Katarungang Pambarangay (S 399 to 422 & 515,
One party is the government, or any subdivision or
Local Government Code of 1991, Supreme Court
Circular No. 14-93)
1. Spouses Morata vs Spouses Go, 125 SCRA 444,
GR No. L-62339
FACTS: On August 25, 1982, the spouses Go filed a
complaint against petitioners Morata for recovery of
a sum of money plus damages amounting to P49,400
in the CFI of Cebu.
On the basis of the allegation that the parties-
litigants are all residents of Cebu City, petitioner filed
a motion to dismiss citing as grounds the failure of
the complaint to allege prior availment by the
plaintiffs of the barangay conciliation process
required by PD 1508, as well as the absence of
certification by the Lupon or Pangkat Secretary that
no conciliation/settlement has been reached by the
parties.
The motion to dismiss was denied on September 2,
1982. The petitioners' motion for reconsideration
was also denied on October 3, 1982.
Petitioner’s contend that said legislation is so broad
and all-embracing as to apply to actions cognizable
not only by the city and municipal courts but also by
the CFI.
Upon the other hand, respondents would limit its
coverage only to those cases falling within the
exclusive jurisdiction of the metropolitan trial courts
and municipal trial courts.
ISSUE: Whether the conciliation process at the
barangay level, prescribed by PD 1508 as a
precondition for filing a complaint in court, is also
compulsory for actions cognizable by the RTC.
HELD: Yes. Sec.I, PD 1508 provides that the
confrontation of the parties and conciliation before
the Lupon is a precondition for filing a complaint,
except when:
1. The accused is under detention;
2. A person has otherwise been deprived of personal
liberty calling for *habeas corpus* proceedings;
3. Actions coupled with provisional remedies; and
4. Where the action may be barred by the Statute of
Limitations.
Sec.2 provides additional exceptions, such as when:
1.
instrumentality;
2. One party is a public officer/employee and the
dispute relates to the performance of his official
functions;
3. Offenses punishable by imprisonment exceeding
30 days or a fine exceeding P200;
4. Where there is no private offended party; and
5. Such other classes of disputes which the Prime
Minister may, in the inetrest of justice, determine
upon recommendation of the Minister of Justice and
the Minister of Local Government.
Thus, except in the instances enumerated in Secs. 2
and I of the law, the Lupon has the authority to
settle amicably all types of disputes involving parties
who actually reside in the same city or municipality.
The law makes no distinction whatsoever with
respect to the classes of civil disputes that should be
compromised at the barangay level. Where the law
does not distinguish, we should not distinguish. By
compelling the disputants to settle their differences
through the intervention of the barangay leader and
other respected members of the barangay, the
animosity generated by protracted court litigations
between members of the same political unit, a
disruptive factor toward unity and cooperation, is
avoided. It must be borne in mind that the
conciliation process at the barangay level is also
designed to discourage indiscriminate filing of cases
in court in order to decongest its clogged dockets
and enhance the quality of justice dispensed by it.
The law obviously intended to grant the Lupon as
broad and comprehensive authority as possible as
would bring about the optimum realization of the
aforesaid objectives. These objectives would only be
half-met and easily thwarted if the Lupon's authority
is exercised only in cases falling within the exclusive
jurisdiction of inferior courts. Jurisdiction over cases
involving real property or any interest therein,
except forcible entry and detainer cases, has always
been vested in the Courts of First Instance.
The authority of the Lupon is clearly established in
Sec.2 of the law; whereas Secs. 11, 12 and 14 deal
with the nullification or execution of the settlement
or arbitration awards obtained at the barangay
level. These sections conferred upon the city &
municipal courts the jurisdiction to pass upon and
resolve petitions or actions for nullification or
enforcement of settlement/arbitration awards
issued by the Lupon, regardless of the amount
involved or the nature of the original dispute. But
1
there is nothing in the context of said sections to
justify the thesis that the mandated conciliation
process in other types of cases applies exclusively to
said inferior courts. Therefore, the conciliation
process at the barangay level, prescribed by P.D.
1508 as a pre-condition for filing a complaint in
court, is compulsory not only for cases falling under
the exclusive competence of the metropolitan and
municipal trial courts, but for actions cognizable by
the regional trial courts as well.

2
2. Pang-et vs. Manacnes-Dao-as (517 SCRA 292)
SUMMARY: Petitioner filed an action for recovery of
possession of real property against the predecessors-
in-interest of respondent, the Sps. Manacnes.
During pre-trial before the MCTC, in which the case
was pending, the parties agreed to refer the matter
to the Lupon for arbitration. As the Sps. Manacnes
refused to enter into any Agreement for Arbitration,
the Lupon issued a Certificate to File Action with the
MCTC.
Upon transmittal of records, however, the MCTC
issued an order remanding the matter back to the
Lupon as, according to it, based on the records of the
case, an Agreement was actually executed by the
parties. The Lupon was ordered to issue an
Arbitration Award.
Florentina Manacnes filed a Motion to repudiate the
Award, but this was denied. She later filed a Motion
for resumption of the proceedings with the MCTC
but this, too, was denied, for having been filed
beyond the reglementary period (10days) provided
in the LGC and the Katarungang Pambarangay Law.
When petitioner filed a Motion to execute the Award
before the MCTC, the heirs of the Sps. Manacnes,
then already deceased, filed a Motion to Dismiss,
alleging that the Agreement and the Award are both
null and void as the Agreement was not personally
signed by the parties, and the Award was written in
English – a language not known to the Sps.
Manacnes - in violation of the LGC and the
Katarungang Pambarangay Law.
The MCTC ruled that both are null and void indeed,
because the parties did not personally sign the
document (their daughter Catherine did), and the
language of the Award should have been Kankana-
ey.
The RTC reversed, finding that on its face, the
Agreement was signed by the Sps. Manacnes, and it
was not assailed within the reglementary period.
 The RTC further ruled that the Sps.
Manacnes can be presumed to know English
as an American religious order has long
stayed in Sagada and mingled with the
locals.
3
The CA disagreed the RTC and essentially reinstated
the ruling of the MCTC. The Court affirmed the CA.
ISSUE: Whether or not the Agreement to arbitrate is
null and void.
DOCTRINE: The object of the Katarungang
Pambarangay Law is the amicable settlement of
disputes through conciliation proceedings voluntarily
and freely entered into by the parties. The disputing
parties are not compelled to settle their controversy
during the barangay proceedings before the Lupon
or the Pangkat, as they are free to instead find
recourse in the courts in the event that no true
compromise is reached. It is not compulsory on the
part of the parties to wait to submit the case for
arbitration until an arbitration award is rendered by
the Lupon. This is contrary to the very nature of the
proceedings under the Katarungang Pambarangay
Law which espouses the principle of voluntary
acquiescence of the disputing parties to amicable
settlement. The only necessary pre-condition before
any case falling within the authority of the Lupon or
the Pangkat may be filed before a court is that there
has been personal confrontation between the
parties but despite earnest efforts to conciliate,
there was a failure to amicably settle the dispute.
RULING:
o The defendants-heirs of Sps. Manacnes are not
estopped from questioning the proceedings before
the Lupon as they have put in issue the validity of
the proceedings and the products thereof. A null and
void act could always be questioned at any time as
the action or defense based upon it is
imprescriptible.
o The Agreement is null and void. (Cites Secs. 413(a)
and 415 of the LGC). It is very clear that the
execution of the agreement to arbitrate must be
done personally by the parties themselves so that
they themselves are mandated to sign the
agreement.
Section 413 – (a) The parties may, at any stage of the
proceedings, agree in writing that they shall abide by
the arbitration award of the lupon chairman or the
pangkat.
Section 415. Appearance of parties in person. In all
katarungang pambarangay proceedings, the parties
must appear in person without the assistance of
counsel or representative, except for minors and
incompetents who may be assisted by their next-of-
kin who are not lawyers.
Personal appearance of the parties in conciliation
proceedings before a LUpon Tagapamayapa is
mandatory. Likewise, the execution of the
agreement to arbitrate must be done personally by
the parties themselves so that they themselves are
mandated to sign the agreement.
In this case, it was not Sps. Manacnes who signed
the agreement to arbitrate, as petitioner herself
admits. The mandatory provisos of Secs. 413 and 415
of RA 7160 are violated.
What is compulsory under the Katarungang
Pambarangay Law is that there be a confrontation
between the parties before the Lupon Chairman or
the Pangkat and that a certification be issued that no
conciliation or settlement has been reached, as
attested to by the Lupon or Pangkat Chairman,
before a case falling within the authority of the
Lupon may be instituted in court or any other
government office for adjudication
In other words, the only necessary pre-condition
before any case falling within the authority of the
Lupon or the Pangkat may be filed before a court is
that there has been personal confrontation between
the parties but despite earnest efforts to conciliate,
there was a failure to amicably settle the dispute.
While the spouses Manacnes appeared before the
Lupon during the initial hearing for the conciliation
proceedings, they refused to sign the Agreement for
Arbitration form, which would have signified their
consent to submit the case for arbitration.
Therefore, upon certification by the Lupon ng
Tagapamayapa that the confrontation before the
Pangkat failed because the spouses Manacnes
refused to submit the case for arbitration and
insisted that the case should go to court, the MCTC
should have continued with the proceedings in the
case for recovery of possession which it suspended
in order to give way for the possible amicable
resolution of the case through arbitration before the
Lupon ng Tagapamayapa.
Petitioner’s assertion that the parties must be bound
by their respective counsels’ agreement to submit
the case for arbitration and thereafter enter into an
amicable settlement is imprecise.
4
 The parties may only be compelled to
appear before the Lupon ng
Tagapamayapa for the necessary
confrontation, but not to enter into any
amicable settlement, or in the case at bar,
to sign the Agreement for Arbitration.
 Thus, when the Manacnes spouses
personally appeared during the initial
hearing before the Lupon ng
Tagapamayapa, they had already complied
with the agreement during the pre-trial to
submit the case for conciliation
proceedings. Their presence during said
hearing is already their acquiescence to the
order of the MCTC remanding the case to
the Lupon for conciliation proceedings, as
there has been an actual confrontation
between the parties despite the fact that no
amicable settlement was reached due to
the spouses Manacnes’ refusal to sign the
Agreement for Arbitration.
The MCTC should not have persisted in ordering the
Lupon ng Tagapamayapa to render an arbitration
award upon the refusal of the spouses Manacnes to
submit the case for arbitration since such arbitration
award will not bind the spouses.
 As reflected in Section 413 of the Revised
Katarungang Pambarangay Law, in order
that a party may be bound by an arbitration
award, said party must have agreed in
writing that they shall abide by the
arbitration award of the Lupon or the
Pangkat.
 Parties who have not signed an agreement
to arbitrate will not be bound by said
agreement since it is axiomatic that a
contract cannot be binding upon and
cannot be enforced against one who is not a
party to it.
 The spouses Manacnes refused to affix their
signature or thumb mark on the Agreement
for Arbitration Form, the Manacnes spouses
cannot be bound by the Agreement for
Arbitration and the ensuing arbitration
award since they never became privy to any
agreement submitting the case for
arbitration by the Pangkat.
 VENUE:
1. Dante M. Pascual, represented by Reymel
Sagario v Marilou M. Pascual GR No. 157830,
November 17, 2005
FACTS: Petitioner Dante, a permanent resident of
USA, appointed Sagario as attorney- in- fact by an
SPA. Pursuant to such SPA, Sagario filed a complaint
entitled “Dante M. Pascual v Marilou M. Pascual and
Register of Deeds, Defendants for Annulment of TCT
and Deed of Absolute Sale of Registered Land and/or
Reconveyance with Damages.
To construe the express statutory requirement of
actual residency as applicable to the attorney- in-
fact of the party- plaintiff, as contended by the
respondent, would abrogate the meaning of a “real
party- in- interest” as defined in Sec 2 of Rule 3 of
the Rules of Court.
 The Lupon shall have no jurisdiction over
disputes where the parties are not actual
residents of the same city or municipality,
except where the barangays in which they
actually reside adjoin each other.

Respondent then filed Motion to Dismiss on the
ground of non- compliance with the requirement
under Sec 412 of LGC, contending that there is no
showing that the dispute was referred to the
barangay court before the case was filed in court.
RTC granted the motion to dismiss ruling that when
real property or any interest therein is involved, the
dispute shall be filed before the barangay where the
property is located regardless of the residence of the
parties.
In fine, since the plaintiff herein petitioner, the real
party in interest, is not an actual resident of the
barangay where the defendant herein respondent
resides, the local lupon has no jurisdiction over their
dispute, hence, prior referral to it for conciliation is
not a pre- condition to its filing in court.
RTC thus erred in dismissing complaint.

Hence, this petition where petitioner Dante argues

that he, not his attorney- in – fact Sagario is the real
party- in- interest and since he actually resides
abroad, the lupon would have no jurisdiction to pass
upon the dispute involving real property.

Respondent, on the other hand argued that it is

Sagario who is considered as the real partyin-
interest, and that since Sagario is a resident of the
same barangay as that of hers, the matter shall be
brought under the jurisdiction of the lupon.

ISSUE: Whether or not the lupon has authority to act

upon the case (WON PD 1508 or the Katarungang
Pambarangay Law applies)

HELD: Negative. Sec 408 of LGC provides that “the

lupon of each barangay shall have authority to bring
together the parties actually residing in the same city
or municipality for amicable settlement of all
disputes xxx”

In the case of Tavora v Veloso, SC held that where

the parties are not actual residents in the same city
or municipality or adjoining barangays, there is no
requirement for them to submit their dispute to the
lupon as provided for in Section I vis a vis SEC 2 and 3
of PD 1508.

5
2. Magno vs. Velasco-Jacoba [A.C. No. 6296
November 22, 2005] Post under case digests,
Legal Ethics at Monday, March 2I, 2012 Posted
by Schizophrenic Mind
FACTS: Atty. Evelyn J. Magno, President of the
Integrated Bar of the Philippines (IBP), Nueva Ecija
Chapter had a disagreement with her uncle, Lorenzo
Inos, over a landscaping contract they had entered
into.
During the conciliation/confrontation proceeding,
Atty. Olivia Velasco-Jacoba appeared on the strength
of a Special Power of Attorney signed by Lorenzo
Inos.
Atty. Magno objected to Atty. Jacoba’s appeareance
in the conciliation but the latter interpose that
Lorenzo Inos is entitled to be represented by a
lawyer inasmuch as complainant is herself a lawyer.
Complainant enumerated specific instances, with
supporting documentation, tending to prove that
respondent had, in the course of the conciliation
proceedings before the Punong Barangay, acted as
Inos Lorenzo’s counsel instead of as his attorney-in-
fact.
Respondent alleged that the administrative
complaint was filed with the Office of the Punong
Barangay, instead of before the Lupong
Tagapamayapa, and heard by Punong Barangay
Bonifacio Alcantara alone, instead of the Lupon or
the Pangkat.
 Respondent submits that the prohibition
against a lawyer appearing to assist a client
in katarungan pambarangay proceedings
does not apply.
 She argued that her appearance was not as
a lawyer, but only as an attorney-in-fact.
Thus, this petition for willful violation of (a) Section
415 of the Local Government Code (LGC) of 1991 and
(b) Canon 4 of the Code of Professional
Responsibility.
ISSUE: Whether or not Atty. Olivia Velasco-Jacoba
violated the Local Government Code and the Code of
Professional Responsibility.
HELD: YES. Section 415 of the LGC of 1991, on the
subject Katarungang Pambarangay, provides:
6
Section 415. Appearance of Parties in Person. - In all
katarungang pambarangay proceedings, the parties
must appear in person without the assistance of the
counsel or representative, except for minors and
incompetents who may be assisted by their next of
kin who are not lawyers.
The above-quoted provision clearly requires the
personal appearance of the parties in katarungan
pambarangay conciliation proceedings, unassisted by
counsel or representative. The rationale behind the
personal appearance requirement is to enable the
lupon to secure first hand and direct information
about the facts and issues, the exception being in
cases where minors or incompetents are parties.
There can be no quibbling that laymen of goodwill
can easily agree to conciliate and settle their
disputes between themselves without what
sometimes is the unsettling assistance of lawyers
whose presence could sometimes obfuscate and
confuse issues. Worse still, the participation of
lawyers with their penchant to use their analytical
skills and legal knowledge tend to prolong instead of
expedite settlement of the case.
The prohibition against the presence of a lawyer in a
barangay conciliation proceedings was not, to be
sure, lost on respondent. Her defense that the
aforequoted Section 415 of the LGC does not apply
since complainant addressed her Sumbong to the
barangay captain of Brgy. San Pascual who
thereafter proceeded to hear the same is specious at
best. In this regard, suffice it to state that
complainant wrote her Sumbong with the end in
view of availing herself of the benefits of barangay
justice. That she addressed her Sumbong to the
barangay captain is really of little moment since the
latter chairs the Lupong Tagapamayapa
The prohibition in question applies to all katarungan
barangay proceedings. Section 412(a) [11] the LGC
of 1991 clearly provides that, as a precondition to
filing a complaint in court, the parties shall go
through the conciliation process either before the
lupon chairman or the lupon or pangkat.
As what happened in this case, the punong
barangay, as chairman of the Lupon Tagapamayapa,
conducted the conciliation proceedings to resolve
the disputes between the two parties.
Doubtless, respondent’s conduct tended to
undermine the laudable purpose of the katarungan
pambarangay system. What compounded matters
was when respondent repeatedly ignored
complainant’s protestation against her continued
appearance in the barangay conciliation
proceedings. Hence, Atty. Jacoba was ordered to fine
P5,000 and warned that commission of similar acts
of impropriety on her part in the future will be dealt
with more severely.

7
 SUBSTANTIAL COMPLIANCE:
1. AVELINA ZAMORA et. Al. vs. HEIRS of CARMEN
IZQUIERDO G.R. No. 146195, November 18,
2004
FACTS: Carmen Izquierdo and Pablo Zamora entered
into a verbal stipulation whereby the Izquierdo
leased to Zamora one of her apartment units in
Caloocan City. They agreed that the rental is
P3,000.00 per month, it is only for residence and
only a single family is allowed to occupy it.
After the death of Carmen her attorney-in-
fact (Punzalan), representing her heirs, prepared a
new contract of lease wherein the rental was
increased from P3,000.00 to P3,600.00 per month.
But, petitioners refused to sign it.
When Pablo died on January 1997. His
wife, Avelina Zamora, and their children continued
to reside in the apartment unit. They also refused
to pay the increased rental and operated a
photocopying business in the leased property.
Avelina applied with the Metropolitan
Waterworks & Sewerage System for a water line
installation in the premises but the respondent’s
attorney- in- fact declined to sign the permit because
the petitioners refused to pay the new rental rate
and violated the on the agreement.
Avelina then filed with the Office of the
Punong Barangay of Barangay 16, Sona 2, District I,
Lungsod ng Caloocan, a complaint against the
respondents’ attorney-in-fact for her refusal to file
the permit.
During the barangay conciliation
proceedings, Zamora said that she refused to sign
the new lease contract because she does not agree
with its conditions. The following day, Punzalan sent
Avelina a letter informing her that the lease is being
terminated and demanding that petitioners vacate
the premises within 30 days from notice.
Despite several barangay conciliation
sessions, the parties failed to settle their dispute
amicably. Hence, the Barangay Chairman issued a
Certification to File Action. Thus, Punzalan, filed
with the Metropolitan Trial Court, Branch 49 of
Caloocan City, a complaint for unlawful detainer and
damages against petitioners.
On the other hand, petitioners filed a
motion to dismiss the complaint on the ground that
the controversy was not referred to the barangay
for conciliation. They alleged that the barangay
Certification to File Action “is fatally defective”
because it pertains to another dispute, i.e., the
refusal by respondents’ attorney-in-fact to give her
8
written consent to petitioners’ request for
installation of water facilities in the premises. And,
when the parties failed to reach an amicable
settlement before the Lupong Tagapamayapa, the
Punong Barangay, did not constitute the Pangkat ng
Tagapagkasundo before whom mediation or
arbitration proceedings should have been
conducted.
The MTC denied the petitioners’ motion to
dismiss and considered the case submitted for
decision in view of their failure to file their answer to
the complaint.
Aggrieved, petitioners filed a motion for
reconsideration which was denied. Thus, petitioners,
appealed before the RTC which affirmed the decision
of the MTC. Aggrieved, they appealed before the
Court of Appeals which affirmed the decision of the
RTC. Thus, this petition.
ISSUE: Whether respondent complied with the
Katarungang Pambarangay Law providing for a
conciliation before any complaint, petition, action, or
proceeding involving any matter within the authority
of the Lupon of the barangay shall be filled or
instituted in the court.
DECISION: Yes, respondent’s complied with
the Katarungang Pambarangay Law providing for a
conciliation.
The primordial objective of PD No. 1508
(The Katarungang Pambarangay Law), now included
under RA No. 7160 ( The Local Government Code of
1991), is to reduce the number of court litigations
and prevent the deterioration of the quality of
justice which has been brought about by the
indiscriminate filing of cases in the courts. To attain
this objective, Section 412(a) of RA No. 7160 requires
the parties to undergo a conciliation process before
the Lupon Chairman or the Pangkat as a
precondition to filing a complaint, thus:
Section 412(a) – Precondition to Filing of
Complaint in Court - of R.A. No. 7160 provides that
No complaint, petition, action, or proceeding
involving any matter within the authority of the
lupon shall be filed or instituted directly in court or
any other government office for adjudication, unless
there has been a confrontation between the parties
before the lupon chairman or the pangkat, and that
no conciliation or settlement has been reached as
certified by the lupon or pangkat secretary and
attested to by the lupon or pangkat chairman x x x.”
In the case at bar, the Punong Barangay, as
Chairman of the Lupong Tagapamayapa, conducted
conciliation proceedings to resolve the dispute
between the parties. As correctly pointed out by
the RTC, the complaint does not only allege, as a
cause of action, the refusal of respondents’ attorney-
in-fact to give her consent to the installation of
water facilities in the premises, but also petitioners’
violation of the terms of the lease, specifically their
use of a portion therein for their photocopying
business and their failure to pay the increased rental.
The law also provides that, as a
precondition to filing a complaint in court, the
parties shall go through the conciliation process
either before the Lupon Chairman or the Pangkat.
This was complied in the case at bar because a
conciliation proceeding was conducted with the
Lupon Chairman. It is clear that the respondent’s
complied with the Katarungang Pambarangay Law
providing for conciliation.

Thus, the motion to dismiss was not granted.

9
 WHEN PARTIES MAY DIRECTLY GO TO COURT: corporation sole, testate or intestate, estate, etc. In
1. Vda de. Borromeo vs. Pogoy, GR No. 63277, the case at bar, plaintiff Ricardo Reyes is a mere
November 29, 1983, 126 SCRA 217 X nominal party who is suing in behalf of the Intestate
Estate of Vito Borromeo. While it is true that Section
FACTS: The intestate estate of the late Vito 3, Rule 3 of the Rules of Court allows the
Borromeo is the owner of a building bearing the administrator of an estate to sue or be sued without
deceased's name which has been leased and joining the party for whose benefit the action is
occupied by petitioner Petra Vda. de Borromeo. On presented or defended, it is indisputable that the
August 28, 1982, private respondent Atty. Ricardo real party in interest is the intestate estate under
Reyes, administrator of the estate and a resident of administration. Since the said estate is a juridical
Cebu City, served upon petitioner a letter demanding person plaintiff administrator may file the complaint
that the latter shall pay the overdue rentals and directly in court, without the same being coursed to
thereafter to vacate the premises. As petitioner the Barangay Lupon for arbitration.
failed to do so, Atty. Reyes instituted an ejectment
case against the former in the Municipal Trial Court
of Cebu City. The complaint was docketed as Civil
Case No. R-23915 and assigned to the sala of
respondent judge. Petitioner moved to dismiss for
want of jurisdiction, wherein she points out that the
parties are from the same cities and as such they
must refer the dispute to the barangay Court or
Lupon before going through the judicial courts.
Respondent’s defense was that it was danger of
prescribing under the statute of limitations. The
motion was dismissed thus this case. Issue: (1)
Whether or not it was indeed in danger of
prescribing (2) dWhether or not going through Lupon
was necessary Ruling: (1) No. Under Article 1147 of
the Civil Code, the period for filing actions for
forcible entry and detainer is one year, and this
period is counted from demand to vacate the
premises. In the case at bar, the letter-demand mand
was dated August 28, 1982, while the complaint for
ejectment was filed in court on September 16, 1982.
Between these two dates, less than a month had
elapsed, thereby leaving at least eleven (11) full
months of the prescriptive period provided for in
Article 1147 of the Civil Code. In the case at bar, the
case was filed on September 16, 1982, less than a
month before the letter of demand was served.
Forcible entry and detainer prescribes in one year
counted from demand to vacate the premises and
the law only required 60 days upon which the parties
should try to reconcile in Lupon. Respondent had
more than 9 months left even if reconciliation failed.
(2) No. Under Section 4(a) of PD No. 1508, referral of
a dispute to the Barangay Lupon is required only
where the parties thereto are "individuals". An
"individual" means "a single human being as
contrasted with a social group or institution."
Obviously, the law applies only to cases involving
natural persons, and not where any of the parties is
a juridical person such as a corporation, partnership,

10
 TOPIC: KATARUNGANG PAMBARANGAY
(JURISDICTION) First Division ISSUE: Whether or not Katarungang Pambarangay
Law is applicable in this case.
2. Napoleon Gregare v. Court of Appeals GR No.
83907 September 13, 1989, X HELD: Yes, Katarungang Pambarangay Law is
applicable in the case at bar.
Respondent Elma’s Defense Petitioner failed to
comply with the provisions of PD No. 1508 Ratio: True it is that the Board is a government
(Katarungang Pambarangay Law) before filing his instrumentality but the petitioner and private
complaint in court. respondent who are also contending parties in the
case are residents of the same barangay so Section 6
Gancayco, J: of Presidential Decree No. 1508 should apply to
them as it provides---
FACTS: There was a lot with an area of
approximately 270 sq. m. in General Santos City. Its Section 6. Conciliation, pre-condition to filing of
title was named after Paulino Elma. A reversion case complaint. No complaint, petition, action or
was filed by the State against Elma in the CFI of proceeding involving any matter within the authority
South Cotabato, wherein a decision was rendered of the Lupon as provided in Section 2 hereof shall be
declaring Elma’s title null and void and thus, was filed or instituted in court or any other government
ordered cancelled. The lot was reverted to the mass office for adjudication unless there has been a
of public domain subject to disposition and giving confrontation of the parties before the Lupon
preferential right to its actual occupant, Napoleon Chairman or the Pangkat and no conciliation or
Gegare. (The writ of execution went to series of settlement has been reached as certified by the
processes including applying before the Board of Lupon Secretary or the Pangkat Secretary attested by
Liquidators. They are, however, not essential to our the Lupon or Pangkat Chairman, or unless the
topic.) The chief of LASEDECO, through the Board of settlement has been repudiated.
Liquidators’ directive, investigated the lot and
recommended the division of the same equally to The purpose of this confrontation is to enable the
both parties. The Board issued the resolution parties to settle their differences amicably. If the
ordering the said division. The Office of the President other only contending party is the government or its
affirmed the board’s resolution. Private respondent, instrumentality or subdivision the case falls within
Armie Elma, paid for the value of the ½ of the lot. An the exception but when it is only one of the
original certificate was then issued to him. Petitioner contending parties, a confrontation should still be
was also advised by the Board to do the same. undertaken among the other parties.
Petitioner then filed an action for “Annulment and
Cancellation of Partition of Lot 5989, Ts-217, situated
at Dadiangas, General Santos City and Annulment of
Resolutions No. 272 and and 185 and/or to Declare
them Null and Void” against private respondent and
the Board. The suit was docketed Civil Case No. 3270
in the RTC of General Santos City. Sequence of
events after filing: Priv. Resp: Motion to dismiss
(GRANTED) Pet: Motion for reconsideration
(GRANED) PR: Asked for a preliminary hearing of the
grounds for the motion to dismiss in his affirmative
defenses. (DENIED) PR: Petition for certiorari and
prohibition in the CA (GRANTED) Pet: Urgent Motion
for reconsideration (DENIED) Pet: Appeal before the
SC (DISMISSED)

Petitioner’s Response Such law is not applicable

since one of the parties is the government or any
subdivision or instrumentality.

