AM. No. 11-‐‑3-‐‑
6-‐‑SC)
• When the defendant is a foreign private juridical entity which has
transacted business in the Philippines, service may be made on its
resident agent designated in accordance with law for that purpose,
or, if there be no such agent, on the government official designated
by law to that effect, or on any of its officers or agents within the
Philippines.

• If the foreign private juridical entity is not registered in the
Philippines or has no resident agent, service may, with leave of
court, be effected out of the Philippines through any of the
following means:

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a) By personal service coursed through the appropriate court in the

foreign country with the assistance of the Department of Foreign Affairs;

b) By publication once in a newspaper of general circulation in the
country where the defendant may be
found and by serving a copy of the summons and the court order by-‐‑
registered mail at the last known address of the defendant;

c) By facsimile or any recognized electronic means that could generate
proof of service; or

d) By such other means as the court may in its discretion direct.

Public corporation
When the defendant is the Republic of the Philippines, service may be effected on
the Solicitor General.

In case of a province, city or municipality, or like public corporations, service may
be effected on
(1) its executive head, or
(2) on such other officer or officers as the law or the court may direct. (Sec.
13, Rule 14)

Prisoners
When the defendant is a prisoner confined in a jail or institution, service shall be effected
upon him by the officer having the management of such jail or institution who is
deemed deputized as a special sheriff for said purpose (Section 9, Rule 14).

Minors
When the defendant is a minor, service shall be made
(1) upon him personally and
(2) on his legal guardian if he has one, or if none, upon his guardian ad litem whose
appointment shall be applied for by the plaintiff, or
(3) on his father or mother, In the case of a minor, service may also be made. (Sec. 10,
Rule 14)

Insane, incompetents
When the defendant is insane or otherwise an incompetent, service shall be made
(1) upon him personally and
(2) on his legal guardian if he has one, or if none, upon his guardian ad litem whose
appointment shall be applied for by the plaintiff. (Sec. 10, Rule 14)

Unknown defendant or whereabouts unknown
Where the defendant is
(1) designated as an unknown owner, or the like, or
(2) whenever his whereabouts are unknown and cannot be ascertained by diligent
inquiry,

Service may, by leave of court, be effected upon him by
(1) publication in a newspaper of general circulation and
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(2) in such places and for such time as the court may order. (Sec. 14, Rule 14)

*Whether in rem, quasi in rem or personal

SANTOS v. PNOC
(556 SCRA 272, 2008)

FACTS: PNOC Exploration Corp. (respondent) filed a complaint for a
sum of money against Pedro T. Santos, Jr. (petitioner), seeking to collect the
P698,502.10 unpaid balance of the car loan advanced to Santos when he was still
member of the board of directors.

Personal service of summons to Santos failed because he could not be
located in his last known address despite earnest efforts to do so. On PNOC’s
motion, the trial court allowed service of summons by publication. PNOC then
caused the publication of the summons in Remate, a newspaper of general
circulation in the Philippines. Thereafter, PNOC submitted the affidavit of
publication of the advertising manager of Remate and an affidavit of service of
the PNOC’s employee to the effect that he sent a copy of the summons by
registered mail to Santos’ last known address.

When Santos failed to file his answer, PNOC moved the case be set for
the reception of its evidence ex parte. The trial court granted the motion. An
omnibus motion for reconsideration was then sought by Santos, alleging that the
affidavit of service submitted by PNOC failed to comply with Sec. 19, Rule 14, as
it was not executed by the Clerk of Court. He also claimed denial of due process
for he was not notified of the trial court’s order. PNOC opposed the motion and
insisted that it complied with the rules on service by publication. The trial court
denied Santos’ motion.

ISSUE: Whether there is improper service of summons because summons by publication
only applies to actions in rem, and not in personam

NO. Since petitioner could not be personally served with summons
despite diligent efforts to locate his whereabouts, respondent sought and was
granted leave of court to effect service of summons upon him by publication in a
newspaper of general circulation. Thus, petitioner was properly served with
summons by publication.

The in rem/in personam distinction was significant under the old rule
because it was silent as to the kind of action to which the rule was applicable.
Because of this silence, the Court limited the application of the old rule to in rem
actions only. This has been changed. The present rule expressly states that it
applies "ʺ[i]n any action where the defendant is designated as an unknown
owner, or the like, or whenever his whereabouts are unknown and cannot be
ascertained by diligent inquiry."ʺ Thus, it now applies to any action, whether in
personam, in rem or quasi in rem.

Service of summons by publication is proved by the affidavit of the
printer, his foreman or principal clerk, or of the editor, business or advertising
manager of the newspaper which published the summons. The service of
summons by publication is complemented by service of summons by registered
mail to the defendant'ʹs last known address. This complementary service is
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evidenced by an affidavit "ʺshowing the deposit of a copy of the summons and

order for publication in the post office, postage prepaid, directed to the
defendant by registered mail to his last known address."ʺ The rules, however, do
not require that the affidavit of complementary service be executed by the clerk
of court. While the trial court ordinarily does the mailing of copies of its orders
and processes, the duty to make the complementary service by registered mail is
imposed on the party who resorts to service by publication.

The trial court acquired jurisdiction over the person of petitioner by his
own voluntary appearance in the action against him. This was equivalent to
service of summons and vested the trial court with jurisdiction over the person of
petitioner.

Residents temporarily out
When any action is commenced against a defendant who ordinarily resides within the
Philippines, but who is temporarily out of it, service may, by leave of court, be also
effected out of the Philippines by extraterritorial service. (Sec. 16, Rule 14)

Extraterritorial service: When the defendant does not reside and is not found in the
Philippines, and the action affects the personal status of the plaintiff or relates to,
or the subject of which is, property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent, or in which the
relief demanded consists, wholly or in part, in excluding the defendant from any
interest therein, or the property of the defendant has been attached within the
Philippines, service may, by leave of court, be effected out of the Philippines by
personal service; or by publication in a newspaper of general circulation in such
places and for such time as the court may order, in which case a copy of the
summons and order of the court shall be sent by registered mail to the last
known address of the defendant, or in any other manner the court may deem
sufficient. (Sec. 15, Rule 14).

PALMA VS. GALVEZ
G.R. NO. 165273, 10 MARCH 2010

Facts:
On July 28, 2003, Palma filed with the RTC an action for damages against
the Philippine Heart Center, Dr. Giron, Dr. Cruz, alleging that the defendants
committed professional fault, negligence and omission for having removed her
right ovary against her will, and losing the same and the tissues extracted from
her during her surgery; and that although the specimens were subsequently
found, Palma was doubtful and uncertain that the same was hers as the label
therein pertained that of somebody else. Later, Palma filed a Motion for Leave to
Admit Amended Complaint, praying for inclusion of some nurses, one of which
is respondent Agudo.

The RTC’s process server submitted his return of summons stating that
the alias summons, together with a copy of the amended complaint and its
annexes, were served upon Agudo thru her husband Alfredo, who received and
signed the same since Agudo was out of the country.

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Agudo’s counsel filed a Notice of Appearance and Motion for Extension
of Time to File Answer stating that he was just engaged by Alfredo Agudo, as
respondent Agudo was out of the country and the Answer was already due.
Two weeks later, counsel again filed a Motion for Another Extension of Time to
File Answer, stating that the draft answer was finished but would be sent to
Agudo for clarification/verification before the Phil. Consulate in Ireland. Two
weeks later, Agudo filed a Motion to Dismiss on the ground that the RTC had
not acquired jurisdiction over her as she was not property served with summons
since she was temporarily out of the country. Palma filed her Opposition to the
MTD, arguing that a substituted service of summons on Agudo’s husband was
valid and binding on her, that the service of summons under Sec. 16, Rule 14 was
not exclusive and maybe effected by other modes of service.

RTC granted Agudo’s MTD. RTC found that while summons was served
at Agudo’s house and received by her husband, such service did not qualify as a
valid service of summons on her as she was out of the country at the time it was
served. Palma thus filed this petition for certiorari under Rule 65.Issues:1.

Issue: Whether or not there was a valid service of summons on Agudo.

Held: YES. In civil cases, the trial court acquires jurisdiction over the person of
the defendant either by the service of summons or by the latter’s voluntary
appearance and submission to the authority of the former. Agudo was a Filipino
resident temporarily out of the country at the time of the service of summons,
thus service of summons on her is governed by Sec. 16, Rule 14 of the ROC:

“Sec. 16. When an action is commenced against a defendant who
ordinarily resides within the Philippines, but who is temporarily out of
it, service may, by leave of court, be also effected out of the Philippines,
as under the preceding section.” “Sec. 15. When the defendant does not
reside and is not found in the Philippines x x x service may, by leave of
court, be effected out of the Philippines by personal service as under
section 6;or by publication in a newspaper of general circulation in such
places x x x”

The use of the words “may” and “also” in Sec. 16 means that it is not
mandatory. Other methods of service of summons allowed may also be availed
of. Thus, if a resident defendant is temporarily out of the country, any of the
following modes of service may be resorted to: (1) submitted service set forth in
Sec. 7, Rule 14; (2) personal service outside the country with leave of court, (3)
service of publication, with leave of court; (4) in any other manner the court may
deem sufficient. Sec. 7 states that:

“Sec. 7. If, for justifiable causes, the defendant cannot be served
within a reasonable time as provided in the preceding section, service
may be effected (a) by leaving copies of the summons at defendant’s
residence with some person of suitable age and discretion then residing
therein, or (b) by leaving the copies at defendant’s office or regular place
of business with some competent person in charge thereof.”

In this case, the service of summons was made at her residence with her
husband, Alfredo Agudo, acknowledging receipt thereof. Alfredo was
presumably of suitable age and discretion, who was residing in that place, and
therefore, was competent to receive the summons on Agudo’s behalf.
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Statements were made that establish the fact that Agudo had knowledge
of the case filed against her, and that her husband had told her about the case as
Alfredo even engaged the services of her counsel: (1) In the notice of appearance
and Motion for Extension of Time to File
Answer, Agudo’s counsel confirmed that Agudo was out of the country and his
service was engaged by the husband. In the other motion for extension of time,
Agudo’s counsel stated that a draft of the answer had already been prepared, to
be submitted to Agudo in Ireland. RTC acquired jurisdiction over the person of
Agudo when her counsel entered his appearance on Agudo’s behalf, without
qualification and without questioning the propriety of the service of summons,
and even filed 2 Motions for Extension of Time to File Answer. In effect, Agudo,
through counsel, invoked RTC’s jurisdiction over her person. This is considered
voluntary submission to the jurisdiction of the court. Petition is granted. Agudo
is directed to file her Answer.

Non-‐‑resident
*in rem, quasi in rem

When the defendant
(1) does not reside and is not found in the Philippines, and
(2) the action affects
a. the personal status of the plaintiff or
b. relates to, or the subject of which is, property within the Philippines, in
which the defendant has or claims a lien or interest, actual or contingent;
or
c. in which the relief demanded consists, wholly or in part, in excluding the
defendant from any interest therein, or
d. the property of the defendant has been attached within the Philippines,

Service may, by leave of court, be effected out of the Philippines
(1) by personal service as under section 6; or
(2) by publication in a newspaper of general circulation in such places and for such
time as the court may order,
• in which case a copy of the summons and order of the court shall be sent
by registered mail to the last known address of the defendant,
(3) or in any other manner the court may deem sufficient.

Any order granting such leave shall specify a reasonable time, which shall not be less
than sixty (60) days after notice, within which the defendant must answer. (Sec. 15, Rule
14)

Modes of service

Personal
Whenever practicable, the summons shall be served
(1) by handing a copy thereof to the defendant in person, or
(2) by tendering it to him, if he refuses to receive and sign for it. (Sec. 6, Rule 14)

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Substituted
If, for justifiable causes, the defendant cannot be served within a reasonable time as
provided in the preceding section, service may be effected
(a) by leaving copies of the summons at the defendant’s residence with some person
of suitable age and discretion then residing therein, or
(b) by leaving the copies at defendant’s office or regular place of business with some
competent person in charge thereof. (Sec. 7, Rule 14)

Impossibility of prompt service must appear in the return of the service

SPOUSES GALURA VS. MATH-‐‑AGRO CORPORATION
G.R. NO. 167230, 14 AUGUST 2009

Facts:
Spouses Galura purchased broiler starters and finishers from Math-‐‑Agro
Corporation (MAC). The Spouses Galura paid MAC P72,500. Despite several
demands, they failed to pay the P353,500 unpaid balance. MAC engaged the
services of a certain Atty. Pasamba for the purpose of collecting the unpaid
balance from the Spouses Galura. A demand letter was sent to spouses Galura
wherein it stated that they were giving them 5 days upon receipt of the letter, to
pay the unpaid balance plus interest; that failure to pay would result in an action
in court. Because of non-‐‑payment after demand was made, MAC filed a
complaint with the RTC praying that the court would order spouses Galura to
settle the balance plus attorney’s fee and litigation expenses. In their complaint,
MAC provided for their address where summons may be served to them. Clerk
of Court Ortega issued the summons. 1st SERVICE: went to 230 Apo St., Sta.
Mesa Heights , Quezon City where he was informed that the Spouses Galura
were presently residing at Tierra Pura Subdivision, Tandang Sora, Quezon City .
2nd SERVICE: went to G.L. Calayan Agro System, Inc. in Barrio Kalayaan,
Gerona , Tarlac to serve the summons, however he learned that the property had
been foreclosed and that the Spouses Galura no longer resided there. 3rd
SERVICE: went to Tierra Pura Subdivision, Tandang Sora, Quezon City , to serve
the summons. Sildo served the summons on Teresa L. Galura’s sister, Victoria
Lapuz. The Spouses Galura failed to file their answer. RTC declared them in
default and allowed MAC to present its evidence ex parte. RTC ruled in favor of
MAC and ordered the Spouses Galura to pay the unpaid balance, attorney’s fees,
and expenses of litigation. Subsequently, RTC issued a writ of execution to
implement its Decision. Thereafter, Spouses Galura received ―from their
parents-‐‑in-‐‑law‖ a copy of the 10 November 2004 Order. Spouses Galura filed
with the CA a petition for annulment of judgment and final order under Rule 47
of the Rules of Court, with prayer for the issuance of a writ of preliminary
injunction or temporary restraining order, claiming that the RTC’s Decision and
Order were void beacuse the RTC failed to acquire jurisdiction over their persons
because the substituted service of summons was invalid, and there was extrinsic
fraud because MAC made them believe that it would not file a case against them
-‐‑ MAC, despite the commitment of its owner not to file the complaint, did so.
Such an act on the part of Math-‐‑Agro and its owner constitutes extrinsic fraud, as
it prevented petitioners from defending themselves in the action lodged with the
RTC. common law; it is a method extraordinary in character, and hence may be
used only as prescribed and in the circumstances authorized by statute.‖ CA
dismissed the petition for lack of merit. The Court of Appeals held that there was
a valid substituted service of summons, that the allegation of extrinsic fraud was
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unbelievable, and that the Spouses Galura should have first availed of the
ordinary remedies of new trial, appeal, or petition for relief. The Spouses Galura
filed a MR but was denied. Hence, the present petition. In the present case, there
was no showing in the return of service (1) of the impossibility of personal
service within a reasonable time; (2) that Lapuz, the person on whom summons
was served, was of suitable age and discretion; and (3) that Lapuz resided in the
residence of the Spouses Galura. Consequently, the RTC did not acquire
jurisdiction over the persons of the Spouses Galura, and thus the Spouses Galura
are not bound by the RTC’s Decision and Order.
Issue:
Was there a valid substituted service of summons? NONE.
Held:
Sildo, in his Rertun, did not state that his attempts to serve the summons
by personal service at the Tierra Pura Subdivision address failed, and that the
same could not be made within a reasonable time. He likewise failed to state
facts and circumstances showing why personal service of the summons upon the
petitioners at the said address was impossible. Finally, he also failed to state that
Ms. Victoria Lapuz, the person with whom he left the summons, was a person of
sufficient age and discretion, and residing in the said Tierra Pura address. In a
case where a petition for annulment of a judgment or final order of the RTC filed
under Rule 47 of the Rules of Court is grounded on lack of jurisdiction over the
person of the defendant/respondent or over the nature or subject of the action,
the petitioner need not allege in the petition that the ordinary remedy of new
trial or reconsideration of the final order or judgment or appeal therefrom are no
longer available through no fault of her own. This is so because a judgment
rendered or final order issued by the RTC without jurisdiction is null and void
and may be assailed any time either collaterally or in a direct action or by
resisting such judgment or final order an any action or proceeding whenever it is
invoked, unless barred by laches.

Presumption of regularity in the performance of official functions does not apply

PASCUAL V. PASCUAL
G.R. NO. 171916, 4 DECEMBER 2009

Facts:
Constatino A. Pascual filed a complaint for Specific Performance before
the RTC. In the Return Service, the Process Server reported that he failed to
deliver the summons to the defendant. According to the report, the defendant
[Dr. Lourdes Pascual] was not at her home and only her maid was there who
refused to receive the summons. His efforts to effect the service is backed up by a
certification of the Barangay in the area. The following day, the Process Server
went back at the defendant’s place, but again she is not home.

Thereafter, an alias summons was issued by the RTC. Subsequently, the
Process Server returned with the report that a substituted service was effected.
For failure of respondent to file a responsive pleading, petitioner, filed a Motion
to Declare Defendant in Default to which Dr. Lourdes Pascual filed an opposition
claiming that she was not able to receive any summons and a copy of the
complaint hence the RTC cannot exercise jurisdiction over her person. RTC
declared Dr. Lourdes Pascual in Default. She filed a Motion for Reconsideration,
which was denied. Consequently, the RTC in its decision found favor on Mr.
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Constantino Pascual against Dr. Lourdes Pascual. She then filed a Motion to Set
Aside Order of Default with the argument of non-‐‑service of Summons. RTC
denied and on the same day issued a Certificate of Finality and Entry
of Judgment. Dr. Lourdes filed a Petition for Certiorari and Prohibition under
Rule 65 in the CA. The CA ruled favoring her. Petitioner herein [Constantino
Pascual] through a Petition for Review on Certiorari under Rule 45 comes now to
the SC.

Issue:
Whether the Service of Summons is valid?

Held:
In a case where the action is ‘in personam’ and the defendant is in the
Philippines, the service may be done by personal or substituted. A plain reading
of Rule 14, Sections 6 and 7 indicates that “Personal Service” should and always
be the first option, only when the said summons cannot be served within a
reasonable time can the process server resort to substituted service. The Court
gave a discussion as to the nature of the requisites of substituted service in
Manotoc v. Court of Appeals. We can break down this section into the following
requirements to effect a valid substituted service:

1) Impossibility of Prompt Personal Service
2) Specific Details in the Return
3) A Person Suitable of Age and Discretion
4) A Competent Person in Charge Petitioner contends that there was a valid
substituted service of summons as shown in three officer’s return.

However, this Court stresses that the Process Server must show that the
defendant cannot be served promptly, or that there was an impossibility of
service. The Return of Summons in this case does not show or indicate the actual
exertion or any steps by the officer to serve the summons. In the absence of even
the barest compliance with the procedure for substituted service of summons
outlined in the Rules, the principle of “Presumption of Regularity” cannot apply.

Exception – the absence in the sheriff’s return of a statement about the impossibility of
personal service does not conclusively prove that the service is invalid (liberal rule)

MAPA V. CA
214 SCRA 417 (1993)
Facts:
A complaint for Recovery of sum of money was filed vs. High Peak
Mining. Summons was issued to be served upon Mapa, the chairperson, & upon
other officers of the corporation. However, said summons was served upon an
employee of said corp. Defendants were declared in default. Defendants filed
an MTD & Set Aside Default Judgment on the ground of lack of jurisdiction of
the ct. over their person as the service of summons was improper, i.e., served
upon an EE who may not be considered as an “agent” of the corporation;
moreover, Sheriff did not indicate in his Return his efforts at serving summons
personally before resorting to substituted service.

Issue:
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WON the Court the Court acquired jurisdiction over the defendant. NO

Held:

The Court lacked jurisdiction.

1. General Rule: Sheriff’s Return must show that prior attempts at
personal service were made by the Sheriff & that such attempts had failed,
prompting him to resort to Substituted service. HOWEVER, it must be
emphasized that Absence in the Sheriff’s Return of a statement about the impossibility
of personal service DOES NOT conclusively prove that the service is invalid. Proof of
such prior attempts may be submitted by the plaintiff during the hearing of any incident
assailing the validity of the substituted service. While Sheriff’ Return carries w/ it the
presumption of regularity, that entries therein are deemed correct, it does not
necessarily follow that an act done in relation to the official duty for w/c the
return is made was not simply done bec. it is not disclosed therein. Besides, the
sheriff’s neglect in making such a disclosure should not unduly prejudice the
plaintiff if what was undisclosed was in fact done.

2. The EE may be considered as an “agent” for the purpose of Sec. 13, & there
was a substantial compliance under the said sec. because in the CAB, petitioner failed
to deny the statement in Sheriff’s Return that the EE is “authorized to receive
process of this nature”, said Return enjoying the presumption of regularity, &
the logical conclusion is that she delivered the summons to the corporation.

3. In an action in personam as in the CAB, personal service of summons
w/in the forum is essential to the acquisition of jurisdiction over the person of the
defendant who does not voluntarily submit himself to the authority of the court.

Effect of receipt by security guard

Individual Defendant

ROBINSON v. MIRALLES
(510 SCRA 678, 2006)

FACTS: Respondent Celita Miralles filed a complaint for collection
of sum of money against petitioner Remelita Robinson, alleging that
$20,054 was borrowed by Robinson, as shown in the MOA they both
executed.

Summons was served on Robinson at her given address.
However, per return of service of the Sheriif, petitioner no longer resides
there. Thus, the trial court issued an alias summons to be served at
Muntinlupa City, petitioner’s new address.

Again, the Sheriff reported twice thereafter that the summons
could not be served on petitioner. Sheriff Pontente, who was to serve the
summons interposed that he was stopped by the Security Guard of
Alabang Hills Village because they were allegedly told by Robinson not
to let anyone proceed to her house if she is not around. Despite the
explanations of the Sheriff, the guards didn’t let him in. Thereafter, the
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Sheriff just left a copy of the complaint to a guard, who refused to affix
his signature on the original copy, so he will be the one to give the
summons to petitioner Robinson.

Eventually, petitioner Robinson was declared in default for her
failure to file an answer seasonably despite service of summons. The trial
court rendered its decision in favor of Miralles ordering Robinson to pay
her obligations plus cost of damages. A copy of the court Order was sent
to petitioner by registered mail at her new address and a writ of
execution was also issued.

Robinson filed a petition for relief from the judgment by default.
She claimed that summons was improperly served upon her, thus, the
trial court never acquired jurisdiction over her and that all its proceedings
are void. Petitioner Robinson contends that the service of the summons
upon the subdivision guard is not in compliance with Section 7, Rule 14
since he is not related to her or staying at her residence, as required by
the rule.

ISSUE: Whether the substituted service of summons effected is valid

YES. Although the SC have ruled that the statutory requirements
of substituted service must be followed strictly, faithfully, and fully and
any substituted service other than that authorized by the Rules is
considered ineffective, the Court frowns upon an overly strict application
of the Rules. It is the spirit, rather than the letter of the procedural rules,
that governs.

Obviously, it was impossible for the sheriff to effect personal or
substituted service of summons upon petitioner. We note that she failed
to controvert the sheriff’s declaration. Nor did she deny having received
the summons through the security guard. Considering her strict
instruction to the security guard, she must bear its consequences. Thus,
we agree with the trial court that summons has been properly served
upon petitioner and that it has acquired jurisdiction over her.

Where the action is in personam and the defendant is in the
Philippines, the service of summons may be made through personal or
substituted service in the manner provided for in Sections 6 and 7, Rule
14 of the 1997 Rules of Procedure, as amended.

Under our procedural rules, personal service is generally
preferred over substituted service, the latter mode of service being a
method extraordinary in character. For substituted service to be justified,
the following circumstances must be clearly established: (a) personal
service of summons within a reasonable time was impossible; (b) efforts
were exerted to locate the party; and (c) the summons was served upon a
person of sufficient age and discretion residing at the party’s residence or
upon a competent person in charge of the party’s office or place of
business.

14

Defendant Corporation

ORION SECURITY CORPORATION V. KALFAM ENTERPRISES, INC.
G.R. NO. 163287, 27 APRIL 2007

FACTS: Petitioner Orion Security Corporation is a domestic private
corporation engaged in the business of providing security services. One of its
clients is respondent Kalfam Enterprises, Inc. Respondent was not able to pay
petitioner for services rendered. Petitioner thus filed a complaint against
respondent for collection of sum of money. The sheriff tried to serve the
summons and a copy of the complaint on the secretary of respondent’s manager.
However, respondent’s representatives allegedly refused to acknowledge their
receipt. The summons and the copy of the complaint were left at respondent’s
office. When respondent failed to file an Answer, petitioner filed a motion to
declare respondent in default. The trial court, however, denied the motion on the
ground that there was no proper service of summons on respondent.