11
3. G.R. No. 137359 September 13, 2004
EDWIN N. TRIBIANA, petitioner, vs. LOURDES
M. TRIBIANA, respondent
FACTS: Edwin Tribiana & Lourdes Tribiana are
husband and wife. Lourdes filed a petition for habeas
corpus before the Regional Trial Court claiming that
Edwin left their conjugal home with their daughter
Khriza Mae who was then only 1 year and 4 months
old. It turned out that Khriza was being held by
Edwin’s mother, Rosalina Tribiana.
Edwin moved to dismiss Lourdes petition on
the ground that it failed to allege that earnest efforts
at a compromise were madew before its filing as
required by Article 151 of the Family Code.
Lourdes filed her opposition to Edwin’s
motion to dismiss claiming that there were prior
efforts at a compromise, which failed. Lourdes
attached the Certification to file Action from their
barangay.
RTC denied Edwin’s motion to dismiss and
reiterated a previous order requiring Edwin and his
mother to bring Khriza Mae before the RTC.
 The Certification to File Action attached by
Lourdes to her opposition clearly indicates
that the parties attempted to reach a
compromise but failed.
Edwin filed with the Court of Appeals a
petition for prohibition and certiorari under Rule 65
of the Rules of Court. The CA denied Edwin’s petition
and also the motion for reconsideration.
 Upheld RTC ruling and added that under
Section 412 (b) (2) of the LGC, conciliation
proceedings before the barangay are not
required in petitions for habeas corpus.
ISSUE: Whether the Trial Court and the Appellate
Court, should have dismissed the petition for habeas
corpus on the ground of failure to comply with the
condition precedent under art. 151 of Family code.
HELD: The petition is lack of merit.
Edwin argues that Lourdes’ failure to indicate in her
petition for habeas corpus that the parties exerted
prior efforts to reach a compromise and that such
efforts failed is a ground for the petition’s dismissal
under Section 1(j), Rule 16 of the 1997 Rules of Civil
Procedure. Edwin maintains that under Article 151 of
the Family Code, an earnest effort to reach a
compromise is an indispensable condition
precedent.
12
It is true that the petition for habeas corpus filed by
Lourdes failed to allege that she resorted to
compromise proceedings before filing the petition.
However, in her opposition to Edwin’s motion to
dismiss, Lourdes attached a Barangay Certification
to File Action dated 1 May 1998. Edwin does not
dispute the authenticity of the Barangay Certification
and its contents. This effectively established that the
parties tried to compromise but were unsuccessful in
their efforts. However, Edwin would have the
petition dismissed despite the existence of the
Barangay Certification, which he does not even
dispute.
Evidently, Lourdes has complied with the condition
precedent under Article 151 of the Family Code. A
dismissal under Section 1(j) of Rule 16 is warranted
only if there is a failure to comply with a condition
precedent. Given that the alleged defect is a mere
failure to allege compliance with a condition
precedent, the proper solution is not an outright
dismissal of the action, but an amendment under
Section 1 of Rule 10 of the 1997 Rules of Civil
Procedure.
The failure of a party to comply with a condition
precedent is not a jurisdictional defect. Such defect
does not place the controversy beyond the court’s
power to resolve. If a party fails to raise such defect
in a motion to dismiss, such defect is deemed
waived. Such defect is curable by amendment as a
matter of right without leave of court, if made
before the filing of a responsive pleading. A motion
to dismiss is not a responsive pleading. More
importantly, an amendment alleging compliance
with a condition precedent is not a jurisdictional
matter. Neither does it alter the cause of action of a
petition for habeas corpus.
The Court of Appeals dismissed Edwin’s contentions
by citing as an additional ground the exception in
Section 412 (b) (2) of the Local Government Code
("LGC") on barangay conciliation, which states:
(b) Where the parties may go directly to court. – the
parties may go directly to court in the following
instances:
xxx
2) Where a person has otherwise been deprived of
personal liberty calling for habeas corpus
proceedings;

xxx.

Under Rule 102 of the 1997 Rules of Civil Procedure,

a party may resort to a habeas corpus proceeding in
two instances:
 First, when any person is deprived of liberty
either through illegal confinement or
through detention.
 Second, when custody of any person is
withheld from the person entitled to such
custody. The most common case falling
under the second instance involves children
who are taken away from a parent by
another parent or by a relative.

The barangay conciliation requirement in Section

412 of the LGC does not apply to habeas corpus
proceedings where a person is "deprived of personal
liberty." In such a case, Section 412 expressly
authorizes the parties "to go directly to court"
without need of any conciliation proceedings. There
is deprivation of personal liberty warranting a
petition for habeas corpus where the "rightful
custody of any person is withheld from the person
entitled thereto."
Thus, the Court of Appeals did not err when it
dismissed Edwin’s contentions on the additional
ground that Section 412 exempts petitions for
habeas corpus from the barangay conciliation
requirement.

13
4. Abagatnan, et. al. v. Spouses Clarito, G.R. No.
211966, August 7, 2017
FACTS: The petitioners in the case filed a Complaint
for Unlawful Detainer and Damages against
respondents where they claimed to have been
unlawfully deprived of the use and possession of a
portion of their land and for failure to comply with
the mandatory requirement of resorting to prior
barangay conciliation, as required under Section 412
of RA No. 7160, or the LGC.
Notably, the Complaint alleged that prior
barangay conciliation proceedings are not required
as a pre-condition for the filing of the case in court,
given that not all petitioners are residents of Roxas
City. Specifically, petitioner Jimmy C. Abagatnan
resided in Laguna, while petitioner Jenalyn A. De
Leon resided in Pasig City.
In their Answer with Counterclaim,
respondents argued that prior barangay conciliation
is a mandatory requirement that cannot be
dispensed with, considering that Jimmy and Jenalyn
had already executed a Special Power of Attomey in
favor of their co-petitioner and sister, Josephine A.
Paree, who is a resident of Roxas City. This matter,
however, was not made an issue in the Pre-Trial
Order.
In its Decision, the MTCC rendered
judgment in favor of petitioners.
Respondents thereafter appealed the MTCC
Decision to the RTC, raising, among others, the issue
of lack of prior barangay conciliation proceedings.
In its Decision, the RTC denied the appeal for lack of
merit. Among others, it held that the lack of
barangay conciliation proceedings cannot be brought
on appeal because it was not made an issue in the
Pre-Trial Order.
In its Decision, the CA ruled that the findings of fact
of both the MTCC and the RTC are supported by the
evidence on record.
Nevertheless, the CA granted the Petition and
dismissed the petitioners’ Complaint, albeit without
prejudice, for lack of prior referral to the
Katarungang Pambarangay.
It pointed out that majority of petitioners actually
resided in Barangay Cogon, Roxas City, while the
two non-residents of Roxas City already executed
an SP A in favor of Josephine, whom they
authorized, among others, to enter into an
14
amicable settlement with respondents. Since
respondents also reside in the same barangay, the
dispute between the parties is clearly within the
ambit of the Lupon Tagapamayapa’s authority.
The CA thus concluded that petitioners’ Complaint
had been prematurely filed with the MTCC, as it
should have been first brought before the Lupon for
mandatory conciliation to accord the parties the
chance for amicable settlement.
Petitioners moved for reconsideration, but the CA
denied the motion in its Resolution. As a
consequence, petitioners filed the present Petition
for Review on Certiorari before the Court assailing
the CA’s Decision and Resolution.
ISSUE: Whether the CA correctly dismissed the
Complaint for failure to comply with the prior
barangay conciliation requirement under Section 412
of the LGC, despite the fact that not all real parties in
interest resided in the same city or municipality.
RULING: No.
The LGC provides that “the lupon of each barangay
shall have authority to bring together the parties
actually residing in the same city or municipality for
amicable settlement of all disputes” subject to
certain exception one of which is in cases where the
dispute involves parties who actually reside in
barangays of different cities or municipalities,
unless said barangay units adjoin each other and
the parties thereto agree to submit their
differences to amicable settlement by an
appropriate lupon, which means that parties who do
not actually reside in the same city or municipality or
adjoining barangays are not required to submit their
dispute to the lupon as a pre-condition to the filing
of a complaint in court.
It has been held that the express statutory
requirement of actual residency in the LGC pertains
specifically to the real parties in interest in the case.
Said requirement cannot be construed to apply to
the attorney-in-fact of the party-plaintiff, as doing so
would abrogate the meaning of a “real party in
interest” as defined in Section 2, in relation to
Section 3, of Rule 3 of the Rules of Court.
In Banting v. Spouses Maglapuz, the Court has ruled
that “the requirement under Section 412 of the
[LGC] that a case be referred for conciliation before
the Lupon as a precondition to its filing in court
applies only to those cases where the real parties-
in-interest actually reside in the same city or
municipality.”

Here, the Complaint filed before the MTCC

specifically alleged that not all the real parties in
interest in the case actually reside in Roxas City, to
wit: Jimmy resided in Poblacion, Siniloan, Laguna,
while Jenalyn resided in Brgy. de La Paz, Pasig City.

As such, the lupon has no jurisdiction over their

dispute, and prior referral of the case for barangay
conciliation is not a precondition to its filing in
court.

This is true regardless of the fact that Jimmy and

Jenalyn had already authorized their sister and co-
petitioner, Josephine, to act as their attorney-in-fact
in the ejectment proceedings before the MTCC. As
previously explained, the residence of the attorney-
in-fact of a real party in interest is irrelevant in so
far as the "actual residence" requirement under the
LGC for prior barangay conciliation is concerned.

WHEREFORE, we GRANT the Petition for Review on

Certiorari. CA reversed and set aside.

15
 EXECUTION:
1. Berba vs Pablo, G.R. No. 160032, November 11,
2005
FACTS: Estela L. Berba, a resident of Malate, Manila,
was the owner of a parcel of land located at Sta.
Ana, Manila covered by TCT No. 63726. A house was
constructed on the lot, which she leased to
Josephine Pablo and the Heirs of Carlos Palanca
sometime in 1976. The lease was covered by a lease
contract. Upon its expiration, the lessees continued
leasing the house on a month-to-month basis.
The lessees failed to pay the rentals due, and by May
1999, their arrears amounted to P81,818.00. Berba
then filed a complaint for eviction and collection of
unpaid rentals only against Pablo in the Office of
thePunong Barangay. On June 5, 1999, Berba and
Pablo executed an Agreement approved by the
pangkat, as follows:
“Ako si Josephine Pablo, naninirahan sa 2338
M. Roxas St., Sta. Ana, Manila, na nasasakop ng
Barangay 873, Zone 96, ay nangangako kay GG
Robert Berba na nagmamay-ari ng aking tinitirahan
ay maghuhulog ng halagang Tatlong Libong Piso
P3,000.00 kada ika-sampu ng buwan bilang hulog sa
aking pagkakautang kay GG Berba na umaabot sa
halagang P81,818.00 na ang nasabing halagang ito ay
aking huhulugan hanggang aking mabayaran ng buo
ang aking pagkakautang. Ako rin, si Josephine Pablo,
ay nangangako na ang hindi ko pagsunod o
pagbayad ng buwanang hulog, ako ay kusang aalis
sa aking tinitirahan. Bukod pa sa hulog sa aking
pagkakautang, ako rin ay magbabayad ng
halagangP3,450.00 bilang aking upa sa aking
tinitirahan.”
By May 2000, Pablo and the lessees still had a
balance of P71,716.00. As of May 1, 2001, the total
arrearages of the lessees amounted toP135,115.63.
On May 2, 2001, Berba, through counsel, wrote the
lessees, demanding payment of the said amount and
to vacate the house within 30 days from notice,
otherwise she will sue them. The lessees ignored
the demand. On June 21, 2001, Berba filed a
complaint against Josephine Pablo and the Heirs of
Carlos Palanca in the Metropolitan Trial Court (MTC)
of Manila for unlawful detainer.
Berba, however, failed to append to her
complaint a certification from the Lupon ng
16
Tagapamayapa that no conciliation or settlement
had been reached.
In their answer to the complaint, the defendants
admitted to have stopped paying rentals because of
financial distress. They also alleged that they were
not certain if the plaintiff was the owner of the
property. By way of special and affirmative
defenses, they averred that the plaintiff had no
cause of action against them as she failed to secure
a Certificate to File Action from the Lupon.
During the pre-trial conference, the parties
manifested to the court that, despite earnest efforts,
no amicable settlement was reached. They defined
the main issue as whether or not the plaintiff had a
valid cause of action for unlawful detainer against
the defendants.
Berba appended an Agreement dated June 5, 1999
between her and Pablo, which appeared to have
been approved by Punong Barangay Cayetano L.
Gonzales of Barangay 873, as well as other members
of the Lupon, duly approved by the Pangkat.
The defendants insisted that the dispute did not go
through the Lupon ng Tagapamayapa prior to the
filing of the complaint; hence, Berba’s complaint was
premature.
The plaintiff alleged that there was no more need for
her to secure a Certificate to File Action because she
was a resident of No. 978 Maligaya Street, Malate,
Manila, while the defendants were residing in
Barangay 873, Zone 6 in Sta. Ana, Manila.
ISSUE: Whether or not petitioner had the right to
enforce the Agreement against her.
RULING: No, the settlement of the parties may be
enforced by the Lupon, through the punong
barangay, within six months; and if the settlement is
not enforced after the lapse of said period, it may be
enforced by an action in the proper city or municipal
court, as provided in Section 417 of the Local
Government Code.
The Secretary of the Lupon is mandated to transmit
the settlement to the appropriate city or municipal
court within the time frame under Section 418 of the
LGC and to furnish the parties and the Lupon
Chairman with copies thereof. The amicable
settlement which is not repudiated within the period
therefor may be enforced by execution by the Lupon
through the Punong Barangay within a time line of
six months, and if the settlement is not so enforced
by the Lupon after the lapse of said period, it may be
enforced only by an action in the proper city or
municipal court as provided for in Section 417 of the
LGC of 1991.
Section 417 of the Local Government Code provides
a mechanism for the enforcement of a settlement of
the parties before the Lupon. It provides for a two-
tiered mode of enforcement of an amicable
settlement executed by the parties before the
Lupon, namely, (a) by execution of the Punong
Barangay which is quasi-judicial and summary in
nature on mere motion of the party/parties entitled
thereto; and (b) by an action in regular form, which
remedy is judicial. Under the first remedy, the
proceedings are covered by the LGC and the
Katarungang Pambarangay Implementing Rules and
Regulations. The Punong Barangay is called upon
during the hearing to determine solely the fact of
non-compliance of the terms of the settlement and
to give the defaulting party another chance at
voluntarily complying with his obligation under the
settlement. Under the second remedy, the
proceedings are governed by the Rules of Court, as
amended. The cause of action is the amicable
settlement itself, which, by operation of law, has the
force and effect of a final judgment.
Section 417 of the LGC grants a period of six months
to enforce the amicable settlement by the Lupon
through the Punong Barangay before such party may
resort to filing an action with the MTC to enforce the
settlement. The raison d’etre of the law is to afford
the parties during the six-month time line, a simple,
speedy and less expensive enforcement of their
settlement before the Lupon
In the present case, respondent Josephine Pablo
failed to comply with her obligation of repaying the
back rentals of ₱81,818.00 and the current rentals
for the house. Hence, the petitioner had the right to
enforce the Agreement against her and move for her
eviction from the premises. However, instead of
filing a motion before the Lupon for the
enforcement of the agreement, or (after six
months), an action in the Metropolitan Trial Court
(MTC) for the enforcement of the settlement, the
petitioner filed an action against respondent
Josephine Pablo for unlawful detainer and the
collection of unpaid rentals, inclusive of those
17
already due before the June 5, 1999 Agreement was
executed. The action of the petitioner against
respondent Pablo was barred by the Agreement of
June 5, 1999
Petition DENIED.
The Court thus rules that the petitioner’s complaint
against respondent Heirs of Carlos Palanca was
premature. It bears stressing that they were not
impleaded by the petitioner as parties-respondents
before the Lupon. The petitioner filed her complaint
solely against respondent Josephine Pablo.
Moreover, the said respondent heirs were not privy
to the said agreement, and, as such, were not bound
by it.
In this case, the petitioner and the
respondent Heirs of Carlos Palanca resided in the
City of Manila, albeit in different barangays. The
dispute between the petitioner and the respondent
heirs was thus a matter within the authority of the
Lupon. Hence, the petitioner’s complaint for
unlawful detainer and the collection of back rentals
should have been first filed before the Lupon for
mandatory conciliation, to afford the parties an
opportunity to settle the case amicably. However,
the petitioner filed her complaint against the
respondent Heirs of Carlos Palanca directly with the
MTC. Clearly then, her complaint was premature.
The execution of the June 5, 1999 Agreement
between petitioner and respondent Josephine Pablo
does not amount to substantial compliance to the
requirements of the Local Government Code on
mandatory barangay conciliation proceedings.
2. Miguel v Montanez, G.R. No. 191336, January
25, 2012
DOCTRINE: If the amicable settlement is repudiated
by one party, either expressly or impliedly, the other
party has two options, namely, to enforce the
compromise in accordance with the Local
Government Code or Rules of Court as the case may
be, or to consider it rescinded and insist upon his
original demand. This is in accord with Article 2041
of the Civil Code
FACTS: Respondent Jerry Montanez (Montanez)
secured a loan of P143,864.00, payable in one (1)
year, or until February 1, 2002, from the petitioner.
The respondent gave as collateral therefor his house
and lot. Resp failed to pay the loan. The petitioner
filed a complaint against the respondent.
The parties entered into a Kasunduang Pag-aayos
wherein the respondent agreed to pay his loan in
installments in the amount of P2,000.00 per month,
and in the event the house and lot given as collateral
is sold, the respondent would settle the balance of
the loan in full. However, the respondent still failed
to pay, the Lupong Tagapamayapa issued a
certification to file action in court in favor of the
petitioner.
The petitioner filed before the MeTC of Makati City a
complaint for Collection of Sum of Money. In his
Answer with Counterclaim, the respondent raised
the defense of improper venue considering that the
petitioner was a resident of Bagumbong, Caloocan
City while he lived in San Mateo, Rizal.
MeTC: ordered def Montanez to pay ptff.
RTC: Affirmed MeTC
CA: REVERSED and SET ASIDE RTC.
 No novation of the old obligation has taken
place.
 Since the parties entered into a Kasunduang
Pag-aayos before the Lupon ng Barangay,
such settlement has the force and effect of
a court judgment, which may be enforced
by execution within six (6) months from the
date of settlement by the Lupon ng
Barangay, or by court action after the lapse
of such time. Considering that more than six
(6) months had elapsed from the date of
settlement, the CA ruled that the remedy of
18
the petitioner was to file an action for the
execution of the Kasunduang Pag-aayos in
court and not for collection of sum of
money. Consequently, the CA deemed it
unnecessary to resolve the issue on venue
The petitioner contends that the CA erred in ruling
that she should have followed the procedure for
enforcement of the amicable settlement as provided
in the Revised Katarungang Pambarangay Law,
instead of filing a collection case. The petitioner
points out that the cause of action did not arise from
the Kasunduang Pag-aayos but on the respondent’s
breach of the original loan agreement
ISSUE: Whether or not the CA erred in ruling that
petitioner should have followed the procedure for
enforcement of the amicable settlement as provided
in the Revised Katarungang Pambarangay Law
HELD: Yes. It is true that an amicable settlement
reached at the barangay conciliation proceedings,
like the Kasunduang Pag-aayos in this case, is binding
between the contracting parties and, upon its
perfection, is immediately executory insofar as it is
not contrary to law, good morals, good customs,
public order and public policy. This is in accord with
the broad precept of Article 2037 of the Civil Code
Because the respondent failed to comply with the
terms of the Kasunduang Pag-aayos, said agreement
is deemed rescinded pursuant to Article 2041 of the
New Civil Code and the petitioner can insist on his
original demand. Perforce, the complaint for
collection of sum of money is the proper remedy. It
is true that an amicable settlement reached at the
barangay conciliation proceedings, like the
Kasunduang Pag-aayos in this case, is binding
between the contracting parties and, upon its
perfection, is immediately executory insofar as it is
not contrary to law, good morals, good customs,
public order and public policy. This is in accord with
the broad precept of Article 2037 of the Civil Code,
viz: A compromise has upon the parties the effect
and authority of res judicata; but there shall be no
execution except in compliance with a judicial
compromise.
Being a by-product of mutual concessions and good
faith of the parties, an amicable settlement has the
force and effect of res judicata even if not judicially
approved. It transcends being a mere contract
binding only upon the parties thereto, and is akin to
a judgment that is subject to execution in
accordance with the Rules.
Thus, under Section 417 of the Local Government
Code, such amicable settlement or arbitration award
may be enforced by execution by the Barangay
Lupon within six (6) months from the date of
settlement, or by filing an action to enforce such
settlement in the appropriate city or municipal
court, if beyond the six-month period.
Under the first remedy, the proceedings are covered
by the Local Government Code and the Katarungang
Pambarangay Implementing Rules and Regulations.
The Punong Barangay is called upon during the
hearing to determine solely the fact of non-
compliance of the terms of the settlement and to
give the defaulting party another chance at
voluntarily complying with his obligation under the
settlement.
Under the second remedy, the proceedings are
governed by the Rules of Court, as amended. The
cause of action is the amicable settlement itself,
which, by operation of law, has the force and effect
of a final judgment.
It must be emphasized, however, that enforcement
by execution of the amicable settlement, either
under the first or the second remedy, is only
applicable if the contracting parties have not
repudiated such settlement within ten (10) days
from the date thereof in accordance with Section
416 of the Local Government Code. If the amicable
settlement is repudiated by one party, either
expressly or impliedly, the other party has two
options, namely, to enforce the compromise in
accordance with the Local Government Code or
Rules of Court as the case may be, or to
consider it rescinded and insist upon his original
demand.
This is in accord with Article 2041 of the Civil Code,
which qualifies the broad application of Article 2037,
viz: If one of the parties fails or refuses to abide by
the compromise, the other party may either enforce
the compromise or regard it as rescinded and insist
upon his original demand.
In the case at bar, the Revised Katarungang
Pambarangay Law provides for a two-tiered mode
of enforcement of an amicable settlement, to wit:
(a) by execution by the Punong Barangay which is
quasi-judicial and summary in nature on mere
19
motion of the party entitled thereto; and (b) an
action in regular form, which remedy is judicial.
However, the mode of enforcement does not rule
out the right of rescission under Art. 2041 of the Civil
Code. The availability of the right of rescission is
apparent from the wording of Sec. 417 itself which
provides that the amicable settlement "may" be
enforced by execution by the lupon within six (6)
months from its date or by action in the appropriate
city or municipal court, if beyond that period. The
use of the word "may" clearly makes the procedure
provided in the Revised Katarungang Pambarangay
Law directory or merely optional in nature.
Thus, although the "Kasunduan" executed by
petitioner and respondent before the Office of the
Barangay Captain had the force and effect of a final
judgment of a court, petitioner's non-compliance
paved the way for the application of Art. 2041 under
which respondent may either enforce the
compromise, following the procedure laid out in the
Revised Katarungang Pambarangay Law, or regard it
as rescinded and insist upon his original demand.
In the instant case, the respondent did not comply
with the terms and conditions of the Kasunduang
Pag-aayos. Such non-compliance may be construed
as repudiation because it denotes that the
respondent did not intend to be bound by the terms
thereof, thereby negating the very purpose for which
it was executed. Perforce, the petitioner has the
option either to enforce the Kasunduang Pag-aayos,
or to regard it as rescinded and insist upon his
original demand, in accordance with the provision of
Article 2041 of the Civil Code. Having instituted an
action for collection of sum of money, the petitioner
obviously chose to rescind the Kasunduang Pag-
aayos. As such, it is error on the part of the CA to
rule that enforcement by execution of said
agreement is the appropriate remedy under the
circumstances.
 JURISDICTION:
1. VICTORINO C. FRANCISCO, petitioner, vs.
WINAI PERMSKUL and THE HON. COURT OF
APPEALS, respondents. G.R. No. 81006 |173
SCRA 324 | May 12, 1989 | En Banc | Justice
Cruz
Validity of the memorandum decision authorized
under Section 40 of BP Blg 129 in the light of Article
8, Section 14 of the Constitution
Constitutional Law | Judicial Department | Judicial
Power
Conditions to make a memorandum decision valid:
(1) it should actually embody the findings of fact and
conclusions of law of the lower court in an annex
attached to and made an indispensable part of the
decision; and
(2) it is resorted to only in cases where the facts are
in the main accepted by both parties and easily
determinable by the judge and there are no doctrinal
complications involved that will require an extended
discussion of the laws involved.
BP 129; Decisions; Memorandum Decisions; The
memorandum decision authorized under Sec. 40,
BP 129 should actually embody the findings of fact
and conclusions of law of the lower court in an
annex attached to and made an indispensable part
of the decision
Memorandum decision should be sparingly used
lest it become an addictive excuse for judicial sloth.
FACTS: Francisco, the petitioner, filed a petition
seeking to nullify the decision of the Court of
Appeals as it violates Article 8 section 14 of the
constitution.
The Petitioner leased his apartment to Permskul, the
private respondent. Both agreed on the terms of
lease at a lease rate of 3000.00 per month. The
private respondent deposited with the petitioner the
amount of P9,000.00 to answer for unpaid rentals or
any damage to the leased premises except when
caused by reasonable wear and tear.
The private respondent vacated the property after a
year. He requested the refund of his deposit less of
P1,000.00, representing the rental for the additional
ten days of his occupancy after the expiration of the
lease.
20
The petitioner refused to give the deposit and
instead said that the respondent still owed him for
other charges, including the electricity and water
bills and the sum of P2,500.00 for repainting of the
apartment to restore it to its original condition.
The private respondent filed a case in the
Metropolitan Trial Court (MTC) of Makati and won
the case. The petitioner was ordered to pay the
private respondent the amount of P7,750.00,
representing the balance of the deposit after
deducting the water and electricity charges,
including the sum of P1,250.00 as attorney’s fees in
favor of the respondent.
RTC of Makati affirmed in toto the decision.
He appealed the decision all the way to the Court of
appeals for a petition for review but was denied.
Both, The RTC and the CA, took cognizance of his
appeal and in their decisions, they relied on the
well-written decision of the MTC. The CA
incorporated the memorandum decision of the RTC
in its decision.
Hence, his petition citing that the Memorandum
Decision of the CA failed to comply with the
provision of the constitution that state that:
Art. 8 Sec. 14. No decision shall be rendered by any
court without expressing therein clearly and
distinctly the facts and the law on which it is based.
No petition for review or motion for reconsideration
of a decision of the court shall be refused due course
or denied without stating the legal basis therefor.
Petitioner’s arguments:
 The memorandum decision rendered by the
RTC should be revoked for noncompliance
with the constitutional mandate.
 Asks that the case be remanded to the RTC
for a full blown hearing on the merits, to be
followed by a decision stating therein
clearly and distinctly the facts and the law
on which it is based.
Respondent answer:
 Justifies the memorandum decision as
authorized by BP Blg 129
ISSUE: Whether or not such incorporation by
reference of Memorandum Decision was a valid act
that effectively elevated the decision of the MTC for
examination by the CA, in line with Sec. 14 Article 8
of the Constitution.
RULING: YES. The Court finds the action of CA valid.
The Court finds it necessary to emphasize that the
memorandum decision should be sparingly used lest
it become an addictive excuse for judicial sloth. It is
an additional condition for its validity that this kind
of decision may be resorted to only in cases where
the facts are in the main accepted by both parties
or easily determinable by the judge and there are
no doctrinal complications involved that will
require an extended discussion of the laws
involved. The memorandum decision may be
employed in simple litigations only, such as
ordinarily collection cases, where the appeal is
obviously groundless and deserves no more than the
time needed to dismiss it.
The Court said that the memorandum decision to be
valid, cannot incorporate the findings of fact and the
conclusions of law of the lower court only by remote
reference. For the incorporation to be allowed, it
must provide for direct access to the facts and the
law being adopted which must be contained in a
statement attached to the said decision. Thus, the
memorandum decision authorized under Section 40
of B.P. Blg. 129 should actually embody the findings
of fact and conclusions of law of the lower court in
an annex attached to and made an indispensable
part of the decision. It is expected that this
requirement will allay the suspicion that no study
was made of the decision of the lower court and that
its decision was merely affirmed without a proper
examination of the facts and the law on which it was
based. The proximity at least of the annexed
statement should suggest that such an examination
has been undertaken. It is, of course, also
understood that the decision being adopted should,
to begin with, comply with Article VIII, Section 14 as
no amount of incorporation or adoption will rectify
its violation.
“It ill becomes an appellate judge to write his rulings
with a pair of scissors and a pot of paste as if he
were a mere researcher. He is an innovator, not an
echo.
21
The appellate judge should prune the cluttered
record to make the issues clearer. He cannot usually
do this by simply mimicking the lower court. He must
use his own perceptiveness in unraveling the rollo
and his own discernment in discovering the law. No
less importantly, he must use his own language in
laying down his judgment. And in doing so, he should
also guard against torpidity lest his pronouncements
excite no more fascination than a technical tract on
the values of horse manure as a fertilizer. A little
style will help liven the opinion trapped in the
tortuous lexicon of the law with all its whereases and
wherefores. A judicial decision does not have to be a
bore.”
The parties are entitled to no less than this
explanation if only to assure them that the court
rendering the decision actually studied the case
before pronouncing its judgment. But there are
more substantial reasons.
For one thing, the losing party must be given an
opportunity to analyze the decision so that, if
permitted, he may elevate what he may consider its
errors for review by a higher tribunal.
For another, the decision, if well-presented and
reasoned, may convince the losing party of its merits
and persuade it to accept the verdict in good grace
instead of prolonging the litigation with a useless
appeal.
A third reason is that decisions with a full exposition
of the facts and the law on which they are based,
especially those coming from the Supreme Court,
will constitute a valuable body of case law that can
serve as useful references; and even as precedents
(STARE DECISIS) in the resolution of future
controversies.
The memorandum decision can be welcomed
indeed as an acceptable method of dealing
expeditiously with the case load of the courts of
justice. But expediency alone, no matter how
compelling, cannot excuse non-compliance with the
Constitution; or to put it more familiarly, the end
does not justify the means.
In the case at bar, we find that a judgment was
made by the metropolitan trial court in compliance
with the rule on summary procedure. The decision
consisted of three typewritten pages, single space,
and stated clearly and distinctly the facts and the
law on which it was based. It was a concise and
well-written decision, and a correct one to boot, for
which Judge Paciano B. Balita is to be commended.
It is not really correct to say that the Court of
Appeals did not review the memorandum decision of
the regional trial court which was the subject of the
petition for review. A reading of its own decision will
show that it dealt extensively with the memorandum
decision and discussed it at some length in the light
of the observations — and reservations — of this
Court in the Romero case. Moreover, in reviewing
the decision of the metropolitan trial court, the
Court of Appeals was actually reviewing the
decision of the regional trial court, which had
incorporated by reference the earlier decision
rendered by Judge Balita.
Despite the convenience afforded by the
memorandum decision, it is still desirable that the
appellate judge exert some effort in restating in his
own words the findings of fact of the lower court
and presenting his own interpretation of the law
instead of merely parroting the language of the court
a quo as if he cannot do any better. There must be
less intellectual indolence and more pride of
authorship in the writing of a decision, especially if it
comes from an appellate court.
It is clear that where the decision of the appellate
court actually reproduces the findings of fact or the
conclusions of law of the court below, it is not a
memo decision as envisioned in the provision. The
distinctive features of the memorandum decision
are, first, it is rendered by an appellate court, and
second, it incorporates by reference the findings of
fact or the conclusions of law contained in the
decision, order or ruling under review.
Most likely, the purpose is to affirm the decision,
although it is not impossible that the approval of the
findings of fact by the lower court may lead to a
different conclusion of law by the higher court. At
any rate, the reason for allowing the incorporation
by reference is evidently to avoid the cumbersome
reproduction of the decision of the lower court, or
portions thereof, in the decision of the higher court.
The idea is to avoid having to repeat in the body of
the latter decision the findings or conclusions of the
lower court since they are being approved or
adopted anyway
22
2. VILLAMOR vs. SALAS G.R. No. 101041
November 13, 1991 203 SCRA 450 GRIÑO-
AQUINO, J.: X
FACTS: Carlos filed an administrative case against
Judge Villamor, charging him with having issued
illegal orders and an unjust decision in a case he was
a party of regarding a dispute on ownership and
possession of a certain parcel of land against Naval.
The same was summarily dismissed by the Supreme
Court. Dissatisfied, Carlos filed a civil action for
damages against Judge Villamor for knowingly
rendering an unjust judgment when he dismissed
five criminal cases against Naval and the same was
raffled to the RTC presided by Judge Salas.
Meanwhile, Attorney Guerrero's complaint for
damages was raffled to Branch 21, Regional Trial
Court, Cebu City wherein Judge Aleonar took
cognizance of the same.
ISSUE: Whether or not Judges Aleonar and Salas may
take cognizance of the actions for damages against
Judge Villamor for allegedly having rendered an
unjust order against Carlos and Attorney Guerrero
which the Supreme Court subsequently annulled
HELD: No. No Regional Trial Court can pass upon and
scrutinize, and much less declare as unjust a
judgment of another Regional Trial Court and
sentence the judge thereof liable for damages
without running afoul with the principle that only
the higher appellate courts, namely, the Court of
Appeals and the Supreme Court, are vested with
authority to review and correct errors of the trial
courts. To allow respondent Judges Aleonar and
Salas to proceed with the trial of the actions for
damages against the petitioner, a co-equal judge of a
co-equal court, would in effect permit a court to
review and interfere with the judgment of a co-equal
court over which it has no appellate jurisdiction or
power of review. The various branches of a Court of
First Instance (now the Regional Trial Court) being
co-equal, may not interfere with each other's cases,
judgments and orders. Only after the Appellate
Court, in a final judgment, has found that a trial
judge's errors were committed deliberately and in
bad faith may a charge of knowingly rendering an
unjust decision be leveled against the latter.
3. Ong Chiu Kwan v. CA Pardo, J. G.R. No. 113006
Although a memorandum decision is permitted
under certain conditions, it cannot merely refer to
the findings of fact and the conclusions of law of
the lower court. The court must make a full findings
of fact and conclusions of law of its own.
Unjust Vexation
What is before the Court for consideration is the
decision of the Court of Appeals affirming the
conviction of accused Ong Chiu Kwan, for unjust
vexation.
FACTS
1. On January 31, 1991, Assistant City Prosecutor
Andres M. Bayona of Bacolod filed with the
Municipal Trial Court, Bacolod City an information
charging petitioner with unjust vexation for cutting
the electric wires, water pipes and telephone lines of
“Crazy Feet,” a business establishment owned and
operated by Mildred Ong.
2. On April 24, 1990, at around 10:00 in the morning,
Ong Chiu Kwan ordered Wilfredo Infante to
“relocate” the telephone, electric and water lines of
“Crazy Feet,” because said lines posed as a
disturbance. However, Ong Chiu Kwan failed to
present a permit from appropriate authorities
allowing him to cut the electric wires, water pipe and
telephone lines of the business establishment.
3. After due trial, on September 1, 1992, the
Municipal Trial Court found Ong Chiu Kwan guilty of
unjust vexation, and sentenced him to
“imprisonment for twenty days.” The court also
ordered him to pay moral damages, finding that the
wrongful act of abruptly cutting off the electric,
water pipe and telephone lines of “Crazy Feet”
caused the interruption of its business operations
during peak hours, to the detriment of its owner,
Mildred Ong. The trial court also awarded exemplary
damages to complainant “as a deterrent to the
accused not to follow similar act in the future and to
pay attorney’s fees.”
4. On appeal to the Regional Trial Court, Bacolod
City, the latter court in a decision dated December 8,
1992, simplistically adopted the decision of the
lower court in toto, without stating the reasons for
doing so.
23
5. On April 22, 1993, by petition for review, Ong Chiu
Kwan elevated the case to the Court of Appeals. On
August 16, 1993, the Court of Appeals promulgated
its decision dismissing the appeal, agreeing with the
lower court’s finding that petitioner was guilty
beyond reasonable doubt of unjust vexation.
ISSUE: Whether or not the decision of the RTC
adopting the lower court’s decision in toto is valid.
RULING: NO. Consequently, the decision of the
regional trial court is a nullity.
The Court notes that in the decision of the Regional
Trial Court which the Court of Appeals affirmed
peremptorily without noticing its nullity, the
Regional Trial Court merely quoted the decision of
the Municipal Trial Court in full and added two
paragraphs, thus:
"This Court, in accordance with the rules, required
the parties to submit their corresponding
memorandum or brief. The prosecution filed its
memorandum, and also with the defense.
"After a careful perusal of the record of the case and
evaluating the evidence thereto and exhibits thereof,
this Court finds no ground to modify, reverse or alter
the above-stated decision and hereby affirms the
decision of the lower court in toto.
The Constitution requires that "[N]o decision shall
be rendered by any court without expressing
therein clearly and distinctly the facts and the law
on which it is based." The 1985 Rules of Criminal
Procedure, as amended, provides that "[T]he
judgment must be written in the official language,
personally and directly prepared by the judge and
signed by him and shall contain clearly and distinctly
a statement of the facts proved or admitted by the
accused and the law upon which the judgment is
based."
Although a memorandum decision is permitted
under certain conditions, it cannot merely refer to
the findings of fact and the conclusions of law of
the lower court. The court must make a full findings
of fact and conclusions of law of its own.
Consequently, the case may be remanded to the
lower court for compliance with the constitutional
requirement of contents of a decision. However,
considering that this case has been pending for
sometime, the ends of justice will be fully served if
we review the evidence and decide the case.

Petitioner admitted having ordered the cutting of the

electric, water and telephone lines of complainant’s
business establishment because these lines crossed
his property line. He failed, however, to show
evidence that he had the necessary permits or
authorization to relocate the lines. Also, he timed
the interruption of electric, water and telephone
services during peak hours of the operation of
business of the complainant. Thus, petitioner’s act
unjustly annoyed or vexed the complainant.
Consequently, petitioner Ong Chiu Kwan is liable for
unjust vexation.

Moral damages may be recovered if they were the

proximate result of defendant’s wrongful act or
omission. An award of exemplary damages is
justified if the crime was committed with one or
more aggravating circumstances. There is no
evidence to support such award. Hence, we delete
the award of moral damages, exemplary damages,
and attorney’s fees.

DISPOSITIVE PORTION WHEREFORE, the decisions of

the lower courts are REVERSED and SET ASIDE. In
lieu thereof, accused Ong Chiu Kwan is hereby
sentenced to pay a fine of P200.00, and the costs.
The award of moral and exemplary damages and
attorney’s fees is hereby deleted. SO ORDERED.

24
4. Ching v CA (Civil Procedure) – WRONG ATA TO
NA DIGEST!!!!
Alfredo Ching v. CA, Pedro Asedillo
Action in Rem and Action in Personam
FACTS:
· Alfredo Ching is the legitimate son of Ching
Leng;
· Ching Leng bought a property from Sps.
Nofuente and the former registered the property in
her name on September 18, 1961, her postal address
was in Pasay City;
· Ching Leng died in Boston and his legitimate son
was appointed as administrator of her estate;
· 13 years after the death of Ching Leng, a suit
was commenced on December 27, 1978 by private
respondent Pedro Asedillo against Ching Leng for the
reconveyance of said property;
· An amended complaint was made by private
respondent alleging “that on account of the fact that
the defendant has been residing abroad up to the
present, and it is not known whether the defendant
is still alive or dead, he or his estate may be served
by summons and other processes only by
publication.”
· Summons by publication was made through
“Economic Monitor”, newspaper of general
circulation in Province of Rizal, Pasay City. Since no
responsive pleading was filed after the lapse of 60
days, judgment on the merits in favor of private
respondents was made.
· Consequently, the title of Ching Leng was
cancelled and transferred to private respondent who
sold the same to Villa Esperanza Dev., Inc.
· Petitioner learned of the decision, and so he
filed a petition to set it aside as null and void for lack
of jurisdiction;
Lower court decision:
RTC: At first, granted the verified petition to set
aside as null and void the prior order of the RTC;
however, on motion by private respondent, the
same was set aside. So, petitioner filed for
reconsideration but was denied.
*the case was elevated directly to SC
ISSUE: WON reconveyance and cancellation of title is
in personam which cannot give jurisdiction to the
court by service of summons by publication.
(Note: private respondents argue that they are quasi
in rem)
25
WHETHER OR NOT THE TRIAL COURT ACQUIRED
JURISDICTION OVER THE SUBJECT MATTER AND THE
PARTIES.
RULING: Yes, reconveyance and cancellation of title
are acts in personam.
Actions in personam and actions in rem differ in that
the former are directed against specific persons and
seek personal judgments, while the latter are
directed against the thing or property or status of a
person and seek judgments with respect thereto as
against the whole world.
An action to recover a parcel of land is a real action
but it is an action in personam, for it binds a
particular individual only although it concerns the
right to a tangible thing.
Private respondent’s action for reconveyance and
cancellation of title being in personam, the judgment
in question is null and void for lack of jurisdiction
over the person of the deceased defendant Ching
Leng. Verily, the action was commenced thirteen
(13) years after the latter’s death.
According to Dumlao v. Quality plastic products, the
decision of the lower court insofar as the deceased is
concerned is void for lack of jurisdiction over his
person. He was not, and he could not have been
validly served with summons. He had no more civil
personality, that its fitness to be subject of legal
relations was lost through death.
Ching Leng is an innocent purchaser for value as
shown by the evidence adduced in his behalf by
petitioner herein, tracking back the roots of his title
since 1960, from the time the decree of registration
was issued.
The sole remedy of the landowner whose property
has been wrongfully or erroneously registered in
another’s name after one year from the date of the
decree is not to set aside the decree but respecting it
and to bring an ordinary action in the ordinary court
of justice for damages if the property has transferred
to an innocent purchaser for value.
Failure to take steps to assert any rights over a
disputed land for 19 years from the date of
registration of title is fatal to the private
respondent's cause of action on the ground of
laches. Laches is the failure or neglect, for an
unreasonable length of time to do that which by
exercising due diligence could or should have been
done, earlier; it is negligence or omission to assert a
right within a reasonable time warranting a
presumption that the party entitled to assert it
either has abandoned it or declined to assert it
The complaint for cancellation of Ching Leng's
Torrens Title must be filed in the original land
registration case, RTC, Pasig, Rizal, sitting as a land
registration court in accordance with Section 112 of
the Land Registration Act (Act No. 496, as amended)
not in CFI Pasay City in connection with, or as a mere
incident in Civil Case No. 6888-P (Estanislao v.
Honrado, 114 SCRA 748 [1982]).
Section 112 of the same law requires "notice to all
parties in interest." Since Ching Leng was already in
the other world when the summons was published
he could not have been notified at all and the trial
court never acquired jurisdiction over his person.
The ex-parte proceedings for cancellation of title
could not have been held.
26
Ching vs CA
GR No. 118830, February 24, 2003
Azcuna, J.,:
DOCTRINE: No court has the power to interfere by
injunction with the judgments or decrees of a court
of concurrent or coordinate jurisdiction. The various
trial courts of a province or city, having the same or
equal authority, should not, cannot, and are not
permitted to interfere with their respective cases,
much less with their orders or judgments. A contrary
rule would obviously lead to confusion and seriously
hamper the administration of justice.
FACTS:
On August 6, 1981, respondent Family Savings Bank
(Bank) filed a complaint with the Court of First
Instance (CFI) of Manila, for the collection of a sum
of money against its debtor Cheng Ban Yek & Co.,
Inc. and petitioner Alfredo Ching, who acted as a
surety for Cheng Ban Yek & Co., Inc.
A day after the complaint was filed, the Bank was
able to obtain a writ of preliminary attachment
against the defendants. Armed with a writ of
preliminary attachment, the deputy sheriff of the CFI
of Manila, herein respondent Ferdinand J. Guerrero,
proceeded to levy upon a conjugal property
belonging to petitioners, spouses Alfredo and
Encarnacion Ching.
On July 26, 1982, petitioners filed a petition with the
CFI of Rizal, seeking to declare illegal the levy on
attachment upon their conjugal property. Petitioners
claimed that the branch sheriff had no authority to
levy upon a property belonging to the conjugal
partnership.
 The trial court dismissed the case for lack of
jurisdiction because the subject property
was already under custodia legis of the CFI
of Manila
On September 5, 1984, petitioners filed a second
annulment case with the Regional Trial Court (RTC)
of Makati. Petitioners sought to declare void the levy
and sale on execution of their conjugal property by
reiterating the same argument raised in the first
annulment case, i.e., that the branch sheriff had no
authority to levy upon a property belonging to the
conjugal partnership.
 the RTC of Makati rendered judgment in the
second annulment case in favor of
petitioners and declared null and void the
 levy and sale on execution upon the
conjugal property

Respondents appealed to CA
 reversing and setting aside the decision of
the RTC of Makati.
 declared that the Makati annulment case is
barred by res judicata because of the prior
Rizal annulment case and Manila collection
case

Hence, the petition.

ISSUE:
Whether or not the RTC of Makati has the authority
to nullify the levy and sale on execution that was
ordered by the CFI of Manila, a co-equal court.

RULING. NO. Petition denied.

The Makati annulment case should have been

dismissed from the start for lack of jurisdiction. The
RTC of Makati does not have the authority to nullify
the levy and sale on execution that was ordered by
the CFI of Manila, a co-equal court. The
determination of whether or not the levy and sale of
a property in execution of a judgment was valid,
properly falls within the jurisdiction of the court that
rendered the judgment and issued the writ of
execution.

No court has the power to interfere by injunction

with the judgments or decrees of a court of
concurrent or coordinate jurisdiction. The various
trial courts of a province or city, having the same or
equal authority, should not, cannot, and are not
permitted to interfere with their respective cases,
much less with their orders or judgments. A contrary
rule would obviously lead to confusion and seriously
hamper the administration of justice.

There is no dispute that the subject conjugal

property was under custodia legis of the CFI of
Manila. It was initially attached under a writ of
preliminary attachment issued by the CFI of Manila.
Said property was later on levied upon and sold
under a writ of execution issued by the same court.
Since the attachment, levy and sale have been
carried out upon orders of the CFI of Manila, any and
all questions concerning the validity and regularity
thereof necessarily had to be addressed to the CFI of
Manila.

27
5. ARMAND NOCUM and THE PHILIPPINE DAILY
INQUIRER, INC., Petitioners, vs. LUCIO TAN,
Respondent, G.R. No. 145022 September 23,
2005 CHICO-NAZARIO, J.:
DOCTRINE: Jurisdiction vs Venue; Venue can be
waived in civil cases
FACTS: Lucio Tan filed a complaint against reporter
Armand Nocum, Capt. Florendo Umali, ALPAP and
Inquirer with the Regional Trial Court of Makati,
seeking moral and exemplary damages for the
alleged malicious and defamatory imputations
contained in a news article.
INQUIRER and NOCUM filed their joint answer and
alleged:
(1) the complaint failed to state a cause of action;
(2) the defamatory statements alleged in the
complaint were general conclusions without factual
premises;
(3) the questioned news report constituted fair and
true report on the matters of public interest
concerning a public figure and therefore, was
privileged in nature; and
(4) malice on their part was negated by the
publication in the same article of plaintiff’s or PAL’s
side of the dispute with the pilot’s union.
ALPAP and UMALI answers:
(1) the complaint stated no cause of action;
(2) venue was improperly laid; and
(3) plaintiff Lucio Tan was not a real party in interest.
It appeared that the complaint failed to state the
residence of the complainant at the time of the
alleged commission of the offense and the place
where the libelous article was printed and first
published.
RTC dismissed the complaint without prejudice on
the ground of improper venue.
Aggrieved, Lucio Tan filed an Omnibus Motion
seeking reconsideration of the dismissal and
admission of the amended complaint.
In par. 2.01.1 of the amended complaint, it is alleged
that "This article was printed and first published in
the City of Makati", and in par. 2.04.1, that "This
caricature was printed and first published in the City
of Makati"
28
RTC admitted the amended complaint and deemed
set aside the previous order of dismissal stating that
the mistake or deficiency in the original complaint
appears now to have been cured in the Amended
Complaint. Also, there is no substantial amendment,
but only formal, in the Amended Complaint which
would affect the defendants’ defenses and their
Answers.
Dissatisfied, petitioners appealed to the Court of
Appeals. Two petitions for certiorari were filed, one
filed by petitioners and the other by defendants. The
two petitions were consolidated.
CA affirmed the decision of the RTC.
 MR denied.
Hence, this Petition for review filed by the
petitioners.
Petitioners argue that since the original complaint
only contained the office address of respondent and
not the latter’s actual residence or the place where
the allegedly offending news reports were printed
and first published, the original complaint, by reason
of the deficiencies in its allegations, failed to confer
jurisdiction on the lower court.
ISSUE: WON THE LOWER COURT ACQUIRED
JURISDICTION OVER THE CIVIL CASE UPON THE
FILING OF THE ORIGINAL COMPLAINT FOR DAMAGES
HELD: YES. It is settled that jurisdiction is conferred
by law based on the facts alleged in the complaint
since the latter comprises a concise statement of the
ultimate facts constituting the plaintiff's causes of
action.
Here, the RTC acquired jurisdiction over the case
when the case was filed before it. From the
allegations thereof, respondent’s cause of action is
for damages arising from libel, the jurisdiction of
which is vested with the RTC.
Article 360 of the Revised Penal Code provides that
it is the RTC that is specifically designated to try a
libel case. Petitioners are confusing jurisdiction with
venue.
The Hon. Florenz D. Regalado, differentiated
jurisdiction and venue as follows:
(a) Jurisdiction is the authority to hear and
determine a case; venue is the place where the case
is to be heard or tried;
(b) Jurisdiction is a matter of substantive law; venue,
of procedural law;
(c) Jurisdiction establishes a relation between the
court and the subject matter; venue, a relation
between plaintiff and defendant, or petitioner and
respondent; and,
(d) Jurisdiction is fixed by law and cannot be
conferred by the parties; venue may be conferred by
the act or agreement of the parties.
Here, the additional allegations in the Amended
Complaint that the article and the caricature were
printed and first published in the City of Makati
referred only to the question of venue and not
jurisdiction. These additional allegations would
neither confer jurisdiction on the RTC nor would
respondent’s failure to include the same in the
original complaint divest the lower court of its
jurisdiction over the case.
Respondent’s failure to allege these allegations
gave the lower court the power, upon motion by a
party, to dismiss the complaint on the ground that
venue was not properly laid.
The term "jurisdiction" in Article 360 of the Revised
Penal Code as referring to the place where actions
for libel shall be filed or "venue."
The amended complaint or amendment to the
complaint was not intended to vest jurisdiction to
the lower court where originally it had none. The
amendment was merely to establish the proper
venue for the action. It is a well-established rule that
venue has nothing to do with jurisdiction, except in
criminal actions. Assuming that venue were properly
laid in the court where the action was instituted,
that would be procedural, not a jurisdictional
impediment.
Consequently, by dismissing the case on the ground
of improper venue, the lower court had jurisdiction
over the case. Apparently, the herein petitioners
recognized this jurisdiction by filing their answers to
the complaint, albeit, questioning the propriety of
venue, instead of a motion to dismiss.
The dismissal of the complaint by the lower court
was proper considering that the complaint, indeed,
on its face, failed to allege neither the residence of
the complainant nor the place where the libelous
29
article was printed and first published.
Nevertheless, before the finality of the dismissal, the
same may still be amended. In so doing, the court
acted properly and without any grave abuse of
discretion.
Petitioners’ argument that the lower court has no
jurisdiction over the case because respondent failed
to allege the place where the libelous articles were
printed and first published would have been tenable
if the case filed were a criminal case. The failure of
the original complaint to contain such information
would be fatal because this fact involves the issue of
venue which goes into the territorial jurisdiction of
the court. This is not to be because the case before
us is a civil action where venue is not jurisdictional.
ISSUE: WON VENUE MAY BE WAIVED IN CIVIL CASES
HELD: YES. It is elementary that objections to venue
in CIVIL ACTIONS arising from libel may be waived
since they do not involve a question of jurisdiction.
The laying of venue is procedural rather than
substantive, relating as it does to jurisdiction of the
court over the person rather than the subject
matter. Venue relates to trial and not to jurisdiction.
It is a procedural, not a jurisdictional, matter. It
relates to the place of trial or geographical location
in which an action or proceeding should be brought
and not to the jurisdiction of the court. It is meant to
provide convenience to the parties, rather than
restrict their access to the courts as it relates to the
place of trial. In contrast, in criminal actions, it is
fundamental that venue is jurisdictional it being an
essential element of jurisdiction.
Petitioners’ argument that the lower court has no
jurisdiction over the case because respondent failed
to allege the place where the libelous articles were
printed and first published would have been tenable
if the case filed were a criminal case. The failure of
the original complaint to contain such information
would be fatal because this fact involves the issue of
venue which goes into the territorial jurisdiction of
the court. This is not to be because the case before
us is a civil action where venue is not jurisdictional.
CA’s DECISION AFFIRMED.
6. Villacastin vs Pelaez, GR No. 170478, May 22,
2008, Tinga, J.:
FACTS: Pelaez and his wife mortgaged their
agricultural lands to DBP. For failure of the Pelaez
spouses to pay for their mortgage obligation, the
properties were foreclosed and subsequently sold at
public auction.
The purported tenants of the property filed an action
to annul the mortgage, foreclosure and sale of the
properties, claiming that they are the owners
thereof under PD No. 27. Case was filed in the
Provincial Agrarian Reform Adjudicator in Cebu.
Villacastin filed a Complaint for Forcible Entry with
Prayer for a Writ of Preliminary Mandatory
Injunction with the First MCTC of Bantayan, Cebu
against Pelaez and a certain Elesio Monteseven. The
complaint averred that Villacastin are the owners
and actual possessors of the subject landholding and
that defendants, having entered the property
through stealth and strategy, unlawfully deprived
plaintiffs of possession thereof.
Respondent countered that he is the owner of the
subject property, which was foreclosed by the DBP
and later purchased by petitioners at an auction sale.
Petitioners, however, were allegedly never in
possession of the subject property as they failed to
apply for a writ of possession therefor.
Respondent further claimed that he had redeemed
the property on March 3, 1988 and accordingly
reacquired possession thereof.
Provincial Agrarian Reform Adjudicator in Cebu
rendered a decision in favour of the tenants and was
affirmed by the DARAB (Department of Agrarian
Reform Adjudication Board)
MCTC rendered judgment in civil case in favour of
Villacastin. RTC affirmed this decision.
CA, however, ruled that regular courts should
respect the primary jurisdiction vested upon the
DARAB (Department of Agrarian Reform
Adjudication Board) in cases involving agricultural
lands such as the property subject of this case.
 Set aside the decision rendered by the RTC
and MCTC, and dismissed the complaint for
forcible entry filed by the petitioners.
30
 MR denied.
Villacastin contend that the case they filed did not
involve any agrarian matter and thus, the MCTC
correctly exercised jurisdiction over the case.
Respondent underscores the fact that the parcels of
land subject of this case are tenanted agricultural
lands. Before judgment was rendered in the forcible
entry case, the tenants of the property already filed
a suit with the DARAB for the annulment of the real
estate mortgage executed by respondent over the
same in favor of DBP and the subsequent foreclosure
and auction sale in favor of petitioners. The DARAB's
decision declaring the mortgage, foreclosure and
auction sale null and void became final as regards
petitioners who did not appeal from the decision.
Respondent asserts that the complaint for forcible
entry filed by petitioners had lost its legal basis after
the DARAB declared that the foreclosure and auction
sale of the subject property were null and void.
Petitioners insisting that the tenant-farmers involved
in the DARAB case were not parties to the forcible
entry case, the only defendant therein being
respondent in this case. Respondent, in turn, raised
the defense of ownership, thereby joining the issues
regarding possession and ownership.
 the subject property had been declared as
wilderness area and the same had been
classified as alienable and disposable on
December 22, 1987.
ISSUE:
WON the MCTC and also the RTC has jurisdiction
over the case filed by Villacastin.
HELD: Yes, MCTC has jurisdiction. Petition granted.
Jurisdiction over the subject matter is determined by
the allegations of the complaint. In ascertaining
whether an action is one for forcible entry falling
within the exclusive jurisdiction of the inferior
courts, the averments of the complaint and the
character of the relief sought are to be examined.
A review of the complaint reveals that the pertinent
allegations thereof sufficiently vest jurisdiction over
the action on the MCTC.
The complaint alleges:
  that the plaintiffs are the owners and legal
as well as actual possessors of a parcel of
agricultural land.
 That Pelaez, by strategy and through stealth
entered the above-described land of the
Villacastin and took possession thereof.
 That several demands were made the
plaintiffs upon the defendants to restore to
them the possession of the above-described
parcel of land; but, defendants refused and
still refuse to restore possession of said
property to the plaintiffs

It has not escaped our notice that no landowner-

tenant vinculum juris or juridical tie was alleged
between petitioners and respondent, let alone that
which would characterize the relationship as an
agrarian dispute.