Petitioner then filed a motion for alias summons, which the trial court
granted. The process server again left the summons and a copy of the complaint
at respondent’s office through respondent’s security guard, who allegedly
refused to acknowledge their receipt. Again, respondent failed to file an Answer.
On motion of petitioner, respondent was declared in default. Thereafter,
petitioner was allowed to adduce evidence ex parte.

Respondent filed a motion for reconsideration of the resolution declaring
it in default. Respondent alleged the trial court did not acquire jurisdiction over
its person due to invalid service of summons. The trial court denied the motion
for reconsideration. The trial court rendered a default judgment. On appeal, the
Court of Appeals held that summons was not validly served on respondent.
Petitioner’s MR of the Court of Appeals’ decision was denied. Hence, the instant
petition.

Petitioner contends that the trial court acquired jurisdiction over
respondent due to the latter’s voluntary appearance in the proceedings before
the said court. Petitioner insists substituted service of summons on respondent’s
security guard is substantial compliance with the rule on service of summons, in
view of the exceptional circumstances in the present case.

Respondent counters that the special appearance of its counsel does not
constitute voluntary appearance. Respondent maintains that its filing of an
opposition to petitioner’s motion to declare respondent in default and other
subsequent pleadings questioning the trial court’s jurisdiction over it does not
amount to voluntary appearance. Respondent stresses it was not properly served
with summons via substituted service.
ISSUE: Whether or not the trial court acquired jurisdiction over respondent
either by (1) valid substituted service of summons on respondent; or (2)
respondent’s voluntary appearance in the trial court and submission to its
authority.

HELD: NO. Courts acquire jurisdiction over the plaintiffs upon the filing of the
complaint. On the other hand, jurisdiction over the defendants in a civil case is
15

acquired either through the service of summons upon them or through their
voluntary appearance in court and their submission to its authority.

As a rule, summons should be personally served on the defendant. It is
only when summons cannot be served personally within a reasonable period of
time that substituted service may be resorted to. In this case, records show that
respondent’s president, managing partner, general manager, corporate secretary,
treasurer, or in-‐‑house counsel never received the summons against respondent,
either in person or by substituted service.

Note that in case of substituted service, there should be a report
indicating that the person who received the summons in the defendant’s behalf
was one with whom the defendant had a relation of confidence ensuring that the
latter would actually receive the summons. Here, petitioner failed to show that
the security guard who received the summons in respondent’s behalf shared
such relation of confidence that respondent would surely receive the summons.
Hence, we are unable to accept petitioner’s contention that service on the security
guard constituted substantial compliance with the requirements of substituted
service.

Neither did the trial court acquire jurisdiction over respondent by the
latter’s voluntary appearance in court proceedings. Note that a party who makes
a special appearance in court challenging the jurisdiction of said court based on
the ground of invalid service of summons is not deemed to have submitted
himself to the jurisdiction of the court. In this case, records show that respondent,
in its special appearance, precisely questioned the jurisdiction of the trial court
on the ground of invalid service of summons. Thus, it cannot be deemed to have
submitted to said court’s authority.

Hence, respondent cannot be bound by the trial court’s judgment
ordering it to pay petitioner a sum of money.

Publication
Where the defendant is
(1) designated as an unknown owner, or the like, or
(2) whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry,

Service may, by leave of court, be effected upon him by
(1) publication in a newspaper of general circulation and
(2) in such places and for such time as the court may order. (Sec. 14, Rule 14)

Extraterritorial
When the defendant
(1) does not reside and is not found in the Philippines, and
(2) the action affects
a. the personal status of the plaintiff or
b. relates to, or the subject of which is, property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent; or
c. in which the relief demanded consists, wholly or in part, in excluding the
defendant from any interest therein, or
d. the property of the defendant has been attached within the Philippines,
16

Service may, by leave of court, be effected out of the Philippines
(4) by personal service as under section 6; or
(5) by publication in a newspaper of general circulation in such places and for such time as
the court may order,
• in which case a copy of the summons and order of the court shall be sent by
registered mail to the last known address of the defendant,
(6) or in any other manner the court may deem sufficient.

Any order granting such leave shall specify a reasonable time, which shall not be less than sixty
(60) days after notice, within which the defendant must answer. (Sec. 15, Rule 14)

Residents temporarily out of the Philippines.
When any action is commenced against a defendant who ordinarily resides within the
Philippines, but who is temporarily out of it, service may, by leave of court, be also effected out
of the Philippines by extraterritorial service. (Sec. 16, Rule 14)

VALMONTE v. CA
(252 SCRA 92, 1996)

FACTS: Rosita Dimalanta, sister of petitioner Lourdes Valmonte, filed a complaint for
partition of real property and accounting of rentals against petitioners Valmonte spouses.
Lourdes Valmonte is a foreign resident. The RTC denied private respondent'ʹs motion to declare
petitioner Lourdes A. Valmonte in default. A motion for reconsideration was similarly denied.
Private respondent filed a petition for certiorari, prohibition and mandamus with the Court of
Appeals. The Court of Appeals rendered a decision granting the petition and declaring Lourdes
in default. A copy of the appellate court'ʹs decision was received by petitioner Lourdes’ husband
at his Manila law office and in Seattle, Washington.

ISSUE: Whether in an action for partition filed against her and her husband, who is also her
attorney, summons intended for her may be served on her husband, who has a law office in the
Philippines

NO. Private respondent'ʹs action, which is for partition and accounting under Rule 69, is
in the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting
the defendant'ʹs interest in a specific property and not to render a judgment against him. As
petitioner Lourdes Valmonte is a nonresident who is not found in the Philippines, service of
summons on her must be in accordance with Rule 14, §17. Such service, to be effective outside
the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper
of general circulation in such places and for such time as the court may order, in which case a
copy of the summons and order of the court should be sent by registered mail to the last known
address of the defendant; or (3) in any other manner which the court may deem sufficient.

PERKIN ELMER SINGAPORE v. DAKILA TRADING
(530 SCRA 170)

FACTS: Dakila Trading Corp (Dakila) entered into a Distribution Agreement with
Perkin-‐‑Elmer Singapore Pte. Ltd. (PES) which appointed Dakila as sole distributor of its
products in the Philippines. PES was obligated to give Dakila a commission for the sale of its
products in the Philippines. Dakila was granted the right to purchase and sell the products of
17

PES. The agreement further stipulated that Dakila shall order the products of PES, which it shall
sell in the Philippines, either from PES itself or from PEIP.

However, PES unilaterally terminated the Distribution Agreement, prompting Dakila to
file before the RTC a Complaint for Collection of Sum of Money and Damages with Prayer for
Issuance of a Writ of Attachment against PES and its affiliate, Perkin-‐‑Elmer Instruments
Philippines Corporation (PEIP). RTC denied respondent’s prayer.

Dakila filed Ex-‐‑Parte Motions for Issuance of Summons and for Leave of Court to
Deputize Dakila’s General Manager (DGM) to Serve Summons Outside of the Philippines. RTC
granted this motion. Thus, an Alias Summons was issued by the RTC to PES. But the said Alias
Summons was served and received by Perkin-‐‑Elmer Asia (PEA), a corporation allegedly
unrelated to PES. PEIP moved to dismiss the Complaint filed by Dakila. PEA, on the other
hand, sent letters to Dakila and RTC to inform them of the wrongful service of summons.

Accordingly, Dakila filed an Ex-‐‑Parte Motion to Admit Amended Complaint, together
with the Amended Complaint claiming that (1) PEA had become a sole proprietorship owned
by the PES, (2) PES changed its name to PEA, (3) such changes did not avoid its due and
outstanding obligations to Dakila, and (4) the name of PES in the complaint should be changed
to PEA. RTC admitted the Amended Complaint.

Dakila filed another Motion for the Issuance of Summons and for Leave of Court to
Deputize DGM to serve summons outside the Philippines. RTC granted the motion. RTC thus
issued summons and the DGM went to Singapore and served summons on PES.

Meanwhile, RTC denied the Motion to Dismiss filed by PEIP, compelling the latter to file
its Answer to the Amended Complaint.

PES filed with the RTC a Special Appearance and Motion to Dismiss the Amended
Complaint, which were denied. It held that even though the Amended Complaint is primarily
for damages, it does relate to a property of PES, to which the latter has a claim interest, or an
actual or contingent lien, which will make it fall under one of the requisites for extraterritorial
service. PES filed a Petition for Certiorari under Rule 65 with application for temporary
restraining order and/or preliminary injunction before the CA. The CA affirmed the RTC
Orders.

ISSUE: Whether summons were properly served under the 2nd or 4th instance of extra-‐‑territorial
service

NO. Extraterritorial service of summons applies only where the action is in rem or quasi
in rem, but not if an action is in personam. In the case at bar, there can never be a valid
extraterritorial service of summons upon it, because the case involving collection of a sum of
money and damages is an action in personam, as it deals with the personal liability of PES by
reason of the alleged unilateral termination of the Distribution Agreement. The objective sought
in Dakila’s Complaint was to establish a claim against PES. Moreover, The action instituted by
Dakila affects the parties alone, not the whole world.

Thus, being an action in personam, personal service of summons within the Philippines
is necessary in order for the RTC to validly acquire jurisdiction over the person of PES, and this
is not possible in the present case because the PES is a non-‐‑resident and is not found within the
Philippines. Dakila’s allegation in its Amended Complaint that PES had personal property
within the Philippines in the form of shares of stock in PEIP did not make the case fall under
any of the four instances mentioned in Section 15, Rule 14 of the Rules of Court, as to convert
18

the action in personam to an action in rem or quasi in rem and, subsequently, make the
extraterritorial service of summons upon the petitioner valid.

The 2nd instance for extra-‐‑territorial service has no application in the case. The action for
collection of a sum of money and damages was purely based on the personal liability of the
PES. For the action to be one falling under the 2nd instance, the main subject matter of the action
must be the property itself of the PES in the Philippines and in such instance, judgment will be
limited to the res. However, the allegations made by the respondent that the petitioner has
property within the Philippines in support of its application for the issuance of a writ of
attachment was actually denied by the RTC.

Neither does the allegation that PES had personal property within the Philippines in the
form of shares of stock in PEIP convert the case from an action in personam to one quasi in rem,
so as to qualify said case under the 4th instance of extra-‐‑territorial service. What is required is
not a mere allegation of the existence of personal property belonging to the non-‐‑resident
defendant within the Philippines but that the non-‐‑resident defendant’s personal property
located within the Philippines must have been actually attached. Evidently, PES’s personal
property within the Philippines, in the form of shares of stock in PEIP, had not been attached;
hence, the case for collection of sum of money and damages remains an action in personam.

In the case at bar, there can never be a valid extraterritorial service of summons upon it,
because the case involving collection of a sum of money and damages is an action in personam,
as it deals with the personal liability of PES by reason of the alleged unilateral termination of
the Distribution Agreement. The objective sought in Dakila’s Complaint was to establish a claim
against PES. Moreover, The action instituted by Dakila affects the parties alone, not the whole
world.

Thus, being an action in personam, personal service of summons within the Philippines
is necessary in order for the RTC to validly acquire jurisdiction over the person of PES, and this
is not possible in the present case because the PES is a non-‐‑resident and is not found within the
Philippines. Dakila’s allegation in its Amended Complaint that PES had personal property
within the Philippines in the form of shares of stock in PEIP did not make the case fall under
any of the four instances mentioned in Section 15, Rule 14 of the Rules of Court, as to convert
the action in personam to an action in rem or quasi in rem and, subsequently, make the
extraterritorial service of summons upon the petitioner valid.

Voluntary appearance
The defendant’s voluntary appearance in the action shall be equivalent to service of summons.

The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of
the defendant shall not be deemed a voluntary appearance. (Sec. 20, Rule 14)

CEZAR v. RICAFORT-‐‑BAUTISTA
(506 SCRA 322, 2006)

FACTS: Private respondent Specified Materials Corporation filed a Complaint for
collection of sum of money against petitioner Cezar due to the latter’s failure to pay the
construction materials it purportedly purchased under a credit line extended by private
respondent. At the time of the institution of the action, petitioner’s obligation stood at
P1,860,000.00, and under the terms of the credit arrangement, materials sold to petitioner were
19

supposed to be paid within 30 days from date of delivery, subject to a 3% interest per month for
delayed payments.

After the filing of the complaint, summons was issued, and this was received by a
certain Robles. As petitioner failed to file his answer to the complaint, private respondent
moved that he be declared in default. This motion was granted.

Private respondent filed a Motion to Admit Amended Complaint alleging that it
erroneously computed petitioner’s obligation to be P1,860,000.00, when it should have
amounted to P2,005,000.00. A copy of the motion and the Amended Complaint were personally
received by petitioner as evidenced by his signatures thereon. The Amended Complaint was
ordered admitted. The court ruled in favor of plaintiff.

Petitioner, by way of special appearance, argued that the trial court did not acquire
jurisdiction over his person. This motion was denied. Petitioner filed before the CA a Petition
for Annulment of Judgment, Preliminary Injunction with Prayer for Temporary Restraining
Order. This petition was dismissed for “failure to attach an affidavit of merit alleging the facts
supporting the good and substantial defense, as well as the affidavits of witnesses or document
supporting the defense.”

Petitioner filed a motion for reconsideration but this was denied. Following this set-‐‑
back, petitioner filed before this Court a Petition for Review on Certiorari of the resolutions of
the CA, which was also denied for failure to comply with procedural requirements. Our
resolution became final and executory. Private respondent filed a Motion for Execution before
the trial court.

ISSUE: Whether the court acquired jurisdiction over the person of the petitioner by virtue of the
substituted service of summons effected by the sheriff

NO. The person who allegedly received the summons was identified in the sheriff’s
return as Arsenio Robles, was not petitioner’s employee, was a native of Batangas and was
merely peddling mango seedlings within the vicinity of his office when the summons was
served.

In the event that summons cannot be served within a reasonable time, the Rules permit
that substituted service may be resorted to. In this case, the sheriff employed the substituted
service of summons. The defect, however, in the manner in which he implemented this mode
of service of summons is readily apparent on the face of the return. It must be emphasized that
laws providing for modes other than the personal service of summons must be strictly followed
in order for the court to acquire jurisdiction over the person of respondent or defendant. As the
sheriff’s return in the present case does not contain any statement with regard to the
impossibility of personal service the same is patently defective and so the presumption of
regularity in the performance of official functions will not lie.

ISSUE: Whether petitioner’s voluntary appearance cured the defect in service of summons.

HELD: YES. In Flores v. Zurbito, we held that an appearance in whatever form without
expressly objecting to the jurisdiction of the court over the person, is a submission to the
jurisdiction of the court over the person of the defendant or respondent, thus:

He may appear without such formal appearance and thus submit himself to the
jurisdiction of the court. He may appear by presenting a motion, for example, and unless by
20

such appearance he specifically objects to the jurisdiction of the court, he thereby gives his
assent to the jurisdiction of the court over his person.

Hence, in this case, petitioner’s filing of a Motion for Re-‐‑setting of the Hearing
effectively cured the defect of the substituted service of summons. Petitioner’s insistence of lack
of jurisdiction over his person is utterly lacking in any legal basis.

LHUILLER v. BRITISH AIRWAYS
(615 SCRA 380, 2010)

FACTS: Lhuillier took respondent British Airway’s flight 548 from London, United
Kingdom to Rome, Italy. Once on board, she allegedly requested Halliday, one of the
respondent’s flight attendants, to assist her in placing her hand-‐‑carried luggage in the overhead
bin. However, Halliday allegedly refused to help and assist her, and even sarcastically
remarked that "ʺIf I were to help all 300 passengers in this flight, I would have a broken back!"ʺ

Petitioner further alleged that when the plane was about to land in Rome, Italy, another
flight attendant, Kerrigan, singled her out from among all the passengers in the business class
section to lecture on plane safety. Allegedly, Kerrigan made her appear to the other passengers
to be ignorant, uneducated, stupid, and in need of lecturing on the safety rules and regulations
of the plane. Affronted, petitioner assured Kerrigan that she knew the plane’s safety regulations
being a frequent traveler. Thereupon, Kerrigan allegedly thrust his face a mere few centimeters
away from that of the petitioner and menacingly told her that "ʺWe don’t like your attitude."ʺ

Upon arrival in Rome, petitioner complained to respondent’s ground manager and
demanded an apology. However, the latter declared that the flight stewards were "ʺonly doing
their job."ʺ

Thus, petitioner filed the complaint for damages. Summons, together with a copy of the
complaint, was served on the respondent through Echevarria, General Manager of Euro-‐‑
Philippine Airline Services, Inc.

Respondent, by way of special appearance through counsel, filed a Motion to Dismiss on
grounds of lack of jurisdiction over the case and over the person of the respondent. Respondent
alleged that only the courts of London, United Kingdom or Rome, Italy, have jurisdiction over
the complaint for damages pursuant to the Warsaw Convention. Thus, since respondent is
domiciled in London; respondent’s principal place of business is in London; petitioner bought
her ticket in Italy (through Jeepney Travel S.A.S, in Rome); and Rome, Italy is petitioner’s place
of destination, then it follows that the complaint should only be filed in the proper courts of
London, United Kingdom or Rome, Italy. Likewise, it was alleged that the case must be
dismissed for lack of jurisdiction over the person of the respondent because the summons was
erroneously served on Euro-‐‑Philippine Airline Services, Inc. which is not its resident agent in
the Philippines.

Instead of filing a Comment/Opposition, petitioner filed an Urgent Ex-‐‑Parte Motion to
Admit Formal Amendment to the Complaint and Issuance of Alias Summons. Petitioner alleged
that upon verification with the SEC, she found out that the resident agent of respondent in the
Philippines is Alonzo Q. Ancheta. Subsequently, petitioner filed a Motion to Resolve Pending
Incident and Opposition to Motion to Dismiss.

ISSUE: Whether British Airways, in filing its motion to dismiss may be deemed as having in fact
and in law submitted itself to the jurisdiction of the lower court,.
21

HELD: NO. The Warsaw Convention has the force and effect of law in this country. The
Warsaw Convention applies because the air travel, where the alleged tortious conduct occurred,
was between the United Kingdom and Italy, which are both signatories to the Warsaw
Convention. Since the Warsaw Convention applies in the instant case, then the jurisdiction over
the subject matter of the action is governed by the provisions of the Warsaw Convention.

Respondent, in seeking remedies from the trial court through special appearance of
counsel, is not deemed to have voluntarily submitted itself to the jurisdiction of the trial court.
Thus, a defendant who files a motion to dismiss, assailing the jurisdiction of the court over his
person, together with other grounds raised therein, is not deemed to have appeared voluntarily
before the court. What the rule on voluntary appearance means is that the voluntary appearance
of the defendant in court is without qualification, in which case he is deemed to have waived
his defense of lack of jurisdiction over his person due to improper service of summons.

A special appearance before the court––challenging its jurisdiction over the person
through a motion to dismiss even if the movant invokes other grounds––is not tantamount to
estoppel or a waiver by the movant of his objection to jurisdiction over his person; and such is
not constitutive of a voluntary submission to the jurisdiction of the court.

In this case, the special appearance of the counsel of respondent in filing the Motion to
Dismiss and other pleadings before the trial court cannot be deemed to be voluntary submission
to the jurisdiction of the said trial court.

Return of service
When the service has been completed, the server shall,
(1) within five (5) days therefrom,
(2) serve a copy of the return, personally or by registered mail, to the plaintiff’s counsel, and
(3) shall return the summons to the clerk who issued it,
(4) accompanied by proof of service. (Sec. 4, Rule 14)

Alias summons
If a summons is returned without being served on any or all of the defendants, the server shall
also serve a copy of the return on the plaintiff'ʹs counsel, stating the reasons for the failure of
service, within five (5) days therefrom. In such a case, or if the summons has been lost, the clerk,
on demand of the plaintiff, may issue an alias summons.

Proof of service
The proof of service of a summons shall be
(1) made in writing by the server and
(2) shall set forth the manner, place, and date of service;
(3) shall specify any papers which have been served with the process and
(4) the name of the person who received the same; and
(5) shall be sworn to when made by a person other than a sheriff or his deputy. (Sec. 18,
Rule 14)

Publication
If the service has been made by publication, service may be proved by
22

(1) the affidavit of the printer, his foreman or principal clerk, or of the editor, business or
advertising manager,
(2) an attached copy of the publication, and
(3) an affidavit showing the deposit of a copy of the summons and order for publication in
the post office, postage prepaid, directed to the defendant by registered mail to his last
known address. (Sec. 19, Rule 14)

RULE 15
MOTIONS

In general
A motion is an application for relief other than by a pleading. (Sec. 1, Rule 15)

Form
General rule: All motions shall be in writing.

Exceptions:
(1) Motions made in open court or
(2) Motions made in the course of a hearing or trial. (Sec. 2, Rule 15)

Generally
The Rules applicable to pleadings shall apply to written motions so far as concerns
(1) caption,
(2) designation,
(3) signature, and
(4) other matters of form. (Sec. 10, Rule 15)

May be oral
General rule: All motions shall be in writing.
Exception Motions made in open court or in the course of a hearing or trial. (Sec. 2, Rule
15)

Motion for leave
A motion for leave to file a pleading or motion shall be accompanied by the pleading or motion
sought to be admitted. (Sec. 9, Rule 15)

Prohibited motion
The following pleadings and motions are prohibited in a summary procedure:
(1) Motion to dismiss except on the ground of lack of jurisdiction over subject matter and
failure to comply with barangay conciliation proceedings;
(2) Motion for new trial, or for reconsideration of a judgment, or for reopening of trial;
(3) Petition for relief from judgment;
(4) Motion for extension of time to file pleadings, affidavits and other papers;
(5) Memoranda;
(6) Petition for certiorari, and mandamus or prohibition against an interlocutory order of the
court;
(7) Motion to declare the defendant in default;
(8) Dilatory motions for postponement
(9) Reply;
(10) Third-‐‑party complaints;
(11) Interventions.
23

The following are prohibited in Small Claims Cases:
(1) Motion to dismiss the complaint, except on ground of lack of jurisdiction’
(2) Motion for bill of particulars;
(3) Motion for new trial, or for reconsideration of a judgment, or for reopening of trial;
(4) Petition for relief from judgment;
(5) Motion for extension of time to file pleadings, affidavits and other papers;
(6) Memoranda;
(7) Petition for certiorari, and mandamus or prohibition against an interlocutory order of the
court;
(8) Motion to declare the defendant in default;
(9) Dilatory motions for postponement
(10) Reply;
(11) Third-‐‑party complaints;
(12) Interventions.

Contents
A motion shall
(1) state the relief sought to be obtained
(2) the grounds upon which it is based, and
(3) shall be accompanied by supporting affidavits and other papers, if required by these
Rules or necessary to prove facts alleged therein. (Sec. 3, Rule 15)

Omnibus motion rule
A motion attacking a pleading, order, judgment, or proceeding shall include all objections
then available, and all objections not so included shall be deemed waived. (Sec. 8, Rule 15)

Exceptions
The court shall dismiss the claim when it appears from the pleadings or the
evidence on record that
(1) the court has no jurisdiction over the subject matter,
(2) there is another action pending between the same parties for the same
cause, or that
(3) the action is barred by a prior judgment or
(4) barred by the statute of limitations. (Sec. 1, Rule 9)

Notice of hearing
General Rule: Every written motion shall be set for hearing by the applicant.

Exception: Motions which the court may act upon without prejudicing the rights of the
adverse party. (Sec. 4, Rule 15)

NOTE: Every written motion required to be heard and the notice of the hearing thereof shall
be served
(1) in such a manner as to ensure its receipt by the other party
(2) at least three (3) days before the date of hearing, unless the court for good cause
sets the hearing on shorter notice.

Notice of hearing—
The notice of hearing shall be
24

(1) addressed to all parties concerned, and

(2) shall specify the time and date of the hearing which must not be later than ten
(10) days after the filing of the motion. (Sec. 5, Rule 15)

General rule: without compliance — scrap of paper
A motion which does not meet the requirements of Sections 4 and 5 of Rule 15 is a
mere scrap of paper which the clerk of court has not right to receive and the trial
court has no authority to act upon.