Rule II of the DARAB Rules 17 provide that the

DARAB “shall have primary jurisdiction, both
original and appellate, to determine and adjudicate
all agrarian disputes, cases, controversies and
matters or incidents involving the implementation
of the Comprehensive Agrarian Reform Program.

Petitioner’s action is clearly for the recovery of

physical or material possession of the subject
property only, a question which both the MCTC and
the RTC ruled petitioners are entitled to. It does not
involve the adjudication of an agrarian reform
matter, nor an agrarian dispute falling within the
jurisdiction of the DARAB.

Courts have jurisdiction over possessory actions

involving public or private agricultural lands to
determine the issue of physical possession as this
issue is independent of the question of disposition
and alienation of such lands which should be
threshed out in the DAR.18 Thus, jurisdiction was
rightfully exercised by the MCTC and the RTC.

31
 JURISDICTION OF COURT OF APPEALS (SECTION 9,
B.P. NO. 129, AS AMENDED)
1. ORDA vs. COURT OF APPEALS, G.R. No. 92625;
December 26, 1990
FACTS:
Private Respondent Gil Galang (Gil) filed a petition
for habeas corpus with the Regional Trial Court of
San Pablo City in order to regain custody of his minor
daughter who was staying with her maternal
grandparents, petitioner’s herein. Her mother had
already died when the case was initiated.
The Trial Court dismissed the case for lack of
jurisdiction because the petitioners, Orda, had
moved to Bataan, and any writ of habeas corpus to
be issued by the trial court may not be enforced.
Subsequently, Gil on the basis of his being the sole
surviving parent of his daughter commenced an
original action for habeas corpus with the Court of
Appeals over his minor daughter.
The Court of Appeals, finding that based of the
arguments presented by both parties, a full blown
trial is required, accordingly, the CA issued the
assailed order remanding the case to the RTC of San
Pablo City.
The RTC issued an order directing the Chief, Archives
Section of the Court of Appeals "to transmit to this
Court the original record of case upon knowing that
only the order of dismissal was in the expediente of
the case.
The respondent Court of Appeals advised the trial
court that no records can be remanded because no
expediente from the lower court was ever elevated.
Petitioners filed with the respondent CA a motion for
clarification of its earlier decision alleging that the
case filed was Toriginal action, not an appeal
emanating from, or a special civil action to assail, a
case filed with the trial court, that Special
Proceedings No. SP-719 (87) was dismissed for lack
of jurisdiction and the order of dismissal has long
become final and, moreover, herein petitioners were
never brought to the jurisdiction of the trial court in
said special proceedings.
The Court of appeals later clarified the order as a
“referral” of the case to the RTC for appropriate
32
action, it enjoying original and concurrent
jurisdiction with this Court over habeas corpus cases.
Both parties filed separate motions for
reconsideration of the foregoing resolution.
Petitioners contended that respondent Court of
Appeals had no authority to refer the case to the
lower court for trial on the merits because said
court, in the original habeas corpus case filed by
private respondent, had never acquired jurisdiction
over their persons. Further, that respondent court
had no power to order a case docketed with the
lower court without private respondent having paid
the docketing fee and filing an appropriate pleading
therein.
Private respondent, on the other hand, also set forth
similar contentions and prayed that trial on the
merits be resumed by respondent Court.
CA’s resolution: Referred the case to RTC
 pointed out again that with the filing of
another petition for habeas corpus before
this Court an entirely new proceeding was
commenced. Unlike the lower court in the
previous habeas corpus case, this Court
acquired jurisdiction over the persons of
[petitioners] upon their filing of an
Opposition/Answer.
Hence, the petition.
Petitioners argue that the Court of Appeals has no
power to issue the decision remanding the
proceedings to the trial court and the two
subsequent resolutions clarifying the same.
ISSUE: Whether or not the Court of Appeals may
refer a petition for habeas corpus originally filed with
it to the Regional Trial Court for a full-blown trial due
to conflicting facts presented by the parties.
HELD: NO. Petition for certiorari is granted.
The Court of Appeals was in error in ordering the
remand and later on the referral of the original
petition for habeas corpus filed with it to the
Regional Trial Court. What respondent court should
have done was to conduct the reception of evidence
and pass upon the merits of the conflicting
allegations of the parties insofar as the petition for a
writ of habeas corpus is concerned.
While the case requires a full-blown trial of the facts,
the same should be done in the context of the
special proceedings for custody of minors under Rule
99 of the Rules of Court, and not a remand or
referral of the original action for a writ of habeas
corpus filed with the respondent court.
Parenthetically, the proper venue in this action is the
place where the petitioner therein resides.

WHEREFORE, the petition for certiorari is hereby

GRANTED. The assailed decision and resolutions of
the respondent Court of Appeals are SET ASIDE and a
new one is rendered DISMISSING the petition for
habeas corpus WITHOUT PREJUDICE to the filing by
private respondent of the appropriate special
proceedings to gain custody of his minor child.

The assailed decision and the two resolutions of the

Court of Appeals are not supported by law and the
Rules of Court. The provisions of the Judiciary
Reorganization Act (B.P. Blg. 129) cited by the
respondent Court of Appeals in its resolution dated
13 March 1990 are not in point.

Sections 9(1) and 21 thereof merely provide that the

Court of Appeals and Regional Trial Courts,
respectively, exercise original jurisdiction to issue
writs of habeas corpus, among others. While
recognizing the concurrent original jurisdiction of
both courts over habeas corpus cases as special
proceedings, these provisions are not authority for
remanding or referring to the latter original actions
filed with the former.

On the contrary, the Court of Appeals is specifically

given the power to receive evidence and perform
any and all acts necessary to resolve factual issues
raised in cases falling within its original jurisdiction.
11 Furthermore, under the Supreme Court
Resolution dated 11 February 1983 implementing
B.P. Blg. 129 pending the corresponding thorough
revision of the Rules of Court, the Court of Appeals is
authorized to conduct a trial or hearing to receive
evidence and for the purpose shall observe the
procedure prescribed for the trial courts. 12 Clearly,
the Court of Appeals should not have remanded or
referred the petition for a writ of habeas corpus to
the trial court.

33
2. Vital – Gozon v. CA, GR No. 101428, August 5,
1992, Narvasa, C.J.:
FACTS:
In 1987, by virtue of E.O. 119 issued by then Pres.
Cory Aquino, a reorganization of the Ministry of
Health was effected.
At the time of such reorganization, Dr. Alejandro
Dela Fuente was the Chief of Clinics of the National
Children’s Hospital.
In February 1988, Dr. Dela Fuente received a notice
from the Deparment of Health that he would be re-
appointed as Medical Specialist II. Such a position
was considered as two ranks lower than his previous
position of Chief of Clinics. This prompted Dr. Dela
Fuente to file a protest with the DOH Reorganization
Board. The protest was ignored. Dela Fuente then
filed a case before the CSC.
In the meantime, the position of Chief of Clinics
(then changed to Chief of Medical Professional Staff)
were turned over and thereafter exercised by one
Dr. Merencilla.
CSC ruled in favor of Dr. Dela Fuente.
 It ruled that Dr. Dela Fuente is deemed
having retained his previous position.
 The demotion/transfer of Dr. Dela Fuente is
null and void.
 He be paid back salaries, transportation,
representation and housing allowances and
such other benefits withheld from him from
the date of his illegal demotion/transfer.
Neither an MR nor an appeal was filed assailing such
a decision thereby rendering the decision as final
and executory.
De la Fuente thereupon sent two (2) letters to Dr.
Vital-Gozon, the Medical Center Chief of National
Children's Hospital, demanding the implementation
of the Commission's decision.
Months have elapsed but still there was no action on
the part of Vital-Gozon et. al. to execute the decision
of the CSC.
CSC told him to file in court a petition for mandamus
because of the belief that the Commission had no
coercive powers — unlike a court — to enforce its
final decisions/resolutions.
34
 So he instituted in the Court of Appeals on
December 28, 1988 an action of
"mandamus and damages with preliminary
injunction" to compel Vital-Gozon, and the
Administrative Officer, Budget Officer and
Cashier of the NCH to comply with the final
and executory resolution of the Civil Service
Commission.
CA required the respondents to answer; issued TRO;
required the respondent to show cause why it
should not be converted to a writ of preliminary
injunction.
Dela Fuente filed with the same court a
Supplemental/Amended Petition" described as one
for "quo warranto" aside from "mandamus.
CA again, required respondents to answer, but none
was filed. The petitions were consequently "resolved
on the basis of their allegations and the annexes.
CA granted the decision insofar as his restoration to
his former position but denied insofar as the grant of
damages ruling that the petition is not the correct
vehicle to claim such damages not the CA is the
correct forum for such relief.
CA also took note to representation by the SolGen of
Dr. VitalGozon saying that pursuant to the ruling in
Urbano and Co cases, the SolGen is not authorized to
represent her.
MR was filed by Dela Fuente arguing that CA has the
power to grant damages in a mandamus action by
virtue of BP 129 which gave the SC, CA and RTCs
concurrent jurisdiction over such petitions and that
CA was given the power to conduct hearings and
receive evidence to resolve factual issues. To require
him to separately litigate the matter of damages he
continued, would lead to that multiplicity of suits
which is abhorred by the law.
CA eventually granted the MR and ordered setting a
date for reception of evidence on the la Fuente's
claim for damages. It based its judgment on the last
phrase of Sec. 3 Rule 65 ROC which expressly allows
the award of damages in a mandamus petition.
Another lawyer, Atty. Pedro F. Martinez entered his
appearance for Isabelita Gozon - contentions
 that the decision of June 9, 1989 could no
longer be altered, having become final and
 executory and having in fact been executed,
and
 (b) that under BP 129, the Appellate Court
had no jurisdiction over the question of
damages in a mandamus action.
CA denied:
 declared that the amended decision had
already become final and could no longer
be re-opened
 prohibited the Solicitor General from
representing Gozon "in connection with . . .
(de la Fuente's) claim for damages
Solicitor General's Office had instituted the special
civil action of certiorari
 contends that the Court of Appeals is not
legally competent to take cognizance of and
decide the question of damages in a
mandamus suit
 argues that B.P. Blg. 129 does not confer
jurisdiction upon the Court of Appeals to
hear, as a trial court, claims for moral and
exemplary damages such an award of
damages is allowable only in actions
commenced in Regional Trial Courts but not
in the Court of Appeals or this Court.
Issue: Whether or not the Court of Appeals has
jurisdiction to take cognizance of the matter of
damages in a special civil action of mandamus.
Held: Yes.
CA has jurisdiction to award damages in mandamus
petitions.
The Solicitor General's Office correctly identifies
Section 9, B.P. 129 as the legal provision specifying
the original and appellate jurisdiction of the Court of
Appeals. The section pertinently declares that the
"Intermediate Appellate Court (now the Court of
Appeals) shall exercise . .," among others:
. . . Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or processes, whether
or not in aid of its appellate jurisdiction . .
Sec. 3 of Rule 65 of the Rules of Court explicitly
authorized the rendition of judgment in a mandamus
action "commanding the defendant, immediately or
at some other specified time, to do the act required
to be done to protect the rights of the petitioner,
35
and to pay the damages sustained by the petitioner
by reason of the wrongful acts of the defendant."
The provision makes plain that the damages are an
incident, or the result of, the defendant's wrongful
act in failing and refusing to do the act required to
be done. It is noteworthy that the Rules of 1940 had
an identical counterpart provision. The Solicitor
General's theory that the rule in question is a mere
procedural one allowing joinder of an action of
mandamus and another for damages, is untenable,
for it implies that a claim for damages arising from
the omission or failure to do an act subject of a
mandamus suit may be litigated separately from the
latter, the matter of damages not being inextricably
linked to the cause of action for mandamus, which is
certainly not the case.
An award of damages was and is also allowed in
connection with the auxiliary writ of preliminary
attachment, preliminary injunction or receivership
which the Court of Appeals has the power to issue in
common with the Supreme Court and the Regional
Trial Courts, payable by the sureties of the bond
given in support of the writ, upon seasonable
application and summary hearing.
In conferring on the Court of Appeals original
jurisdiction over the special civil action of
mandamus, among others, as well as over the
issuance of auxiliary writs or processes, the Batasang
Pambansa clearly intended that said Court should
exercise all the powers then possessed by it under
the Rules of Court in relation to said action of
mandamus and auxiliary writs, including the
adjudication of damages to the petitioner in the
action in appropriate cases.
ISSUE:
whether or not the SolGen is authorized to represent
Vital-Gozon in this case
HELD:
Yes. The doctrine laid down in the Urbano and Co
cases already adverted to, is quite clear to the effect
that the Office of the Solicitor General is not
authorized to represent a public official at any stage
of a criminal case. This observation should apply as
well to a public official who is haled to court on a
civil suit for damages arising from a felony allegedly
committed by him (Article 100, Revised Penal Code).
Any pecuniary liability he may be held to account for
on the occasion of such civil suit is for his own
account. The State is not liable for the same. A
fortiori, the Office of the Solicitor General likewise
has no authority to represent him in such a civil suit
for damages. Here, Dr. Vital-Gozon is not charged
with a crime, or civilly prosecuted for damages
arising from a crime, there is no legal obstacle to her
being represented by the Office of the Solicitor
General.

36
3. St. Martin Funeral Homes vs. National Labor
Relations Commission and Bienvenido Arcayos,
G.R. No. 130866, September 16, 1998,
Regalado, J.:
FACTS: Herein private respondent, Bienvenido
Aricayos, filed a complaint for illegal dismissal before
the National Labor Relations Commission (NLRC),
Regional Arbitration Branch No. III, in San Fernando,
Pampanga. Respondent (Arcayos) was summarily
dismissed by St. Martin Funeral Homes for
misappropriating funds worth Php 38,000 which was
supposed to be taxes paid to the Bureau of Internal
Revenue (BIR).
Petitioner’s (St. Martin Funeral Homes)
contention is that the respondent is not an
employee due to the lack of an employer-employee
contract; that as an indication of gratitude to Amelita
Malabed, owner of St. Martin Funeral Homes whom
he asked for a financial assistance, private
respondent voluntarily helped the mother of Amelita
in overseeing the business. In addition, respondent is
not listed on St. Martin’s monthly payroll.
The labor arbiter ruled in favor of petitioner,
confirming that indeed, there was no employer-
employee relationship between the two and hence,
his office had no jurisdiction over the case.
The respondent appealed to the secretary of NLRC
who set aside the decision and remanded the case to
the labor arbiter. Petitioner filed a motion for
reconsideration, but was denied by the NLRC for lack
of merit. Now, petitioners appealed to the Supreme
Court – alleging that the NLRC committed grave
abuse of discretion.
ISSUE: Whether or not the petitioner’s
appeal/petition for certiorari was properly filed in
the Supreme Court.
HELD: No. Historically, decisions from the NLRC were
appealable to the Secretary of Labor, whose
decisions are then appealable to the Office of the
President. However, the new rules do not anymore
provide provisions regarding appellate review for
decisions rendered by the NLRC. The present Section
223, as last amended by Section 12 of R.A. No. 6715,
instead merely provides that the Commission shall
decide all cases within twenty days from receipt of
the answer of the appellee, and that such decision
shall be final and executory after ten calendar days
from receipt thereof by the parties.
37
However in this case, the Supreme Court took it
upon themselves to review such decisions from the
NLRC by virtue of their role under the check and
balance system and the perceived intention of the
legislative body who enacted the new rules.
“It held that there is an underlying power of the
courts to scrutinize the acts of such agencies on
questions of law and jurisdiction even though no
right of review is given by statute; that the purpose
of judicial review is to keep the administrative
agency within its jurisdiction and protect the
substantial rights of the parties; and that it is that
part of the checks and balances which restricts the
separation of powers and forestalls arbitrary and
unjust adjudications.”
The petitioners rightfully filed a motion for
reconsideration, but the appeal or certiorari should
have been filed initially to the Court of Appeals – as
consistent with the principle of hierarchy of courts.
As such, the Supreme Court remanded the case to
the Court of Appeals.
All references in the amended Section 9 of B.P. No.
129 to supposed appeals from the NLRC to the
Supreme Court are interpreted and hereby declared
to mean and refer to petitions for certiorari under
Rule 65. Consequently, all such petitions should
hence forth be initially filed in the Court of Appeals
in strict observance of the doctrine on the hierarchy
of courts as the appropriate forum for the relief
desired.
This provision was amended by R.A. No. 7902
effective March 18, 1995, to wit:
Sec. 9. Jurisdiction. — The Court of Appeals shall
exercise:
(1) Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or processes, whether
or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for
annulment of judgments of Regional Trial Courts;
and
(3) Exclusive appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards
of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including
the Securities and Exchange Commission, the Social
Security Commission, the Employees Compensation
Commission and the Civil Service Commission,
except those falling within the appellate jurisdiction
of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the
third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.
The Court of Appeals shall have the power to try
cases and conduct hearings, receive evidence and
perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and
appellate jurisdiction, including the power to grant
and conduct new trials or further proceedings. Trials
or hearings in the Court of Appeals must be
continuous and must be completed within, three (3)
months, unless extended by the Chief Justice.
the word "appeal" in relation thereto and in the
instances we have noted could have been a lapsus
plumae because appeals by certiorari and the
original action for certiorari are both modes of
judicial review addressed to the appellate courts.
The important distinction between them, however,
and with which the Court is particularly concerned
here is that the special civil action of certiorari is
within the concurrent original jurisdiction of this
Court and the Court of Appeals; 23 whereas to
indulge in the assumption that appeals by certiorari
to the Supreme Court are allowed would not
subserve, but would subvert, the intention of
Congress as expressed in the sponsorship speech on
Senate Bill No. 1495.

1. The last paragraph which excluded its application

to the Labor Code of the Philippines and the Central
Board of Assessment Appeals was deleted and
replaced by a new paragraph granting the Court of
Appeals limited powers to conduct trials and
hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that last
paragraph was transposed to paragraph (3) of the
section, such that the original exclusionary clause
therein now provides "except those falling within the
appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of
the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section
17 of the Judiciary Act of 1948." (Emphasis supplied).

Contrarily, however, specifically added to and

included among the quasi-judicial agencies over
which the Court of Appeals shall have exclusive
appellate jurisdiction are the Securities and
Exchange Commission, the Social Security
Commission, the Employees Compensation
Commission and the Civil Service Commission.

The Court is, therefore, of the considered opinion

that ever since appeals from the NLRC to the
Supreme Court were eliminated, the legislative
intendment was that the special civil action of
certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC. The use of

38
4. National Water Resources Board (NWRB) vs.
A.L. Ang Network, Inc., GR 186450, April
14,2010, Carpio Morales, J.:
FACTS:
A.L. Ang Network filed on January 23,2003 an
application for a Certificate of Public Convenience
(CPC) with the National Water Resources Board
(NWRB) to operate and maintain a water service
system in Alijis, Bacolod City which application was
later approved on August 20, 2003 despite
opposition by the Bacolod City Water District
(BACIWA).
BACIWA opposed A.L. Ang Network's application on
the ground that it is the only govemment agency
authorized to operate a water service system within
the city.
BACIWA moved to have the decision reconsidered,
contending that its right to due process was violated
when it was not allowed to present evidence in
support of its opposition.
The NWRB reconsidered its Decision and allowed
BACIWA to present evidence prompting A.L Ang
Network to file a petition for certiorari with the
Regional Trial Court (RTC) of Bacolod City against
NWRB and BACIWA. The NWRB moved to dismiss
the petition, arguing that the proper recourse of
respondent was to the Court of Appeals, citing Rule
43 of the Rules of Court.
Lower Court's Ruling:
The Regional Trial Court ruled in favor of NWRB and
dismissed A.L. Ang Network's petition for lack of
jurisdiction. The RTC held that with Art. 89 of PD
1067 having been long repealed by BP 129, as
amended, it is the Court of Appeals which has
exclusive appellate jurisdiction over all decisions of
quasi-judicial agencies except those within the
appellate jurisdiction of the Supreme Court.
Appellate Court's Ruling: The Court of Appeals
annulled and set aside the decision of theRTC and
held that it is the RTC which has jurisdiction over
appeals from NWRB's decisions.
As no repeal is expressly made, Article 89 of P.D. No.
1067 is certainly meant to be an exception to the
jurisdiction of the Court of Appeals over appeals or
petitions for certiorari of the decisions of quasi-
judicial bodies. This finds harmony with Paragraph 2,
39
Section 4, Rule 65 of the Rules of Court wherein it is
stated that, "If it involves the acts of a quasi-judicial
agency, unless otherwise provided by law or these
rules, the petition shall be filed in and cognizable
only by the Court of Appeals." Evidently, not all
petitions for certiorari under Rule 65 involving the
decisions of quasi-judicial agencies must be filed
with the Court of Appeals. The rule admits of some
exceptions as plainly provided by the phrase 'unless
otherwise provided by law or these rules" and Article
89 of P.D. No. 1067 is verily an example of these
exceptions.
ISSUE: Whether or not Regional Trial Courts have
jurisdiction over appeals from decisions, resolutions
or orders of the National Water Resources Board.
SUPREME COURT'S RULING:
The Supreme Court ruled in favor of the NWRB and
reversed and set aside the Decision of the Court of
Appeals and upheld the Order of the Regional Trial
Court of Bacolod Citv.
Section 9 (1) of BP 129 granted the Court of Appeals
(then known as the Intermediate Appellate Court)
original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus and quo
warranto, and auxiliary writs or processes, whether
or not in aid of its appellate jurisdiction.
Since the appellate court has exclusive appellate
jurisdiction over quasi-judicial agencies under Rule
43 of the Rules of Court, petitions for writs of
certiorari, prohibition or mandamus against the acts
and omissions of quasi-judicial agencies, like the
NWRB, should be filed with it. This is what Rule 65 of
the Rules imposes for procedural uniformity. The
only exception to this instruction is when the law or
the Rules itself directs otherwise, as cited in Section
4, Rule 65.
ART. 89. The decisions of the [NWRB] on water rights
controversies may be appealed to the [RTC] of the
province where the subject matter of the
controversy is situated within fifteen (15) days from
the date the party appealing receives a copy of the
decision, on any of the following grounds: (1) grave
abuse of discretion; (2) question of law; and (3)
questions of fact and law (emphasis and
underscoring supplied), is such an exception, is
erroneous.
Article 89 of PD 1067 had long been rendered The employment of the word "among" clearly
inoperative by the passage of BP 129. Aside from instructs so.
delineating the jurisdictions of the Court of Appeals
and the RTCs, Section 47 of BP 129 repealed or
modified:

x x x. [t]he provisions of Republic Act No. 296,

otherwise known as the Judiciary Act of 1948, as
amended, of Republic Act No. 5179, as amended, of
the Rules of Court, and of all other statutes, letters
of instructions and general orders or parts thereof,
inconsistent with the provisions of this Act x x x.

The general repealing clause under Section 47

"predicates the intended repeal under the condition
that a substantial conflict must be found in existing
and prior acts."

In enacting BP I29, the Batasang Pambansa was

presumed to have knowledge of the provision of
Article 89 of P.D. No. 1067 and to have intended to
change it. The legislative intent to repeal Article 89 is
clear and manifest given the scope and purpose of
BP 129, one of which is to provide a homogeneous
procedure for the review of adjudications of quasi-
judicial entities to the Court of Appeals.

What Article 89 of PD 1067 conferred to the RTC was

the power of review on appeal the decisions of
petitioner. It appears that the appellate court gave
significant consideration to the ground of "grave
abuse of discretion" to thus hold that the RTC has
certiorari jurisdiction over petitioner’s decisions. A
reading of said Article 89 shows, however, that it
only made "grave abuse of discretion" as another
ground to invoke in an ordinary appeal to the RTC.
Indeed, the provision was unique to the Water Code
at the time of its application in 1976.

In the present case, respondent assailed petitioner’s

order via certiorari before the RTC, invoking grave
abuse of discretion amounting to lack or excess of
jurisdiction as ground-basis thereof. In other words,
it invoked such ground not for an error of judgment.

While Section 9 (3) of BP 129 and Section I of Rule 43

of the Rules of Court does not list the NWRB as
"among" the quasi-judicial agencies whose final
judgments, orders, resolutions or awards are
appealable to the appellate court, it is settled that
the list of quasijudicial agencies specifically
mentioned in Rule 43 is not meant to be exclusive.

40
 JURISDICTION OF TRIAL COURT
A.M. No. 02-1-11-SC dated February 19, 2002
a. Admiralty and Maritime
CRESCENT PETROLEUM, LTD., Petitioner, vs. M/V
"LOK MAHESHWARI," THE SHIPPING CORPORATION
OF INDIA, and PORTSERV LIMITED G.R. No. 155014
November 11, 2005, Puno, J.: XXX
FACTS: Respondent M/V "Lok Maheshwari" is an
oceangoing vessel of Indian registry that is owned by
respondent Shipping Corporation of India (SCI), a
corporation organized and existing under the laws of
India and principally owned by the Government of
India. It was time-chartered by respondent SCI to
Halla Merchant Marine Co. Ltd. (Halla), a South
Korean company. Halla, in turn, sub-chartered the
Vessel through a time charter to Transmar Shipping,
Inc. (Transmar). Transmar further sub-chartered the
Vessel to Portserv Limited (Portserv). Both Transmar
and Portserv are corporations organized and existing
under the laws of Canada. On or about November 1,
1995, Portserv requested petitioner Crescent
Petroleum, Ltd. (Crescent), a corporation organized
and existing under the laws of Canada that is
engaged in the business of selling petroleum and oil
products for the use and operation of oceangoing
vessels, to deliver marine fuel oils (bunker fuels) to
the respondent M/V "Lok Maheshwari". Petitioner
Crescent granted and confirmed the request through
an advice via facsimile dated November 2, 1995. As
security for the payment of the bunker fuels and
related services, petitioner Crescent received two (2)
checks in the amounts of US$100,000.00 and
US$200,000.00. Thus, petitioner Crescent contracted
with its supplier, Marine Petrobulk Limited (Marine
Petrobulk), another Canadian corporation, for the
physical delivery of the bunker fuels to respondent
M/V "Lok Maheshwari". On or about November 4,
1995, Marine Petrobulk delivered the bunker fuels
amounting to US$103,544 inclusive of barging and
demurrage charges to respondent M/V "Lok
Maheshwari" at the port of Pioneer Grain,
Vancouver, Canada. The Chief Engineer Officer of
respondent duly acknowledged and received the
delivery receipt. Marine Petrobulk issued an invoice
to petitioner Crescent for the US$101,400.00 worth
of the bunker fuels. Petitioner Crescent issued a
check for the same amount in favor of Marine
Petrobulk, which check was duly encashed. Having
paid Marine Petrobulk, petitioner Crescent issued a
revised invoice dated November 21, 1995 to
41
"Portserv Limited, and/or the Master, and/or
Owners, and/or Operators, and/or Charterers of
M/V ‘Lok Maheshwari’" in the amount of
US$103,544.00 with instruction to remit the amount
on or before December 1, 1995. The period lapsed
and several demands were made but no payment
was received. Also, the checks issued to petitioner
Crescent as security for the payment of the bunker
fuels were dishonored for insufficiency of funds. As a
consequence, petitioner Crescent incurred additional
expenses of US$8,572.61 for interest, tracking fees,
and legal fees. On May 2, 1996, while M/V "Lok
Maheshwari" was docked at the port of Cebu City,
petitioner Crescent instituted before the RTC of Cebu
City an action "for a sum of money with prayer for
temporary restraining order and writ of preliminary
attachment" against respondents M/V "Lok
Maheshwari" and SCI, Portserv and/or Transmar. On
May 3, 1996, the trial court issued a writ of
attachment against respondent M/V "Lok
Maheshwari" with bond at P2,710,000.00. Petitioner
Crescent withdrew its prayer for a temporary
restraining order and posted the required bond. On
May 18, 1996, summonses were served to
respondents M/V "Lok Maheshwari" and SCI, and
Portserv and/or Transmar through the Master of the
Vessel. On May 28, 1996, respondents M/V "Lok
Maheshwari" and SCI, through Pioneer Insurance
and Surety Corporation (Pioneer), filed an urgent ex-
parte motion to approve Pioneer’s letter of
undertaking, to consider it as counter-bond and to
discharge the attachment. On May 29, 1996, the trial
court granted the motion; thus, the letter of
undertaking was approved as counter-bond to
discharge the attachment. This case is for the
satisfaction of unpaid supplies furnished by a foreign
supplier in a foreign port to a vessel of foreign
registry that is owned, chartered and sub-chartered
by foreign entities.
ISSUE: Whether the Philippine court has jurisdiction
and whether petitioner Crescent is entitled to
maritime lien under Philippine laws ( Ship Mortgage
Decree of 1978) on foreign vessel docked on
Philippine port and supplies furnished to a vessel in a
foreign port? HELD: (Having settled that that a
contract for furnishing supplies is maritime and
within the jurisdiction of admiralty hence can be
invoked before Philippine courts through an action in
rem or quasi in rem or an action in personam.
Question now is whether petitioner can invoke PH
law governing maritime lien to have the case ruled in
its favor) Various tests used in the US to determine
whether a maritime lien exists: 1) In a suit to the entity which physically delivered the bunker
establish and enforce a maritime lien for supplies fuels is in Canada, the place of contracting and
furnished to a vessel in a foreign port, whether such negotiation is in Canada, and the supplies were
lien exists, or whether the court has or will exercise delivered in Canada. The submission of petitioner is
jurisdiction, depends on the law of the country not in keeping with the reasonable expectation of
where the supplies were furnished, which must be the parties to the contract. Indeed, when the parties
pleaded and proved. 2) The Lauritzen-Romero- entered into a contract for supplies in Canada, they
Rhoditis trilogy of cases, which replaced such single- could not have intended the laws of a remote
factor methodologies as the law of the place of country like the Philippines to determine the
supply. The multiple-contact test to determine, in creation of a lien by the mere accident of the
the absence of a specific Congressional directive as respondent ‘s being in Philippine territory.
to the statute’s reach, which jurisdiction’s law should
be applied. The following factors were considered:
(1) place of the wrongful act; (2) law of the flag; (3)
allegiance or domicile of the injured; (4) allegiance of
the defendant shipowner; (5) place of contract; (6)
inaccessibility of foreign forum; and (7) law of the
forum. This is applicable not only to personal injury
claims / maritime torts arising under the Jones Act
but to all matters arising under maritime law in
general. 3) Factors provided in Restatement (Second)
of Conflicts of Laws have also been applied in
resolving cases brought under the Federal Maritime
Lien Act. Their application suggests that in the
absence of an effective choice of law by the parties,
the forum contacts to be considered include: (a) the
place of contracting; (b) the place of negotiation of
the contract; (c) the place of performance; (d) the
location of the subject matter of the contract; and
(e) the domicile, residence, nationality, place of
incorporation and place of business of the parties.
The Court cannot sustain petitioner Crescent’s
insistence on the application of P.D. No. 1521 or the
Ship Mortgage Decree of 1978 and hold that a
maritime lien exists. Out of the seven basic factors
listed in the case of Lauritzen, Philippine law only
falls under one – the law of the forum. All other
elements are foreign – Canada is the place of the
wrongful act, of the allegiance or domicile of the
injured and the place of contract; India is the law of
the flag and the allegiance of the defendant
shipowner. Applying P.D. No. 1521,a maritime lien
exists would not promote the public policy behind
the enactment of the law to develop the domestic
shipping industry. Opening up our courts to foreign
suppliers by granting them a maritime lien under our
laws even if they are not entitled to a maritime lien
under their laws will encourage forum shopping. In
light of the interests of the various foreign elements
involved, it is clear that Canada has the most
significant interest in this dispute. The injured party
is a Canadian corporation, the sub-charterer which
placed the orders for the supplies is also Canadian,

42
b. Incapable of Pecuniary Estimation not capable of pecuniary estimation and falls under
the exclusive jurisdiction of the RTC.I n determining
1. Raymundo v. CA, 213 SCRA 457 whether an action is one the subject matter of which
GR 97805, September 2, 1992 Nocon, J.: is not capable of pecuniary estimation, the criterion
XXX is first to ascertain the nature of the principal action
or remedy sought.
REMEDIAL LAW; REGIONAL TRIAL COURT;
JURISDICTION IN CIVIL CASES NOT CAPABLE OF A claim of attorney’s fees is only incidental to its
PECUNIARY ESTIMATION. — Private respondent’s principal cause of action and therefore not
complaint is an action to compel the petitioner to determinative of the jurisdiction of the court. If it is
remove the illegal and unauthorized installation of primarily for the recovery of a sum of money, the
glasses at Unit AB-122 of the condominium which is claim is considered capable of pecuniary estimation,
not capable of pecuniary estimation and falls under and whether jurisdiction is in the MTC or in the RTC
the exclusive jurisdiction of the Regional Trial Court would depend on the amount of the claim.However,
Section 33 of Batas Pambansa Bilang 129 is not where the basic issue is something other than the
applicable in the instant case, but paragraph (1), right to recover a sum of money, or where the
Section 19 and paragraph (1), Section 21. money claim is purely incidental to, or a
consequence of, the principal relief sought, the
FACTS: subject of the litigation may not be estimated in
Petioner, Nilo Raymundo is an owner/occupant of terms of money, and are cognizable exclusively by
the Galleria de MagallanesCondominium. The Admin the RTC.
of said condominium discovered that Raymundo
madean unauthorized installation of glasses at the
balcony of his unit which isconsidered a violation of
the Master Deed and Declaration of Restriction of
theCorporation.The admin reported said violation to
the BOD. A letter was sent for the removal ofthe
illegal and unauthorized unstllation of
glasses.Petitioner refused.Repondent Galleria de
Magallanes Assoc. filed a complaint for
mandatoryinjunction against Raymundo at the
RTC.Raymundo filed a motion to dismiss on the
ground that:1. RTC has no jurisdiction over the case
since a complaint for mandatoryinjuction is within
the exclusive jurisdiction of the MTC.2. that the
pecuniary claim of the complaint was only attorney's
fees ofP10,000, hence, the MTC had jurisdiction

RTC: Denied the motion and rendered decision in

favor of Magallanes Assoc.
CA: likewise dismissed petitioner’s petition for
certiorari and prohibition.
Hence, this petition for certiorari and prohibition
with restraining order andpreliminary injunction to
annul and set aside the decision of the CA.

ISSUE:
WON the RTC has no jurisdiction over the case.

HELD:
The SC held that RTC has jurisdiction bec. an action
to remove the illegal and unauthorized installation of
glasses at a condominium unit is

43
 2. Russel vs. Vestil, 304 SCRA 738; GR No.
119347, March 17, 1999, Kapunan, J.:
Facts:
Petitioners discovered a public document, which is a
declaration of heirs and deed of confirmation of a
previous oral agreement, of partition, affecting the
land executed by and among the respondents
whereby respondents divided the property among
themselves to the exclusion of petitioners who are
entitled thereto as legal heirs also.
Petitioners filed a complaint, denominated
“DECLARATION OF NULLITY AND PARTITION”
against defendants with the RTC of Mandaue City
claiming that the document was false and perjurious
as the private respondents were not the only heirs
and that no oral partition of the property
whatsoever had been made between the heirs. The
complaint prayed that the document be declared
null and void and an order be issued to partition the
land among all the heirs.
Private respondents filed a Motion to Dismiss the
complaint on the ground of lack of jurisdiction over
the nature of the case as the total assessed value of
the subject land is P5,000.00 which under section 33
(3) of Batas Pambansa Blg. 129, as amended by R.A.
No. 7691, falls within the exclusive jurisdiction of the
MCTC of Liloan Compostela.
Petitioners filed an Opposition to the Motion to
Dismiss saying that the RTC has jurisdiction over the
case since the action is one which is incapable of
pecuniary estimation within the contemplation of
Section 19(l) of B.P. 129, as amended.
Respondent judge issued an Order granting the
Motion to Dismiss.
Petitioners for a MR alleging that the same is
contrary to law because their action is not one for
recovery of title to or possession of the land but an
action to annul a document or declare it null and
void, hence, one incapable of pecuniary estimation
falling within the jurisdiction of the Regional Trial
Court.
 DENIED.
Hence the petition.
Petitioner’s argument:
44
 maintain the view that the complaint filed
before the Regional Trial Court is for the
annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF
CONFIRMATION OF PREVIOUS ORAL
PARTITION," which is clearly one incapable
of pecuniary estimation, thus, cognizable by
the Regional Trial Court.
Respondent’s answer:
 insists that the action is one for re-partition
and since the assessed value of the property
as stated in the complaint is P5,000.00,
then, the case falls within the jurisdiction of
the Municipal Circuit Trial Court of Liloan,
Compostela, Cebu.
Issue:
WON the RTC has jurisdiction over the nature of the
civil case.
Held: Petition granted.
Yes. The complaint filed before the Regional Trial
Court is one incapable of pecuniary estimation and
therefore within the jurisdiction of said court.
In Singsong vs. Isabela Sawmill, the Supreme Court
ruled that:
In determining whether an action is one the subject
matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of
first ascertaining the nature of the principal action
or remedy sought. If it is primarily for the recovery
of a sum of money, the claim is considered capable
of pecuniary estimation, and whether jurisdiction is
in the municipal courts or in the courts of first
instance would depend on the amount of the claim.
However, where the basic issue is something other
than the right to recover a sum of money, where the
money claim is purely incidental to, or a
consequence of, the principal relief sought, this
Court has considered such actions as cases where
the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by
courts of first instance (now Regional Trial Courts).
Examples of actions incapable of pecuniary
estimation are those for specific performance,
support, or foreclosure of mortgage or annulment of
judgment; 14 also actions questioning the validity of
a mortgage, 15 annulling a deed of sale or
conveyance and to recover the price paid 16 and for
rescession, which is a counterpart of specific
performance.

While actions under Sec. 33(3) of B.P. 129 are also

incapable of pecuniary estimation, the law
specifically mandates that they are cognizable by the
MTC, METC, or MCTC where the assessed value of
the real property involved does exceed P20,000.00 in
Metro Manila, or P50,000.00, if located elsewhere. If
the value exceeds P20,000.00 or P50,000.00 as the
case may be, it is the Regional Trial Courts which
have jurisdiction under Sec. 19(2). 18 However, the
subject matter of the complaint in this case is
annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF
CONFIRMATION OF PREVIOUS ORAL PARTITION."

The main purpose of petitioners in filing the

complaint is to declare null and void the document in
question. While the complaint also prays for the
partition of the property, this is just incidental to the
main action, which is the declaration of nullity of the
document above-described. It is axiomatic that
jurisdiction over the subject matter of a case is
conferred by law and is determined by the
allegations in the complaint and the character of the
relief sought, irrespective of whether the plaintiff is
entitled to all or some of the claims asserted therein.

45
 3. Bardillon vs Barangay Masili of Calamba,
Laguna , 402 scra 330) XXX
FACTS:
This present case originated from the two
complaints for eminent domain that had been filed
by the respondent (Barangay Masili of Calamba,
Laguna) to expropriate a 144-square meter parcel of
land otherwise known as Lot 4381-D situated in Bgy.
Masili, Calamba, Laguna to provide a multi-purpose
hall.
The first complaint was filed with the MTC on
February 23, 1998 after the parties failed to reach an
agreement. However it was subsequently dismissed
by the MTC on March 5, 1999, or after 1 year from
the filing of the first case, “for lack of interest” for
failure of respondent to appear at the pre-trial. I
don’t know bat di sila sumipot, di nabanggit dito sa
main case. But i think narealize nila siguro na walang
jurisdiction ang MTC so baka mabalewala ang finile
nilang case.
The second complaint was filed on October 18, 1999
with the RTC involving the same lot. Petitioner
(Devorah Bardillon, beast mode si owner) moved to
dismiss the second case before the RTC on the
ground of res judicata (pertaining to the first case
that was dismissed by the MTC, SABI KASI NYA WITH
PREJUDICE DAW YUNG PREVIOUS DISMISSAL NG
FIRST CASE BY THE MTC, WALA DAW KASING
NAKALAGAY SA ORDER OF DISMISSAL NA W/O
PREJUDICE TO THE FILING OF THE CASE AGAIN),
tsaka she’s claiming that MTC has jurisdiction since
the value of the property is only P 11,448 (meaning
lower than P 20,000. ang iniinvoke nya dito is yung
20k or 50k na threshold ng jurisdiction ng mtc sa real
property depende dun sa location if within metro
manila or outside metro manila, calamba nga naman
kasi yung location ng property). But the respondent
argued that res judicata is not applicable since the
MTC has no jurisdiction over the case, invoking the
RTC’s jurisdiction over expropriation proceedings.
NOTE: The RTC subsequently issued an order for the
issuance of the writ of possession in favor of the
respondent despite the MR filed by the respondent.
The CA affirmed the assailed orders of the RTC.
ISSUES:
A.) WON THE MTC HAS JURISDICTION
46
B.) WON THERE IS RES JUDICATA
C.) WON THE ENTRY OF THE PREMISES IS LEGAL.
(BEASTMODE SI OWNER, NAGFILE SYA NG MR SA
RTC PERO NAG ISSUE PARIN NG WRIT OF
POSSESSION)
D.) WON THERES A FORUM SHOPPING (DAGDAG KO
NARIN)
HELD: (pakimemorize nalang mga naka parenthesis)
A.) NO.
An expropriation suit does not involve the recovery
of a sum of money. Rather, it deals with the exercise
by the government of its authority and right to take
property for public use. As such, it is incapable of
pecuniary estimation and should be filed with the
regional trial courts.
This was explained by the Court in Barangay San
Roque v. Heirs of Francisco Pastor:
“It should be stressed that the primary consideration
in an expropriation suit is whether the government
or any of its instrumentalities has complied with the
requisites for the taking of private property. Hence,
the courts determine the authority of the
government entity, the necessity of the
expropriation, and the observance of due process. In
the main, the subject of an expropriation suit is the
government’s exercise of eminent domain, a matter
that is incapable of pecuniary estimation.
“True, the value of the property to be expropriated is
estimated in monetary terms, for the court is duty-
bound to determine the just compensation for it.
This, however, is merely incidental to the
expropriation suit. Indeed, that amount is
determined only after the court is satisfied with the
propriety of the expropriation.”
“Verily, the Court held in Republic of the Philippines
v. Zurbano that ‘condemnation proceedings are
within the jurisdiction of Courts of First Instance,’ the
forerunners of the regional trial courts. The said case
was decided during the effectivity of the Judiciary
Act of 1948 which, like BP 129 in respect to RTCs,
provided that courts of first instance had original
jurisdiction over ‘all civil actions in which the subject
of the litigation is not capable of pecuniary
estimation.’ The 1997 amendments to the Rules of
Court were not intended to change these amount required was proper, because it had
jurisprudential precedents. complied with the foregoing requisites.

To reiterate, an expropriation suit is within the
jurisdiction of the RTC regardless of the value of the
land, because the subject of the action is the
government’s exercise of eminent domain — a
matter that is incapable of pecuniary estimation.
B.) NO.
Res judicata literally means a matter adjudged,
judicially acted upon or decided, or settled by
judgment. It provides that a final judgment on the
merits rendered by a court of competent jurisdiction
is conclusive as to the rights of the parties and their
privies; and constitutes an absolute bar to
subsequent actions involving the same claim,
demand or cause of action.
The following are the requisites of res judicata: (1)
the former judgment must be final; (2) the court that
rendered it had jurisdiction over the subject matter
and the parties; (3) it is a judgment on the merits;
and (4) there is — between the first and the second
actions — an identity of parties, subject matter and
cause of action.
Since the MTC had no jurisdiction over expropriation
proceedings, the doctrine of res judicata finds no
application even if the Order of dismissal may have
been an adjudication on the merits.
The issue of the necessity of the expropriation is a
matter properly addressed to the RTC in the course
of the expropriation proceedings. If petitioner
objects to the necessity of the takeover of her
property, she should say so in her Answer to the
Complaint. The RTC has the power to inquire into the
legality of the exercise of the right of eminent
domain and to determine whether there is a genuine
necessity for it.
D.) NO.
The test for determining the presence of forum
shopping is whether the elements of litis pendentia
are present in two or more pending cases, such that
a final judgment in one case will amount to res
judicata in another.
Be it noted that the earlier case lodged with the MTC
had already been dismissed when the Complaint was
filed before the RTC. Even granting arguendo that
both cases were still pending, a final judgment in the
MTC case will not constitute res judicata in the RTC,
since the former had no jurisdiction over the
expropriation case.

C.) YES.

The requirements for the issuance of a writ of

possession in an expropriation case are expressly
and specifically governed by Section 2 of Rule 67 of
the 1997 Rules of Civil Procedure. On the part of
local government units, expropriation is also
governed by Section 19 of the Local Government
Code. Accordingly, in expropriation proceedings, the
requisites for authorizing immediate entry are as
follows: (1) the filing of a complaint for expropriation
sufficient in form and substance; and (2) the deposit
of the amount equivalent to 15 percent of the fair
market value of the property to be expropriated
based on its current tax declaration.

In the instant case, the issuance of the Writ of

Possession in favor of respondent after it had filed
the Complaint for expropriation and deposited the

47
 4. Villena vs Payoyo, 522 scra 592
DOCTRINE: In determining the jurisdiction of an
action whose subject is incapable of pecuniary
estimation, the nature of the principal action or
remedy sought must first be ascertained. If it is
primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation
and the jurisdiction of the court depends on the
amount of the claim. But, where the primary issue is
something other than the right to recover a sum of
money, where the money claim is purely incidental
to, or a consequence of, the principal relief sought,
such are actions whose subjects are incapable of
pecuniary estimation, hence cognizable by the RTCs.
Facts:
Payoyo and Novaline, Inc., through its president,
Villena, entered into a contract for the delivery and
installation of kitchen cabinets in Payoyo's residence.
The cabinets were to be delivered within 90 days
from downpayment of 50% of the purchase price.
Payoyo paid the downpayment. Another contract
was entered into for the delivery of home appliances
and Villena also paid the 50% downpayment. Despite
demand, Villena failed to install the kitchen cabinets
and deliver the appliances.
Payoyo filed a complaint for recovery of a sum of
money and damages against Villena. Villena posits
that the RTC has no jurisdiction over the complaint
since it is mainly for recovery of a sum of money in
the amount of P184,821.50 which is below the
jurisdictional amount set for RTCs.
Payoyo, on the other hand, contends that the RTC
has jurisdiction over the complaint as the allegations
therein show that it is actually a case for rescission of
the contracts. The recovery of a sum of money is
merely a necessary consequence of the cancellation
of the contracts.
Issue:
Whether or not the RTC has jurisdiction over the
case.
Held:
Yes. In determining the jurisdiction of an action
whose subject is incapable of pecuniary estimation,
the nature of the principal action or remedy sought
must first be ascertained. If it is primarily for the
recovery of a sum of money, the claim is considered
capable of pecuniary estimation and the jurisdiction
48
of the court depends on the amount of the claim.
But, where the primary issue is something other
than the right to recover a sum of money, where the
money claim is purely incidental to, or a
consequence of, the principal relief sought, such are
actions whose subjects are incapable of pecuniary
estimation, hence cognizable by the RTCs.
Verily, what determines the nature of the action and
which court has jurisdiction over it are the
allegations of the complaint and the character of the
relief sought.
The complaint, albeit entitled as one for collection of
a sum of money with damages, is one incapable of
pecuniary estimation; thus, one within the RTC's
jurisdiction. The allegations therein show that it is
actually for breach of contract. A case for breach of
contract is a cause of action either for specific
performance or rescission of contracts. An action for
rescission of contract, as a counterpart of an action
for specific performance, is incapable of pecuniary
estimation, and therefore falls under the jurisdiction
of the RTC. The averments in the complaint show
that Payoyo sought the cancellation of the contracts
and refund of the downpayments since Villena failed
to comply with the obligation to deliver the
appliances and install the kitchen cabinets subject of
the contracts. While the respondent prayed for the
refund, this is just incidental to the main action,
which is the rescission or cancellation of the
contracts. (Villena vs. Payoyo, G.R. No. 163021, April
27, 2007)
 5. Ungria vs Court of Appeals, 654 scra 314,
GR No. 165777, July 25, 2011
FACTS:
Private filed with the RTC of GenSan a Complaint for
ownership, possession and damages, and alternative
causes of action either to declare two documents as
patent nullities, and/or for recovery of Rosario's
conjugal share with damages or redemption of the
subject land against petitioner Ceferina de Ungria
and defendants.
The documents they sought to annul are
(1) the Deed of Transfer of Rights and Interest
including Improvements thereon allegedly executed
by Fernando in favor of Eugenio de Ungria,
petitioner's father; and
(2) the Affidavit of Relinquishment executed by
Eugenio in favor of petitioner.
Ceferina filed a Motion to Dismiss alleging that the
court has no jurisdiction over the case for failure of
plaintiffs to pay the filing fee in full.
The RTC denied the Motion to Dismiss.
Ceferina filed a Motion for Reconsideration which
the RTC denied.
On the omnibus motion regarding filing fees, the
plaintiffs asserted in its motion that they are
charging defendant actual and compensatory
damages such as are proved during the hearing of
this case. So also are attorneys fees and moral
damages, all to be proved during the hearing of this
case. Since there was no hearing yet, they are not in
a position to determine how much is to be charged.
At any rate, if after hearing the Clerk of Court
determine that the filing fees is still insufficient,
considering the total amount of the claim, the Clerk
of Court should determine and, thereafter, if any
amount is found due, he must require the private
respondent to pay the same.
From this Order, petitioner filed a motion for
reconsideration and clarification on whether
plaintiffs should be allowed to continue prosecuting
the case as indigent litigants.
RTC again denied petitioner's motion for
reconsideration.
49
Petitioner filed with the CA a petition for certiorari
and prohibition with prayer for the issuance of a
temporary restraining order and/or writ of
preliminary injunction for the nullification of the
Orders by the RTC.
The CA dismissed the petition. The CA found that SC
Circular No. 7 would not apply where the amount of
damages or value of the property was immaterial;
that the Circular could be applied only in cases
where the amount claimed or the value of the
personal property was determinative of the court's
jurisdiction. The CA found that respondents had paid
the corresponding docket fees upon the filing of the
complaint, thus, the RTC had acquired jurisdiction
over the case despite the failure to state the amount
of damages claimed in the body of the complaint or
in the prayer thereof. The CA found that the RTC did
not commit grave abuse of discretion amounting to
lack of jurisdiction when it denied petitioner's
motion to dismiss.
ISSUE: THE COURT OF APPEALS ERRED IN NOT
FINDING THAT RESPONDENT TRIAL COURT
COMMITTED GRAVE ABUSE OF DISCRETION IN
DENYING PETITIONER'S MOTION TO DISMISS
DESPITE RESPONDENTS' NON-PAYMENT OF THE
CORRECT DOCKET FEES.
RULING:
Respondents' complaint was filed in 1999, at the
time Batas Pambansa Blg. (BP) 129, the Judiciary
Reorganization Act of 1980, was already amended by
Republic Act (RA) No. 7691, An Act Expanding the
Jurisdiction of the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts, amending for the purpose BP Blg. 129. The
first cause of action involves the issue of recovery of
possession and interest of the parties over the
subject land which is a real action. Respondents
alleged that the assessed value of the subject land
was P12,780.00. Thus, since it is a real action with an
assessed value of less thanP20,000.00, the case
would fall under the jurisdiction of the MTC. Notably,
however, respondents in the same Complaint filed
alternative causes of action assailing the validity of
the Deed of Transfer of Rights and Interest executed
by Fernando in favor of petitioner's father.
Respondents also sought for the reconveyance to
respondent Rosario of the undivided one-half
portion of the subject land as conjugal owner
thereof in case the Deed of Transfer of Rights and
Interest will be upheld as valid; and/or for
redemption of the subject land. Clearly, this is a case
of joinder of causes of action which comprehends
more than the issue of possession of, or any interest
in the real property under contention, but includes
an action to annul contracts and reconveyance which
are incapable of pecuniary estimation and, thus,
properly within the jurisdiction of the RTC.