SPOUSES RUSTIA V.EMERITA RIVERA
G.R. No. 156903, 24 NOVEMBER 2006

FACTS: Emerita Rivera filed with the Metropolitan Trial Court (MeTC), Branch 36,
Quezon City, a complaint for sum of money against spouses Carlos and Teresita Rustia,
petitioners, and Rosemarie F. Rocha. The trial court rendered its Decision in favor of Emerita
Rivera. The MeTC ruled in favor of Emerita Rivera. On appeal by spouses Rustia, the Regional
Trial Court (RTC), Branch 77, Quezon City affirmed the MeTCs Decision in toto. Spouses Rustia
filed a motion for reconsideration but it was denied by the RTC as it does not contain a notice of
the time and place of hearing required by Sections 4 and 5, Rule 15 of the 1997 Rules of Civil
Procedure, as amended.

ISSUE: Whether the motion for reconsideration filed with the RTC by spouses Rustia is a
mere scrap of paper for lack of notice of hearing;

HELD: Yes.

Sections 4 and 5, Rule 15 of the 1997 Rules of Civil Procedure, as amended, provide:

SEC. 4. Hearing of motion. Except for motions which the court may act
upon without prejudicing the rights of the adverse party, every written motion
shall be set for hearing by the applicant.

Every written motion required to be heard and the notice of the
hearing thereof shall be served in such a manner as to ensure its receipt by the
other party at least three (3) days before the date of hearing, unless the court for
good cause sets the hearing on shorter notice.

SEC. 5. Notice of hearing. The notice of hearing shall be addressed to all
parties concerned, and shall specify the time and date of the hearing which
must not be later than ten (10) days after the filing of the motion.

Section 4 lays the general rule that all written motions shall be set for hearing by the
movant, except the non-‐‑litigated motions or those which may be acted upon by the court
without prejudicing the rights of the adverse party. These ex parte motions include a motion for
extension of time to file pleadings, motion for extension of time to file an answer, and a motion
for extension of time to file a record on appeal. The requirement of notice under Sections 4 and
5, Rule 15 is mandatory and the lack thereof is fatal to a motion for reconsideration. Thus, the
Court of Appeals did not err when it affirmed the RTC ruling that petitioners motion for
reconsideration is but a mere scrap of paper because it does not comply with Sections 4 and 5,
Rule 15.

25

Defective notice of hearing

VICTORY LINER, INC. v. MALINIAS
(G.R. No. 151170, 29 May 2007)

FACTS: A vehicular collision happened between petitioner Victory Liner, Inc. (VLI) and
an Isuzu Truck used by respondent Michael Malinias. No one died, but both vehicles were
damaged. Malinias filed a complaint for damages against petitioner and the bus driver, Leoncio
Bulaong with the MTC, alleging pecuniary damage to the truck worth P47,180 representing lost
income for the non-‐‑use of the truck. After pre-‐‑trial, the bus driver was dropped as defendant in
the case.

During trial, respondent finished presenting his evidence and rested his case. Counsel
for petitioner VLI filed a motion to withdraw as counsel, but the same was denied. When the
case was called for reception of petitioner’s evidence, no appearance was made for the bus
company. Respondent thus moved that petitioner be declared to have waived its right to
adduce evidence in its favor. The case was deemed submitted for judgment and the MTC ruled
in favor of respondent Malinias, ordering VLI to pay him.

VLI’s new counsel filed a Motion for Reconsideration. The Notice of Hearing therein
stated: "ʺPlease submit the foregoing Motion for Reconsideration for hearing before the CA at a
schedule and time convenient to the Court and the parties.” The MTC ruled that the notice did
not conform with the mandatory requirements of Section 5, Rule 15, and that the motion was
thus a mere scrap of paper which did not suspend the period to appeal.

Petitioner VLI thereafter filed a Notice of Appeal and a motion for the inhibition by the
MTC, which was granted. The case was assigned to a new MTC judge, who was tasked to rule
on the Notice of Appeal. The MTC ruled that it had been filed beyond the reglementary period.
Again, the MTC reiterated its initial judgment in favor of Malinias since the fatally defective MR
did not toll the reglementary period for appeal.

The RTC affirmed the judgment of the MTC and held the decision final and executory.

ISSUE: Whether the Notice of Hearing filed was defective

HELD: YES. The most crucial failure on the part of petitioner was to file a Motion for
Reconsideration of the MTC Judgment which contained a defective Notice of Hearing, failing as
it did to set a date for hearing. Under Sections 5 and 6 of Rule 15, the notice of hearing shall be
addressed to the parties concerned and shall specify the time and date of the hearing of the
motion; no motion shall be acted upon by the court without proof of service of the notice
thereof, except when the court is satisfied that the rights of the adverse party are not affected.
Unless the movant sets the time and place of hearing, the court will be unable to determine
whether the adverse party agrees or objects to the motion, and if he objects, to hear him on his
objection, since the rules themselves do not fix any period within which he may file his reply or
opposition.

Not only did the defect render the motion for reconsideration itself unworthy of
consideration, it more crucially failed to toll the period to appeal. A motion without a notice of
hearing is pro forma, a mere scrap of paper that does not toll the period to appeal, and upon the
expiration of the 15-‐‑day period, the questioned order or decision becomes final and executory.

That did not mean that petitioner was left bereft of further remedies under our Rules.
For one, petitioner could have assailed the MTC’s denial of the Motion for Reconsideration
26

through a special civil action for certiorari under Rule 65 alleging grave abuse of discretion
amounting to lack of jurisdiction on the part of the MTC in denying the motion. If that remedy
were successful, the effect would have been to void the MTC’s denial of the Motion for
Reconsideration, thus allowing petitioner to again pursue such motion as a means towards the
filing of a timely appeal.

Another remedy for the petitioner is found under Rule 38, which governs petitions for
relief from judgment. Indeed, Section 2, Rule 38 finds specific application in this case, as it
provides that "ʺ[w]hen a judgment or final order is rendered by any court in a case, and a party
thereto, by fraud, accident, mistake, or excusable negligence, has been prevented from taking an
appeal, he may file a petition [for relief from denial of appeal] in such court and in the same
case praying that the appeal be given due course."ʺ36 Such petition should be filed within sixty
(60) days after the petitioner learns of the judgment or final order, and not more than six (6)
months after such judgment or final order was entered. The facts of this case indicate that
petitioner could have timely resorted to this remedy.

Exceptions
Motions which may be granted ex parte
An ex parte motion does not require that parties be hard. An example is a motion to set
the case for pre-‐‑trial.

NOTE: A motion to dismiss, a motion for judgment on the pleadings, and a summary
judgment are litigated motions.

Where adverse party had opportunity to oppose

LANTO v. DIMAPORO
(16 SCRA 599, 1966)

FACTS: Resolution No. 7, adopted by the Provincial Board of Lanao del Norte, reverted
a previous salary appropriation for the position of Assistant Provincial Assessor to the general
fund. In effect, that position then held by petitioner was then abolished. He sought relief to
various government officials, including the President but was disappointed. He then went to
the court seeking mandamus praying for annulment of the resolution, payment of backwages,
restatement of salary appropriations as well as reinstatement.

Respondents moved to dismiss stating lack of cause of action. Petitioner’s counsel moved to
postpone the hearing, but failed to appear. The court below granted such motion and dismissed
said petition. Hence this appeal.

ISSUE: Whether the dismissal order issued without any hearing on the motion to dismiss is void

NO. Petitioner was given the chance to adduce his case, yet it is because of his constant
absences that he was unable to present his arguments. One good reason for the statutory
requirement of hearing on a motion is to enable the suitors to adduce evidence to support their
claims. But here the Motion to Dismiss is grounded on the lack of cause of action. Existence of a
cause of action or lack of it is determined by a reference to the facts averred in the challenged
pleading. The question raised in the motion is purely one of law. In this posture, oral arguments
on the motion are reduced to an unnecessary ceremony and should be overlooked. The hearing
for the Motion to Dismiss was set, yet the petitioner failed to appear (only his counsel showed
27

up). Moreover, without any clear showing to the contrary, there is a presumption of regularity
within the actions of the court with regard to entertaining motions. In the case at bar, petitioner
failed to show irregularity within the courts.

VLASON ENTERPRISES CORP v. CA
(330 SCRA 26, 1999)

FACTS: Duraproof sought to enforce its preferred salvors lien by filing with the RTC a
petition for certiorari, prohibition and mandamus assailing the actions of the Customs Officers in
forfeiting the vessel and cargo owned by Omega, which Duraproof contracted to repair. It
impleaded PPA and Med Line Philippines, Inc. as respondents.

Duraproof amended its petition to include the former District Collector, and other
companies involved, including Vlason Enterprises. In both Petitions, Duraproof failed to allege
anything pertaining to Vlason Enterprises, or any prayer for relief against it.

Summonses for the amended Petition were served. Duraproof moved several times to
declare the respondents it impleaded in default. Out of those respondents, only the following
were declared by RTC in default: the Singkong Trading Co., Commissioner Mison, M/V Star Ace
and Omega. Duraproof filed an ex parte Motion to present evidence against the defaulting
respondents, which was granted.

Duraproof alleged that Vlason Enterprises, through constant intimidation and
harassment in utilizing the PPA Management of La Union, caused Duraproof to incur heavy
overhead expenses, causing irreparable damages of about P3 Million worth of ship tackles, rigs,
and appurtenances including radar antennas and apparatuses, which were taken
surreptitiously by persons working for Vlason Enterprises or its agents.

The RTC ruled that in favor of Duraproof and ordered Vlason to pay P3 Million worth of
damages. Duraproof and the other companies entered into a compromise agreement, except
Vlason. Duraproof moved for the execution of judgment. The Motion was granted and a Writ of
Execution was issued.

Vlason Enterprises filed a Motion for Reconsideration addressed to Duraproof’s counsel,
Atty. Concepcion, on the ground that it was allegedly not impleaded as a defendant, served
summons or declared in default, and hence Duraproof may not present evidence against it in
default. Duraproof opposed the Motion, arguing that it was a mere scrap of paper due to its
defective notice of hearing.

RTC reversed its Decision, finding that there never was issued an order of default
against Vlason Enterprises, so there could not have been any valid default-‐‑judgment rendered
against it.

The CA ruled that there was no need to serve summons anew on Vlason Enterprises,
since it had been served summons when the second amended petition was filed; and that
Vlason Enterprisess Motion for Reconsideration was defective and void, because it contained no
notice of hearing addressed to the counsel of Duraproof in violation of Rule 16, Section 4 of the
Rules of Court.

ISSUE: Whether the motion for reconsideration filed by Vlason was void for not containing a
notice of hearing to Duraproof’s counsel

28

HELD: NO. The Motion contained a notice of hearing sent to Atty. Concepcion who had
already died and had since been substituted by Duraproof’s new counsel, Atty. Desierto.
Although Rule 15 of the Rules of Court requires Vlason Enterprises to address and to serve on
the counsel of Duraproof the notice of hearing of the Motion for Reconsideration, the case at
bar, however, is far from ideal. First, Vlason Enterprises was not validly summoned and it did
not participate in the trial of the case in the lower court; thus, it was understandable that Vlason
Enterprises would not be familiar with the parties and their counsels. Second, Atty. Desierto
entered his appearance only as collaborating counsel, who is normally not entitled to notices
even from this Court. Third, Duraproof made no manifestation on record that Atty. Concepcion
was already dead. Besides, it was Atty. Concepcion who signed the Amended Petition, wherein
Vlason Enterprises was first impleaded as respondent and served a copy thereof. Naturally,
Vlason Enterprisess attention was focused on this pleading, and it was within its rights to
assume that the signatory to such pleading was the counsel for Duraproof.

The Court has consistently held that a motion which does not meet the requirements of
Sections 4 and 5 of Rule 15 of the Rules of Court is considered a worthless piece of paper, which
the clerk of court has no right to receive and the trial court has no authority to act upon.
However, there are exceptions to the strict application of this rule. These exceptions include:
“(1) where a rigid application will result in a manifest failure or miscarriage of justice; especially
if a party successfully shows that the alleged defect in the questioned final and executory
judgment is not apparent on its face or from the recitals contained therein.” The present case
falls under such exception since Vlason Enterprises was not informed of any cause of action or
claim against it. All of a sudden, the vessels which Vlason Enterprises used in its salvaging
business were levied upon and sold in execution to satisfy a supposed judgment against it. To
allow this to happen simply because of a lapse in fulfilling the notice requirement which, as
already said, was satisfactorily explained would be a manifest failure or miscarriage of justice.

Circumstances in the case at bar show that Duraproof was not denied procedural due
process, and that the very purpose of a notice of hearing had been served. On the day of the
hearing, Atty. Desierto did not object to the said Motion for lack of notice to him; in fact, he was
furnished in open court with a copy of the motion and was granted by the trial court thirty days
to file his opposition to it. These circumstances clearly justify a departure from the literal
application of the notice of hearing rule. In other cases, after the trial court learns that a motion
lacks such notice, the prompt resetting of the hearing with due notice to all the parties is held to
have cured the defect.

Proof of service
No written motion set for hearing shall be acted upon by the court without proof of service
thereof. (Sec. 6, Rule 15)

Hearing of motion
General rule: All motions shall be scheduled for hearing on Friday afternoons, or if Friday is a
non-‐‑working day, in the afternoon of the next working day

Exception: Motions requiring immediate action. (Sec. 7, Rule 15)

29

RULE 16
MOTION TO DISMISS

Four general types of motion to dismiss under the Rules
1. Motion to dismiss before answer (Rule 16)
2. Motion to dismiss by plaintiff (Rule 17)
3. Motion to dismiss on demurrer to evidence after plaintiff has rested his case
under Rule 33
4. Motion to dismiss appeal either in RTC (Rule 41, Sec. 13), CA (Rule 50, Sec. 1) or
SC (Rule 56, Sec. 5)

Grounds (Sec. 1)
1. Lack of jurisdiction

a. That the court has no jurisdiction over the person of the defending party.

i. The fundamental rule is that jurisdiction over a defendant in a civil case is
acquired either through service of summons or through voluntary
appearance in court and submission to its authority. If a defendant has
not been properly summoned, the court acquires no jurisdiction over its
person, and a judgment rendered against it is null and void. (Planters
Development Bank v. Chandumal, G.R. No. 195619, 5 September 2012)

ii. Where the action is in personam, and the defendant is in the Philippines,
service of summons may be made through personal service, that is,
summons shall be served by handing to the defendant in person a copy
thereof, or if he refuses to receive and sign for it, by tendering it to him. If
the defendant cannot be personally served with summons within a
reasonable time, it is then that substituted service may be made. Personal
service of summons should and always be the first option, and it is only
when the said summons cannot be served within a reasonable time can
the process server resort to substituted service. (Id.)

iii. The court’s jurisdiction over a defendant is founded on a valid service of
summons. Without a valid service, the court cannot acquire jurisdiction
over the defendant, unless the defendant voluntarily submits to it. The
defendant must be properly apprised of a pending action against him and
assured of the opportunity to present his defenses to the suit. Proper
service of summons is used to protect one’s right to due process. (Manotoc
v. Court of Appeals, G.R. No. 130974, 16 August 2006)

iv. In Manotoc v. Court of Appeals,1 the Supreme Court detailed the requisites
for a valid substituted service of summons, summed up as follows: (1)
impossibility of prompt personal service – the party relying on
substituted service or the sheriff must show that the defendant cannot be
served promptly or there is impossibility of prompt service; (2) specific
details in the return – the sheriff must describe in the Return of Summons
the facts and circumstances surrounding the attempted personal service;
(3) a person of suitable age and discretion – the sheriff must determine if
the person found in the alleged dwelling or residence of defendant is of
legal age, what the recipient’s relationship with the defendant is, and

1 Manotoc v. Court of Appeals, G.R. No. 130974, 16 August 2006.
30

whether said person comprehends the significance of the receipt of the

summons and his duty to immediately deliver it to the defendant or at
least notify the defendant of said receipt of summons, which matters
must be clearly and specifically described in the Return of Summons; and
(4) a competent person in charge, who must have sufficient knowledge to
understand the obligation of the defendant in the summons, its
importance, and the prejudicial effects arising from inaction on the
summons.

v. In Pascual v. Pascual,2 the substituted service of summon made was
invalidated due to the sheriff’s failure to specify in the return the
necessary details of the failed attempts to effect personal service which
would justify resort to substituted service of summons.

vi. The defense of lack of jurisdiction over the person of a party to a case is
not one of those defenses which are not deemed waived under Section 1
of Rule 9, and thus, it must be invoked when an answer or a motion to
dismiss is filed in order to prevent a waiver of the defense. If the objection
is not raised either in a motion to dismiss or in the answer, the objection
to the jurisdiction over the person of the plaintiff or the defendant is
deemed waived. (Boston Equity Resources, Inc. v. Court of Appeals, G.R. No.
173946, 19 June 2013)

vii. The ground of "ʺlack of jurisdiction over the person, being subject to
waiver, is a personal defense which can only be asserted by the party who
can thereby waive it by silence.(Id.)

b. That the court has no jurisdiction over the subject matter of the claim.

viii. Under Section 1, Rule 9, Rules of Court, the objection based on lack of
jurisdiction over the subject matter is not waived even if not alleged
in a motion to dismiss or the answer. Lack of jurisdiction over the
subject matter can always be raised anytime, even for the first time on
appeal, since jurisdictional issues cannot be waived subject, however,
to the principle of estoppel by laches.

ELISEO BOTICANO V. MANUEL CHU, JR.
G.R. No. L-‐‑58036, 16 March 1987

Facts:
Eliseo Boticano (“Boticano”) filed a complaint for damages against
Manuel Chu (“Chu”) and Jamie Sigua (“Sigua”) for allegedly causing damaged
to Boticano’s Bedford truck .Summonses were issued against Chua and Sigua.
However, the same was returned unserved for Sigua.

Thereafter, Boticano moved to dismiss the case against Sigua, and to
declare in default Chu for failure to file responsive pleadings within the
reglementary period, which motions were granted by the trial court and allowed
Boticano to present evidence ex parte.

2 G.R. No. 171916, 4 December 2009.
31

The trial court ruled in favor of Boticano, and ordered Chu to pay
damages.

Aggrieved, Chu filed a Notice of Appeal and an Urgent Motion for
Extension of Time to file Record on Appeal which was granted by the trial court
on the same date.

After the case was brought to the Court of Appeals and the parties had
filed their respective briefs, said Appellate Court issued its decision on March 31,
1981, setting aside the appealed judgment directed that the same be remanded to
the court of origin and that Chu be properly served with summons and a copy of
the complaint.

Issue:
Whether or not the question of jurisdiction over the person of the
defendant can be raised for the first time on appeal.

Held:
No. In fact, one of the circumstances considered by the Court as
indicative of waiver by the defendant-‐‑appellant of any alleged defect of
jurisdiction over his person arising from defective or even want of process, is his
failure to raise the question of jurisdiction in the Court of First Instance and at
the first opportunity. It has been held that upon general principles, defects in
jurisdiction arising from irregularities in the commencement of the proceedings,
defective process or even absence of process may be waived by a failure to make
seasonable objections.

In this case, Chu voluntarily appeared thru counsel in the trial court. He
filed a Notice of Appeal, Appeal Bond, Motion for Extension of Time to File
Record on Appeal, Record on Appeal, Motion for Withdrawal of Appearance,
Notice of Appearance and Opposition to Plaintiff'ʹs Motion to Dismiss Appeal
and for Issuance of a Writ of Execution. Not only did he submit pleadings and
motions, but he likewise appeared in person, thru counsel in the hearing held on
May 14, 1979 at 8:30 a.m. and orally argued in open court on the pending
incident.

Under Section 23, Rule 14 of the Rules of Court, the defendant'ʹs voluntary
appearance in the action shall be equivalent to service. Thus, under this
principle, it has been consistently held by the Supreme Court that the defect of
summons is cured by the voluntary appearance of the defendant.

2. Res judicata

DEL ROSARIO V. FAR EAST BANK AND TRUST COMPANY
G.R. No. 150134, October 31, 2007

Facts:
PDCP extended a loan agreement of USD265,000 and P2.5million to
DATICOR. DATICOR paid 3million to PDCP which latter applied to the
interest, service fees and other charges. There was still a balance of 10million.
DATICOR filed a complaint against PDCP for the violation of the Usury Law,
32

annulment of contract and damages (Civil Case No. 82-‐‑8088) but it was
dismissed by the CFI. IAC set aside the dismissal and declared the stipulation
of interest in the contract as void. PDCP appealed to the SC (G.R. NO. 73198).
In the interim, PDCP assigned its interest to FEBTC . FEBTC and DATICOR
executed a Memorandum of Agreement where DATICOR agreed to pay
FEBTC P6.4million as full settlement of the receivables. SC then affirmed the
decision of the IAC, and saying that the balance was only 1.4 million.
DATICOR filed a complaint for sum of money against PDCP and FEBTC
before RTC to recover the excess payments of 5.3million (Civil Case No. 94-‐‑
1610). RTC ordered PDCP to pay DATICOR. The case against FEBTC was
dismissed for lack of cause of action saying that the MOA between DATICOR
and FEBTC was not a subject of the SC decision. From the trial court'ʹs
decision, petitioners and respondent PDCP appealed to the Court of Appeals
(CA). The appeal was docketed as CA-‐‑G.R. CV No. 50591. On May 22, 1998,
the CA rendered a decision13 in CA-‐‑G.R. CV No. 50591, holding that
petitioners'ʹ outstanding obligation, which this Court had determined in G.R.
No. 73198 to be P1.4 million, could not be increased or decreased by any act
of the creditor PDCP. FEBTC later filed a 3rd party complaint against PDCP
on the ground that it received a consideration when it assigned the
receivables. PDCP went on to contend that since the final and executory
decision in CA-‐‑G.R. CV No. 50591 had held that DATICOR has no cause of
action against it for the refund of any part of the excess payment, FEBTC can
no longer re-‐‑litigate the same issue.

Issue: Whether the action should be dismissed on the ground of res judicata.

Held: YES. There is no doubt that the judgment on appeal relative to
the first civil case was a final judgment. Not only did it dispose of the case on
the merits, it also became executory as a consequence of the denial of
FEBTC’s motion for reconsideration and appeal. In fact, authorities tend to
widen rather than restrict the doctrine of res judicata on the ground that
public as well as private interest demands the ending of suits by requiring
the parties to sue once and for all in the same case all the special proceedings
and remedies to which they are entitled.

Section 47 of Rule 39 lays down two main rules. Section 49(b)
enunciates the first rule of res judicata known as “bar by prior judgment” or
“estoppel by judgment,” which states that the judgment or decree of a court
of competent jurisdiction on the merits concludes the parties and their privies
to the litigation and constitutes a bar to a new action or suit involving the
same cause of action either before the same or any other tribunal.

Stated otherwise, “bar by former judgment” makes the judgment
rendered in the first case an absolute bar to the subsequent action since that
judgment is conclusive not only as to the matters offered and received to
sustain it but also as to any other matter which might have been offered for
that purpose and which could have been adjudged therein. It is in this
concept that the term res judicata is more commonly and generally used as a
ground for a motion to dismiss in civil cases.

The second rule of res judicata embodied in Section 47(c), Rule 39 is
“conclusiveness of judgment.” This rule provides that any right, fact, or
matter in issue directly adjudicated or necessarily involved in the
33

determination of an action before a competent court in which a judgment or
decree is rendered on the merits is conclusively settled by the judgment
therein and cannot again be litigated between the parties and their privies
whether or not the claim or demand, purpose, or subject matter of the two
suits is the same. It refers to a situation where the judgment in the prior
action operates as an estoppel only as to the matters actually determined or
which were necessarily included therein.

The case at bar satisfies the four essential requisites of “bar by prior
judgment,” viz:
a) finality of the former judgment;
b) the court which rendered it had jurisdiction over the subject matter and
the parties;
c) it must be a judgment on the merits; and
d) there must be, between the first and second actions, identity of parties,
subject matter and causes of action.

3. Failure to state cause of action

HEIRS OF ANTONIO SANTOS VS. HEIRS OF CRISPULO BERAMO
G.R. No. 151454 August 8, 2010

Facts:

Respondents filed a complaint for reconveyance against
spouses borreros and NORCAIC. petitioners heirs of Antonio Santos
and Luisa Esguerra Santos filed a Motion to Dismiss3 on the ground
that the Amended Complaint stated no cause of action against them.
They pointed out that respondents were unable to substantiate their
claim of ownership over the subject property, since they failed to
present any documentary proof which established prima facie that the
subject parcels of land were owned by their predecessor-‐‑in-‐‑interest.
Moreover, respondents did not annex documents to the Amended
Complaint evincing their right over the subject property. Petitioners
also asserted that respondents failed to substantiate their claim of
fraud on the part of defendants spouses Antonio and Luisa Santos;
hence, respondents were unable to establish a right that was allegedly
violated by the defendants Spouses Santos.