50
 6. SURVIVING HEIRS OF ALFREDO R.
BAUTISTA v. FRANCISCO LINDO, GR No.
208232, 2014-03-10
Facts:
This is a Petition for Review on Certiorari under Rule
45 assailing the April 25, 2013 Order of the Regional
Trial Court (RTC)
Alfredo R. Bautista (Bautista), petitioner's
predecessor, inherited in 1983 a free-patent land
located in Poblacion, Lupon, Davao Oriental and
covered by Original Certificate of Title (OCT) No.
(1572) P-6144. A few years later, he subdivided the
property and sold it to several vendees, herein
respondents, via a notarized deed of absolute sale
dated May 30, 1991. Two months later, OCT No.
(1572) P-6144 was canceled and Transfer Certificates
of Title (TCTs) were issued in favor of the vendees.
Three years after the sale, or on August 5, 1994,
Bautista filed a complaint for repurchase against
respondents before the RTC, Branch 32, Lupon,
Davao Oriental, docketed as Civil Case No. 1798,[2]
anchoring his cause of action on Section 119 of
Commonwealth Act No. (CA) 141, otherwise known
as the "Public Land Act," which reads:
SECTION 119. Every conveyance of land acquired
under the free patent or homestead provisions,
when proper, shall be subject to repurchase by the
applicant, his widow, or legal heirs, within a period
of five years from the date of the conveyance.
Respondents, in their Answer, raised lack of cause of
action, estoppel, prescription, and laches, as
defenses.
Meanwhile, during the pendency of the case,
Bautista died and was substituted by petitioner
Epifania G. Bautista (Epifania).
Respondents Francisco and Welhilmina Lindo later
entered into a compromise agreement with
petitioners, whereby they agreed to cede to Epifania
a three thousand two hundred and thirty square
meter (3,230 sq.m.)-portion of the property as well
as to waive, abandon, surrender, and... withdraw all
cla... s and counterclaims against each other. The
compromise was approved by the RTC in its Decision
dated January 27, 2011, the fallo of which reads:
Compromise Agreement
51
Other respondents, however, filed a Motion to
Dismiss[4] dated February 4, 2013, alleging that the
complaint failed to state the value of the property
sought to be recovered.
Moreover, they asserted that the total selling price
of all the properties is only... sixteen thousand five
hundred pesos (PhP 16,500), and the selling price or
market value of a property is always higher than its
assessed value.
RTC Ruling
Acting on the motion, the RTC issued the assailed
order dismissing the complaint for lack of
jurisdiction. The trial court found that Bautista failed
to allege in his complaint that the value of the
subject property exceeds... s 20 thousand pesos
With respect to the belated filing of the motion, the
RTC, citing Cosco Philippines Shipping, Inc. v. Kemper
Insurance Company,[6] held that a motion to dismiss
for lack of jurisdiction may be filed at any stage of
the proceedings, even on appeal,... and is not lost by
waiver or by estoppel.
Arguments
Petitioners argue that respondents belatedly filed
their Motion to Dismiss and are now estopped from
seeking the dismissal of the case, it having been filed
nine (9) years after the filing of the complaint and
after they have actively participated in the
proceedings.
Additionally, they allege that an action for
repurchase is not a real action, but one incapable of
pecuniary estimation, it being founded on privity of
contract between the parties. According to
petitioners, what they seek is the enforcement of
their right to repurchase the... subject property
under Section 119 of CA 141.
Issues:
Whether or not the RTC erred in granting the motion
for the dismissal of the case on the ground of lack of
jurisdiction over the subject matter
Ruling:
The petition is meritorious.
Sec. 19. Jurisdiction in civil cases. Regional Trial
Courts shall exercise exclusive original jurisdiction:
In all civil actions in which the subject of the
litigation is incapable of pecuniary estimation;
In all civil actions which involve the title to, or
possession of, real property, or any interest therein,
where the assessed value of the property involved
exceeds Twenty thousand pesos (P20,000.00) or, for
civil actions in Metro Manila, where such value
exceeds Fifty... thousand pesos (P50,000.00) except
actions for forcible entry into and unlawful detainer
of lands or buildings, original jurisdiction over which
is conferred upon the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts.
On the other hand, jurisdiction of first level courts is
prescribed in Sec. 33 of BP 129, which provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial
Courts in civil cases. Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise:... x x x x
3) Exclusive original jurisdiction in all civil actions
which involve title to, or possession of, real property,
or any interest therein where the assessed value of
the property or interest therein does not exceed
Twenty thousand pesos (P20,000.00) or, in civil...
actions in Metro Manila, where such assessed value
does not exceed Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses and costs:
Provided, That in cases of land not declared for
taxation purposes, the... value of such property shall
be determined by the assessed value of the adjacent
lots.
The core issue is whether the action filed by
petitioners is one involving title to or possession of
real property or any interest therein or one
incapable of pecuniary estimation.
The Court rules that the complaint to redeem a land
subject of a free patent is a civil action incapable of
pecuniary estimation.
It is a well-settled rule that jurisdiction of the court is
determined by the allegations in the complaint and
the character of the relief sought.[10] In this regard,
the Court, in Russell v. Vestil,[11] wrote that
52
"in determining whether an action is one the subject
matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of
first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a
sum... of money, the claim is considered capable of
pecuniary estimation, and whether jurisdiction is in
the municipal courts or in the RTCs would depend on
the amount of the claim." But where the basic issue
is something other than the right to recover a sum of
money, where the... money claim is purely incidental
to, or a consequence of, the principal relief sought,
this Court has considered such actions as cases
where the subject of the litigation may not be
estimated in terms of money, and, hence, are
incapable of pecuniary estimation. These cases... are
cognizable exclusively by RTCs.[12]
Actions for specific performance;
Actions for support which will require the
determination of the civil status;
The right to support of the plaintiff;
Those for the annulment of decisions of lower
courts;
Those for the rescission or reformation of contracts;
[13]
Interpretation of a contractual stipulation.[14]
The Court finds that the instant cause of action to
redeem the land is one for specific performance.
Such being the case, his action for specific
performance is incapable of pecuniary estimation
and cognizable by the RTC.
In Heirs of Jose Fernando v. De Belen, it was held
that the party raising defenses to the complaint,
actively participating in the proceedings by filing
pleadings, presenting his evidence, and invoking its
authority by asking for an affirmative relief is
deemed estopped... from questioning the
jurisdiction of the court.[18]
Here, we note that aside from the belated filing of
the motion to dismiss it having been filed nine (9)
years from the filing of the complaint respondents
actively participated in the proceedings through the
following acts:
By filing their Answer and Opposition to the Prayer
for Injunction[19] dated September 29, 1994
whereby they even interposed counterclaims,
specifically: PhP 501,000 for unpaid survey accounts,
PhP 100,000 each as litigation expenses, PhP
200,000... and PhP 3,000 per daily appearance by
way of attorney's fees, PhP 500,000 as moral
damages, PhP 100,000 by way of exemplary
damages, and costs of suit;
By participating in Pre-trial;
By moving for the postponement of their
presentation of evidence;[20]
By presenting their witness;[21] and
By submitting the compromise agreement for
approval.[22]
Having fully participated in all stages of the case, and
even invoking the RTC's authority by asking for
affirmative reliefs, respondents can no longer assail
the jurisdiction of the said trial court. Simply put,
considering the extent of their participation in the
case, they... are, as they should be, considered
estopped from raising lack of jurisdiction as a ground
for the dismissal of the action.
53
c. Actions Involving Real Properties
1. Hilario vs Salvador (457 scra 815)
FACTS:
Petitioners herein are co-owners of a parcel of land
located in Romblon. In 1996, they filed a complaint
with the RTC of Romblon against herein, respondent,
alleging that as co-owners, they are entitled to
possession of the lot, and that respondent
constructed his house thereon without their
knowledge and refused to vacate the property
despite demands to do so. They prayed for the
private respondent to vacate the property and
restore possession thereof to them.
The complaint, however, failed to allege the
assessed value of the land. Nevertheless, petitioners
were able to present during the trial the most recent
tax declaration, which shows that the assessed value
of the property was Php 5,950.00. The respondent
filed a Motion to Dismiss on the ground of lack of
jurisdiction because of the failure to allege the value
of the land. The motion was denied. Respondent
then filed an Answer, traversing the material
allegations of the complaint, contending that
petitioners had no cause of action against him since
the property in dispute was the conjugal property of
his grandparents, the spouses Salustiano Salvador
and Concepcion Mazo-Salvador. The RTC ruled in
favor of the petitioners. On appeal, the CA reversed
the decision, holding that the action was one for the
recovery of ownership and possession of real
property, and that “absent any allegation in the
complaint of the assessed value of the property, the
MTC had exclusive jurisdiction over the action”
(citing Sec. 33 of R.A. No. 7691). The CA then
ordered the refiling of the case in the proper court.
ISSUES:
Whether the RTC has jurisdiction over the action
HELD: NO.
Petitioner argues that the RTC has jurisdiction since
their action is an accion reinvindicatoria, an action
incapable of pecuniary estimation. Thus, regardless
of the assessed value of the subject property,
exclusive jurisdiction falls within the said court. This
argument is without merit. The jurisdiction of the
court over an action involving title to or possession
of land is now determined by the assessed value of
the said property and not the market value thereof.
In the case at bar, the complaint does not contain an
allegation stating the assessed value of the property
subject of the complaint.

The court cannot take judicial notice of the assessed

or market value of land. The Court noted that during
the trial, the petitioners adduced in evidence a tax
declaration, showing that the assessed value of the
property in 1991 was Php5,950.00. The petitioners,
however, did not bother to adduce in evidence the
tax declaration containing the assessed value of the
property when they filed their complaint in 1996.
Even assuming that the assessed value of the
property in 1991 was the same in 1995 or 1996, the
MTC, and not the RTC had jurisdiction over the
action of the petitioners, since the case involved title
to or possession of real property with an assessed
value of less than Php20,000.00.

As the Court of Appeals had held: “The determining

jurisdictional element for the accion reinvindicatoria
is, as RA 7691 discloses, the assessed value of the
property in question. For properties in the provinces,
the RTC has jurisdiction if the assessed value exceeds
Php20,000.00, and the MTC, if the value is
Php20,000.00 or below. An assessed value can have
reference only to the tax rolls in the municipality
where the property is located, and is contained in
the tax declaration. In the case at bench, the most
recent tax declaration secured and presented by the
plaintiffs-appellees is Exhibit B. The loose remark
made by them that the property was worth 3.5
million pesos, not to mention that there is absolutely
no evidence for this, is irrelevant in the light of the
fact that there is an assessed value. It is the amount
in the tax declaration that should be consulted and
no other kind of value, and as appearing in Exhibit B,
this is Php5,950.00. The case, therefore, falls within
the exclusive original jurisdiction of the Municipal
Trial Court of Romblon which has jurisdiction over
the territory where the property is located, and not
the court a quo. ” The Supreme Court finally held
that all proceedings before the RTC, including the
RTC decision, are null and void, since the RTC had no
jurisdiction over the action of the petitioners.

54
 2. San Pedro vs. Asdala, 593 scra 397
FACTS:
Sometime in July 2001, the heirs of spouses Apolonio
and Valeriana Dionisio, filed with the Metropolitan
Trial Court (MeTC) of Quezon City, Branch 42, a
Complaint against Ana De Guia San Pedro and Wood
Crest Residents Association, Inc., for Accion
Reivindicatoria, Quieting of Title and Damages, with
Prayer for Preliminary Mandatory Injunction.
Dionisio alleged that subject property located in
Batasan Hills, Quezon City, with an assessed value of
P32,100.00, was titled in the name of spouses
Apolonio and Valeriana Dionisio; but San Pedro, with
malice and evident bad faith, claimed that they were
the owners of a parcel of land that encompasses and
covers subject property. Dionisio had allegedly been
prevented from entering, possessing and using
subject property. It was further alleged in the
Complaint that petitioners' Transfer Certificate of
Title over their alleged property was spurious.
Dionisio then prayed that they be declared the sole
and absolute owners of the subject property; that
San Pedro be ordered to surrender possession of
subject property to them; that petitioners and Wood
Crest and/or its members be ordered to pay actual
and moral damages, and attorney's fees.
Petitioners assailed the aforementioned Order by
filing a petition for certiorari with the Regional Trial
Court (RTC) of Quezon City, Branch 87. However, in
its Decision dated March 10, 2003, the RTC dismissed
the petition, finding no grave abuse of discretion on
the part of the MeTC Presiding Judge. The RTC
sustained the MeTC ruling, stating that, in
accordance with Section 33(3) of Republic Act (R.A.)
No. 7691, amending B.P. Blg. 129, the MeTC had
jurisdiction over the complaint for Accion
Reivindicatoria, as it involves recovery of ownership
and possession of real property located in Quezon
City, with an assessed value not exceeding
P50,000.00. A Motion for Reconsideration[6] of the
Decision was filed by petitioners, but was denied in
an Order[7] dated July 3, 2003.
Petitioners then filed with the Court of Appeals
another petition for certiorari, insisting that both the
MeTC and RTC acted with grave abuse of discretion
amounting to lack or excess of jurisdiction by not
ordering the dismissal of the complaint for Accion
Reivindicatoria, for lack of jurisdiction over the same.
In the assailed CA Resolution dated September 15,
2003, the CA dismissed the petition outright, holding
55
that certiorari was not available to petitioners as
they should have availed themselves of the remedy
of appeal. Petitioners' motion for reconsideration of
the resolution of dismissal was denied per
Resolution[8] dated June 1, 2004
ISSUE:
1. WON the MeTC has a jurisdiction on cases
involving Accion Reivindicatoria?
2. WON the Petition for Certiorari under Rule 65 was
the correct remedy?
HELD:
1. Yes, clearly, the RTC and the CA ruled correctly
that the MeTC had jurisdiction over private
respondents' complaint for Accion Reivindicatoria.
2. Yes, settled is the rule that where appeal is
available to the aggrieved party, the special civil
action for certiorari will not be entertained remedies
of appeal and certiorari are mutually exclusive, not
alternative or successive. Hence, certiorari is not and
cannot be a substitute for a lost appeal, especially if
one's own negligence or error in one's choice of
remedy occasioned such loss or lapse. One of the
requisites of certiorari is that there be no available
appeal or any plain, speedy and adequate remedy.
Where an appeal was available, as in this case,
certiorari will not prosper, even if the ground
therefore is grave abuse of discretion. Petitioner's
resort to this Court by Petition for Certiorari was a
fatal procedural error, and the instant petition must,
therefore, fail.
For the very same reason given above, the CA,
therefore, acted properly when it dismissed the
petition for certiorari outright, on the ground that
petitioners should have resorted to the remedy of
appeal instead of certiorari. Verily, the present
Petition for Certiorari should not have been given
due course at all.
Moreover, since the period for petitioners to file a
petition for review on certiorari had lapsed by the
time the instant petition was filed, the assailed CA
Resolutions have attained finality. In a number of
cases, we have held that actions for reconveyance of
or for cancellation of title to or to quiet title over real
property are actions that fall under the classification
of cases that involve title to, or possession of, real
property, or any interest therein.
Thus, under Section 19(1) of B.P. 129, or one
involving title to property under Section 19(2). The
distinction between the two classes became crucial
with the amendment introduced by R.A. No. 7691 in
1994, which expanded the exclusive original
jurisdiction of the first level courts to include "all civil
actions which involve title to, or possession of, real
property, or any interest therein where the assessed
value of the property or interest therein does not
exceed Twenty thousand pesos (P20,000.00) or, in
civil actions in Metro Manila, where such assessed
value does not exceed Fifty thousand pesos
(P50,000.00) exclusive of interest, damages of
whatever kind, attorney's fees, litigation expenses
and costs." Thus, under the present law, original
jurisdiction over cases the subject matter of which
involves "title to, possession of, real property or any
interest therein" under Section 19(2) of B.P. 129 is
divided between the first and second level courts,
with the assessed value of the real property involved
as the benchmark. This amendment was introduced
to "unclog the overloaded dockets of the RTCs which
would result in the speedier administration of
justice."