Held:

The contention lacks merit.

When the ground for dismissal is that the complaint states no
cause of action under Section 1 (g), Rule 16 of the Rules of Court, such
fact must be determined from the allegations of the complaint. In a
motion to dismiss, a defendant hypothetically admits the truth of the
material allegations of the plaintiff’s complaint15 for the purpose of
resolving the motion. The general rule is that the allegations in a
complaint are sufficient to constitute a cause of action against the
defendant, if, admitting the facts alleged, the court can render a valid
judgment upon the same in accordance with the prayer therein. To
34

sustain a motion to dismiss for lack of cause of action, the complaint
must show that the claim for relief does not exist.

From the amended complaint, it appears that since 1892,
private respondents'ʹ predecessor, Don Juan Beramo, was in open,
continuous, exclusive and notorious possession and occupation of the
subject property, an agricultural land of the public domain; that the
subject property was merely entrusted by private respondents'ʹ
predecessor, Don Juan Beramo, to Cornelio Borreros, from whom
petitioners derived their title; and that the titling of the subject
property and transfers thereof were simulated and fraudulent. These
averments indicate that private respondents are the rightful owners of
the subject property but the same was wrongfully registered by
petitioners'ʹ predecessors, the Borreros spouses. Such averments make
out a case for reconveyance.

Contrary to the contention of petitioners, respondents did not
have to present or append proof of their allegations in the complaint
to establish a sufficient cause of action for reivindicacion and/or
reconveyance in their Amended Complaint. The Court has held that
in determining whether the allegations of a complaint are sufficient to
support a cause of action, it must be borne in mind that the complaint
does not have to establish or allege facts proving the existence of a
cause of action at the outset; this will have to be done at the trial on
the merits of the case.

HALIMAO v. Villanueva
253 SCRA 1, 1996

Facts:

Reynaldo Halimao wrote a letter to the Chief Justice, alleging that
respondents, without lawful authority and armed with armalites and
handguns, forcibly entered the Oo Kian Tiok Compound in Cainta, Rizal, of
which complainant was caretaker. Complainant prayed that an investigation
be conducted and that respondents be disbarred.
Respondents Villanueva et. al. filed a comment, claiming that the complaint
is a mere duplication of the complaint filed by Danilo Hernandez in
Administrative Case No. 3835, which this Court had already dismissed for
lack of merit. They pointed out that both complaints arose from the same
incident and the same acts complained of and that Danilo Hernandez, who
filed the prior case, is the same person whose affidavit is attached to the
complaint in this case.

Co-‐‑respondent Ferrer claimed that the two complaints were filed for
the purpose of harassing him because he was the principal lawyer of Atty.
Daniel Villanueva in two cases before the SEC.

This case was referred to the IBP, whose Board of Governors
dismissed the case. The Investigating Commissioner found that the
complaint is barred by the decision in Administrative Case No. 3835 which
35

involved the same incident. The complaints in the two cases were similarly
worded.

Complainant filed a motion for reconsideration of the resolution of
the IBP Board of Governors, alleging that the commissioner erroneously
dismissed the complaint since the respondents are deemed to have admitted
the allegations of the complaint against them by filing a motion to dismiss

Issue:
Whether the respondents hypothetically admitted petitioner’s
allegations by filing a motion to dismiss

Held:

NO. The rule that a motion to dismiss is to be considered as a
hypothetical admission of the facts alleged in the complaint applies more
particularly to cases in which the ground for dismissal is the failure of the
complaint to state a cause of action. This rule does not apply to other grounds
for dismissal. In such cases, the hypothetical admission is limited to the facts
alleged in the complaint which relate to and are necessary for the resolution
of these grounds as preliminary matters involving substantive or procedural
laws, but not to the other facts of the case.

Two motions for reconsideration of this resolution were filed by the
complainant therein, both of which were denied. While the complainant
(Danilo Hernandez) in Administrative Case No. 3835 is different from the
complainant in the present case, the fact is that they have an identity of
interest, as the Investigating Commissioner ruled. Both complainants were
employed at the Oo Kian Tiok Compound at the time of the alleged incident.
Both complain of the same act allegedly committed by respondents. The
resolution of this Court in Administrative Case No. 3835 is thus conclusive in
this case, it appearing that the complaint in this case is nothing but a
duplication of the complaint of Danilo Hernandez in the prior case.

TAN v. CA
295 SCRA 247, 1998

Facts: Tan Keh sold two parcels of land to Tan Kiat, but failed to effect the
immediate transfer of the properties since Tan Kiat was still a foreign
national at the time of the sale. Nevertheless Tan Keh secured the sale by
executing a lease contract of 40 years in favor of Tan Kiat.
Four years later, Tan Keh sold the properties to his brother, Tan. Tan
knowingly held the property in trust for Tan Kiat until the latter acquires
Filipino citizenship. The new TCTs were issued in the name of Tan as trustee
of Tan Kiat. Tank Keh and Tan executed another lease contract to secure the
conveyance of the property to Tan Kiat. Tan Kiat never paid rental and no
demand for rentals was made on him.

Tan Died. Tan Kiat thereafter demanded for the conveyance of the
property as he was finally a naturalized Filipino. Petitioners failed to convey
them.

36

Tan Kiat filed a complaint for recovery of property. Petitioners moved
for its dismissal based, among others, on failure to state a cause of action.
RTC dismissed complaint acceding to all grounds set forth by the petitioners.
CA reversed and ordered that case be remanded for further proceedings.

Issue: Whether the complaint stated no cause of action.

Held:

YES. Averments in the complaint are deemed hypothetically admitted
upon filing of a Motion to Dismiss grounded on failure to state a cause of
action. But there are also limitations to such rule.

In the case at bar, the “trust theory” claimed by Tan Kiat does not
hold water. The lease contract as evidenced by document attached with the
Motion to Dismiss and admitted by Tan Kiat already belies the latter’s claim
of ownership. There is an apparent lessor-‐‑lessee relationship. Ownership of
Tan is further supported by the annotated mortgage on the back of the TCT
which Tan executed in favor of a bank so as to secure a loan. In truth, By the
very nature of a mortgage contract, Tan could not have mortgage the
property if he was not the real owner.

Having failed to prove the trust relationship, it may be gleaned from
the allegations that the transaction was a double sale instead. Since Tan had
the TCT in his name, he is presumed to have the better right.

4. Statute of Frauds

ASIA PRODUCTION CO., INC. V. PANO
205 SCRA 458, 1992

Facts: Respondents Hua and Dy, owners of a building constructed on a lot
leased from Lucio San Andres and located in Bulacan, sold the building to
the petitioners for P170,000.00, with the assurance that respondents will also
assign to them the contract of lease over the land. The above agreement and
promise were not reduced to writing.

Private respondents undertook to deliver the deed of conveyance
over the building and the deed of assignment of the contract of lease within
sixty (60) days upon the P20,000 downpayment. The balance was to be paid
in monthly installments. Petitioners paid the downpayment and issued eight
(8) postdated checks for the payment of the eight (8) monthly installments.

Petitioners constructed a weaving factory on the leased lot.
Unfortunately, private respondents, despite extensions granted, failed to
comply with their undertaking to execute the deed of sale and to assign the
contract despite the fact that they were able to encash the checks in the total
amount of P30,000. Worse, the lot owner made it plain to petitioners that he
was unwilling to give consent to the assignment of the lease unless
petitioners agreed to certain onerous terms, such as an increase in rental, or
the purchase of the land at a very unconscionable price.
37

Petitioners removed all their property, machinery and equipment from the
building, vacated the same and returned its possession to private
respondents. They demanded from the latter the return of their partial
payment for the purchase price of the building in the total sum of P50,000,
which respondents refused to return. Petitioner filed a complaint for recovery
and of actual, moral and exemplary damages and attorney'ʹs fees with the
CFI.

Hua was declared in default. Dy filed a motion to dismiss the
complaint on the ground that the claim on which the action is based — an
alleged purchase of a building which is not evidenced by any writing —
cannot be proved by parol evidence since Article 1356 in relation to Article
1358 of the Civil Code requires that it should be in writing. The RTC granted
the motion to dismiss on the ground that the complaint is barred by the
Statute of Frauds. Their motion for reconsideration was denied for the reason
that the oral contract in this case was not removed from the operation of the
Statute of Frauds because there was no full or complete performance by the
petitioners of the contract as required by jurisprudence.

Issue: Whether petitioner’s action is barred by the Statute of Frauds.

Held: NO. Article 1403 of the Civil Code declares the following contracts,
among others, as unenforceable, unless they are ratified: The purpose of the
statute is to prevent fraud and perjury in the enforcement of obligations
depending for their evidence on the unassisted memory of witnesses by
requiring certain enumerated contracts and transactions to be evidenced by a
writing signed by the party to be charged. It was not designed to further or
perpetuate fraud.

Under Article 1403, the contracts concerned are simply
"ʺunenforceable"ʺ and the requirement that they—or some note or
memorandum thereof — be in writing refers only to the manner they are to
be proved. It goes without saying then, that the statute will apply only to
executory rather than executed contracts. Partial execution is even enough to
bar the application of the statute.

The instant case is not for specific performance of the agreement to
sell the building and to assign the leasehold right, but to recover the partial
payment for the agreed purchase price of the building. By their motion to
dismiss, private respondents theoretically or hypothetically admitted the
truth of the allegations of fact in the complaint. The action is definitely not
one for specific performance; hence the Statute of Frauds does not apply.
And even if it were for specific performance, partial execution thereof by
petitioners effectively bars the private respondents from invoking it.

5. Condition precedent

SUNVILLE TIMBER PRODUCTS, INC. V. ABAD
206 SCRA 482, 1992

Facts: Sunville Timber Products (Sunville) was granted a Timber License
Agreement (TLA), authorizing it to cut, remove and utilize timber within the
38

concession area covering 29,500 hectares of forest land in Zamboanga del Sur,
for a period of 10 years.

The respondents filed a petition with the DENR for the cancellation of
the TLA and with the RTC for injunction in a civil case, both on the ground of
serious violations of its conditions and the provisions of forestry laws.

Sunville moved to dismiss this case on the ground that the plaintiffs
had not yet exhausted administrative remedies, among others. The motion to
dismiss and the motion for reconsideration were denied.

The CA sustained the RTC’s decision. CA held that the doctrine of
exhaustion of administrative remedies was not without exception and
pointed to the several instances approved by this Court where it could be
dispensed with. The applicable exception was the urgent need for judicial
intervention because City Council of Pagadian requested the Bureau of Forest
Development to reserve 1,000 hectares in Lison Valley. This request remained
unacted upon. Instead a TLA covering 29,500 hectares, including the area
requested, was given to petitioner Sunville. Due to the erosion caused by
Sunville’s logging operations heavy floods have occurred in areas adjoining
the logging concessions. Thus, it is urgent that indiscriminate logging be
stopped.

Sunville contends that the doctrine of exhaustion of administrative
remedies was not correctly applied

Issue: Whether the application of the doctrine of exhaustion of
administrative remedies is correct.

Held: NO. The doctrine of exhaustion of administrative remedies calls for
resort first to the appropriate administrative authorities in the resolution of a
controversy falling under their jurisdiction before the same may be elevated
to the courts of justice for review.

There is the explicit language of pertinent laws vesting in the DENR
the power and function "ʺto regulate the development, disposition, extraction,
exploration and use of the country'ʹs forests"ʺ and "ʺto exercise exclusive
jurisdiction"ʺ in the "ʺmanagement and disposition of all lands of the public
domain,"ʺ and in the Forest Management Bureau the responsibility for the
enforcement of the forestry laws aid regulations here claimed to have been
violated. This comprehensive conferment clearly implies at the very least that
the DENR should be allowed to rule in the first instance on any controversy
coming under its express powers before the courts of justice may intervene.

The charge involves factual issues calling for the presentation of
supporting evidence. Such evidence is best evaluated first by the
administrative authorities, employing their specialized knowledge of the
agreement and the rules allegedly violated, before the courts may step in to
exercise their powers of review.

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Who files
The defendant may file a motion to dismiss based on any of the grounds stated under
Section 1, Rule 16, to wit:

Section 1. Grounds. — Within the time for but before filing the answer to the complaint or
pleading asserting a claim, a motion to dismiss may be made on any of the following
grounds:
(a) That the court has no jurisdiction over the person of the defending party;
(b) That the court has no jurisdiction over the subject matter of the claim;
(c) That venue is improperly laid;
(d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the same parties for the same cause;
(f) That the cause of action is barred by a prior judgment or by the statute of limitations;
(g) That the pleading asserting the claim states no cause of action;
(h) That the claim or demand set forth in the plaintiff'ʹs pleading has been paid, waived,
abandoned, or otherwise extinguished;
(i) That the claim on which the action is founded is enforceable under the provisions of
the statute of frauds; and
(j) That a condition precedent for filing the claim has not been complied with.

How pleaded
a. Period

A motion to dismiss may be filed within the time for but before filing the answer
to the complaint or pleading asserting a claim. (Sec. 1, Rule 16)

b. As affirmative defense

Section 6, Rule 16. Pleading grounds as affirmative defenses. — If no motion to dismiss
has been filed, any of the grounds for dismissal provided for in this Rule may be
pleaded as an affirmative defense in the answer and, in the discretion of the court, a
preliminary hearing may be had thereon as if a motion to dismiss had been filed.

The dismissal of the complaint under this section shall be without prejudice
to the prosecution in the same or separate action of a counterclaim pleaded in the
answer.

The counterclaim which may be prosecuted in the same or separate action
refers to permissive counterclaim

Hearing and resolution

a. Hearing
At the hearing of the motion, the parties shall submit
(1) their arguments on the questions of law and
(2) their evidence on the questions of fact involved except those not available at that
time.

NOTE: Should the case go to trial, the evidence presented during the hearing shall
automatically be part of the evidence of the party presenting the same. (Sec. 2, Rule 16)

40

b. Resolution of motion

After the hearing, the court may
(1) dismiss the action or claim,
(2) deny the motion, or
(3) order the amendment of the pleading.

The court shall not defer the resolution of the motion for the reason that the
ground relied upon is not indubitable.

In every case, the resolution shall state clearly and distinctly the reasons therefor.
(Sec. 3, Rule 6)

LUISTRO V. COURT OF APPEALS AND FIRST GAS POWER CORPORATION
G.R. No. 158819, 16 April 2009

Facts:

Respondent First Gas Power Corporation entered into an agreement with
Meralco and the National Power Corporation to design, construct and energize an
electric power transmission line. This undertaking entailed the acquisition of easements
of right-‐‑of-‐‑way over lands located along the route of the transmission line, including
that of petitioner.

Respondent entered into a Contract of Easement of Right-‐‑of-‐‑Way (contract) with
petitioner. It then commenced the construction of the transmission line. Subsequently,
petitioner’s counsel wrote a letter to respondent, asking for a temporary stoppage of all
kinds of work within the vicinity of petitioner’s residential house since the transmission
line being constructed above it would endanger the life and health of the persons in the
vicinity.

Since the grievance remained unresolved, petitioner filed a complaint for
Rescission/ Amendment of Contract of Easement against respondent, alleging that by
means of fraud and machinations, respondent was able to convince him to enter into the
contract. Thus, while his house was supposed to be 20 to 25 meters away from the
transmission line, it turned out that his house was only 7.23 meters directly under the
transmission line.

Respondent filed a Motion to Dismiss on the ground that petitioner failed to
state a cause of action in his complaint. The trial court denied the motion to dismiss.
Upon appeal, the Court of Appeals reversed and ordered the dismissal of the complaint
for failure to state a cause of action. The Court of Appeals ruled that the trial court
failed to comply with Section 3, Rule 16 of the 1997 Rules of Procedure which requires
that the resolution shall state clearly and distinctly the reasons therefor.

Issue: Whether or not the trial court’s Order failed to comply with Section 3, Rule 16 of
the 1997 Rules of Procedure.

Held: Section 3, Rule 16 of the 1997 Rules of Procedure prescribes that the resolution of
the motion to dismiss shall clearly and distinctly declare the reasons therefor. The directive
proscribes the common practice of perfunctorily dismissing the motion for lack of merit which
can often pose difficulty and misunderstanding on the part of the aggrieved party in taking
41

recourse therefrom and likewise on the higher court called upon to resolve the same. In this
case, the trial court merely stated:

Examining the allegations in the complaint the Court finds that a cause of
action sufficiently exist[s] against defendants.

The trial court did not explain why a sufficient cause of action existed in this
case. The trial court merely cited Article 19 of the Civil Code which provides that [e]very
person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith. The disposition of
the trial court clearly fell short of the requirement set forth under Section 3, Rule 16 of
the 1997 Rules of Civil Procedure.

The Court also sustained the dismissal of the complaint. The complaint was
based on the alleged breach of the Contract and violation of the undertaking that
petitioners house was supposed to be 20 to 25 meters away from the transmission line.
But as pointed out by the Court of Appeals, there was no such undertaking in the
contract. The contract only granted respondent an easement on portions of petitioner’s
property, as indicated in the sketch plan, for the installation and maintenance of poles,
towers and wires. Therefore, the alleged right of petitioner, which respondent supposed
to have violated, did not exist in the contract.

MUNICIPALITY OF BIÑAN, LAGUNA V. COURT OF APPEALS AND JESUS GARCIA
G.R. No. 94733, 17 February 1993

Facts: Petitioner filed a civil case for unlawful detainer against private in the Municipal
Trial Court (MTC) of Biñan, alleging that it was no longer amenable to the renewal of its
lease contract with respondent. Respondent filed an answer contending that the
contract of lease for the original period of 25 years had not yet expired, and assuming
that it expired, he had exercised his option to stay in the premises as expressly provided
in said contract.

Upon petitioner’s filing of a reply, respondent filed a “Motion for Preliminary
Hearing as if a Motion to Dismiss Has Been Filed” (motion for preliminary hearing) on
the ground that the complaint states no cause of action, reiterating its arguments in the
answer.

The MTC rendered judgment ordering respondent to vacate the premises subject
of the ejectment case. Respondent filed an appeal to the Regional Trial Court (RTC),
contending that the judgment by the MTC was irregularly and improvidently issued
when said court failed to resolve the motion for preliminary hearing before rendering
judgment on the merits. Petitioner filed a motion for execution pending appeal with the
RTC, which motion the RTC granted.

Thus, respondent filed with the Court of Appeals (CA) a petition for certiorari
assailing the RTC’s order of execution pending appeal. The CA invalidated said order
for failure of the petitioner to comply with the mandatory proof of notice of the motion
for execution to the adverse party. However, the CA likewise annulled the judgment of
the MTC which judgment is pending before the RTC.

42

Hence the instant petition for certiorari contending that the CA overstepped its
bounds in annulling the decision of the MTC even if said decision was not an issue
raised by respondent, and which decision was in fact pending on appeal with the RTC.

Issue: Whether or not the Court of Appeals had jurisdiction to annul the decision
of the MTC.

Held: Respondent Court of Appeals has no jurisdiction in a certiorari proceeding
involving an incident in a case to rule on the merits of the main case itself which was not
on appeal before it. The validity of the order of the RTC authorizing the issuance of a
writ of execution during the pendency of the appeal therein was the sole issue raised in
the petition for certiorari. Even assuming that the validity of the judgment rendered by
the MTC was squarely raised and before the CA, the same cannot be considered a
proper subject of a special civil action for certiorari under Rule 65 which is limited only to
challenges against errors of jurisdiction. The jurisdiction of the MTC over the ejectment
case filed by the petitioner against private respondent is not disputed. The error, if any
was committed by the MTC, was at most one of judgment or procedure correctible by
ordinary appeal.

Neither can it be said that the MTC committed a grave abuse of discretion or
exceeded its jurisdiction when it failed to conduct a preliminary hearing before
summarily rendering judgment on the merits of the case. Contrary to the claim of
respondent, the preliminary hearing permitted under Section 5 (now Section 6) of Rule
16 is not mandatory even when the same is prayed for. It rests largely on the sound
discretion of the trial court. The use of the word "ʺmay” shows that such a hearing is not
a matter of right demandable from the MTC.

Moreover, a preliminary hearing on an affirmative defense for failure to state a
cause of action is not necessary. As ruled in Heirs of Juliana Clavano vs. Genato, et al.:

…[R]espondent Judge committed an error in conducting a preliminary
hearing on the private respondent'ʹs affirmative defenses. It is a well-‐‑settled rule
that in a motion to dismiss based on the ground that the complaint fails to state a
cause of action, the question submitted to the court for determination is the
sufficiency of the allegations in the complaint itself. Whether those allegations are
true or not is beside the point, for their truth is hypothetically admitted by the
motion. The issue rather is: admitting them to be true, may the court render a valid
judgment in accordance with the prayer of the complaint? Stated otherwise, the
sufficiency of the cause of action must appear on the face of the complaint in order
to sustain a dismissal on this ground. No extraneous matter may be considered nor
facts not alleged, which would require evidence and therefore, must be raised as
defenses and await the trial. In other words, to determine sufficiency of the cause
of action, only the facts alleged in the complaint, and no other should be
considered.

The respondent Judge departed from this rule in conducting a hearing and
in receiving evidence in support of private respondent'ʹs affirmative defense, that
is, lack of cause of action.

Effects of dismissal
An order granting a motion to dismiss based on the following shall bar the refiling of the
same action or claim:

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(1) That the cause of action is barred by a prior judgment [res judicata] or by the statute
of limitations [prescription];
(2) That the claim or demand set forth in the plaintiff’s pleading has been paid,
waived, abandoned, or otherwise extinguished; and
(3) That the claim on which the action is founded is unenforceable under the
provisions of the statute of frauds;

a. Appealable; refiling barred if motion based on Sec. 1(f), (h) and (i)

Dismissal based on the above grounds is appealable. (Sec. 5, Rule 16)

Sec. 5. Effect of dismissal.
Subject to the right of appeal, an order granting a motion to dismiss based on
paragraphs (f), (h) and (i) of Section 1 hereof shall bar the refiling of the same action or
claim.

b. On periods for pleading

If the motion is denied—
The movant shall file his answer within the balance of the period prescribed by Rule 11
to which he was entitled at the time of serving his motion, BUT not less than five (5)
days in any event, from his receipt of the notice of the denial.

If the pleading is ordered to be amended—
He shall file his answer within the period prescribed by Rule 11 counted from service of
the amended pleading, unless the court provides a longer period. (Sec. 4, Rule 16)

c. On other grounds and omnibus motion rule
A motion attacking a pleading, order, judgment, or proceeding shall include all objections
then available, and all objections not so included shall be deemed waived. (Sec. 8, Rule 15)

Exceptions
The court shall dismiss the claim when it appears from the pleadings or the evidence on
record that –
(1) the court has no jurisdiction over the subject matter,
(2) there is another action pending between the same parties for the same cause, or
that
(3) the action is barred by a prior judgment or barred by the statute of limitations.
(Sec. 1, Rule 9)

Remedies
If motion granted – appeal or refile complaint

If motion denied – file answer, unless without jurisdiction, in which case, Rule 65
petition

Effects of Action on Motion to Remedy
Dismiss
Order granting motion to dismiss Re-‐‑file the complaint.
is a final order (without prejudice)
Order granting motion to dismiss Appeal.
(with prejudice)
44

Order denying the motion to File answer and proceed with the trial.
dismiss is interlocutory If there is grave abuse of discretion
amounting to lack or excess of
jurisdiction, certiorari or prohibition
under Rule 65 may lie.

NPC v. CA
(185 SCRA 169, 1990)

Facts:

FINE Chemicals, a company engaged in the manufacturing of plastics applied
with the NPC for direct power connection. Meralco assured that it had the capabilities to
serve FINE but that to allow direct connections will be detrimental to other consumers
since they’ll shoulder the additional subsidy burden.

However, NPC went on with the plan anyway and provided its services with
FINE. Because of this, Meralco filed a petition for Prohibition, Mandamus and Damages
with Preliminary Injunction with the RTC. FINE countered saying that Injuction would
be moot since the service has already been consummated and the facilities have been
installed and are functional. Meralco amended its petition by incorporating an
application for a writ of preliminary mandatory injunction. FINE moved to dismiss the
amended petition on the ground of insufficiency of the allegations in the petition to
plead a cause of action. The trial judge allowed Meralco to adduce evidence over FINE’s
objection. FINE then filed a manifestation adopting its Motion to Dismiss but was
denied.

Undaunted, FINE proceeded directly to the CA and filed a petition for Certiorari,
Prohibition and Mandamus. CA dismissed. Hence this petition.