56
 3. Maslag vc Monzon, et al., 698 scra 584
FACTS:
Sometime in the year 1987, Elizabeth Monzon, the
owner of the adjacent parcel of land being occupied
by Darmag Maslag, informed Maslag that the
respective parcels of land being claimed by them
now be titled. A suggestion was, thereafter made,
that those who were interested to have their lands
titled, will contribute to a common fund for the
surveying and subsequent titling of the land.
Since Maslag had, for so long, yearned for a title to
the land she occupies, she contributed to the
amount being requested by Elizabeth Monzon.
A subdivision survey was made and in the survey, the
respective areas of both were defined and delimited
- all for purposes of titling.
But alas, despite the assurance of subdivided titles,
when the title was finally issued by the Registry of
Deeds, the same was only in the name of Elizabeth
Monzon and William Geston. The name of Darma
Maslag was fraudulently, deliberately and in bad
faith omitted. Thus, the title to the property to the
extent of 18, 295 square meters, was titled solely in
the name of Elizabeth Monzon.
Darmag Maslag filed an action for nullity of OCT
against Elizabeth Monzon in the MTC of La Trinidad,
Benguet. To which the court found Monzon guilty of
fraud in obtaining an OCT.
Monzon appealed to the RTC and upon going to the
record, the court decided that the MTC has no
jurisdiction, it held further that it will take
cognizance to the case pursuant to Section 8, Rule 40
of the Rules of Court, and asked both parties to
submit additional evidence to be tried therein. Both
parties, however, did not submit additional
evidence.
After trial, the RTC reversed the decision of the MTC
and ordered Maslag to turn over the possession of
the 4,415 square meter land with an amount of Php
12, 400 she presently occupies to Monzon. To which
Maslag appealed to the Court of Appeals the
decision of the RTC reversing the MTC
pronouncement. The CA dismissed Maslag's appeal
as it found that the proper remedy is a Petition for
Review under Rule 42, and not a ordinary appeal.
57
Maslag filed a Motion for Reconsideration which was
subsequently denied.
ISSUE:
Whether or not the Court of Appeals was correct in
dismissing the appeal filed by the petitioner.
HELD:
Yes. There are two modes of appealing an RTC
decision or resolution on issues of the fact of law.
The first mode is an ordinary appeal under Rule 41 in
cases where the RTC exercised its original
jurisdiction. The second mode is a petition for review
under Rule 42 in cases where the RTC exercised its
appellate jurisdiction over MTC decisions.
As discussed above, the MTC has original and
exclusive jurisdiction over the subject matter of the
case; hence, there is no other way the RTC could
have taken cognizance of the case and review the
court a quo's Judgment except in the exercise of its
appellate jurisdiction. Only statutes can confer
jurisdiction. Court issuances cannot seize or
appropriate jurisdiction.
Petitioner’s argument lacks merit. To reiterate, only
statutes can confer jurisdiction. Court issuances
cannot seize or appropriate jurisdiction. It has been
repeatedly held that “any judgment, order or
resolution issued without [jurisdiction] is void and
cannot be given any effect.”39 By parity of
reasoning, an order issued by a court declaring that
it has original and exclusive jurisdiction over the
subject matter of the case when under the law it has
none cannot likewise be given effect. It amounts to
usurpation of jurisdiction which cannot be
countenanced. Since BP 129 already apportioned the
jurisdiction of the MTC and the RTC in cases
involving title to property, neither the courts nor the
petitioner could alter or disregard the same. Besides,
in determining the proper mode of appeal from an
RTC Decision or Resolution, the determinative factor
is the type of jurisdiction actually exercised by the
RTC in rendering its Decision or Resolution.
Was it rendered by the RTC in the exercise of its
original jurisdiction, or in the exercise of its appellate
jurisdiction? In short, we look at what type of
jurisdiction was actually exercised by the RTC. We do
not look into what type of jurisdiction the RTC
should have exercised. This is but logical. Inquiring
into what the RTC should have done in disposing of
the case is a question which already involves the
merits of the appeal, but we obviously cannot go
into that where the mode of appeal was improper to
begin with.
58
4. Roldan vs Barrios, GR No. 214803, April 23,
2018, 862 scra 318
DOCTRINE:
While actions under Sec. 33(3) of B.P. 129 are also
incapable of pecuniary estimation, the law
specifically mandates that they are cognizable by the
MTC, METC, or MCTC where the assessed value of
the real property involved does exceed P20,000.00 in
Metro Manila, or P50,000.00, if located elsewhere. If
the value exceeds P20,000.00 or P50,000.00 as the
case may be, it is the Regional Trial Courts which
have jurisdiction under Sec. 19(2).
Clearly, the last paragraph clarified that while civil
actions which involve title to, or possession of, real
property, or any interest therein, are also incapable
of pecuniary estimation as it is not for recovery of
money, the court’s jurisdiction will be determined by
the assessed value of the property involved.
As foreclosure of mortgage is a real action, it is the
assessed value of the property which determines the
court’s jurisdiction. Considering that the assessed
value of the mortgaged property is only P13,380.00,
the RTC correctly found that the action falls within
the jurisdiction of the first level court.
FACTS:
Petitioner Alona G. Roldan filed an action for
foreclosure of real estate mortgage against
respondents spouses Clarence I. Barrios and Anna
Lee T. Barrios and respondent Romel D. Matorres.
The RTC, however, dismissed the complaint.
According to the RTC, it appearing from the
complaint that the assessed value of the property
mortgaged is only P13,380.00 and the instant case
being a real action, the assessed value of the
property determines the jurisdiction. The assessed
value of the property involved being below
P20,000.00, it is the first level court that has
jurisdiction over the cases. The MR by petitioner was
also denied.
Petitioner filed the instant petition for certiorari
alleging grave abuse of discretion committed by the
RTC when it ordered the dismissal of her foreclosure
case without prejudice and denying her motion for
reconsideration. She argues that foreclosure of
mortgage is an action incapable of pecuniary
estimation which is within the exclusive jurisdiction
of the RTC.
ISSUE:
Whether or not the RTC committed grave abuse of
discretion in dismissing the foreclosure cases filed
with it on the ground of lack of jurisdiction.
RULING:
No. The RTC dismissed the foreclosure cases finding
that being a real action and the assessed value of the
mortgaged property is only P13,380.00, it is the first
level court which has jurisdiction over the case and
not the RTC.
The allegations and reliefs sought in petitioner’s
action for foreclosure of mortgage showed that the
loan obtained by respondents spouses Barrios from
petitioner fell due and they failed to pay such loan
which was secured by a mortgage on the property of
the respondents spouses; and prayed that in case of
default of payment of such mortgage indebtedness
to the court, the property be ordered sold to answer
for the obligation under the mortgage contract and
the accumulated interest.
It is worthy to mention that the essence of a contract
of mortgage indebtedness is that a property has
been identified or set apart from the mass of the
property of the debtor-mortgagor as security for the
payment of money or the fulfillment of an obligation
to answer the amount of indebtedness, in case of
default in payment. Foreclosure is but a necessary
consequence of non-payment of the mortgage
indebtedness. In a real estate mortgage when the
principal obligation is not paid when due, the
mortgagee has the right to foreclose the mortgage
and to have the property seized and sold with the
view of applying the proceeds to the payment of the
obligation. Therefore, the foreclosure suit is a real
action so far as it is against property, and seeks the
judicial recognition of a property debt, and an order
for the sale of the res.
As foreclosure of mortgage is a real action, it is the
assessed value of the property which determines the
court’s jurisdiction. Considering that the assessed
value of the mortgaged property is only P13,380.00,
the RTC correctly found that the action falls within
the jurisdiction of the first level court.
Petitioner cites Russell v. Vestil to show that action
for foreclosure of mortgage is an action incapable of
pecuniary estimation and, therefore, within the
jurisdiction of the RTC.
59
We are not persuaded. In the Russell case, we held:
In Singsong vs. Isabela Sawmill, we had the occasion
to rule that:
[I]n determining whether an action is one the subject
matter of which is not capable of pecuniary
estimation, this Court has adopted the criterion of
first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a
sum of money, the claim is considered capable of
pecuniary estimation, and whether jurisdiction is in
the municipal courts or in the courts of first instance
would depend on the amount of the claim.
However, where the basic issue is something other
than the right to recover a sum of money, where the
money claim is purely incidental to, or a
consequence of, the principal relief sought, this
Court has considered such actions as cases where
the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by
courts of first instance (now Regional Trial Courts).
Examples of actions incapable of pecuniary
estimation are those for specific performance,
support, or foreclosure of mortgage or annulment of
judgment; also actions questioning the validity of a
mortgage, annulling a deed of sale or conveyance
and to recover the price paid and for rescission,
which is a counterpart of specific performance.
While actions under Sec. 33(3) of B.P. 129 are also
incapable of pecuniary estimation, the law
specifically mandates that they are cognizable by the
MTC, METC, or MCTC where the assessed value of
the real property involved does exceed P20,000.00 in
Metro Manila, or P50,000.00, if located elsewhere. If
the value exceeds P20,000.00 or P50,000.00 as the
case may be, it is the Regional Trial Courts which
have jurisdiction under Sec. 19(2). X XX
Clearly, the last paragraph clarified that while civil
actions which involve title to, or possession of, real
property, or any interest therein, are also incapable
of pecuniary estimation as it is not for recovery of
money, the court’s jurisdiction will be determined by
the assessed value of the property involved.
d. Damages
1. Movers-Baseco Integrated Port Services vs
Cyborg Leasing 317 scra 327 GR No.
131755, October 25, 1999, Vitug, J.:
FACTS:
August 22, 1996:
Cyborg Leasing Corporation ("Cyborg"), herein
private respondent, filed before the Metropolitan
Trial Court ("MTC") of Manila a case, captioned
"Damages with Prayer for a Writ of Replevin, against
Conpac Warehousing, Inc. ("Conpac"), and herein
petitioner Movers-Baseco Integrated Port Services
("Movers").
 alleged that pursuant to a lease agreement,
Cyborg had delivered one (1) NISSAN forklift
to CONPAC
The lease agreement stipulated a monthly rental of
P11,000.00 for the use of the equipment from its
date of delivery. Conpac supposedly failed and
refused to pay the stipulated rentals starting April
1995 notwithstanding demands therefor. Sometime
in May 1995, petitioner took control of the
operations of Conpac and seized all cargoes and
equipment including the subject forklift. Petitioner
ignored Cyborg’s demand for the return to it of the
equipment and the formal disclaimer of ownership
made by CONPAC.
February 6, 1997:
Petitioner was served with a copy of the summons
and the writ of replevin.
February 14, 1997:
Petitioner filed a motion to dismiss the case on the
ground of lack of jurisdiction on the part of the MTC
since the complaint had asked for, among other
things, the following
(a) . . . actual market value of the equipment (par. 8
of the complaint) P150,000.00
(b) . . . actual damages for use of the equipment at
the rate of P11,000.00 monthly from 09 April 1995
up to the time possession was taken by
the plaintiff under the order of the Honorable Court
(par. 9(a) of the complaint)" 242,000.00
(c) exemplary damages 1,000,000.00
(d) attorney’s fees 50,000.00
60
On 18 March 1997, the MTC issued an order
dismissing the complaint for lack of jurisdiction.
MR: denied.
 if the principal request in the complaint is
for damages, or one of the causes of action,
the amount of such claim shall be
determinative of competencia under
Supreme Court Circular No. 09-94 dated
June 14, 1994.
 The amount sought to be recovered is the
‘amount of the demand’ and included in the
computation of the jurisdictional amount
are attorney’s fees recoverable as damages
(Article 2208, New Civil Code),
consequential damages, exemplary
damages if the amount thereof is specified
in the complaint.
On 26 September 1997, Cyborg filed a petition for
certiorari and prohibition, with preliminary
injunction and/or prayer for temporary restraining
order, against the MTC Judge, Conpac Warehousing
and Movers, before the RTC of Manila.
On 20 October 1997, the RTC issued an order
granting Cyborg’s application for preliminary
injunction
Feeling aggrieved, petitioner filed before the RTC on
24 October 1997 this manifestation:
"For accuracy, respondent Movers-Baseco would like
to state that:
"(a) respondent Movers-Baseco never took custody
of the forklift after the respondent Sheriff took
possession of the same pursuant to the writ of
replevin issued by the MTC; and
"(b) moreover, there is no bond posted by the
petitioner for the issuance of the injunction. The
bond referred to by this Court is the replevin bond
posted in the Metropolitan Trial Court."
RTC RULING:
Petition for certiorari granted
Petitioner timely resorted to this Court, via the
instant petition for review, assailing the decision of
the RTC
ISSUE: YES, Petition for review granted
Whether or not the MTC had jurisdiction over
respondent’s complaint;
RULING:
Section 33 of Batas Pambansa Blg. 129, as amended
by Republic Act No. 7691,
states:jgc:chanrobles.com.ph
"SECTION 33. Jurisdiction of Metropolitan Trial
Courts; Municipal Trial Courts and Municipal Circuit
Trial Courts in Civil Cases. — Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts shall exercise:jgc:chanrobles.com.ph
"(1) Exclusive original jurisdiction over civil actions
and probate proceedings testate and intestate,
including the grant of provisional remedies in proper
cases, where the value of the personal property,
estate, or amount of the demand does not exceed,
or amount of the demand does not exceed One
hundred thousand pesos (P100,000.00) or, in Metro
Manila where such personal property, estate, or
amount of the demand does not exceed Two
hundred thousand pesos (P200,000.00), exclusive of
interest, damages of whatever kind, attorney’s fees,
litigation expenses, and costs, the amount of which
must be specifically alleged: Provided, That interest,
damages of whatever kind, attorney’s fees, litigation
expenses, and costs shall be included in the
determination of the filing fees: Provided, further,
That where there are several claims or causes of
actions between the same or different parties,
embodied in the same complaint, the amount of the
demand shall be the totality of the claims in all the
causes of action, irrespective of whether the causes
of action arose out of the same or different
transactions;"
Supreme Court Administrative Circular No. 09-94, in
turn, provides:
"SUBJECT: Guidelines in the Implementation of
Republic Act No. 7691, Entitled ‘An Act Expanding
the Jurisdiction of the Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial
Courts, Amending For the Purpose Batas Pambansa
Blg. 129, otherwise Known As the Judiciary
Reorganization Act of 1980.’
"2. the exclusion of the term ‘damages’ of whatever
kind’ in determining the jurisdictional amount under
Section 19(8) and Section 33(1) of B.P. Blg. 129, as
amended by R.A. No. 7691, applies to cases where
61
the damages are merely incidental to or a
consequence of the main cause of action. However,
in cases where the claim for damages is the main
cause of action, or one of the causes of action, the
amount of such claim shall be considered in
determining the jurisdiction of the court."
The complaint filed by Cyborg with the Metropolitan
Trial Court of Manila prayed for the return of the
Nissan Forklift to it, as owner and as lessor pursuant
to a lease agreement executed by it in favor of
Conpac, or, in the alternative for the payment of
P150,000.00 (the actual market value of the forklift),
plus damages, plus the amount of unpaid lease,
starting 09 April 1995 at P11,000.00 per month,
which as of the time of the filing of the complaint on
22 August 1996 had amounted to P180,000.00
which, together with the value of the forklift, reach
the sum of P230,000.00 excluding the amount of
damages and attorney’s fees likewise claimed. It
would be incorrect to argue that the actual damages
in the form of unpaid rentals were just incident of
the action for the return of the forklift, considering
that private respondent specifically sought in the
complaint not only the seizure of the forklift from
petitioner-Movers, which took control of the
operations of Conpac, but likewise the payment of
unpaid and outstanding rentals. Verily, the
Metropolitan Trial Court’s orders of 18 March 1997
and 10 June 1997 dismissing the complaint and
denying the motion of private respondent,
respectively, were properly decreed.
 2. Mangaliag vs Catubig-Pastoral (474 scra
153)
FACTS:
On January 21, 1999, from 9:00 to 10:00 a.m.,
private respondent Apolinario Serquina, together
with Marco de Leon, Abner Mandapat and Manuel
de Guzman, was on board a tricycle driven by Jayson
Laforte. While in Pagal, San Carlos City, a dump truck
owned by petitioner Norma Mangaliag and driven by
her employee, petitioner Narciso Solano, coming
from the opposite direction, tried to overtake and
bypass a tricycle in front of it and thereby
encroached the left lane and sideswiped the tricycle
ridden by private respondent. Due to the gross
negligence, carelessness and imprudence of
petitioner Solano in driving the truck, private
respondent and his co-passengers sustained serious
injuries and permanent deformities. Petitioner
Mangaliag failed to exercise due diligence required
by law in the selection and supervision of her
employee. As a result, private respondent was
hospitalized and spent ₱71,392.00 as medical
expenses. Private respondent sustained a permanent
facial deformity due to a fractured nose and suffers
from severe depression as a result thereof, for which
he should be compensated in the amount of
₱500,000.00 by way of moral damages. As a further
result of his hospitalization, private respondent lost
income of ₱25,000.00 and even engaged the services
of counsel on a contingent basis equal to 25% of the
total award.
On July 21, 1999, petitioners filed their answer with
counterclaim denying that private respondent has a
cause of action against them. They attributed fault or
negligence in the vehicular accident on the tricycle
driver, Jayson Laforte, who was allegedly driving
without license.
Subsequently, on March 8, 2000, petitioners,
assisted by a new counsel, filed a motion to dismiss
on the ground of lack of jurisdiction over the subject
matter of the claim, alleging that the Municipal Trial
Court (MTC) has jurisdiction over the case since the
principal amount prayed for, in the amount of
₱71,392.00, falls within its jurisdiction.
ISSUE:
62
Whether or not, the MTC or RTC has jurisdiction over
the action.
HELD:
MTC. It is necessary to stress that generally a direct
recourse to this Court is highly improper, for it
violates the established policy of strict observance of
the judicial hierarchy of courts. Although this Court,
the RTCs and the Court of Appeals (CA) have
concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas
corpus and injunction, such concurrence does not
give the petitioner unrestricted freedom of choice of
court forum. This Court is a court of last resort, and
must so remain if it is to satisfactorily perform the
functions assigned to it by the Constitution and
immemorial tradition. Note also that the judicial
hierarchy of courts is not an iron-clad rule. It
generally applies to cases involving warring factual
allegations. For this reason, litigants are required to
repair to the trial courts at the first instance to
determine the truth or falsity of these contending
allegations on the basis of the evidence of the
parties. Cases which depend on disputed facts for
decision cannot be brought immediately before
appellate courts as they are not triers of facts.
Therefore, a strict application of the rule of hierarchy
of courts is not necessary when the cases brought
before the appellate courts do not involve factual
but legal questions.
Private respondent argues that the defense of lack of
jurisdiction may be waived by estoppel through
active participation in the trial. Such, however, is not
the general rule but an exception, best characterized
by the peculiar circumstances in Tijam vs.
Sibonghanoy. In Sibonghanoy, the party invoking lack
of jurisdiction did so only after fifteen years and at a
stage when the proceedings had already been
elevated to the CA. Sibonghanoy is an exceptional
case because of the presence of laches, which was
defined therein as failure or neglect for an
unreasonable and unexplained length of time to do
that which, by exercising due diligence, could or
should have been done earlier; it is the negligence or
omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to
assert has abandoned it or declined to assert it.
Section 1 of Republic Act (R.A.) No. 7691, which took
effect on April 15, 1994, provides inter alia that
where the amount of the demand in civil cases
exceeds ₱100,000.00, exclusive of interest, damages
of whatever kind, attorney's fees, litigation expenses,
and costs, the exclusive jurisdiction thereof is lodged
with in the RTC. Under Section 3 of the same law,
where the amount of the demand in the complaint
does not exceed ₱100,000.00, exclusive of interest,
damages of whatever kind, attorney's fees, litigation
expenses, and costs, the exclusive jurisdiction over
the same is vested in the Metropolitan Trial Court,
MTC and Municipal Circuit Trial Court. The
jurisdictional amount was increased to ₱200,000.00,
effective March 20, 1999, pursuant to Section 5 of
R.A. No. 7691 and Administrative Circular No. 21-99.
e. Jurisdiction formerly with the SEC
63
1. Pascual vs Court of Appeals (339 scra 117)
XXX
FACTS:
RULING:
Petitioners reiterate their contention that the
complaint against them involves an intra-corporate
dispute cognizable by the SEC and, therefore, the
Regional Trial Court should have dismissed the
complaint. They complain that the trial court should
not have allowed the amendment of the complaint
because it was done in order to confer jurisdiction
on the trial court.
First, Petitioners contend that the existence of a
corporation at the time of filing of a complaint
involving an intra-corporate dispute is not required
in order that such dispute be cognizable by the SEC
because such requirement is not found in P.D. No.
902-A (NO MERIT)
P.D. No. 902-A provides:
In addition to the regulatory and adjudicative
functions of the Securities and Exchange Commission
over corporations, partnerships and other forms of
association registered with it as expressly granted
under existing laws and decrees, it shall have original
and exclusive jurisdiction to hear and decide cases
involving:chanrob1es virtua1 1aw 1ibrary
b) Controversies arising out of intra-corporate or
partnership relations, between and among
stockholders members, or associates; between any
or all of them and the corporation, partnership or
association of which they are stockholders members
or associates, respectively; and between such
corporation, partnership or association and the state
insofar as it concerns their individual franchise or
right to exist as such entity;
Sec. 5(b) does not define what an intra-corporate
controversy is, but case law has fashioned out two
tests for determining what suit is cognizable by the
SEC or the regular courts, and sometimes by the
National Labor Relations Commission. The first test
uses the enumeration in §5(b) of the relationships to
determine jurisdiction, 2 to wit:
(1) Those between and among stockholders and
members;
(2) Those between and among stockholders and
members, on one hands and the corporation, on the
other hand; and
(3) Those between the corporation and the State but
only insofar as its franchise or right to exist as an
entity is concerned.
The second test, on the other hand, focuses on the
nature of the controversy itself. Recent decisions of
this Court consider not only the subject of their
controversy but also the status of the parties
The Court of Appeals correctly ruled that the regular
courts, not the SEC, have jurisdiction over this case.
Petitioners and private respondent never had any
corporate relations in Phillens. It appears that
private respondent was never a stockholder in
Phillens, of which the parties’ predecessor-in-
interest, Luciano Pascual, Sr. was a stockholder and
whose properties are being litigated. Private
respondent’s allegation is that, upon the death of
their father, he became co-owner in the estate left
by him, and part of this estate includes the corporate
interests in Phillens. He also alleges that petitioners
repudiated the trust relationship created between
them and appropriated to themselves even the
property that should have belonged to Respondent.
It is thus clear that there is no corporate relationship
involved here. That petitioner Alfredo Pascual was a
corporate officer holding in trust for his brother their
father’s corporate interests did not create an intra-
corporate relationship between them.
supervisory authority of the SEC over the
corporation has likewise come to an end.
It is true that a complaint for accounting,
reconveyance, etc. on corporate properties has
previously been held to be within the jurisdiction of
the SEC. 6 Nonetheless, a distinction can be drawn
between those cases and the case at bar, for, in
those cases, the corporations involved were still
existing, whereas in the present case, there is no
more corporation involved. There is no question that
assessing the financial status of an existing
corporation, for purposes of an action for
accounting, requires the expertise of the SEC. But in
the case of a dissolved corporation, no such
expertise is required, for all its business has been
properly accounted for already, and what is left to be
determined is properly within the competence of
regular courts.
It may be noted in this connection that pursuant to
R.A. No. 8799, §5.2, 7 which took effect on August 8,
2000, the jurisdiction of the SEC to decide cases
involving intra-corporate dispute was transferred to
courts of general jurisdiction and, in accordance
therewith, all cases of this nature, with the exception
only of those submitted for decision, were
transferred to the regular courts. Hence, the
question whether this case should be filed in the SEC
is now only of academic interest. For even if it
involves an intra-corporate dispute, it would be
remanded to the Regional Trial Court just the same.

Controversy corporate in Nature. NO

 the grant of jurisdiction must be viewed in
the light of the nature and function of the
SEC under the law. 5 P.D. No. 902-A, §3
gives the SEC jurisdiction, supervision, and
control over all corporations, partnerships
or associations, who are the grantees of
primary franchise and/or a license or permit
issued by the government to operate in the
Philippines. From this, it can be deduced
that the regulatory and adjudicatory
functions of the SEC, insofar as intra-
corporate controversies are concerned,
comes into play only if a corporation still
exists.

In the case at bar, the corporation whose properties

are being contested no longer exists, it having been
completely dissolved in 1993; consequently, the

64
 2. Transfarm & Co. vs Daewoo Corporation Trial Court of Cebu City for further proceedings. No
343 scra 410 XXX costs.

FACTS:
Transfarm and TAMC filed a petition for certiorari,
prohibition and mandamus before the Court of
Appeals. The appellate court, in its 29th July 1999
decision, declared that the jurisdiction over the case
rested with the SEC and, accordingly, granted the
petition and ordered the dismissal of the complaint.
The subsequent motion for reconsideration was
rebuffed.

ISSUE:

RULING:
The Court required respondents to file their
comment and petitioners to file their reply thereon,
respectively, in its resolutions of 25 November 1999
and 21 June 2000. During the pendency of the
petition, Republic Act No. 8799, otherwise also
known as The Securities Regulation Code, was
enacted into law, providing, inter alia that —

"5.2. The Commission’s jurisdiction over all cases

enumerated under Section 5 of Presidential Decree
No. 902-A is hereby transferred to the Courts of
general jurisdiction or the appropriate Regional Trial
Court: Provided, That the Supreme Court in the
exercise of its authority may designate the Regional
Trial Court branches that shall exercise jurisdiction
over these cases. The Commission shall retain
jurisdiction over pending cases involving intra-
corporate disputes submitted for final resolution
which should be resolved within one (1) year from
the enactment of this Code. The Commission shall
retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June
2000 until finally disposed." 1

Statutes regulating court jurisdiction and procedures

are generally construed to be applicable to actions
pending and undetermined at the time of the
passage of said enactments. 2 The instant case,
neither filed with the Securities and Exchange
Commission nor therewith pending, let alone ready
for final resolution by it, is clearly cognizable by the
RTC under the amendatory law.chanrob1es virtua1
1aw 1ibrary

WHEREFORE, the decision of the appellate court

subject of the instant petition for review is SET
ASIDE, and the case is REMANDED to the Regional

65
 3. Medical Plaza Makati Condominium
Corporation vs Cullen 709 scra 110
FACTS:
Respondent (Cullen) purchased from Meridien Land
Holding,Inc. (MLHI) condominium Unit No. 1201 of
the petitioner. Old title was later cancelled and new
title (CCT 64218) was issued in respondent's name.
On 19 September 2002, petitioner (MPMCC)
demanded from Cullen payment for unpaid
association dues and assessments claiming a carry-
over of MLHI. Cullen refused claiming they are being
religiously paid. Consequently, Cullen was prevented
from exercising his right to vote and be voted during
election of MPMCC's BOD. When MLHI clarified that
his dues had already been settled and upon
MPMCC's failure to explain why is such, he filed a
Complaint for Damages against MPMCC in RTC
Makati, acting as a regular court. MPMCC and MLHI
moved to dismiss mainly on the ground of lack of
jurisdiction. On 9 September 2009, the RTC
dismissed the complaint on the ground that the
action falls within the exclusive jurisdiction of HLURB
and that the issues raised are intra-corporate
between the corporation and member. On appeal,
the CA reversed RTC decision holding that the
controversy is an ordinary civil action for damages
within the jurisdiction of regular courts. When
motions for reconsideration was denied, petitioners
filed the present petition for review on certiorari
under Rule 45.
ISSUE:
Whether or not the case falls within RTC sitting as a
special commercial court or an ordinary action for
damages within the jurisdiction of regular courts.
HELD:
The petition is meritorious.
It is a settled rule that jurisdiction over the subject
matter is determined by the allegations in the
complaint. It is not affected by the pleas or the
theories set up by the defendant in an answer or a
motion to dismiss. Otherwise, jurisdiction would
become dependent almost entirely upon the whims
of the defendant. Also illuminating is the Court's
pronouncement in Go v. Distinction Properties
Development and Construction, Inc.:
Basic as a hornbook principle is that jurisdiction over
the subject matter of a case is conferred by law and
determined by the allegations in the complaint
66
which comprise a concise statement of the ultimate
facts constituting the plaintiff's cause of action. The
nature of an action, as well as which court or body
has jurisdiction over it, is determined based on the
allegations contained in the complaint of the
plaintiff, irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims
asserted therein. The averments in the complaint
and the character of the relief sought are the ones to
be consulted. Once vested by the allegations in the
complaint, jurisdiction also remains vested
irrespective of whether or not the plaintiff is entitled
to recover upon all or some of the claims asserted
therein.
In determining whether a dispute constitutes an
intra-corporate controversy, the Court uses two
tests, namely, the relationship test and the nature of
the controversy test.
An intra-corporate controversy is one which pertains
to any of the following relationships: (1) between the
corporation, partnership or association and the
public; (2) between the corporation, partnership or
association and the State insofar as its franchise,
permit or license to operate is concerned; (3)
between the corporation, partnership or association
and its stockholders, partners, members or officers;
and (4) among the stockholders, partners or
associates themselves. Thus, under the relationship
test, the existence of any of the above intra-
corporate relations makes the case intra-corporate.
Under the nature of the controversy test, "the
controversy must not only be rooted in the existence
of an intra-corporate relationship, but must as well
pertain to the enforcement of the parties' correlative
rights and obligations under the Corporation Code
and the internal and intra-corporate regulatory rules
of the corporation." In other words, jurisdiction
should be determined by considering both the
relationship of the parties as well as the nature of
the question involved.
Applying the two tests, we find and so hold that the
case involves intra-corporate controversy. It
obviously arose from the intra-corporate relations
between the parties, and the questions involved
pertain to their rights and obligations under the
Corporation Code and matters relating to the
regulation of the corporation.
 f. Intellectual Property Infringement

1. Samson vs Daway (434 scra 612)

FACTS:
Two informations for unfair competition were filed
against Samson, the registered owner of ITTI shoes.
The infomations state that Samson did then and
there willfully, unlawfully and feloniously distribute,
sell and/or offer for sale CATERPILLAR products such
as footwear, garments, clothing, bags, accessories
and paraphernalia which are closely identical to
and/or colorable imitations of the authentic
Caterpillar products and likewise using trademarks,
symbols and/or designs as would cause confusion,
mistake or deception on the part of the buying
public to the damage and prejudice of CATERPILLAR,
INC., the prior adopter, user and owner of the
following internationally: “CATERPILLAR,” “CAT,”
“CATERPILLAR & DESIGN,” “CAT AND DESIGN,”
“WALKING MACHINES” and “TRACK-TYPE TRACTOR
& DESIGN.”

Samson filed a motion to suspend the arraignment

and other proceedings in view of the existence of an
alleged prejudicial question involving a civil case for
unfair competition pending with the same branch,
and also in view of the pendency of a petition for
review filed with the Secretary of Justice assailing
the Chief State Prosecutor’s resolution finding
probable cause to charge petitioner with unfair
competition.

The TC judge denied the motion and arraignment

ensued. Thereafter, Samson filed a motion to quash
the informations contending that since under
Section 170 of R.A. No. 8293, the penalty of
imprisonment for unfair competition does not
exceed six years, the offense is cognizable by the
Municipal Trial Courts and not by the Regional Trial
Court, per R.A. No. 7691. The TC judge denied the
motion. Hence, this petition for certiorari.

ISSUE/S:
1. Which court has jurisdiction over criminal and civil
cases for violation of intellectual property rights?
2. Did the TC judge commit grave abuse of discretion
when he refused to suspend the proceedings on the
ground of existence of prejudicial question and a
pending petition for review before the Sec. of Justice
on the finding of probable cause for unfair
competition?

67
RULING:
1. RTC. Under Section 170 of R.A. No. 8293, which
took effect on January 1, 1998, the criminal penalty
for infringement of registered marks, unfair
competition, false designation of origin and false
description or representation, is imprisonment from
2 to 5 years and a fine ranging from Fifty Thousand
Pesos to Two Hundred Thousand Pesos. Corollarily,
Section 163 of the same Code states that actions
(including criminal and civil) under Sections 150, 155,
164, 166, 167, 168 and 169 shall be brought before
the proper courts with appropriate jurisdiction under
existing laws.
The existing law referred to in the foregoing
provision is Section 27 of R.A. No. 166 (The
Trademark Law) which provides that jurisdiction over
cases for infringement of registered marks, unfair
competition, false designation of origin and false
description or representation, is lodged with the CFI
(now RTC). We find no merit in the claim of Samson
that R.A. No. 166 was expressly repealed by R.A. No.
8293. The use of the phrases “parts of Acts” and
“inconsistent herewith” only means that the repeal
pertains only to provisions which are repugnant or
not susceptible of harmonization with R.A. No.
8293.7 Section 27 of R.A. No. 166, however, is
consistent and in harmony with Section 163 of R.A.
No. 8293. Had R.A. No. 8293 intended to vest
jurisdiction over violations of intellectual property
rights with the Metropolitan Trial Courts, it would
have expressly stated so under Section 163 thereof.
Moreover, the settled rule in statutory construction
is that in case of conflict between a general law and
a special law, the latter must prevail. Jurisdiction
conferred by a special law to Regional Trial Courts
must prevail over that granted by a general law to
Municipal Trial Courts. In the case at bar, R.A. No.
8293 and R.A. No. 166 are special laws conferring
jurisdiction over violations of intellectual property
rights to the Regional Trial Court. They should
therefore prevail over R.A. No. 7691, which is a
general law. Hence, jurisdiction over the instant
criminal case for unfair competition is properly
lodged with the Regional Trial Court even if the
penalty therefor is imprisonment of less than 6
years, or from 2 to 5 years and a fine ranging from
P50,000.00 to P200,000.00.
In fact, to implement and ensure the speedy
disposition of cases involving violations of
intellectual property rights under R.A. No. 8293, the
68
Court issued A.M. No. 02-1-11-SC dated February 19,
2002 designating certain Regional Trial Courts as
Intellectual Property Courts. On June 17, 2003, the
Court further issued a Resolution consolidating
jurisdiction to hear and decide Intellectual Property
Code and Securities and Exchange Commission cases
in specific Regional Trial Courts designated as Special
Commercial Courts.
2. NO. Samson failed to substantiate his claim that
there was a prejudicial question. He made no
discussion in support of said prayer in his petition
and reply to comment. Neither did he attach a copy
of the complaint in Civil Case nor quote the pertinent
portion thereof to prove the existence of a
prejudicial question. At any rate, there is no
prejudicial question if the civil and the criminal
action can, according to law, proceed independently
of each other.
In the case at bar, the common element in the acts
constituting unfair competition under Section 168 of
R.A. No. 8293 is fraud. Pursuant to Article 33 of the
Civil Code, in cases of defamation, fraud, and
physical injuries, a civil action for damages, entirely
separate and distinct from the criminal action, may
be brought by the injured party. Hence, Civil Case
No. Q-00-41446, which as admitted by Caterpilar
also relate to unfair competition, is an independent
civil action under Article 33 of the Civil Code. As
such, it will not operate as a prejudicial question that
will justify the suspension of the criminal cases at
bar.
While the pendency of a petition for review is a
ground for suspension of the arraignment, the
aforecited provision limits the deferment of the
arraignment to a period of 60 days reckoned from
the filing of the petition with the reviewing office. It
follows, therefore, that after the expiration of said
period, the trial court is bound to arraign the
accused or to deny the motion to defer arraignment.
In the instant case, Samson failed to establish that
respondent Judge abused his discretion in denying
his motion to suspend. His pleadings and annexes
submitted before the Court do not show the date of
filing of the petition for review with the Secretary of
Justice.15Moreover, the Order dated August 9, 2002
denying his motion to suspend was not appended to
the petition. He thus failed to discharge the burden
of proving that he was entitled to a suspension of his
arraignment and that the questioned orders are
contrary to Section 11 (c), Rule 116 of the Revised JURISDICTION OF FAMILY COURTS
Rules on Criminal Procedure. Indeed, the age-old but (Section 5 of R.A. No. 8369)
familiar rule is that he who alleges must prove his
allegations. 1. In the Matter of Application for the
Issuance of a Writ of Habeas Corpus 436
scra 550

FACTS: Petitioner was an American, respondent was

a Filipino. They were married and had one daughter.
After 3 years, the woman grew restless and bored as
a plain housewife and wanted to return to her old
job as GRO in a nightclub. One day, the woman left
the family home together with their daughter and
told her servants that she was going to Basilan. The
husband filed a petition for habeas corpus in the
designated Family Court in Makati City but was
dismissed because the child was in Basilan. When he
went to Basilan, he didn’t find them and the
barangay office issued a certification that
respondent was no longer residing there. Petitioner
filed another petition for habeas corpus in CA which
could issue a writ of habeas corpus enforceable in
the entire country. The petition was denied by CA on
the ground that it did not have jurisdiction over the
case since RA 8369 (Family Courts Act of 1997) gave
family courts exclusive jurisdiction over petitions for
habeas corpus, it impliedly repealed RA 7902 (An Act
Expanding the Jurisdiction of CA) and B.P 129 (The
judiciary Reorganization Act of 1980.)

ISSUE: W/N CA has jurisdiction to issue writs of

habeas corpus in cases involving custody of minors in
light of the provision in RA 8369 giving family courts
exclusive jurisdiction over such petitions.

HELD: Petition granted. CA should take cognizance of

the case because nothing in RA 8369 revoked its
jurisdiction to issue writs of habeas corpus involving
custody of minors. The reasoning of CA cant be
affirmed because it will result to iniquitous, leaving
petitioners without legal course in obtaining custody.
The minor could be transferred from one place to
another and habeas corpus case will be left without
legal remedy since family courts take cognizance
only cases within their jurisdiction. Literal
interpretation would render it meaningless, lead to
absurdity, injustice, and contradiction. The literal
interpretation of “exclusive” will result in grave
injustice and negate the policy to protect the rights
and promote welfare of children.