Issue:
Whether Meralco’s petition in the lower court should be dismissed

Held:

YES. As a general rule, whenever a motion is denied, the petitioner should file an
answer, go to trial and if the decision is adverse, reiterate the issue on appeal. However,
if the court who denies the motion acts without or in excess of jurisdiction or with
grave abuse of discretion the proper move is to proceed to a higher court for relief. It
would be unfair to require the defendant to undergo the ordeal and expense of trial
under such circumstances as the remedy of appeal would not be plain and adequate.

More importantly, petitioner’s motion to dismiss is based on the ground that the
complaint states no cause of action, so that there is no need for a full blown trial. It is
also important to note that the courts will strive to settle the controversy in a single
proceeding leaving no root or branch to bear the seeds of future litigation.

45

RULE 17
DISMISSAL OF ACTIONS

Upon notice by plaintiff – before answer (Sec. 1)

Section 1. Dismissal upon notice by plaintiff. — A complaint may be dismissed by the plaintiff by
filing a notice of dismissal at any time before service of the answer or of a motion for summary
judgment. Upon such notice being filed, the court shall issue an order confirming the dismissal.
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.

O.B. JOVENIR CONSTRUCTION AND DEVELOPMENT CORP. VS.
MACAMIR REALTY AND CA
G.R. No. 135803, March 26, 2006

Facts:
Respondent Macamir Realty, and spouses Miranda filed a complaint seeking the
annulment of certain agreements it had with petitioner O.B. Jovenir Construction and Dev’t
Corp (“Jovenir Corp), Oscar Jovenir, and Gregorio Liongson after it discovered that Jovenir had
misrepresented itself as a legitimate contractor.

Ten days after the filing of the complaint, Macamir filed a Motion to Withdraw
Compliant, alleging that its counsel discovered a supposed technical defect (lack of authority of
Spouses Miranda to sue on behalf of Macamir Corp) in the compliant. Thus, respondent prayed
that they be allowed to withdraw the compliant without prejudice.

Subsequently, Macamir filed a similar complaint (2nd Complaint) against the same
parties. This time, however, a Board Resolution authorizing the spouses Miranda to file a
complaint on behalf of Macamir Corp was attached to the complaint.

Eleven days after the filing of the Motion to Withdraw and seven days after the filing of
the second complaint, the Makati RTC granted Macamir’s Motion to Withdraw. Meanwhile,
Jovenir Corp filed a motion to dismiss the 2nd complaint on the grounds of forum-‐‑shopping.
Said motion was, however, denied. The court declared that at the time the Motion to Withdraw
Complaint was filed, none of the defendants had filed any answer or any responsive pleading.
Thus, it was then within respondents right to cause the dismissal of the complaint without
having to await action of the court on their motion. This Order was affirmed by the Court of
Appeals

Issue: Does Macamir have to wait for an order from the court granting its Motion to
Withdraw its first complaint before it can file its second compliant?

Held: No. We find no error on the part of the lower courts since the denial of the motion
to dismiss is wholly in accord with the Rules of Civil Procedure.

Section 1, Rule 17 of the 1964 Rules of Civil Procedure stated:

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,
46

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 the approval of the court.

Indubitably, the provision ordained the dismissal of the complaint by the plaintiff as a
matter of right at any time before service of the answer. The plaintiff was accorded the right to
dismiss the complaint without the necessity of alleging in the notice of dismissal any ground
nor of making any reservation.

In Go v. Cruz, the Court, through Chief Justice Narvasa, has recognized that 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. The
facts in that case are well worth considering. Therein, the notice of dismissal was filed by the
plaintiff on 12 November 1981. Respondent filed his answer three days earlier, or on 9
November, but plaintiff was served a copy of the answer by registered mail only on 16
November. Notwithstanding the fact that the answer was filed with the trial court three days
prior to the filing of the notice of dismissal, the Court still affirmed the dismissal sought by the
plaintiff. The Court declared that the right of the plaintiff to cause the dismissal of the complaint
by mere notice is lost not by the filing of the answer with the trial court, but upon the actual
service to the plaintiff of the answer.

The Court further ruled that [plaintiffs] notice ipso facto brought 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
[plaintiff] 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.

It is quite clear that under Section 1, Rule 17 of the old Rules, the dismissal contemplated
therein could be accomplished by the plaintiff through mere notice of dismissal, and not
through motion subject to approval by the Court. Dismissal is ipso facto upon notice, and
without prejudice unless otherwise stated in the notice. It is due to these considerations that the
petition should be denied.

Evidently, respondents had the right to dismiss their complaint by mere notice on 13
February 1997, since as of even date, petitioners had not yet served their answer on
respondents. The Motion to Withdraw Complaint makes clear respondents desire to withdraw
the complaint without prejudice. That respondents resorted to a motion to effect what they
could have instead by mere notice may be indicative of a certain degree of ignorance of
procedural rules on the part of respondents counsel. Yet such error, if it could be called as such,
should hardly be of fatal consequence. Petitioners posit that the remedy of filing a notice of
dismissal is not exclusive, respondents having the option of securing the courts approval to the
dismissal. On the contrary, the trial court has no discretion or option to deny the motion, since
dismissal by the plaintiff under Section 1, Rule 17 is guaranteed as a matter of right to the
plaintiffs. Even if the motion cites the most ridiculous of grounds for dismissal, the trial
court has no choice but to consider the complaint as dismissed, since the plaintiff may opt for
such dismissal as a matter of right, regardless of ground.

47

Upon motion of plaintiff – after answer (Sec. 2)

Section 2. Dismissal upon motion of plaintiff. — Except as provided in the preceding section, a
complaint shall not be dismissed at the plaintiff'ʹs instance save upon approval of the court and
upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded
by a defendant prior to the service upon him of the plaintiffs motion for dismissal, the dismissal
shall be limited to the complaint. The dismissal shall be without prejudice to the right of the
defendant to prosecute his counterclaim in a separate action unless within fifteen (15) days from
notice of the motion he manifests his preference to have his counterclaim resolved in the same
action. Unless otherwise specified in the order, a dismissal under this paragraph shall be
without prejudice. A class suit shall not be dismissed or compromised without the approval of
the court.

ANTONIO, JR. VS. MORALES
G.R. No. 165552, January 23, 2007

Facts:

E.M Morales & Associates (“EMMA”) filed a complaint for a sum of money against
Pablo Antonio (the “petitioners”), to which petitioner filed a Motion to Dismiss on two grounds:
(a) respondent’s failure to attach a certificate of non-‐‑forum shopping to its complaint; and (b)
respondent’s lack of legal capacity to sure, since it is a sole proprietorship.

Subsequently, Engr. Morales filed an Amended Complaint, attaching thereto a certificate
of non-‐‑forum shopping. RTC admitted the amended complaint and denied petitioners’ Motion
to Dismiss. Petitioner, thus, filed a Motion for Reconsideration, and eventually a Petition for
Certiorari with the Court of Appeals, which remained pending for more than six years.

During the pendency of the Petition for Certiorari, respondent Morales filed with the
RTC a Motion to Dismiss his complaint. The RTC granted said Motion and dismissed the case
without prejudice. Thereafter, respondent filed a manifestation with the Court of Appeals,
informing the CA that the case was dismissed without prejudice.

Meanwhile, Morales filed a new complaint for the collection of sum of money against
petitioner. This prompted the petitioner to file a Motion to Dismiss on the ground of
prescription. Petitioner maintains that from August 14, 1995, when he received respondents last
letter of demand, to September 23, 2002, when respondent filed his second complaint, more
than seven years had elapsed; and that the first case, Civil Case No. 95-‐‑1796, did not interrupt
the running of the period. The RTC, however, denied petitioners’ Motion to Dismiss, prompting
the latter to file a petition for certiorari with the CA, which eventually denied their petition.
Thus, petitioner appealed to the SC.

Issue: Is petitioner’s cause of action already barred by prescription?

Held: No, petitioner’s invocation of prescription is misplaced. We recall that on
December 18, 1995, respondent initially filed with the RTC of Makati City its first complaint.
While it was later dismissed without prejudice to his own motion, we note that the dismissal
sought was not for the purpose of voluntarily abandoning his claim. On the contrary,
respondent’s intention was to expedite the enforcement of his rights. Understandably, he felt
frustrated at the snails pace at which his case was moving. As mentioned earlier, CA-‐‑G.R. SP
No. 59309 remained pending before the Court of Appeals for six (6) long years.

48

We further observe that respondent acted swiftly after the dismissal of his case without
prejudice by the Makati RTC. He immediately filed with the Court of Appeals a manifestation
that Civil Case No. 95-‐‑1796 was dismissed by the lower court. But the Court of Appeals acted
on his manifestation only after one year. This delay, beyond respondents control, in turn further
caused delay in the filing of his new complaint with the Quezon City RTC. Clearly, there was no
inaction or lack of interest on his part.

The statute of limitations was devised to operate primarily against those who slept on
their rights and not against those desirous to act but could not do so for causes beyond their
control. Verily, the Court of Appeals did not err in holding that the RTC, Branch 215, Quezon
City did not gravely abuse its discretion when it denied petitioners motion to dismiss
respondents complaint and ruled that respondents filing of the complaint in Civil Case No. Q-‐‑
02-‐‑47835 is not barred by prescription.

Effect on counterclaim

If a counterclaim has already been pleaded by defendant prior to the service upon him
of the plaintiff’s motion to dismiss, and the court grants the said motion, the dismissal “shall be
limited to the complaint.” The counterclaim is not dismissed, whether it is a compulsory or
permissive counterclaim because the rule makes no distinction.

The defendant if he so desires may prosecute his counterclaim either in a separate action
or in the same action. Should he choose to have his counterclaim resolved in the same action, he
must notify the court of his preference within fifteen days from notice of the plaintiff’s motion
to dismiss. Should he opt to prosecute his counterclaim in a separate action, the court should
render the corresponding order granting and reserving his right to prosecute his claim in a
separate complaint.

Due to fault of plaintiff (Sec. 3)

Section 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff fails to
appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute
his action for an unreasonable length of time, or to comply with these Rules or any order of the
court, the complaint may be dismissed upon motion of the defendant or upon the court'ʹs own
motion, without prejudice to the right of the defendant to prosecute his counterclaim in the
same or in a separate action. This dismissal shall have the effect of an adjudication upon the
merits, unless otherwise declared by the court.

CRUZ VS. CA
G.R. No. 164797, February 13, 2006

FACTS: There are four different cases between the parties, which are involved in the
present controversy, namely: (1st) an unlawful detainer case; (2nd) a Quieting of Title; (3rd) an
injunction case; and (4th) an Annulment of Title with Damages. The first case was resolved in
favor of petitioner Cruz. As regards the second case, it was dismissed by the RTC for
respondents’ failure to prosecute. Lastly, the third case was dismissed on the ground of res
judicata.

As regards the fourth case, petitioners interposed a Motion for Outright Dismissal,
which was granted by the court. As such, respondents filed a Motion for Reconsideration. The
49

court granted said Motion for Reconsideration. Accordingly, it reversed its prior order and
reinstated the case. Aggrieved, petitioners filed a Petition for Review with the CA.
Unfortunately, the CA held that there was no res judicata and thus, dismissed the Petition.
Thereafter, petitioners sought relief before the SC.

ISSUE: Are all the elements of res judicata present?

HELD: No. As regards the second element of res judicata, private respondents argue
that the dismissal of Civil Case No. 1600 (for Quieting of Title) was not a dismissal on the
merits. The dismissal of this case, they claim, will not bar the filing of the instant case (Civil
Case No. 2583-‐‑02 for Annulment of Title) because there was neither litigious consideration of
the evidence nor any stipulations submitted by the parties at the trial. In fact, there was no pre-‐‑
trial conference and that after four years of court inactivity, the case was dismissed for failure to
prosecute.

Their argument does not hold water. Section 3 of Rule 17 of the 1997 Rules of Civil
Procedure provides:

Section 3. Dismissal due to fault of plaintiff. -‐‑ If, for no justifiable cause,
the plaintiff fails to appear on the date of the presentation of his evidence in
chief on the complaint, or to prosecute his action for an unreasonable length of
time, or to comply with these Rules or any order of the court, the complaint
may be dismissed upon motion of the defendant or upon the court'ʹs own
motion, without prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action. This dismissal shall have the
effect of an adjudication upon the merits, unless otherwise declared by the
court.

The rule enumerates the instances where the complaint may be dismissed due to
plaintiff'ʹs fault: (1) if he fails to appear on the date for the presentation of his evidence in chief;
(2) if he fails to prosecute his action for an unreasonable length of time; or (3) if he fails to
comply with the rules or any order of the court. Once a case is dismissed for failure to
prosecute, this has the effect of an adjudication on the merits and is understood to be with
prejudice to the filing of another action unless otherwise provided in the order of dismissal. In
other words, unless there be a qualification in the order of dismissal that it is without prejudice,
the dismissal should be regarded as an adjudication on the merits and is with prejudice. The
order dismissing Civil Case No. 1600 reads:

For failure of the plaintiffs as well as counsel to appear on several settings
despite due notices, precisely for the reception of plaintiffs'ʹ evidence, upon motion of
the defendant through Atty. Mark Arcilla, this case is dismissed for failure to
prosecute.

It is clear from the afore-‐‑mentioned order that said case was dismissed, upon petitioners'ʹ
motion, for failure of private respondents and their counsel to attend several scheduled
hearings for the presentation of their evidence. Since the order did not contain a qualification
whether same is with or without prejudice, following Section 3, it is deemed to be with
prejudice and shall have the effect of an adjudication on the merits. A ruling based on a motion
to dismiss, without any trial on the merits or formal presentation of evidence, can still be a
judgment on the merits.

50

PHILIPPINE NATIONAL BANK VS. DE GUZMAN

G.R. No. 182507, June 18, 201

Facts: Respondent Gina de Guzman obtained a P300,000.00 loan from petitioner,
Philippine National Bank, secured by a real estate mortgage over a parcel of land registered in
her name. Gina acquired the property from her father, Francisco de Guzman, through a Deed of
Absolute Sale dated August 28, 1978. Gina’s sister, Rosalia de Guzman, the beneficiary of the
family home standing on the said lot, gave her consent to the mortgage.

Later, Rosalia filed a Complaint for Declaration of Nullity of Document, Cancellation of
Title, Reconveyance, Cancellation of Mortgage, and Damages against Gina and petitioner,
alleging that the purported sale of the property by Francisco to Gina was fraudulent. The
Complaint was then amended to replace respondent Intestate Estate of Francisco de Guzman as
plaintiff.

Subsequently, the RTC dismissed the case due to Rosalia’s failure to comply with the
court’s order to pay the legal fees so that alias summons could be served. No appeals was taken
from this order, thus, the dismissal became final and executory.

Thereafter, respondent Intestate Estate filed another Complaint, also for Declaration of
Nullity of Documents, Cancellation of Title, Reconveyance, Cancellation of Mortgage, and
Damages, against Gina and petitioner, with essentially the same allegations as the former
Complaint.

On June 1, 2000, petitioner filed a Motion to Dismiss on the ground of res judicata,
alleging that the Complaint is barred by prior judgment. In an Order, the RTC denied said
motion. The court ruled that, since there was no determination of the merits of the first case, the
filing of the second Complaint was not barred by res judicata.

Subsequently, petitioner filed two more motions to dismiss raising forum-‐‑shopping and
lack or jurisdiction as a ground, respectively. Both motions were, however, denied. The CA
affirmed the RTC’s Orders. Eventually the case reached the Supreme Court.

Issue: Whether or not the second complaint is NOT barred by res judicata because there
was no determination of the merits of the first case?

Held: No. In any case, we agree with the CAs conclusion that the trial court did not
commit grave abuse of discretion in denying petitioners Motion to Dismiss. However, we do
not agree that the judgment of dismissal in the first case was not on the merits. A ruling on a
motion to dismiss, issued without trial on the merits or formal presentation of evidence, can
still be a judgment on the merits. Section 3 of Rule 17 of the Rules of Court is explicit that a
dismissal for failure to comply with an order of the court shall have the effect of an
adjudication upon the merits. In other words, unless the court states that the dismissal is
without prejudice, the dismissal should be understood as an adjudication on the merits and is
with prejudice.

Nonetheless, bearing in mind the circumstances obtaining in this case, we hold that
res judicata should not be applied as it would not serve the interest of substantial justice.
Proceedings on the case had already been delayed by petitioner, and it is only fair that the case
be allowed to proceed and be resolved on the merits. Indeed, we have held that res judicata is to
be disregarded if its rigid application would involve the sacrifice of justice to technicality,
particularly in this case where there was actually no determination of the substantive issues in
the first case and what is at stake is respondents home.
51

3A APPAREL CORPORATION VS. METROPOLITAN BANK AND TRUST CO.
G.R. No. 186175, August 25, 2010

Facts: Petitioner 3A Apparel Corporation (the corporation) mortgaged its condominium
unit to respondent Metropolitan Bank and Trust Company (MBTC) to secure a loan. For failure
to settle its obligation, MBTC extrajudicially foreclosed the mortgage, drawing the corporation,
represented by its president Ray Shu, to file a complaint for petition for annulment of real estate
mortgage, promissory note, foreclosure of sale, and related documents before the Regional Trial
Court (RTC) of Pasig against MBTC and its officers.

After almost two years from the time the case was scheduled for presentation of the
corporation’s evidence, without it having presented any evidence, Branch 264 of the Pasig, RTC,
upon motion of MBTC, dismissed the corporation’s complaint for failure to prosecute.

The corporation’s motion for reconsideration having been denied by the trial court, it
filed a petition for certiorari before the Court of Appeals, positing that substantial justice must
prevail over mere technicalities. By Decision of July 18, 2008, the appellate court dismissed the
petition. It held that dismissal on the ground of failure to prosecute has, citing Section 3 of Rule
17, the effect of an adjudication on the merits, unless otherwise declared by the court.

Issue: Is dismissal for failure to prosecute an adjudication on the merits?

Held: Yes, Section 3 of Rule 17 of the Rules of Court is indeed clear that a dismissal for
failure to prosecute is an adjudication upon the merits, unless otherwise declared by the court.
No such declaration was made by the trial court, hence, its dismissal of the corporations petition
should be challenged by appeal within the reglementary period.

The invocation of justice and fair play by the corporation does not impress.

. . . In order to perfect an appeal all that is required is a pro forma notice of
appeal. Perhaps due to failure to file a notice of appeal within the remaining two days
of the appeal period, petitioners counsel instead filed the instant petition. The rules of
procedure, however, do not exist for the convenience of the litigants. These rules are
established to provide order to and enhance the efficiency of our judicial system. They
are not to be trifled with lightly or overlooked by mere expedience of invoking
substantial justice.

Indeed, a plaintiff is duty-‐‑bound to prosecute its action with utmost diligence and
with reasonable dispatch in order to obtain the relief prayed for and, at the same time, minimize
the clogging of court dockets. The expeditious disposition of cases is as much the duty of the
plaintiff as the courts.

The corporation’s attempt to attribute part of the blame to the trial court which
cancelled the hearing on April 15, 2002 when the presiding judge was on official leave, and that
on June 20, 2002 during the semestral docket inventory of cases, at which times the corporation
claims to have been ready to present evidence does not impress too. If indeed that were the
case, it could have presented its evidence during the succeeding scheduled hearings. Yet, it did
not. Instead, it caused the postponement of the subsequent six scheduled hearings from August
7, 2002 to July 9, 2003 inclusive for unjustifiable reasons.

52

Effect on counterclaim

PINGA VS. SANTIAGO
G.R. No. 170354, June 30, 2006

Facts: Respondent Santiago filed a complaint for injunction against petitioner Pinga. The
complaint alleged that petitioner and one Saavedra had been unlawfully entering the coco lands
of the respondent, cutting wood and bamboos and harvesting the fruits of the coconut. In their
Amended Answer with Counterclaim, petitioner disputed respondent’s ownership over the
properties and claimed that his father had been in possession thereof since the 1930s.

During the trial of the case, respondent failed to present his evidence. It appears that on
25 October 2004, the RTC already ordered the dismissal of the complaint after respondents
counsel had sought the postponement of the hearing scheduled then. However, the order of
dismissal was subsequently reconsidered by the RTC in an Order dated 9 June 2005, which took
into account the assurance of respondents counsel that he would give priority to that case.

At the hearing of 27 July 2005, respondent’s counsel once again failed to appear, sending
in his stead a representative who sought the postponement of the hearing. Petitioner’s counsel
opposed the motion for postponement and moved instead for the dismissal of the case. The
RTC noted that it was obvious that respondents had failed to prosecute the case for an
unreasonable length of time, in fact not having presented their evidence yet. On that ground,
the complaint was dismissed.

Thereafter, respondent filed a Motion for Reconsideration, opting, however, not to seek
that their complaint be reinstated, but praying instead that the entire action be dismissed and
petitioner be disallowed from presenting evidence ex parte. They cited two cases which noted
the instances in which a counterclaim could not remain pending for independent adjudication.
The court granted respondent’s motion and dismissed petitioner’s counterclaim. This prompted
petitioner to file a Motion for Reconsideration, but the court denied the same. Notably,
respondent filed an Opposition to petitioner’s Motion for Reconsideration wherein they argued
that compulsory counterclaims cannot be adjudicated independently of plaintiff’s cause of
action, and a conversu, the dismissal of the complaint carries with it the dismissal of the
compulsory counterclaims.

Issue: Is the dismissal of the complaint due to failure to prosecute carries with it the
dismissal of the compulsory counterclaim?

Held: No. We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the
dismissal of the complaint due to the fault of plaintiff does not necessarily carry with it the
dismissal of the counterclaim, compulsory or otherwise. In fact, the dismissal of the complaint is
without prejudice to the right of defendants to prosecute the counterclaim.

Our core discussion begins with Section 3, Rule 17 of the 1997 Rules of Civil Procedure,
which states:

SEC. 3. Dismissal due to fault of plaintiff.If, for no justifiable cause, the plaintiff
fails to appear on the date of the presentation of his evidence in chief on the
complaint, or to prosecute his action for an unreasonable length of time, or to comply
with these Rules or any order of the court, the complaint may be dismissed upon
motion of defendant or upon the court'ʹs own motion, without prejudice to the right of
the defendant to prosecute his counterclaim in the same or in a separate action. This
dismissal shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court.
53

The express qualification in the provision that the dismissal of the complaint due to the
plaintiffs fault, as in the case for failure to prosecute, is without prejudice to the right of the
defendant to prosecute his counterclaim in the same or separate action. This stands in marked
contrast to the provisions under Rule 17 of the 1964 Rules of Court which were superseded by
the 1997 amendments. In the 1964 Rules, dismissals due to failure to prosecute were governed
by Section 3, Rule 17, to wit:

SEC. 3. Failure to prosecute. If 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 or any order of the court, the action may be dismissed upon motion of the
defendant or upon the courts own motion. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise provided by court.

Evidently, the old rule was silent on the effect of such dismissal due to failure to
prosecute on the pending counterclaims. As a result, there arose what one authority on
remedial law characterized as the nagging question of whether or not the dismissal of the
complaint carries with it the dismissal of the counterclaim. Jurisprudence construing the
previous Rules was hardly silent on the matter.

Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim,
since Section 3, Rule 17 mandates that the dismissal of the complaint is without prejudice to the
right of the defendant to prosecute the counterclaim in the same or separate action. If the RTC
were to dismiss the counterclaim, it should be on the merits of such counterclaim. Reversal of
the RTC is in order, and a remand is necessary for trial on the merits of the counterclaim.

The present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable
disposition of the counterclaims by ensuring that any judgment thereon is based on the merit of
the counterclaim itself and not on the survival of the main complaint. Certainly, if the
counterclaim is palpably without merit or suffers jurisdictional flaws, which stand independent
of the complaint, the trial court is not precluded from dismissing it under the amended rules,
provided that the judgment or order dismissing the counterclaim is premised on those defects.
At the same time, if the counterclaim is justified, the amended rules now unequivocally protect
such counterclaim from peremptory dismissal by reason of the dismissal of the complaint.

PERKIN ELMER SINGAPORE PTE LTD. VS. DAKILA TRADING CORPORATION
G.R. No. 172242, August 14, 2007

Facts:

Respondent Dakila entered into a Distribution Agreement with petitioner Perkin-‐‑Elmer
Instruments Asia (PEIA), a corporation duly organized and existing under the laws of
Singapore and engaged in the business of manufacturing, producing, selling or distributing of
laboratory equipment. By virtue of the agreement, PEIA appointed the Dakila as the sole
distributor of its products in the Philippines. Furthermore, the agreement provides that Dakila
shall order the products of PEIA, which it shall sell in the Philippines, either from PEIA itself or
from Perkin-‐‑Elmer Instrument Philippines (PEIP), an affiliate of PEIA.

On 2 August 1997, PEIA unilaterally terminated the agreement, prompting respondent
to file before the RTC a Complaint for collection of sum of money and damages against PEIA
and PEIP.

54

Dakila then filed Ex-‐‑Parte Motions for Issuance of Summons and for Leave of Court to
Deputize Respondents General Manager, Richard A. Tee, to Serve Summons Outside of the
Philippines, which the RTC granted in its Order, dated 27 April 2000., an Alias Summons, dated
4 September 2000, was issued by the RTC to PEIA. However, said Alias Summons was served
on 28 September 2000 and received by Perkinelmer Asia, a Singaporean based sole
proprietorship, owned by the petitioner Perkin Elmer Singapore, Ltd (PSE) and, allegedly, a
separate and distinct entity from PEIA.

Subsequently, Dakila filed an Ex-‐‑Parte motion to Admit Amended Complaint. In its
Amended Complaint, Dakila claimed that PEIA had become a sole proprietorship owned by
PSE. According to Dakila, a change in PEIA’s name and juridical status did not detract from the
fact that all its due and outstanding obligations to 3rd parties were assumed by PSE. Thus, in its
amended complaint, Dakila sought to change the name of PEIA to PSE.

Thereafter, the RTC admitted respondent’s amended complaint. This prompted PSE to
file a Special Appearance and Motion to Dismiss respondent’s Amended Complaint. PSE’s
Motion to Dismiss, however, was denied. As such, Petitioner PSE filed an answer ad cautelam
with compulsory counterclaim. In its counterclaim, petitioner PSE sought payment of damages
and attorney’s fees by reason of the alleged unfounded suit filed by respondent Dakila.

Issue: Will the dismissal of the instant case carry with it the dismissal of petitioner’s
counterclaim?

Held: No. Finally, as regards the petitioners counterclaim, which is purely for damages
and attorney’s fees by reason of the unfounded suit filed by respondent against it, it has long
been settled that the same truly falls under the classification of compulsory counterclaim and it
must be pleaded in the same action, otherwise, it is barred. In the case at bar, this Court orders
the dismissal of the Complaint filed by the respondent against the petitioner because the court a
quo failed to acquire jurisdiction over the person of the latter. Since the complaint of the
respondent was dismissed, what will happen then to the counterclaim of the petitioner? Does
the dismissal of the complaint carry with it the dismissal of the counterclaim?

In the cases of Metal Engineering Resources Corp. v. Court of Appeals, International
Container Terminal Services, Inc. v. Court of Appeals, and BA Finance Corporation v. Co., the Court
ruled that if the court does not have jurisdiction to entertain the main action of the case and
dismisses the same, then the compulsory counterclaim, being ancillary to the principal
controversy, must likewise be dismissed since no jurisdiction remained for any grant of relief
under the counterclaim. If we follow the aforesaid pronouncement of the Court in the cases
mentioned above, the counterclaim of the herein petitioner being compulsory in nature must
also be dismissed together with the Complaint. However, in the case of Pinga vs. Heirs of German
Santiago, the Court explicitly expressed that:

Similarly, Justice Feria notes that the present rule reaffirms the right of the
defendant to move for the dismissal of the complaint and to prosecute his
counterclaim, as stated in the separate opinion [of Justice Regalado in BA Finance].
Retired Court of Appeals Justice Hererra pronounces that the amendment to Section
3, Rule 17 [of the 1997 Revised Rules of Civil Procedure] settles that nagging
question whether the dismissal of the complaint carries with it the dismissal of the
counterclaim, and opines that by reason of the amendments, the rulings in Metals
Engineering, International Container, and BA Finance may be deemed abandoned. x
x x.

x x x, when the Court promulgated the 1997 Rules of Civil Procedure,
including the amended Rule 17, those previous jural doctrines that were inconsistent
55

with the new rules incorporated in the 1997 Rules of Civil Procedure were implicitly
abandoned insofar as incidents arising after the effectivity of the new procedural rules
on 1 July 1997. BA Finance, or even the doctrine that a counterclaim may be necessarily
dismissed along with the complaint, clearly conflicts with the 1997 Rules of Civil
Procedure. The abandonment of BA Finance as doctrine extends as far back as 1997,
when the Court adopted the new Rules of Civil Procedure. If, since then,
abandonment has not been affirmed in jurisprudence, it is only because no proper case
has arisen that would warrant express confirmation of the new rule. That opportunity
is here and now, and we thus rule that the dismissal of a complaint due to fault of
the plaintiff is without prejudice to the right of the defendant to prosecute any
pending counterclaims of whatever nature in the same or separate action. We
confirm that BA Finance and all previous rulings of the Court that are inconsistent
with this present holding are now abandoned. [Emphasis supplied].

It is true that the aforesaid declaration of the Court refers to instances covered by
Section 3, Rule 17 of the 1997 Revised Rules of Civil Procedure on dismissal of the complaint
due to the fault of the plaintiff. Nonetheless, it does not also preclude the application of the
same to the instant case just because the dismissal of respondents Complaint was upon the
instance of the petitioner who correctly argued lack of jurisdiction over its person.

Also in the case of Pinga v. Heirs of German Santiago, the Court discussed the situation
wherein the very filing of the complaint by the plaintiff against the defendant caused the
violation of the latters rights. As to whether the dismissal of such a complaint should also
include the dismissal of the counterclaim, the Court acknowledged that said matter is still
debatable, viz:

Whatever the nature of the counterclaim, it bears the same integral
characteristics as a complaint; namely a cause (or causes) of action constituting an act
or omission by which a party violates the right of another. The main difference lies in
that the cause of action in the counterclaim is maintained by the defendant against the
plaintiff, while the converse holds true with the complaint. Yet, as with a complaint, a
counterclaim without a cause of action cannot survive.

x x x if the dismissal of the complaint somehow eliminates the cause(s) of the
counterclaim, then the counterclaim cannot survive. Yet that hardly is the case,
especially as a general rule. More often than not, the allegations that form the
counterclaim are rooted in an act or omission of the plaintiff other than the plaintiffs
very act of filing the complaint. Moreover, such acts or omissions imputed to the
plaintiff are often claimed to have occurred prior to the filing of the complaint itself.
The only apparent exception to this circumstance is if it is alleged in the
counterclaim that the very act of the plaintiff in filing the complaint precisely
causes the violation of the defendants rights. Yet even in such an instance, it
remains debatable whether the dismissal or withdrawal of the complaint is
sufficient to obviate the pending cause of action maintained by the defendant
against the plaintiff.

Based on the aforequoted ruling of the Court, if the dismissal of the complaint somehow
eliminates the cause of the counterclaim, then the counterclaim cannot survive. Conversely, if
the counterclaim itself states sufficient cause of action then it should stand independently of and
survive the dismissal of the complaint. Now, having been directly confronted with the problem
of whether the compulsory counterclaim by reason of the unfounded suit may prosper even if
the main complaint had been dismissed, we rule in the affirmative.

It bears to emphasize that petitioners counterclaim against respondent is for damages
and attorneys fees arising from the unfounded suit. While respondents Complaint against
petitioner is already dismissed, petitioner may have very well already incurred damages and
56

litigation expenses such as attorneys fees since it was forced to engage legal representation in
the Philippines to protect its rights and to assert lack of jurisdiction of the courts over its person
by virtue of the improper service of summons upon it. Hence, the cause of action of petitioners
counterclaim is not eliminated by the mere dismissal of respondent’s complaint.

It may also do well to remember that it is this Court which mandated that claims for
damages and attorneys fees based on unfounded suit constitute compulsory counterclaim
which must be pleaded in the same action or, otherwise, it shall be barred. It will then be
iniquitous and the height of injustice to require the petitioner to make the counterclaim in the
present action, under threat of losing his right to claim the same ever again in any other court,
yet make his right totally dependent on the fate of the respondents complaint.

If indeed the Court dismisses petitioners counterclaim solely on the basis of the
dismissal of respondents Complaint, then what remedy is left for the petitioner? It can be said
that he can still file a separate action to recover the damages and attorneys fees based on the
unfounded suit for he cannot be barred from doing so since he did file the compulsory
counterclaim in the present action, only that it was dismissed when respondents Complaint was
dismissed. However, this reasoning is highly flawed and irrational considering that petitioner,
already burdened by the damages and attorneys fees it may have incurred in the present case,
must again incur more damages and attorneys fees in pursuing a separate action, when, in the
first place, it should not have been involved in any case at all.

Since petitioners counterclaim is compulsory in nature and its cause of action survives
that of the dismissal of respondents complaint, then it should be resolved based on its own
merits and evidentiary support.

Remedy of plaintiff

KO V. PNB
479 SCRA 298, January 28, 2006

Facts: Petitioners filed an action for the Annulment of Mortgage, Extrajudicial
Foreclosure Sale, and Annulment of TCTs and Deed of Sale. The complaint alleged that the
assailed mortgage and foreclosure proceedings were null and void since the written consent of
petitioners, as beneficiaries of the mortgaged property were not secured.

During the course of the proceedings, petitioners and their counsel failed to attend a scheduled
trial. Upon motion of respondent bank, the complaint was dismissed.

Petitioners filed a motion for reconsideration claiming that they have been continuously
pursuing negotiations with respondent bank to purchase back the property and have gained
positive results. Respondent bank countered that from the time the complaint was filed, a
period of three years had elapsed but petitioners failed to prosecute their case, showing lack of
interest in the early resolution thereof.

Issue: Is an Appeal under Rule 45 the proper remedy in elevating a case dismissed due
to failure to prosecute?

Held: No. On the procedural aspect, we find that petitioners erred in filing a petition for
review on certiorari under Rule 45 of the Rules of Court instead of filing an appeal with the
Court of Appeals. Section 3, Rule 17 of the Rules of Court provides:

57

SEC. 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the plaintiff
fails to appear on the date of the presentation of his evidence in chief on the
complaint, or to prosecute his action for an unreasonable length of time, or to comply
with these Rules or any order of the court, the complaint may be dismissed upon the
motion of the defendant or upon the courts own motion, without prejudice to the right
of the defendant to prosecute his counterclaim in the same or in a separate action. This
dismissal shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court. (Emphasis supplied)

Upon the order of dismissal, petitioners counsel filed a timely motion for
reconsideration which was denied by the trial court. Considering that an order of dismissal for
failure to prosecute has the effect of an adjudication on the merits, petitioners counsel should
have filed a notice of appeal with the appellate court within the reglementary period. Instead of
filing a petition under Rule 45 of the Rules of Court, the proper recourse was an ordinary appeal
with the Court of Appeals under Rule 41, which provides:

Sec. 2. Modes of Appeal.

(a) Ordinary appeal. The appeal to the Court of Appeals in cases
decided by the Regional Trial Court in the exercise of its original
jurisdiction shall be taken by filing a notice of appeal with the court which
rendered the judgment or final order appealed from and serving a copy
thereof upon the adverse party x x x. (Emphasis supplied)

Dismissal of counterclaims (Sec. 4)

Section 4. Dismissal of counterclaim, cross-‐‑claim, or third-‐‑party complaint. — The provisions of this
Rule shall apply to the dismissal of any counterclaim, cross-‐‑claim, or third-‐‑party complaint. A
voluntary dismissal by the claimant by notice as in section 1 of this Rule, shall be made before a
responsive pleading or a motion for summary judgment is served or, if there is none, before the
introduction of evidence at the trial or hearing.

DEFAULT
(RULE 9, SEC. 3)

Nature in general
If the defending party fails to answer within the time allowed therefor, the court shall, upon
motion of the claiming party with notice to the defending party, and proof of such failure,
declare the defending party in default. Thereupon, the court shall proceed to render judgment
granting the claimant such relief as his pleading may warrant, unless the court in its discretion
requires the claimant to submit evidence. Such reception of evidence may be delegated to the
clerk of court. (Rule 9, Section 3, par. 1)

When may a defendant be declared in default?

1. Failure to file answer

Default; declaration of. — If the defending party fails to answer within the time
allowed therefor, the court shall, upon motion of the claiming party with notice
58

to the defending party, and proof of such failure, declare the defending party in
default. Thereupon, the court shall proceed to render judgment granting the
claimant such relief as his pleading may warrant, unless the court in its
discretion requires the claimant to submit evidence. Such reception of evidence
may be delegated to the clerk of court. (Rule 9, Section 3, par. 1)

2. Failure to furnish copy of answer

3. Failure to appear at pre-‐‑trial
Effect of failure to appear. — The failure of the plaintiff to appear when so required
pursuant to the next preceding section (duty of parties and their counsel to appear at
pre-‐‑trial) shall be cause for dismissal of the action. The dismissal shall be with prejudice,
unless other-‐‑wise ordered by the court. A similar failure on the part of the defendant
shall be cause to allow the plaintiff to present his evidence ex parte and the court to
render judgment on the basis thereof. (Rule 18, Section 5)
4. Failure to comply with modes of discovery
Other consequences. — If any party or an officer or managing agent of a party refuses to
obey an order made under section 1 of this Rule requiring him to answer designated
questions, or an order under Rule 27 to produce any document or other thing for
inspection, copying, or photographing or to permit it to be done, or to permit entry upon
land or other property or an order made under Rule 28 requiring him to submit to a
physical or mental examination, the court may make such orders in regard to the refusal
as are just, and among others the following:
… … …
(c) An order striking out pleadings or parts thereof, or staying further proceedings until
the order is obeyed, or dismissing the action or proceeding or any part thereof, or
rendering a judgment by default against the disobedient party. [Rule 29, Section 3(c)]

When allowed
Section 3. Default; declaration of. — If the defending party fails to answer within the time allowed
therefor, the court shall, upon motion of the claiming party with notice to the defending party,
and proof of such failure, declare the defending party in default. Thereupon, the court shall
proceed to render judgment granting the claimant such relief as his pleading may warrant,
unless the court in its discretion requires the claimant to submit evidence. Such reception of
evidence may be delegated to the clerk of court. (Rule 9, Section 3, par. 1)

Effects

Effect of order of default. — A party in default shall be entitled to notice of subsequent
proceedings but not to take part in the trial. [Rule 9, Section 3 (a)]

Effect of partial default. — When a pleading asserting a claim states a common cause of action
against several defending parties, some of whom answer and the others fail to do so, the court
shall try the case against all upon the answers thus filed and render judgment upon the
evidence presented. [Rule 9, Section 3 (c)]

59

GAJUDO V. TRADERS ROYAL BANK

G.R. No. 151098, 21 March 2006

Facts:

Petitioners alleged that petitioner Chua obtained a loan from respondent in the amount
of P75k secured by a real estate mortgage over a parcel of land, and owned in common by
petitioners. As the loan was not paid, respondent commenced extra-‐‑judicial foreclosure
proceedings and the property was sold to respondent for the sum of P24.9k. Petitioners filed a
complaint against respondent seeking the annulment of the extra-‐‑judicial foreclosure and
auction sale of the property, allegedly because the sale was tainted with irregularity and the bid
price was shockingly or unconscionably low, among others. Respondent filed its answer with
counterclaim, asserting that the foreclosure sale of the mortgaged property was done in
accordance with law and that the bid price was neither unconscionable, nor shockingly low.

During trial, a big conflagration hit the City Hall of QC destroying the records of the
case. After the records were reconstituted, it was discovered that the foreclosed property was
sold by respondent to the Ceroferr Realty Corporation, and that the notice of lis pendens
annotated on the certificate of title had already been cancelled. Petitioners, with leave of court,
amended their complaint, but the trial court dismissed the case without prejudice for failure to
pay additional filing fees.

Petitioners re-‐‑filed the complaint with the same court, impleading as additional defendants the
Ceroferr Realty Corporation, and as additional cause of action, that the new defendants
conspired with respondent in canceling the notice of lis pendens. Petitioner filed a motion to set
the case for pre-‐‑trial, which motion was denied by the trial court on the ground that respondent
bank has not yet filed its answer. Petitioner filed a motion to declare respondent in default,
alleging that no answer has been filed despite the service of summons. Accordingly, respondent
was declared in default and petitioners were allowed to present evidence ex parte. A partial
decision was rendered.

Respondent filed a motion to set aside partial decision by default and admit the Answer with
counterclaim. The court denied said motion. Respondent appealed the Partial Decision to the
Court of Appeals (CA). The CA ruled in favor of the respondents.

Petitioners challenge the CA Decision for failing to apply the provisions of Section 3, Rule 9. In
essence, petitioners argue that the quantum of evidence for judgments flowing from a default order
under Section 3 of Rule 9 is not the same as that provided for in Section 1 of Rule 133.

Issue:

Whether or not the CA erred in failing to apply the provisions of Section 3, Rule 9 of the 1997
Rules of Civil Procedure and in applying instead the rule on preponderance of evidence under
Section 1, Rule 133.

Ruling:

No. The Petition has no merit. Between the two rules, there is no incompatibility that
would preclude the application of either one of them. To begin with, Section 3 of Rule 9 governs
the procedure which the trial court is directed to take when a defendant fails to file an answer.
According to this provision, the court "ʺshall proceed to render judgment granting the claimant
such relief as his pleading may warrant,"ʺ subject to the court’s discretion on whether to require
60

the presentation of evidence ex parte. The same provision also sets down guidelines on the
nature and extent of the relief that may be granted. In particular, the court’s judgment "ʺshall not
exceed the amount or be different in kind from that prayed for nor award unliquidated
damages."ʺ

As in other civil cases, basic is the rule that the party making allegations has the burden
of proving them by a preponderance of evidence. Moreover, the parties must rely on the
strength of their own evidence, not upon the weakness of the defense offered by their opponent.
This principle holds true, especially when the latter has had no opportunity to present evidence
because of a default order.

Regarding judgments by default, it was explained in Pascua v. Florendo that
complainants are not automatically entitled to the relief prayed for, once the defendants are
declared in default. Favorable relief can be granted only after the court has ascertained that the
relief is warranted by the evidence offered and the facts proven by the presenting party.

As held in the case of Lim v. Ramolete, the default or failure of the defendant to answer
should not be interpreted as an admission that the plaintiff’s cause of action find support in the
law or that plaintiff is entitled to the relief prayed for. Being declared in default does not
constitute a waiver of rights except that of being heard and of presenting evidence in the trial
court. A defaulted defendant is not actually thrown out of court. While in a sense it may be said
that by defaulting he leaves himself at the mercy of the court, the rules see to it that any
judgment against him must be in accordance with law. The evidence to support the plaintiff’s
cause is, of course, presented in his absence, but the court is not supposed to admit that which is
basically incompetent. Although the defendant would not be in a position to object, elementary
justice requires that only legal evidence should be considered against him. If the evidence
presented should not be sufficient to justify a judgment for the plaintiff, the complaint must be
dismissed. And if an unfavorable judgment should be justifiable, it cannot exceed in amount or
be different in kind from what is prayed for in the complaint.

In sum, while petitioners were allowed to present evidence ex parte under Section 3 of
Rule 9, they were not excused from establishing their claims for damages by the required
quantum of proof under Section 1 of Rule 133. Stated differently, any advantage they may have
gained from the ex parte presentation of evidence does not lower the degree of proof required.
Clearly then, there is no incompatibility between the two rules.

VLASON ENTERPRISES v. CA
G.R. Nos. 121662-‐‑64, July 6, 1999

Facts:

Poro Point Shipping Services, then acting as the local agent of Omega Sea Transport
Company of Honduras & Panama, requested permission for its vessel M/V Star Ace, which had
engine trouble, to unload its cargo and to store it at the Philippine Ports Authority (PPA)
compound in San Fernando, La Union. Despite the approval of the request, the customs
personnel boarded and seized the vessel on suspicion that it was the hijacked M/V Silver
Med and that its cargo would be smuggled into the country. While seizure proceedings were
ongoing, La Union was hit by 3 typhoons, which damaged the vessel. Because of this, Omega
entered into a salvage agreement with respondent Duraproof Services to secure and repair the
vessel at an agreed consideration.

61

The District Collector of Customs lifted the warrant of seizure, but the Customs
Commissioner declined to issue a clearance and instead forfeited the vessel and its cargo. This
prompted Duraproof to enforce its preferred salvors lien by filing with the RTC a petition for
certiorari, prohibition and mandamus assailing the actions of the Customs Officers, and
impleading PPA and Med Line Philippines, Inc. as respondents. Duraproof amended its
petition to include other companies involved, including Vlason Enterprises. In both Petitions,
Duraproof failed to allege anything pertaining to Vlason, or any prayer for relief against it.

Summonses for the amended Petition were served. Duraproof moved several times to
declare the respondents it impleaded in default. Out of those respondents, only the following
were declared by RTC in default: the Singkong Trading Co., Commissioner Mison, M/V Star Ace
and Omega. Duraproof filed an ex parte Motion to present evidence against the defaulting
respondents, which was granted.

The RTC ruled in favor of Duraproof and ordered Vlason to pay P3 Million worth of
damages. Duraproof moved for the execution of judgment. The Motion was granted and a Writ
of Execution was issued.

Vlason Enterprises filed a Motion for Reconsideration on the ground that it was
allegedly not impleaded as a defendant, served summons or declared in default, and hence
Duraproof may not present evidence against it in default. The trial court issued a cease and
desist order to restrain the implementing the Writ of Execution and from levying on the
personal property of the defendants. The order was unheeded.

Duraproof filed with the CA a Petition for Certiorari and Prohibition to nullify the cease
and desist orders of the trial court. CA issued a TRO against the RTC order. The CA rendered
the assailed Decision, stating that the decision of the RTC had become final and executory,
never having been disputed or appealed to a higher court, and that the lower court may now
take appropriate action on the urgent ex-‐‑parte motion for issuance of a writ of execution. Thus,
the RTC issued a writ of possession over petitioner’s barge Lawin.

Issue: Whether or not the default judgment rendered by the RTC was binding on
Vlason.

Ruling: No. Vlason was never declared in default. The trial court denied Duraproof’s
motion to declare all the defendants in default, but it never acted on the latter’s subsequent
motion to likewise declare Vlason in default. The RTC declared in default only Atty. Eddie
Tamondong, as well as the other defendants Hon. Salvador Mison, M/V Star Ace, Omega Sea
Transport Co., Inc. of Panama and Sinkong Trading Co., but despite due notice to them, they
failed to appear. Even Duraproof cannot pinpoint which trial court order held petitioner in
default.

More important, the trial court admitted that it never declared petitioner in default.
There could not have been any valid default-‐‑judgment rendered against it. The issuance of an
order of default is a condition sine qua non in order that a judgment by default be clothed with
validity.

Furthermore, it is a legal impossibility to declare a party-‐‑defendant to be in default
before it was validly served summons.

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Order of default

• When some answer and others default

(c) Effect of partial default. — When a pleading asserting a claim states a common cause of
action against several defending parties, some of whom answer and the others fail to do
so, the court shall try the case against all upon the answers thus filed and render
judgment upon the evidence presented. [Rule 9, Section 3(c)]

• Extent of relief to be awarded

(d) Extent of relief to be awarded. — A judgment rendered against a party in default shall
not exceed the amount or be different in kind from that prayed for nor award
unliquidated damages. [Rule 9, Section 3(d)]

• Where not allowed

(e) Where no defaults allowed. — If the defending party in an action for annulment or
declaration of nullity of marriage or for legal separation fails to answer, the court shall
order the prosecuting attorney to investigate whether or not a collusion between the
parties exists, and if there is no collusion, to intervene for the State in order to see to it
that the evidence submitted is not fabricated. [Rule 9, Section 3(e)]

Procedure after order of default

Section 3. Default; declaration of. — If the defending party fails to answer within the time allowed
therefor, the court shall, upon motion of the claiming party with notice to the defending party,
and proof of such failure, declare the defending party in default. Thereupon, the court shall
proceed to render judgment granting the claimant such relief as his pleading may warrant,
unless the court in its discretion requires the claimant to submit evidence. Such reception of
evidence may be delegated to the clerk of court. (Rule 9, Section 3, par. 1)

Remedy from order of default

Motion to set aside
(b) Relief from order of default. — A party declared in default may at any time after notice
thereof and before judgment file a motion under oath to set aside the order of default
upon proper showing that his failure to answer was due to fraud, accident, mistake or
excusable negligence and that he has a meritorious defense. In such case, the order of
default may be set aside on such terms and conditions as the judge may impose in the
interest of justice. [Rule 9, Section 3(b)]

BHAGWAN RAMNANI V. COURT OF APPEALS
G.R. NO. 101789, 28 APRIL 1993

Facts:

The Dizons filed a case for a sum of money against the spouses Ramnani for their failure
to remit the value of jewelry which they received on a consignment basis. Josephine Ramnani
63

submitted an answer with counterclaim stating the fact that it was the Dizons who owed them
money.

The spouses Ramnani did not appear during the pre-‐‑trial; hence they were declared in
default. Consequently, the spouses Dizon presented their evidence ex parte. The lower court
ruled in against the spouses Ramnani, holding them liable to the spouses Dizon.

The Ramnanis filed a motion for reconsideration on the ground that a "ʺpersonal
obligation contracted by the wife without the consent of the husband (was) being made
enforceable against the spouses'ʹ conjugal partnership despite absence of any allegation and
proof that the same redounded to the benefit of the family. The motion was denied. Hence, a
Petition for Certiorari was filed with the Court of Appeals (CA), arguing that the trial court
erred in denying the motion to lift order of default despite a clear showing of a meritorious
defense.

The CA denied the petition, stressing that the writ of certiorari issues for the correction
of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of
jurisdiction. Petitioner’s allegation of a valid and meritorious defense is a matter that could
very well be ventilated in an ordinary appeal.

Issue: Whether or not the CA erred in not setting aside the order of default against
petitioner Ramnani.

Ruling: No. The remedies available to a defendant who has been declared in default are:

a) The defendant in default may, at any time after discovery thereof and before
judgment, file a motion, under oath, to set aside the order of default on the ground that
his failure to answer was due to fraud, accident, mistake or excusable neglect, and that
he has a meritorious defense; (Sec. 3, Rule 18)
b) If the judgment has already been rendered when the defendant discovered the
default, but before the same has become final and executory, he may file a motion for
new trial under Section 1(a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and
executory, he may file a petition for relief under Section 2 of Rule 38; and
d) He may also appeal from the judgment rendered against him as contrary to the
evidence or to the law, even if no petition to set aside the order of default has been
presented by him. (Sec. 2, Rule 41)

While the first remedy was adopted by the petitioner, the motion to lift the order of
default was denied for failure to prove that the non-‐‑appearance is excusable. The invocation of
the deteriorating health of defendant Josephine necessitating her trip abroad for appropriate
medical treatment is unavailing and there is no medical certificate to attest to such illness.

The petitioner insists, however, that he had a meritorious defense which the trial court
should not have disregarded. A meritorious defense is only one of the two conditions. A
satisfactory showing by the movant of the existence of fraud, accident, mistake or excusable
neglect is also an indispensable requirement for the setting aside of a judgment of default or the
order of default. In view of petitioners’ non-‐‑compliance with this requirement, the motion to lift
the order of default was properly denied.

64

Remedies from judgment by default

Before finality

1. Motion for reconsideration or new trial
2. Appeal

MARTINEZ V. REPUBLIC
G.R. No. 160895, 30 October 2006

FACTS: Jose R. Martinez filed a petition for the registration in his name of three (3)
parcels of land he allegedly purchased from his uncle. He claimed continuous possession of the
lots, that the lots had remained unencumbered, and that they became private property through
prescription.

The OSG, in behalf of the Republic of the Philippines, opposed the petition. Despite the
opposition filed by the OSG, the RTC issued an order of general default, even against the
Republic of the Philippines. This ensued when during the hearing, no party appeared before the
Court to oppose Martinez’s petition.

RTC concluded that Martinez and his predecessors-‐‑in-‐‑interest had been for over 100
years in possession characterized as continuous, open, public, and in the concept of an owner.
The RTC thus decreed the registration of the three (3) lots in the name of Martinez. From this
Decision, the OSG filed a Notice of Appeal. However, after the records had been transmitted to
the CA, the RTC received a letter from the Land Registration Authority (LRA) stating that only
two of the lots sought to be registered were referred to in the Notice of Hearing published in the
Official Gazette, and that the third lot was omitted due to the lack of an approved survey plan
for that property. LRA manifested that this lot should not have been adjudicated to Martinez for
lack of jurisdiction. This letter was referred by the RTC to the CA for appropriate action.

The CA reversed the RTC and ordered the dismissal of the petition for registration. It
found the evidence presented by Martinez as insufficient to support the registration of the
subject lots. Martinez directly assailed the CA decision before the SC, claiming that the OSG no
longer had personality to oppose the petition, or appeal its allowance by the RTC, following the
order of general default.

ISSUE: Whether an order of general default bars the Republic from interposing an
appeal from the trial court’s subsequent decision.

HELD: No. We hold that a defendant party declared in default retains the right to
appeal from the judgment by default on the ground that the plaintiff failed to prove the material
allegations of the complaint, or that the decision is contrary to law, even without need of the
prior filing of a motion to set aside the order of default.

By 1997, the doctrinal rule concerning the remedies of a party declared in default had evolved
into a fairly comprehensive restatement as offered in Lina v. Court of Appeals:

a) The defendant in default may, at any time after discovery thereof and before
judgment, file a motion, under oath, to set aside the order of default on the ground that
his failure to answer was due to fraud, accident, mistake or excusable neglect, and that
he has meritorious defenses; (Sec 3, Rule 18)
65

b) If the judgment has already been rendered when the defendant discovered the
default, but before the same has become final and executory, he may file a motion for
new trial under Section 1(a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and
executory, he may file a petition for relief under Section 2 of Rule 38; and
d) He may also appeal from the judgment rendered against him as contrary to the
evidence or to the law, even if no petition to set aside the order of default has been
presented by him. (Sec. 2, Rule 41)

The fourth remedy, that of appeal, is anchored on Section 2, Rule 41 of the 1964 Rules.
Yet even after that provision’s deletion under the 1997 Rules, the Court did not hesitate to
expressly rely again on the Lina doctrine, including the pronouncement that a defaulted
defendant may appeal from the judgment rendered against him.

Yet even if it were to assume the doubtful proposition that this contested right of appeal
finds no anchor in the 1997 Rules, the doctrine still exists, applying the principle of stare decisis.
Jurisprudence applying the 1997 Rules has continued to acknowledge the Lina doctrine which
embodies this right to appeal as among the remedies of a defendant, and no argument in this
petition persuades the Court to rule otherwise.

The OSG does not impute error on the part of RTC in improperly declaring the Republic
in default even though an opposition had been filed to Martinez’s petition. The RTC appears to
have issued the order of general default simply on the premise that no oppositor appeared
before it on the hearing. But it cannot be denied that the OSG had already duly filed its
Opposition to Martinez’s petition long before the said hearing. It was improper to declare the
oppositor in default simply because he failed to appear on the day set for the initial healing.
Strangely, the OSG did not challenge the propriety of the default order. It would thus be
improper for the Court to make a pronouncement on the validity of the default order since the
same has not been put into issue.

After finality

1. Petition for relief from judgment
2. Annulment of judgment

Is certiorari a proper remedy?

JAO & COMPANY, INC. V. CA
251 SCRA 391, 1995

FACTS: Due to the non-‐‑appearance of the petitioner Jao & Company, Inc., during the
hearing on the merits, the RTC Manila, upon motion of herein private respondent Top Service,
Inc., issued an order dated April 14, 1989 declaring said petitioner in default and allowed
evidence to be presented ex-‐‑parte. The petitioner however filed an answer. On May 26, 1989, the
trial court rendered a decision ordering Jao to pay Top Service the agreed rentals with 12%
interest. A writ of preliminary injunction was issued by the RTC. By virtue of such decision,
Top Service stated that Jao’s counsel had withdrawn his appearance in the trial court and left no
forwarding address. No notice of the said order of default and the decision could be given it.
The former contends that the latter’s remedy was timely appeal, which the latter failed to
perfect.

66

ISSUE: Whether the decision of the trial court, promulgated on May 26, 1989, became
final.

HELD: Yes. Under ordinary circumstances, the proper remedy of a party wrongly
declared in default is either to appeal from the judgment by default or to file a petition for relief
from judgment, and not certiorari. A default judgment is an adjudication on the merits and is,
thus, appealable. Since appeal is the proper remedy, the extraordinary writ of certiorari will not
lie.

Petitioner contends that it could not be bound by the questioned Order of April 14, 1989
declaring it in default and the subsequent Decision of May 20, 1989 because it did not receive
copies thereof. Respondents counter that such non-‐‑service was due to petitioner'ʹs fault in not
furnishing the trial court with its "ʺforwarding address"ʺ after its counsel withdrew his
appearance. This Court is not in a position to settle this issue of fact — as indeed the Supreme
Court does not decide such questions.

But it is not disputed that after receipt of the decision, petitioner filed a motion for
reconsideration. Thus, whatever defects — if indeed there was any — may have been
committed by the trial court in failing to give constructive notice of its erroneous default order
was cured by petitioner'ʹs voluntary filing of the said motion for reconsideration. Upon denial
thereof, petitioner should have appealed. But instead of doing that, it opted for the wrong
remedy of certiorari.

INDIANA AEROSPACE UNIVERSITY V.
COMMISSION ON HIGHER EDUCATION
G.R. NO. 139371, 4 APRIL 2001

FACTS: In 1996, the Chairman of the Technical Panel for Engineering, Architecture, and
Maritime Education of CHED, received a letter from Douglas Macias, Chairman of the Board of
Aeronautical Engineering, PRC inquiring whether petitioner Indiana Aerospace University had
already acquired university status in view of their representation in the advertisement in the
Manila Bulletin.

After investigation, it was found that there was a violation committed by petitioner
when it used the term “university” when it had not yet complied with the basic requirement of
being a university as prescribed in CHED Memorandum. It was affirmed that petitioner
(registered as Indiana School of Aeronautics, Inc.) had not amended its Articles of Incorporation
to change its name to a “university.” CHED ordered petitioner to desist from using the word
“university.” Petitioner through its chairman and founder appealed the Order of CHED
averring that the school will suffer damage if it will not be allowed to use the word “university”
in its school name.

Prior to the court decision granting the Cease and Desist Order filed by CHED,
petitioner filed Complaint for Damages before the Court. Respondent CHED then filed a
Motion to Dismiss the Complaint for damages. Petitioner filed Opposition to the Motion to
Dismiss. The trial court denied respondent CHED’s motion to dismiss and issued a writ of
preliminary injunction in favor of petitioner. The trial court also directed CHED to file its
Answer to the decision within 15 days from the receipt of the Court Order – which was August
15, 1998. On September 22, 1998, petitioner filed Motion to Declare Respondent in Default
pursuant to Section 9, Section 3. On the same day, respondent CHED filed for Motion for
Extension of Time to File its Answer until November 18, 1998 and submitted its Answer on
November 17, 1998. On November 11, petitioner filed its Opposition to the Motion for
67

Extension of Time to File respondent’s Answer. The trial court rendered its Decision and
granted petitioner’s motion to declare respondent CHED in Default.

Respondent CHED consequently filed with the CA a petition for certiorari arguing that
the RTC had committed grave abuse of discretion in declaring respondent CHED in default
despite its Filing of an Answer. The CA ruled that respondent CHED should not have been
declared in default, because its answer had been filed long before the RTC ruled upon
petitioner’s Motion to declare respondent in default. Thus, respondent had not obstinately
refused to file an Answer; on the contrary, its failure to do so on time was due to excusable
negligence.

ISSUE: Whether or not certiorari was the proper remedy to assail the order declaring
CHED in default.

HELD: The SC agreed with respondent CHED that certiorari was the only plain, speedy
and adequate remedy in the ordinary course of law, because the default Order had
improvidently been issued.

The remedies available to a defendant declared in default are as follows:

(1) a motion to set aside the order of default under Section 3(b), Rule 9 of the Rules of
Court, if the default was discovered before judgment could be rendered;
(2) a motion for new trial under Section 1(a) of Rule 37, if the default was discovered
after judgment but while appeal is still available;
(3) a petition for relief under Rule 38, if judgment has become final and executory; and
(4) an appeal from the judgment under Section 1, Rule 41, even if no petition to set aside
the order of default has been resorted to.

These remedies, however, are available only to a defendant who has been validly
declared in default. Such defendant irreparably loses the right to participate in the trial. On the
other hand, a defendant improvidently declared in default may retain and exercise such right
after the order of default and the subsequent judgment by default are annulled, and the case
remanded to the court of origin. The former is limited to the remedy set forth in section 2,
paragraph 3 of Rule 41 of the pre 1997 Rules of Court, and can therefore contest only the
judgment by default on the designated ground that it is contrary to evidence or law. The latter,
however, has the following options: to resort to this same remedy; to interpose a petition for
certiorari seeking the nullification of the order of default, even before the promulgation of a
judgment by default; or in the event that judgment has been rendered, to have such order and
judgment declared void.

In prohibiting appeals from interlocutory orders, the law does not intend to accord
executory force to such writs, particularly when the effect would be to cause irreparable
damage. If in the course of trial, a judge proceeds without or in excess of jurisdiction, this rule
prohibiting an appeal does not leave the aggrieved party without any remedy. In a case like
this, a special civil action of certiorari is the plain, speedy and adequate remedy.

Hence, a petition for certiorari is available to respondent CHED to assail the judgment
by default on the ground that it is intrinsically void for having been rendered pursuant to a
patently invalid order of default.

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RULE 18
PRE-‐‑TRIAL

Nature and purpose

Pre-‐‑trial is a procedural device held prior to the trial for the court to consider the following
purposes:
1. The possibility of amicable settlement or of a submission to alternative modes of dispute
resolution;
2. The simplification of issues;
3. The necessity or desirability of amendments to the pleadings;
4. The possibility of obtaining stipulations or admissions of facts and documents to avoid
unnecessary proof;

The process of securing admissions, whether of facts or evidence, is essentially
voluntary. When the parties are unable to arrive at a stipulation of agreed facts,
the court must close the pre-‐‑trial and proceed with the trial of the case (Filioil
Marketing Corp. vs. Dy Pac & Co., G.R. No. 296636, 30 September 1982)

5. The limitation of the number of witnesses;
6. The advisability of a preliminary reference of issues to a commissioner;
7. The propriety of rendering judgment on the pleadings, or summary judgment, or of
dismissing the action should a valid ground therefor be found to exist;
8. The advisability or necessity of the suspending the proceedings; and
9. Such other matters as may aid in the prompt disposition of the cases. (Sec. 2, Rule 18)

Note: Pre-‐‑trial is mandatory in civil cases.

When

After the last pleading has been served and filed, the pre-‐‑trial should already be
conducted. It shall be the duty of the plaintiff to promptly move ex parte that the case be set for
pre-‐‑trial. (Sec. 1, Rule 18)

The motion is to be filed within five (5) days after the last pleading joining the issues has
been served and filed. (Administrative Circular No. 3-‐‑99,January 15, 1999)

The “last pleading” need not to be literally construed as one having been served and
field. For purposes of pre-‐‑trial, the expiration of the period for filing of the last pleading is
sufficient. (Sarmiento vs. Juan, G.R. No. 56605, 28 January 1983)

LCK INDUSTRIES, INC. VS. PLANTERS DEV’T. BANK
G.R. NO. 170606, 23 November 2007

FACTS: Petitioner LCK is a domestic corporation duly organized and existing as such
under Philippine laws. Respondent bank is a banking institution duly authorized to engage in
banking business under Philippine laws.

On 1 September 1995, petitioner LCK obtained a loan from the respondent bank in the
amount of P3,000,000.00 as evidenced by two promissory notes. As a security for the loan
obligation, petitioners-‐‑spouses Chiko and Elizabeth Lim executed a Real Estate Mortgage over a
parcel of land at Quezon City (Quezon City property). Later on, to secure the same obligation,
69

another Real Estate Mortgage was executed over another parcel of land located at Baguio City
(Baguio City property).

Subsequently, petitioner LCK incurred default in its payment; thus, making the
obligation due and demandable. Several demands were thereafter made by the respondent
bank to no avail. On 13 October 1997, a final letter-‐‑demand was sent by respondent bank to
petitioner LCK asking for the payment of its obligation in the amount of P2,962,500.00. Such
final demand notwithstanding, petitioner LCK failed or refused to pay its obligation.

Consequently, respondent bank caused the extrajudicial foreclosure of the Baguio City
property which was sold at the public auction. Since the proceeds of the foreclosed Baguio City
property were not enough to satisfy the entire loan obligation which amounted to P2,962,500.00,
respondent bank further caused the extrajudicial foreclosure of the Quezon City property.

Prior to the auction sale of the Quezon City property on 18 March 1998, petitioners, on
12 March 1998, filed with the RTC of Quezon City, Branch 81, an action for Annulment of the
Foreclosure of Mortgage and Auction Sale of the Quezon City property with Restraining
Order/Preliminary Injunction and with Damages.

Thereafter, the RTC conducted a pre-‐‑trial conference. In the Pre-‐‑Trial Order dated 8
September 2000, the parties made admissions and stipulations.

On 18 April 2001, the parties agreed to submit the case for the decision of the RTC based
on the stipulations and admissions made at the pre-‐‑trial conference.

HELD: Pre-‐‑trial is an answer to the clarion call for the speedy disposition of cases.
Hailed as the most important procedural innovation in Anglo-‐‑Saxon justice in the nineteenth
century, pre-‐‑trial is a device intended to clarify and limit the basic issues between the parties. It
thus paves the way for a less cluttered trial and resolution of the case. Pre-‐‑trial seeks to achieve
the following:

(a) The possibility of an amicable settlement or of a submission to
alternative modes of dispute resolution;

(b) The simplification of the issues;

(c) The necessity or desirability of amendments to the pleadings;

(d) The possibility of obtaining stipulations or admissions of facts and of
documents to avoid unnecessary proof;

(e) The limitation of the number of witnesses;

(f) The advisability of a preliminary reference of issues to a commissioner;

(g) The propriety of rendering judgment on the pleadings, or summary
judgment, or of dismissing the action should a valid ground therefor be
found to exist;

(h) The advisability or necessity of suspending the proceedings; and

(i) Such other matters as may aid in the prompt disposition of the action.

70

The purpose of entering into a stipulation of facts is to expedite trial and to relieve the
parties and the court as well of the costs of proving facts which will not be disputed on trial and
the truth of which can be ascertained by reasonable inquiry. Its main objective is to simplify,
abbreviate and expedite the trial, or totally dispense with it.

The parties themselves or their representative with written authority from them are
required to attend in order to arrive at a possible amicable settlement, to submit to alternative
modes of dispute resolution, and to enter into stipulations or admissions of facts and
documents. All of the matters taken up during the pre-‐‑trial, including the stipulation of facts
and the admissions made by the parties, are required to be recorded in a pre-‐‑trial order.

In the Pre-‐‑Trial Order dated 8 September 2000, the RTC defined the issues as follows:
(1) whether or not the petition was filed with the Office of the Clerk of Court; (2) whether or not
the extrajudicial foreclosure of real estate mortgage by defendant bank was made in accordance
with the provisions of Act No. 3135; and (3) whether or not the parties are entitled to their
respective claims for attorneys fees and damages.

Based on the admissions and stipulations during the pre-‐‑trial conference and the
issues defined by the court a quo as embodied in the Pre-‐‑Trial Order, the parties agreed to
submit the case for the resolution of the RTC. Both petitioners and respondent also manifested
that they would forego their respective claims for attorneys fees, leaving solely the issue of the
validity of the foreclosure of mortgage and auction sale for the RTCs disposition. However, in
petitioners Memorandum filed after the case was submitted for resolution, petitioners raised the
question of overpayment, a new issue that was included neither in their Complaint nor in the
issues defined in the Pre-‐‑Trial Order issued by the RTC.

Generally, pre-‐‑trial is primarily intended to make certain that all issues necessary to
the disposition of a case are properly raised. Thus, to obviate the element of surprise, parties are
expected to disclose at the pre-‐‑trial conference all issues of law and fact they intend to raise at
the trial. However, in cases in which the issue may involve privileged or impeaching matters, or
if the issues are impliedly included therein or may be inferable therefrom by necessary
implication to be integral parts of the pre-‐‑trial order as much as those that are expressly
stipulated, the general rule will not apply.

The case at bar falls under this particular exception. Upon scrupulous examination of the
Pre-‐‑Trial Order dated 8 September 2000, it can be deduced that the parties stipulated that the
remaining sum of petitioner LCKs obligation as of 13 October 1997 was P2,962,500.00. In the
same Pre-‐‑Trial Order, the parties likewise stipulated that the Baguio City property was sold at
the public auction for P2,625,000.00 and the Quezon City property for P2,231,416.67. On both
occasions, respondent bank emerged as the highest bidder. By applying simple mathematical
operation, the mortgaged properties were purchased by the respondent at the public auctions
for P4,856,416.67; thus, after deducting therefrom the balance of petitioner LCKs obligation in
the amount of P2,962,500.00, an excess in the sum of P1,893,916.67 remains.

Requirements for appearance

It shall be the duty of both parties and their counsels to appear at the pre-‐‑trial. The non-‐‑
appearance of a party may be excused only if:

1. A valid cause is shown therefor; and
2. A representative shall appear in his behalf fully authorized in writing to:
71

a. Enter into amicable settlement;

b. Submit to alternative modes of dispute resolution; and
c. Enter into stipulations or admissions of facts and of documents. (Sec. 4, Rule
18)

Procedure

It shall be the duty of the plaintiff to promptly move ex parte that the case be set for pre-‐‑
trial. (Sec. 1, Rule 18)

Under the Supreme Court Guidelines on Pre-‐‑Trial and Discovery (A.M. No. 03-‐‑1-‐‑09-‐‑SC,
effective 16 August 2004), if the plaintiff fails to file the motion to set the case for pre-‐‑trial, the
clerk of court shall issue a notice of pre-‐‑trial.

Notice

The notice of pre-‐‑trial shall be served on counsel, or on the party who has no counsel.
The counsel served with such notice is charged with the duty of notifying the party represented
by him. (Sec. 3, Rule 18)

Pre-‐‑trial brief required (Sec. 6)

The parties shall file with the court and serve on the adverse party, in such manner as
shall ensure their receipt thereof at least three (3) days before the date of the pre-‐‑trial, their
respective pre-‐‑trial briefs.

Contents of the pre-‐‑trial:
1. A statement of their willingness to enter into amicable settlement or
alternative modes of dispute resolution, indicating the desired terms thereof;
2. A summary of admitted facts and proposed stipulation of facts;
3. The issues to be tried or resolved;
4. The documents or exhibits to be presented stating the purpose thereof;
5. A manifestation of their having availed or their intention to avail themselves
of discovery procedures or referral to commissioners; and
6. The number and names of the witnesses, and the substance of their respective
testimonies.

Failure to file pre-‐‑trial brief shall have the same effect as failure to appear at the pre-‐‑trial.

No evidence shall be allowed to be presented and offered during the trial in support of
party’s evidence–in-‐‑chief other that those that had been earlier identified and pre-‐‑marked
during the pre-‐‑trial, except if allowed by the court for good cause shown. (A.M. No. 03-‐‑1-‐‑09-‐‑SC,
July 13, 2004)

Record or order of pre-‐‑trial
The pre-‐‑trial order shall be issued within ten (10) days after the termination of the pre-‐‑
trial (A.M. No. 03-‐‑1-‐‑09-‐‑SC).

This order recites in detail the following:
1. Matters taken up in the conference;
72

2. Actions taken thereon;

3. Amendments allowed to the pleadings; and
4. Agreements or admissions made by the parties as to any of the matters considered.

Should the action proceed to trial, the pre-‐‑trial order:
1. Defines and limits the issues to be tried; and
2. Controls the subsequent course of the action except if it is modified before trial to
prevent manifest injustice.

The contents of the pre-‐‑trial order shall control the subsequent course of the action,
unless:
1. Modified before trial to prevent manifest injustice (Sec. 7, Rule 18).
2. Issues that are impliedly included among those listed or that may be inferable from
those listed by necessary implication which are as much integral parts of the pre-‐‑tral
order as those expressly listed (Philippine Export and Foreign Loan Guarantee
Corporation vs. Amalgamated Management and Development Corporation, G.R. No.
177729, 28 September 2011).
3. Sec. 5, Rule 10 of the Rules of Court which allows the trial of issues not raised in the
pleadings but not objected to or tried with the express or implied consent of the
parties, and permits an amendment of the pleadings to conform to the evidence (Son
vs. Son, G.R. No. 73077, 29 December 1995).

A party is deemed to have waived the right to invoke stipulations in the pre-‐‑trial order if
he failed to object the introduction of evidence outside of the pre-‐‑trial order, as well as in cross-‐‑
examining the witness in regard to said evidence.

Effect of failure to appear

Sec. 5. Effect of failure to appear.

The failure of the plaintiff to appear when so required pursuant to the next preceding
section shall be cause for dismissal of the action. The dismissal shall be with prejudice, unless
otherwise ordered by the court. A similar failure on the part of the defendant shall be cause to
allow the plaintiff to present his evidence ex parte and the court to render judgment on the basis
thereof.

CALALANG VS. CA
GR 103185, 22 January 1993

Facts:
On April 29, 1980, respondent Filipinas Manufacturers Bank filed a complaint for
collection of a sum of money against petitioner Conrado Calalang and 3 other defendants
namely, Hugo M. Arca, Rio Arturo Salceda and the Acropolis Trading Corporation with the
Court of First Instance of Rizal, 7th Judicial District, Branch 36, Makati under Judge Segundo M.
Zosa.

Petitioner, after having been served with summons on May 19, 1980, filed a Motion to
Dismiss on June 2, 1980. The other summoned defendant, Hugo M. Arca, filed a Motion for Bill
of Particulars on June 5, 1980. The two other defendants namely, the Acropolis Trading
Corporation and Rio Arturo Salceda were also summoned but only a clerk-‐‑employee of the
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Acropolis Trading Corporation received the summons while Arturo R. Salceda was no longer
residing at his given address.

On November 16, 1987, the trial court issued an Order setting the pre-‐‑trial of the case
for January 7, 1988 at 8:30 a.m.

At the pre-‐‑trial conference, respondent bank'ʹs counsel arrived 15 minutes late or at 8:45
a.m.. However, the case had already been dismissed. Thus, in the Order of January 7, 1988, the
court declared:
For failure of plaintiff'ʹs counsel to appear inspite of notice and
considering that this case has been pending for seven (7) years, without plaintiff
having taken positive steps to prosecute the same, it is hereby DISMISSED
pursuant to Section 3, Rule 17, Rules of Court. Defendants'ʹ counterclaim is
likewise dismissed.

On January 12, 1988, counsel for the respondent bank filed a Motion for Reconsideration
of the order of dismissal citing as reason for his late arrival "ʺthe unusually heavy traffic he
encountered along Kamias Road in Quezon City, which was caused by a stalled jeepney along
the main thoroughfare."ʺ The motion was denied on January 26, 1988.

Ruling: The pre-‐‑trial conference scheduled for January 8, 1987 was not premature. A pre-‐‑
trial cannot validly be held until the last pleading has been filed, which last pleading may be the
plaintiff'ʹs reply, except where the period to file the last pleading has lapsed. 15 The period to
appear and file the necessary pleading having expired on the Acropolis Trading Corporation,
the lower court can direct that a pre-‐‑trial conference be held among the answering defendants.
However, though it is within the discretion of the trial court to declare a party non-‐‑suited for
non-‐‑appearance in the pre-‐‑trial conference, such discretion must not be abused. The precipitate
haste of the lower court in declaring the respondent bank non-‐‑suited was uncalled for and
deserved a second look. Considering the fact that the counsel for the plaintiff/respondent bank
did arrive for the pre-‐‑trial conference, though a bit late and that counsel for the defendant was
himself also late, the trial court should have called the case again. An admonition to both
counsels to be more prompt in appearing before the Court as scheduled would have sufficed,
instead of having dismissed the complaint outright.

Unless a party'ʹs conduct is so negligent, irresponsible, contumacious, or dilatory as to
provide substantial grounds for dismissal for non-‐‑appearance, the courts should consi
der lesser sanctions which would still amount into achieving the desired end.
To be a sufficient ground for dismissal, delay must not only be lengthy but also
unnecessary and dilatory resulting in trifling of judicial processes.

On plaintiff

Sec. 3. Dismissal due to fault of plaintiff.

If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of
his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of
time, or to comply with these Rules or any order of the court, the complaint may be dismissed
upon motion of the defendant or upon the court'ʹs own motion, without prejudice to the right of
the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal
shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.

74

SPOUSES CORPUZ VS. CITIBANK

G.R No. 175677, 31 July 2009

FACTS: Azucena Corpuz (Azucena) was a cardholder of Citibank Mastercard No. 5423-‐‑
3925-‐‑5788-‐‑2007 and Citibank VISA Card No. 4539-‐‑7105-‐‑2572-‐‑2001 both issued by Citibank, N.A.
(Citibank). Each card had a credit limit of P40,000.00. In view of her then impending official
business trip to Europe, Azucena paid in full on December 7, 1998 her monthly chargeson both
credit cards via checks and also made advance check payments of P20,000.00 on December 8,
1998 for her VISA Card, and another P20,000.00 for her Mastercard on December 14, 1998, to
cover future transactions.

While in Italy on December 9, 1998, Azucena dined at a restaurant. To settle her bill of
46,000 liras, she presented her VISA Card, but to her surprise and embarrassment, the
restaurant did not honor it. She then brought out her Mastercard which the restaurant honored.
On even date, Azucena incurred a bill of 378,000 liras at a shop which she intended to charge to
her credit cards. This time, both her VISA and Mastercard were not honored, drawing her to
pay the bill in cash.

Informed of the incidents via overseas telephone calls to Manila, Azucenas husband
Renato Corpuz (Renato) inquired why his wifes credit cards were not honored, to which
Citibank explained that her check-‐‑payments had not yet been cleared at the time.

Upon her return to the country, Azucena wrote Citibank on January 13, 1999
informing it that her credit cards had not been honored and demanding the refund of her
overseas call expenses amounting to 132,000 liras or P3,175.00 at the time. Citibank did not
respond to the letter, however, drawing Azucena to write Citibank for the cancellation of the
cards].

Citibank still sent billing statements to Azucena, however, charging her interest
charges and late payment penalties. Only after Azucenas counsel informed Citibank of
imminent legal remedieson her part did Citibank indulge Azucena with a written explanation
why her credit cards were not honored in Italy.

Azucena and Renato (hereafter the spouses) later filed on November 12, 1999 a
complaint for damages against Citibank at the Regional Trial Court of Las Pias City.

After an exchange of pleadings ─ reply, rejoinder and sur-‐‑rejoinder ─ by the parties,
and the issues having been joined, the trial court set the case for pre-‐‑trial conferenceon May 5,
2003 during which the spouses and their counsel failed to appear, despite notice. On Citibanks
counsels motion, the trial court, by Orderof even date, dismissed the spouses Complaint and
directed Citibank to present evidence on its Compulsory Counterclaim.

The spouses moved for the reconsideration of the trial courts May 5, 2003 Order,
explaining that their failure to attend the pre-‐‑trial conference was due to the negligenceof their
counsel who failed to inform [them] about [the pre-‐‑trial] and include the same in his calendar
because . . . the pre-‐‑trial was still far away. The spouses motion for reconsideration was denied
by Order of September 17, 2003

HELD: Section 5of Rule 18 provides that the dismissal of an action due to the plaintiffs
failure to appear at the pre-‐‑trial shall be with prejudice, unless otherwise ordered by the court.
In this case, the trial court deemed the plaintiffs-‐‑herein spouses as non-‐‑suited and ordered the
dismissal of their Complaint. As the dismissal was a final order, the proper remedy was to file
an ordinary appeal and not a petition for certiorari. The spouses petition for certiorari was thus
75

properly dismissed by the appellate court.

Procedural infirmities aside, this Court took a considered look at the spouses excuse
to justify their non-‐‑appearance at the pre-‐‑trial but found nothing exceptional to warrant a
reversal of the lower courts disposition thereof.

Counsel for the spouses admit having failed to inform his clients of the scheduled pre-‐‑
trial because he forgot to note the same in his calendar and eventually forgot about it due to
heavy workload. The spouses eventually admitted too having received the notice of pre-‐‑trial.
Azucena, who is a lawyer herself, advanced the reason that she forgot about the scheduled pre-‐‑
trial owing to her then forthcoming retirement at the Office of the Solicitor General to thus press
her to accomplish her assigned work including winding up all administrative matters in the
office prior to her leaving.

While Section 4 of Rule 18 of the Rules of Court allows as an exception a valid cause for
the non-‐‑appearance of a party at the pre-‐‑trial, the instances cited by the spouses and their
counsel hardly constitute compelling exigencies or situations which warrant occasional
flexibility of litigation rules.

On defendant, compare with default
If the defending party fails to answer within the time allowed therefor, the court shall,
upon motion of the claiming party with notice to the defending party, and proof of such failure,
declare the defending party in default.

CITIBANK, N.A. VS. CHUA
G.R No. 102300, 17 March 1993

Facts:
On September 4 of 1985, he (private respondent Crescencio Velez) deposited his
unfunded personal checks with his current account with the petitioner. But prior to depositing
said checks, he would present his personal checks to a bank officer asking the latter to have his
personal checks immediately credited as if it were a cash deposit and at the same time assuring
the bank officer that his personal checks were fully funded. Having already gained the trust and
confidence of the officers of the bank because of his past transactions, the bank'ʹs officer would
always accommodate his request. After his requests are granted which is done by way of the
bank officer affixing his signature on the personal checks, private respondent Cresencio Velez
would then deposit his priorly approved personal checks to his current account and at the same
time withdraw sums of money from said current account by way of petitioner bank'ʹs manager'ʹs
check. Private respondent would then deposit petitioner bank'ʹs manager'ʹs check to his various
current accounts in other commercial banks to cover his previously deposited unfunded
personal checks with petitioner bank. Naturally, petitioner bank and its officers never
discovered that his personal check deposits were unfunded. On the contrary, it gave the
petitioner bank the false impression that private respondent'ʹs construction business was doing
very well and that he was one big client who could be trusted. This deceptive and criminal
scheme he did every banking day without fail from September 4, 1985 up to March 11, 1986. The
amounts that he was depositing and withdrawing during this period (September 4, 1985 to
March 11, 1986) progressively became bigger. It started at P46,000.00 on September 4, 1985 and
on March 11, 1986 the amount of deposit and withdrawal already reached over P3,000,000.00.
At this point in time (March 11, 1986), the private respondent Cresencio Velez presumably
already feeling that sooner or later he would be caught and that he already wanted to cash in on
his evil scheme, decided to run away with petitioner'ʹs money. On March 11, 1986, he deposited
76

various unfunded personal checks totalling P3,095,000.00 and requested a bank officer that the
same be credited as cash and after securing the approval of said bank officer, deposited his
various personal checks in the amount of P3,095,000.00 with his current account and at the same
time withdrew the sum of P3,244,000.00 in the form of petitioner'ʹs manager'ʹs check. Instead of
using the proceeds of his withdrawals to cover his unfunded personal checks, he ran away with
petitioner bank'ʹs money. Thus, private respondent Cresencio Velez'ʹs personal checks deposited
with petitioner bank on March 11, 1986 in the total aggregate amount of P3,095,000.00 bounced.
The checks bounced after said personal checks were made the substantial basis of his
withdrawing the sum of P3,244,000.00 from his current account with petitioner bank."ʺ

Subsequently, on August 19, 1986, petitioner bank filed a criminal complaint against
private respondents for violation of Batas Pambansa Blg. 22 (Bouncing Checks Law) and estafa
(six counts) under Article 315 par. 2(d) of the Revised Penal Code. On April 28, 1988, the
investigating fiscal recommended the filing of an information against private respondents for
violations of the mentioned laws.

On June 13, 1989, petitioner bank submitted its answer to the complaint filed by private
respondents. In the Order dated February 20, 1990, the case was set for pre-‐‑trial on March 30,
1990 and petitioner bank was directed to submit its pre-‐‑trial brief at least 3 days before the pre-‐‑
trial conference. Petitioner bank only filed its pre-‐‑trial brief on March 30, 1990.

On March 30, 1990, the date of the pre-‐‑trial conference, counsel for petitioner bank
appeared, presenting a special power of attorney executed by Citibank officer Florencia Tarriela
in favor of petitioner bank'ʹs counsel, the J.P. Garcia & Associates, to represent and bind
petitioner bank at the pre-‐‑trial conference of the case at bar.

Inspite of this special power of attorney, counsel for private respondents orally moved
to declare petitioner bank as in default on the ground that the special power of attorney was not
executed by the Board of Directors of Citibank. Petitioner bank was then required to file a
written opposition to this oral motion to declare it as in default. In said opposition petitioner
bank attached another special power of attorney made by William W. Ferguson, Vice President
and highest ranking officer of Citibank, Philippines, constituting and appointing the J.P. Garcia
& Associates to represent and bind the BANK at the pre-‐‑trial conference and/or trial of the case
of "ʺCresencio Velez, et al. vs. Citibank, N.A."ʺ. In an Order dated April 23, 1990, respondent
judge denied private respondents'ʹ oral motion to declare petitioner bank as in default and set
the continuation of the pre-‐‑trial conference for May 2, 1990.

On the scheduled pre-‐‑trial conference, private respondents reiterated, by way of asking
for reconsideration, their oral motion to declare petitioner bank as in default for its failure to
appear through an authorized agent and that the documents presented are not in accordance
with the requirements of the law.

On August 15, 1990, respondent judge issued an order declaring petitioner bank as in
default.

HELD: We reiterate the previous admonitions of this Court against "ʺprecipitate orders of
default as these have the effect of denying the litigant the chance to be heard. While there are
instances, to be sure, when a party may be properly defaulted, these should be the exceptions
rather than the rule and should be allowed only in clear cases of an obstinate refusal or
inordinate neglect to comply with the orders of the court. Absent such a showing, the party
must be given every reasonable opportunity to present his side and to refute the evidence of the
adverse party in deference to due process of law"ʺ.

77

Considering further that petitioner bank has a meritorious defense and that the amount
in contest is substantial, the litigants should be allowed to settle their claims on the arena of the
court based on a trial on the merits rather than on mere technicalities.

RULE 20
CALENDAR OF CASES

Calendar (Rule 20, Sec. 1)
• The clerk of court, under the direct supervision of the judge, shall keep a calendar of
cases for pre-‐‑trial, for trial, those whose trials were adjourned or postponed, and those
with motions to set for hearing.

Preferences (Rule 20, Sec. 1)
• Preference shall be given to:
o habeas corpus cases;
o election cases;
o special civil actions; and
o those so required by law.

Assignment of cases (Rule20, Sec. 2)
• The assignment of cases to the different branches of a court shall be done exclusively by
raffle.
• The assignment shall be done in open session of which adequate notice shall be given so
as to afford interested parties the opportunity to be present.

RULE 22
COMPUTATION OF TIME

How to compute time (Rule 22, Section 1)

• In computing any period of time prescribed or allowed by the Rules of Court, or by
order of the court, or by any applicable statute, the day of the act or event from which
the designated period of time begins to run is to be excluded and the date of
performance included.

• If the last day of the period, as thus computed, falls on a Saturday a Sunday, or a legal
holiday in the place where the court sits, the time shall not run until the next working
day.

Effect of interruption (Rule 22, Section 2)

• Should an act be done which effectively interrupts the running of the period, the
allowable period after such interruption shall start to run on the day after notice of the
cessation of the cause thereof.

• The day of the act that caused the interruption shall be excluded in the computation of
the period.

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RULE 30
TRIAL

Notice of Trial (Rule 30, Section 1)
• Upon entry of a case in the trial calendar, the clerk shall notify the parties of the date of
its trial in such manner as shall ensure his receipt of that notice at least five (5) days
before such date.

Adjournments and postponements (Rule 30, Section 2)
• A court may adjourn a trial from day to day, and to any stated time, as the expeditious
and convenient transaction of business may require, but shall have no power to adjourn
a trial for a longer period than one month for each adjournment nor more than three
months in all, except when authorized in writing by the Court Administrator, Supreme
Court.

Absence of Evidence (Rule 30, Section 3)

• A motion to postpone a trial on the ground of absence of evidence can be granted only
upon affidavit showing the materiality or relevancy of such evidence, and that due
diligence has been used to procure it.

• If the adverse party admits the facts to be given in evidence, even if he objects or
reserves the right to object to their admissibility, the trial shall not be postponed.

Illness of party or counsel (Rule 30, Section 4)
• A motion to postpone a trial on the ground of illness of a party or counsel may be
granted if:
a) it appears upon affidavit or sworn certification that the presence of such party or
counsel at the trial is indispensable; and
b) that the character of his illness is such as to render his non-‐‑attendance excusable.

Subpoena (Rule 21)

• Subpoena is a process directed to a person requiring him to attend and to testify at
the hearing or the trial of an action, or at any investigation conducted under the laws
of the Philippines, or for taking of his deposition (Rule 21, Sec. 1).

§ SUBPOENA DUCES TECUM -‐‑ is a process directed to a person requiring him
to bring with him at the hearing or trial of an action any books, documents,
or other things under his control.

§ SUBPOENA AD TESTIFICANDUM – is a process directed to a person
requiring him to attend and testify at the hearing or the trial of the action, or
at any investigation conducted by the competent authority, or for the taking
of his deposition.

• Service of Subpoena (Rule 21, Section 6)

79

§ Service of subpoena shall be made in the same manner as personal or

substituted service of summons.
§ The original shall be exhibited and a copy thereof delivered to the person on
whom it is served, tendering to him the fees for one day'ʹs attendance and the
kilometrage allowed by these Rules, except that, when a subpoena is issued
by or on behalf of the Republic of the Philippines or an officer or agency
thereof, the tender need not be made.
§ The service must be made so as to allow the witness a reasonable time for
preparation and travel to the place of attendance.
§ If the subpoena is duces tecum, the reasonable cost of producing the books,
documents or things demanded shall also be tendered.

• Compelling attendance (Rule 21, Sec. 8)

§ In case of failure of a witness to attend, the court or judge issuing the
subpoena, upon proof of the service thereof and of the failure of the witness,
may issue a warrant to the sheriff of the province, or his deputy, to arrest the
witness and bring him before the court or officer where his attendance is
required, and the cost of such warrant and seizure of such witness shall be
paid by the witness if the court issuing it shall determine that his failure to
answer the subpoena was willful and without just cause.

§ Exceptions (Rule 21, Sec. 10): This rule shall not apply to:
a) a witness who resides more than one hundred (100) kilometers from
his residence to the place where he is to testify by the ordinary course
of travel; or
b) a detention prisoner if no permission of the court in which his case is
pending was obtained.

• Contempt (Rule 21, Sec. 9)

§ Failure by any person without adequate cause to obey a subpoena served
upon him shall be deemed a contempt of the court from which the subpoena
is issued. If the subpoena was not issued by a court, the disobedience thereto
shall be punished in accordance with the applicable law or Rule.

§ Exceptions (Rule 21, Sec. 10): This rule shall not apply to:
c) a witness who resides more than one hundred (100) kilometers from
his residence to the place where he is to testify by the ordinary course
of travel; or
d) a detention prisoner if no permission of the court in which his case is
pending was obtained.

• Quashing a subpoena (Rule 21, Section 4)

§ The court may quash a subpoena duces tecum upon motion promptly made
and, in any event, at or before the time specified therein if it is unreasonable
and oppressive, or the relevancy of the books, documents or things does not
appear, or if the person in whose behalf the subpoena is issued fails to
advance the reasonable cost of the production thereof.

§ The court may quash a subpoena ad testificandum on the ground that the
witness is not bound thereby. In either case, the subpoena may be quashed
80

on the ground that the witness fees and kilometrage allowed by these Rules
were not tendered when the subpoena was served.

Conduct

Order of Trial (Rule 30, Section 5)
• Unless the court for special reasons otherwise directs, the trial shall be limited to the
issues stated in the pre-‐‑trial order and shall proceed as follows:

(a) The plaintiff shall adduce evidence in support of his complaint;

(b) The defendant shall then adduce evidence in support of his defense,
counterclaim, cross-‐‑claim and third-‐‑party complaints;

(c) The third-‐‑party defendant if any, shall adduce evidence of his defense,
counterclaim, cross-‐‑claim and fourth-‐‑party complaint;

(d) The fourth-‐‑party, and so forth, if any, shall adduce evidence of the material facts
pleaded by them;

(e) The parties against whom any counterclaim or cross-‐‑claim has been pleaded,
shall adduce evidence in support of their defense, in the order to be prescribed by the
court;

(f) The parties may then respectively adduce rebutting evidence only, unless the
court, for good reasons and in the furtherance of justice, permits them to adduce
evidence upon their original case; and

(g) Upon admission of the evidence, the case shall be deemed submitted for
decision, unless the court directs the parties to argue or to submit their respective
memoranda or any further pleadings.

• If several defendants or third-‐‑party defendants, and so forth, having separate defenses
appear by different counsel, the court shall determine the relative order of presentation
of their evidence.

Agreed statement of facts (Rule 30, Section 6)

• The parties to any action may agree, in writing, upon the facts involved in the litigation,
and submit the case for judgment on the facts agreed upon, without the introduction of
evidence.

• If the parties agree only on some of the facts in issue, the trial shall be held as to the
disputed facts in such order as the court shall prescribe.

• During the Pre-‐‑Trial Conference, the court shall consider the possibility of obtaining
stipulations or admissions of facts and of documents to avoid unnecessary proof (Rule
18, Section 2 (d).

Statement of judge (Rule 30, Section 7)
• During the hearing or trial of a case any statement made by the judge with reference to
the case, or to any of the parties, witnesses or counsel, shall be made of record in the
stenographic notes.
81

Suspension of Actions (Rule 30, Section 8)

• The suspension of actions shall be governed by the provisions of the Civil Code.

• The Civil Code provides:

Article 2030. Every civil action or proceeding shall be suspended:

(1) If willingness to discuss a possible compromise is expressed by
one or both parties; or

(2) If it appears that one of the parties, before the commencement
of the action or proceeding, offered to discuss a possible compromise but
the other party refused the offer.

The duration and terms of the suspension of the civil action or
proceeding and similar matters shall be governed by such provisions of
the rules of court as the Supreme Court shall promulgate. Said rules of
court shall likewise provide for the appointment and duties of amicable
compounders.

. . . . . . . . .

Article 2035. No compromise upon the following questions shall
be valid:
(1) The civil status of persons;
(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime.

Duty of judge to receive evidence and power to delegate to clerk of court (Rule 30, Sec. 9)
• The judge of the court where the case is pending shall personally receive the evidence to
be adduced by the parties. However, in default or ex parte hearings, and in any case
where the parties agree in writing, the court may delegate the reception of evidence to
its clerk of court who is a member of the bar. The clerk of court shall have no power to
rule on objections to any question or to the admission of exhibits, which objections shall
be resolved by the court upon submission of his report and the transcripts within ten
(10) days from termination of the hearing.

Trial by commissioner (Rule 32)

• Reference by consent (Rule 32, Sec. 1)
§ By written consent of both parties, the court may order any or all of the issues in
a case to be referred to a commissioner to be agreed upon by the parties or to be
appointed by the court.
§ The word "ʺcommissioner"ʺ includes a referee, an auditor and an examiner.

82

• Reference ordered on motion (Rule 32, Sec. 2)

§ When the parties do not consent, the court may, upon the application of either or
of its own motion, direct a reference to a commissioner in the following cases:

a) When the trial of an issue of fact requires the examination of a long
account on either side, in which case the commissioner may be directed to
hear and report upon the whole issue or any specific question involved
therein;

b) When the taking of an account is necessary for the information of the
court before judgment, or for carrying a judgment or order into effect;

c) When a question of fact, other than upon the pleadings, arises upon
motion or otherwise, in any stage of a case, or for carrying a judgment or
order into effect.

• Order of reference; powers of the commissioner (Rule 32, Sec. 3)
§ When a reference is made, the clerk shall forthwith furnish the commissioner
with a copy of the order of reference. The order may specify or limit the powers
of the commissioner, and may direct him to report only upon particular issues, or
to do or perform particular acts, or to receive and report evidence only and may
fix the date for beginning and closing the hearings and for the filing of his report.
Subject to other specifications and limitations stated in the order, the
commissioner has and shall exercise the power to regulate the proceedings in
every hearing before him and to do all acts and take all measures necessary or
proper for the efficient performance of his duties under the order. He may issue
subpoenas and subpoenas duces tecum, swear witnesses, and unless otherwise
provided in the order of reference, he may rule upon the admissibility of
evidence. The trial or hearing before him shall proceed in all respects as it would
if held before the court.

Consolidation of trial (Rule 31, Sec. 1)
• When actions involving a common question of law or fact are pending before the court,
it may order a joint hearing or trial of any or all the matters in issue in the actions; it may
order all the actions consolidated, and it may make such orders concerning proceedings
therein as may tend to avoid unnecessary costs or delay.

(TO BE CONTINUED)

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subdivision for the construction of low cost housing units. They

a) By personal service coursed through the appropriate court in the

evidenced by an affidavit "ʺshowing the deposit of a copy of the summons and

(1) addressed to all parties concerned, and

Defective notice of hearing

whether said person comprehends the significance of the receipt of the

b. Resolution of motion

the dismissal is without prejudice, except that a notice operates as an adjudication

Upon motion of plaintiff – after answer (Sec. 2)

PHILIPPINE NATIONAL BANK VS. DE GUZMAN

Effect on counterclaim

GAJUDO V. TRADERS ROYAL BANK

Order of default

Remedies from judgment by default

a. Enter into amicable settlement;

2. Actions taken thereon;

SPOUSES CORPUZ VS. CITIBANK

properly dismissed by the appellate court.

§ Service of subpoena shall be made in the same manner as personal or

• Reference ordered on motion (Rule 32, Sec. 2)

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