69
Under the Family Courts Act of 1997, the avowed
policy of the State is to "protect the rights and
promote the welfare of children." The creation of
the Family Court is geared towards addressing three
major issues regarding children’s welfare cases, as
expressed by the legislators during the deliberations
for the law. The legislative intent behind giving
Family Courts exclusive and original jurisdiction over
such cases was to avoid further clogging of regular
court dockets, ensure greater sensitivity and
specialization in view of the nature of the case and
the parties, as well as to guarantee that the privacy
of the children party to the case remains protected.
RA 8369 did not divest the Court of Appeals and the
Supreme Court of their jurisdiction over habeas
corpus cases involving the custody of minors.
70
2. Madriñan vs Madriñan (527 scra 487)
FACTS:
Petitioner Felipe N. Madriñan and respondent
Francisca R. Madriñan were married on July 7,
1993.Their union was blessed with three sons and a
daughter. After a bitter quarrel on May 18, 2002,
petitioner allegedly left their conjugal abode and
took their three sons with him to Albay and
subsequently to Laguna.
Respondent sought the help of her parents and
parents-in-law to patch things up between her and
petitioner but failed. She then brought the matter to
the Lupong Tagapamayapa in their Barangay, but
this too proved futile. Thus respondent filed a
petition for habeas corpus of the three sons in the
Court of Appeals, alleging that petitioner’s act of
leaving the conjugal dwelling and going to Albay and
then to Laguna disrupted the education of their
children and deprived them of their mother’s care.
She prayed that petitioner be ordered to appear and
produce their sons before the court and to explain
why they should not be returned to her custody.
On September 3, 2002, petitioner filed his
memorandum alleging that respondent was unfit to
take custody of their three sons because she was
habitually drunk, frequently went home late at night
or in the wee hours of the morning, spent much of
her time at a beer house and neglected her duties as
a mother. He claimed that, after their squabble on
May 18, 2002, it was respondent who left, taking
their daughter with her. It was only then that he
went to Laguna where he worked as a tricycle driver.
He also questioned the jurisdiction of the Court of
Appeals claiming that under Section 5(b) of RA 8369
(otherwise known as the “Family Courts Act of
1997”) family courts have exclusive original
jurisdiction to hear and decide the petition for
habeas corpus filed by respondent.
For her part, respondent averred that she did not
leave their home on May 18, 2002 but was driven
out by petitioner. She alleged that it was petitioner
who was an alcoholic, gambler and drug addict.
Petitioner’s alcoholism and drug addiction impaired
his mental faculties, causing him to commit acts of
violence against her and their children. The situation
was aggravated by the fact that their home was
adjacent to that of her in-laws who frequently
meddled in their personal problems.
On October 21, 2002, the Court of Appeals rendered corpus which may be issued exclusively by the family
a decision asserting its authority to take cognizance courts under said law pertain to the ancillary remedy
of the petition and ruling that, under Article 213 of that may be availed of in conjunction with the
the Family Code, respondent was entitled to the petition for custody of minors under Rule 99 of the
custody of the two younger sons who were at that Rules of Court.
time aged six and four, respectively, subject to the
visitation rights of petitioner. With respect to eldest
son who was then eight years old, the court ruled
that his custody should be determined by the proper
family court in a special proceeding on custody of
minors under Rule 99 of the Rules of Court.
Petitioner moved for reconsideration of the Court of
Appeals decision but it was denied. Hence, this
recourse.

ISSUE:
Whether or not the CA had jurisdiction to issue the
writ of habeas corpus as jurisdiction over the case is
lodged in the Family Courts under R.A. 8369.

HELD:
RA 8369 did not divest the CA and the Supreme
Court of their jurisdiction over habeas corpus cases
involving custody of minors. The provisions of RA
8369 reveal no manifest intent to revoke the
jurisdiction of the CA and the SC to issue said writ.
Said law should be read in harmony with the
provisions of RA 7092 (expanding the jurisdiction of
the CA) and BP 129 (the Judiciary Reorganization Act
of 1980) — that family courts have concurrent
jurisdiction with the CA and the SC in petitions for
habeas corpus where the custody of minors is at
issue. This is in fact affirmed by Administrative
Circular 03-03-04-SC, dated April 22, 2004.

In this case, after petitioner moved out of their

residence on May 18, 2002, he twice transferred his
sons to provinces covered by different judicial
regions. By giving the family courts exclusive
jurisdiction over habeas corpus cases will result in an
iniquitous situation leaving individuals like the
respondent without legal recourse in obtaining
custody of her children. Individuals who do not know
the whereabouts of minors they are looking for
would be helpless since they cannot seek redress
from family courts whose writs are enforceable only
in their respective territorial jurisdictions. This lack of
recourse could not have been the intention of RA
8369.

Moreover, under RA 8369, the family courts are

vested with original exclusive jurisdiction in custody
cases, not in habeas corpus cases. Writs of habeas

71
 3. Garcia vs Drilon (699 scra 352)
FACTS:
Rosalie Jaype-Garcia (private respondent) filed, for
herself and in behalf of her minor children, a verified
petition before the RTC of Bacolod City for the
issuance of a Temporary Protection Order (TPO)
against her husband, Jesus C. Garcia (petitioner),
pursuant to R.A. 9262. She claimed to be a victim of
physical abuse; emotional, psychological, and
economic violence as a result of marital infidelity on
the part of petitioner, with threats of deprivation of
custody of her children and of financial support.
Finding reasonable ground to believe that an
imminent danger of violence against the private
respondent and her children exists or is about to
recur, the RTC issued a TPO effective for thirty (30)
days.
Claiming that petitioner continued to deprive them
of financial support; failed to faithfully comply with
the TPO; and committed new acts of harassment
against her and their children, private respondent
filed another application for the issuance of a TPO ex
parte.
The RTC issued a TPO, effective for thirty (30) days.
Petitioner filed before the CA challenging (1) the
constitutionality of R.A. 9262 for being violative of
the due process and the equal protection clauses,
and (2) the validity of the modified TPO issued in the
civil case for being “an unwanted product of an
invalid law.”
The CA dismissed the petition for failure of petitioner
to raise the constitutional issue in his pleadings
before the trial court in the civil case, which is
clothed with jurisdiction to resolve the same.
In defending his failure to attack the constitutionality
of R.A. 9262 before the RTC of Bacolod City,
petitioner argues that the Family Court has limited
authority and jurisdiction that is “inadequate to
tackle the complex issue of constitutionality.”
ISSUE:
Whether or not the Family Court has jurisdiction on
the issue of constitutionality of a statute.
RULING:
72
Family Courts have authority and jurisdiction to
consider the constitutionality of a statute.
At the outset, it must be stressed that Family Courts
are special courts, of the same level as Regional Trial
Courts. Under R.A. 8369, otherwise known as the
“Family Courts Act of 1997,” family courts have
exclusive original jurisdiction to hear and decide
cases of domestic violence against women and
children. In accordance with said law, the Supreme
Court designated from among the branches of the
Regional Trial Courts at least one Family Court in
each of several key cities identified.
To achieve harmony with the first mentioned law,
Section 7 of R.A. 9262 now provides that Regional
Trial Courts designated as Family Courts shall have
original and exclusive jurisdiction over cases of
VAWC defined under the latter law, viz:
SEC. 7. Venue. – The Regional Trial Court designated
as a Family Court shall have original and exclusive
jurisdiction over cases of violence against women
and their children under this law. In the absence of
such court in the place where the offense was
committed, the case shall be filed in the Regional
Trial Court where the crime or any of its elements
was committed at the option of the complainant.
Inspite of its designation as a family court, the RTC of
Bacolod City remains possessed of authority as a
court of general original jurisdiction to pass upon all
kinds of cases whether civil, criminal, special
proceedings, land registration, guardianship,
naturalization, admiralty or insolvency. It is settled
that RTCs have jurisdiction to resolve the
constitutionality of a statute, “this authority being
embraced in the general definition of the judicial
power to determine what are the valid and binding
laws by the criterion of their conformity to the
fundamental law.” The Constitution vests the power
of judicial review or the power to declare the
constitutionality or validity of a law, treaty,
international or executive agreement, presidential
decree, order, instruction, ordinance, or regulation
not only in this Court, but in all RTCs. We said in J.M.
Tuason and Co., Inc. v. CA that, “plainly the
Constitution contemplates that the inferior courts
should have jurisdiction in cases involving
constitutionality of any treaty or law, for it speaks of
appellate review of final judgments of inferior courts
in cases where such constitutionality happens to be
in issue.” Section 5, Article VIII of the 1987
Constitution reads in part as follows:
SEC. 5. The Supreme Court shall have the following
powers:
xxx
2. Review, revise, reverse, modify, or affirm on
appeal or certiorari, as the law or the Rules of Court
may provide, final judgments and orders of lower
courts in:
a. All cases in which the constitutionality or validity
of any treaty, international or executive agreement,
law, presidential decree, proclamation, order,
instruction, ordinance, or regulation is in question.
xxxx
Thus, contrary to the posturing of petitioner, the
issue of constitutionality of R.A. 9262 could have
been raised at the earliest opportunity in his
Opposition to the petition for protection order
before the RTC of Bacolod City, which had
jurisdiction to determine the same, subject to the
review of this Court.
73
JURISDICTION OF LABOR ARBITERS vs
REGULAR COURTS
Article 217, Labor Code
1. Tolosa vs NLRC 401 scra 291 XXX
FACTS:
Evelyn Tolosa, was the widow of Captain Virgilio
Tolosa who was hired by Qwana-Kaiun, through its
manning agent, Asia Bulk, to be the master of the
Vessel named M/V Lady Dona. The vessel departed
for Long Beach California, passing by Hawaii in the
middle of the voyage. At the time of embarkation,
CAPT. TOLOSA was allegedly shown to be in good
health. “During ‘channeling activities’ upon the
vessel’s departure from Yokohama sometime on
November 6, 1992, CAPT. TOLOSA was drenched
with rainwater. The following day he had a slight
fever and in the succeeding twelve (12) days Nov. 7-
18, 1992, his health rapidly deteriorated resulting in
his death. It was alleged that the request for
emergency evacuation of Capt Tolosa was too late.
Because of the death of Capt. Tolosa, his wife, Evelyn
filed a Complaint/Position Paper before the POEA
against Qwana-Kaiun, thru its resident-agent, Mr.
Fumio Nakagawa, ASIA BULK, Pedro Garate and
Mario Asis, as respondents. The case was however
transferred to the NLRC, when the amendatory
legislation expanding its jurisdiction, and removing
overseas employment related claims from the ambit
of POEA jurisdiction. Petitioner argues that her cause
of action is not predicated on a quasi delict or tort,
but on the failure of private respondents -- as
employers of her husband (Captain Tolosa) -- to
provide him with timely, adequate and competent
medical services under Article 161 of the Labor Code.
Respondents aver that the Labor Arbiter has no
jurisdiction over the subject matter, since her cause
did not arise from an employer-employee relation,
but from a quasi delict or tort. Further, there is no
reasonable causal connection between her suit for
damages and her claim under Article 217 (a)(4) of
the Labor Code, which allows an award of damages
incident to an employer-employee relation. LA:
awarded the damages NLRC: dismissed for lack of
jurisdiction CA: ruled that the labor commission had
no jurisdiction over the subject matter of the action
filed by petitioner. Hence, this petition for review of
CA’s decision and MR denied.
ISSUE: Whether or not the NLRC and the Labor such a connection with the other claims can the
Arbiter has jurisdiction over the subject matter. claim for damages be considered as arising from
employer-employee relations.” In the present case,
RULING: NO. The SC held that the NLRC and the petitioner’s claim for damages is not related to any
labor arbiter had no jurisdiction over petitioner’s other claim under Article 217, other labor statutes,
claim for damages, because that ruling was based on or collective bargaining agreements. Petitioner
a quasi delict or tort per Article 2176 of the Civil cannot anchor her claim for damages to Article 161
Code. Time and time again, we have held that the of the Labor Code, which does not grant or specify a
allegations in the complaint determine the nature of claim or relief. This provision is only a safety and
the action and, consequently, the jurisdiction of the health standard under Book IV of the same Code.
courts. The enforcement of this labor standard rests with
the labor secretary. Thus, claims for an employer’s
After carefully examining the complaint/position violation thereof are beyond the jurisdiction of the
paper of petitioner, we are convinced that the labor arbiter. In other words, petitioner cannot
allegations therein are in the nature of an action enforce the labor standard provided for in Article
based on a quasi delict or tort. It is evident that she 161 by suing for damages before the labor arbiter. It
sued Pedro Garate and Mario Asis for gross is not the NLRC but the regular courts that have
negligence. Petitioner’s complaint/position paper jurisdiction over actions for damages, in which the
refers to and extensively discusses the negligent acts employer-employee relation is merely incidental,
of shipmates Garate and Asis, who had no and in which the cause of action proceeds from a
employeremployee relation with Captain Tolosa. The different source of obligation such as a tort. Since
SC stressed that the case does not involve the petitioner’s claim for damages is predicated on a
adjudication of a labor dispute, but the recovery of quasi delict or tort that has no reasonable causal
damages based on a quasi delict. The jurisdiction of connection with any of the claims provided for in
labor tribunals is limited to disputes arising from Article 217, other labor statutes, or collective
employer-employee relations. Not every dispute bargaining agreements, jurisdiction over the action
between an employer and employee involves lies with the regular courts -- not with the NLRC or
matters that only labor arbiters and the NLRC can the labor arbiters. Petition is denied.
resolve in the exercise of their adjudicatory or quasi-
judicial powers. The jurisdiction of labor arbiters and
the NLRC under Article 217 of the Labor Code is
limited to disputes arising from an employer-
employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes, or
their collective bargaining agreement.” While it is
true that labor arbiters and the NLRC have
jurisdiction to award not only reliefs provided by
labor laws, but also damages governed by the Civil
Code, these reliefs must still be based on an action
that has a reasonable causal connection with the
Labor Code, other labor statutes, or collective
bargaining agreements. The central issue is
determined essentially from the relief sought in the
complaint. It is the character of the principal relief
sought that appears essential in this connection.
Where such principal relief is to be granted under
labor legislation or a collective bargaining
agreement, the case should fall within the
jurisdiction of the Labor Arbiter and the NLRC.
“Claims for damages under paragraph 4 of Article
217 must have a reasonable causal connection with
any of the claims provided for in the article in order
to be cognizable by the labor arbiter. Only if there is

74
 2. Eviota vs Court of Appeals 407 scra 291
XXX
FACTS:
Respondent is a foreign banking institution
authorized to do business in the Philippines. While
defendant Eduardo Eviota (Eviota) is a former
employee of the Bank. Eviota began negotiating with
the Bank on his possible employment with the latter.
The Bank made sure that Eviota was fully aware of
all the terms and conditions of his possible job with
the Bank. Eviota indicated his conformity with the
Banks Offer of Employment by signing a written copy
of such offer. Eviota assumed his position as
Compensation and Benefits Manager with the Bank
and began to discharge his duties. After leading the
Bank to believe that he had come to stay, Eviota
suddenly resigned his employment with immediate
effect to re-join his previous employer. His
resignation did not comply with the 30-day prior
notice rule under the law and under the Employment
Contract. Aside from causing no small degree of
chaos within the Bank by reason of his sudden
resignation, Eviota made off with a computer
diskette and other papers and documents containing
confidential information on employee compensation
and other Bank matters. With the benefit of
hindsight, the Bank realizes that it was simply used
by Eviota as a mere leverage for his selfish efforts at
negotiating better terms of employment with his
previous employer. The Bank made a written
demand on Eviota to return the aforementioned
computer diskette and other confidential documents
and papers, reimburse the Bank for the various
expenses incurred on his account as a result of his
resignation (with legal interest), and pay damages.
Eviota never complied with the Banks demand that
he reimburse the latter for the other expenses
incurred on his account. This prompted Respondent
bank filed a complaint against the petitioner with the
RTC. The petitioner, on the other hand, filed a
motion to dismiss the complaint on the ground that
the action for damages of the respondent bank was
within the exclusive jurisdiction of the Labor Arbiter
under paragraph 4, Article 217 of the Labor Code of
the Philippines, as amended. The petitioner averred
that the respondent banks claim for damages arose
out of or were in connection with his employer-
employee relationship with the respondent bank or
some aspect or incident of such relationship. The
respondent bank opposed the motion, claiming that
its action for damages was within the exclusive
jurisdiction of the trial court. Although its claims for
75
damages incidentally involved an employer-
employee relationship, the said claims are actually
predicated on the petitioner’s acts and omissions
which are separately, specifically and distinctly
governed by the New Civil Code. Hence, this petition.
ISSUE:
WON the action filed is within the jurisdiction of the
Labor Arbiter or the regular courts.
HELD:
Not every controversy or money claim by an
employee against the employer or vice-versa is
within the exclusive jurisdiction of the labor arbiter.
A money claim by a worker against the employer or
vice-versa is within the exclusive jurisdiction of the
labor arbiter only if there is a reasonable causal
connection between the claim asserted and
employee-employer relation. Absent such a link, the
complaint will be cognizable by the regular courts of
justice. Actions between employees and employer
where the employer-employee relationship is merely
incidental and the cause of action precedes from a
different source of obligation is within the exclusive
jurisdiction of the regular court.
On appeal to the higher court, it held that
jurisdiction over the controversy belongs to the civil
courts. It stated that the action was for breach of a
contractual obligation, which is intrinsically a civil
dispute. It further stated that while seemingly the
cause of action arose from employer-employee
relations, the employers claim for damages is
grounded on wanton failure and refusal without just
cause to report to duty coupled with the averment
that the employee maliciously and with bad faith
violated the terms and conditions of the contract to
the damage of the employer. Such averments
removed the controversy from the coverage of the
Labor Code of the Philippines and brought it within
the purview of the Civil Law. Jurisprudence has
evolved the rule that claims for damages under
paragraph 4 of Article 217, to be cognizable by the
Labor Arbiter, must have a reasonable causal
connection with any of the claims provided for in
that article. Only if there is such a connection with
the other claims can the claim for damages be
considered as arising from employer-employee
relations. It is evident that the causes of action of the
private respondent against the petitioner do not
involve the provisions of the Labor Code of the
Philippines and other labor laws but the New Civil
Code. Thus, the said causes of action are intrinsically
civil. There is no causal relationship between the
causes of action of the private respondent’s causes
of action against the petitioner and their employer-
employee relationship. The fact that the private
respondent was the erstwhile employer of the
petitioner under an existing employment contract
before the latter abandoned his employment is
merely incidental.
76
3. Pioneer Concrete Philippines, Inc. vs
Todaro 524 scra 153 XXX
Facts:
Pioneer International Limited (PIL), an Australian
company engaged in the ready-mix concrete
business, established herein petitioner PCPI to
undertake its business in the Philippines. PIL
contacted respondent Todaro and asked if the latter
is available to join them in their intention to
establish plant operations in the country to which
the latter agreed. Subsequently, PIL and Todaro
came to an agreement wherein the former
consented to engage the services of the latter as
consultant for 2-3 months, after which he would be
employed as manager of concrete operations should
PIL decide to invest in the Philippines. PIL started its
operation however it refused to comply with its
undertaking to employ Todaro on a permanent basis.
Respondent thus filed a complaint for sum of money
and damages against petitioner. Petitioner
meanwhile contends that the case should fall with
the NLRC as the damages arose from an alleged
breach of employment contract. Both the trial court
and CA ruled in favor of respondent.
Issue:
Whether or not there is employer-employee
relationship between PIL and respondent.
Ruling: NO.
In the present case, no employer-employee
relationship exists between petitioners and
respondent. In fact, in his complaint, private
respondent is not seeking any relief under the Labor
Code, but seeks payment of damages on account of
petitioners’ alleged breach of their obligation under
their agreement to employ him. It is settled that an
action for breach of contractual obligation is
intrinsically a civil dispute. In the alternative,
respondent seeks redress on the basis of the
provisions of Articles 19 and 21 of the Civil Code.
Hence, it is clear that the present action is within the
realm of civil law, and jurisdiction over it belongs to
the regular courts.
This Court has consistently held that where no
employer-employee relationship exists between the
parties and no issue is involved which may be
resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, it is
the Regional Trial Court that has jurisdiction.
 4. Matling Industrial and Commercial
Corporation vs Coros 633 scra 12
FACTS:
After his dismissal by Matling as its Vice President for
Finance and Administration, the respondent filed a
complaint for illegal suspension and illegal dismissal
against Matling and some of its corporate officers
(petitioners) in the NLRC, Sub-Regional Arbitration
Branch XII, Iligan City.
The petitioners moved to dismiss the complaint,
raising the ground, among others, that the complaint
pertained to the jurisdiction of the Securities and
Exchange Commission (SEC) due to the controversy
being intra-corporate inasmuch as the respondent
was a member of Matling’s Board of Directors aside
from being its Vice President for Finance and
Administration prior to his termination.
The LA granted the petitioners’ motion to dismiss,
ruling that the respondent was a corporate officer
because he was occupying the position of Vice
President for Finance and Administration and at the
same time was a Member of the Board of Directors
of Matling; and that, consequently, his removal was
a corporate act of Matling and the controversy
resulting from such removal was under the
jurisdiction of the SEC.
The NLRC set aside the dismissal, concluding that the
respondent’s complaint for illegal dismissal was
properly cognizable by the LA, not by the SEC,
because he was not a corporate officer by virtue of
his position in Matling, albeit high ranking and
managerial, not being among the positions listed in
Matling’s Constitution and By-Laws.
The petitioners elevated the issue to the CA by
petition for certiorari. The CA dismissed the petition
for certiorari explaining that “for a position to be
considered as a corporate office, the position must,
if not listed in the by-laws, have been created by the
corporation’s board of directors, and the occupant
thereof appointed or elected by the same board of
directors or stockholders.”
ISSUE:
Whether or not respondent was a corporate officer
Whether the LA or the RTC has jurisdiction over his
complaint for illegal dismissal
77
RULING:
As a rule, the illegal dismissal of an officer or other
employee of a private employer is properly
cognizable by the LA. Where the complaint for illegal
dismissal concerns a corporate officer, however, the
controversy falls under the jurisdiction of the
Securities and Exchange Commission (SEC), because
the controversy arises out of intra-corporate or
partnership relations between and among
stockholders, members, or associates, or between
any or all of them and the corporation, partnership,
or association of which they are stockholders,
members, or associates, respectively; and between
such corporation, partnership, or association and the
State insofar as the controversy concerns their
individual franchise or right to exist as such entity; or
because the controversy involves the election or
appointment of a director, trustee, officer, or
manager of such corporation, partnership, or
association. Such controversy, among others, is
known as an intra-corporate dispute.
Effective on August 8, 2000, upon the passage of
Republic Act No. 8799, otherwise known as The
Securities Regulation Code, the SEC’s jurisdiction
over all intra-corporate disputes was transferred to
the RTC.
Under Sec. 25 of the Corporation Code, a position
must be expressly mentioned in the By-Laws in order
to be considered as a corporate office. Thus, the
creation of an office pursuant to or under a By-Law
enabling provision is not enough to make a position
a corporate office.
Here, respondent’s position of Vice President for
Finance and Administration was not expressly
mentioned in the By-Laws; neither was the position
of Vice President for Finance and Administration
created by Matling’s Board of Directors. Lastly, the
President, not the Board of Directors, appointed
him.
In order to determine whether a dispute constitutes
an intra-corporate controversy or not, the Court
considers two elements instead, namely: (a) the
status or relationship of the parties; and (b) the
nature of the question that is the subject of their
controversy.
The criteria for distinguishing between corporate
officers who may be ousted from office at will, on
one hand, and ordinary corporate employees who
may only be terminated for just cause, on the other
hand, do not depend on the nature of the services
performed, but on the manner of creation of the
office. In the respondent’s case, he was supposedly
at once an employee, a stockholder, and a Director
of Matling. The circumstances surrounding his
appointment to office must be fully considered to
determine whether the dismissal constituted an
intra-corporate controversy or a labor termination
dispute.
Obviously enough, the respondent was not
appointed as Vice President for Finance and
Administration because of his being a stockholder or
Director of Matling. He had started working for
Matling on September 8, 1966, and had been
employed continuously for 33 years until his
termination on April 17, 2000, first as a bookkeeper,
and his climb in 1987 to his last position as Vice
President for Finance and Administration had been
gradual but steady.
Even though he might have become a stockholder of
Matling in 1992, his promotion to the position of
Vice President for Finance and Administration in
1987 was by virtue of the length of quality service he
had rendered as an employee of Matling. His
subsequent acquisition of the status of
Director/stockholder had no relation to his
promotion. Besides, his status of
Director/stockholder was unaffected by his dismissal
from employment as Vice President for Finance and
Administration.
78
5. Locsin vs Nissan Lease Phils., Inc. 634 scra
392
LA HAS NO JURISDICTION OVER INTRA-CORPORATE
CONTROVERSY
DOCTRINE:
Given Locsin’s status as a corporate officer, the RTC,
not the Labor Arbiter or the NLRC, has jurisdiction to
hear the legality of the termination of his
relationship with Nissan. A corporate officers
dismissal is always a corporate act, or an intra-
corporate controversy which arises between a
stockholder and a corporation so that RTC should
exercise jurisdiction based on Section 5(c) of PD 902-
A.
FACTS:
Locsin was elected Executive Vice President and
Treasurer (EVP/Treasurer) of NCLPI. Locsin held this
position for 13 years until he was nominated and
elected Chairman. A few months thereafter, an
election was held and Locsin was neither re-elected
Chairman nor reinstated to his previous position as
EVP/Treasurer. Locsin filed a complaint for illegal
dismissal before the Labor Arbiter against NCLPI.
NCLPI filed a Motion to Dismiss on the ground that
the Labor Arbiter did not have jurisdiction over the
case since the issue of Locsins removal as
EVP/Treasurer involves an intra-corporate dispute.
Locsin maintained that he is an employee of NCPI.
LA RULING: LA denied the Motion to Dismiss, holding
that its office-acquired jurisdiction to arbitrate
and/or decide the instant complaint finding extant in
the case an employer-employee relationship. Article
280 of the Labor Code, the receipt of salaries by
Locsin, SSS deductions on that salary, and the
element of control in the performance of work
duties were used by LA to conclude that Locsin was a
regular employee.
CA RULING: NCLPI elevated the case to the CA
through a Petition for Certiorari under Rule 65 of the
Rules of Court. CA ruled that Locsin was a corporate
officer; hence the issue of his removal as
EVP/Treasurer is an intracorporate dispute under the
RTCs jurisdiction. The fact that the position of
EVP/Treasurer is specifically
enumerated as an office in the corporations by-laws
makes him a corporate officer.
ISSUE:
Whether Locsin’s position as EVP/Treasurer makes
him a corporate officer thereby excluding him from
the coverage of the Labor Code?
SC RULING:
YES. Locsin was undeniably Chairman and President,
and was elected to these positions by the Nissan
board pursuant to its By-laws. As such, he was a
corporate officer, not an employee. Section 25 of the
Corporation Code provides that corporate officers
are the president, secretary, treasurer and such
other officers as may be provided for in the by-laws.
Even as EVP/Treasurer, Locsin already acted as a
corporate officer because such position is provided
for in Nissans By-Laws. An office is created by the
charter of the corporation and the officer is elected
by the directors or stockholders. On the other hand,
an employee usually occupies no office and generally
is employed by the managing officer of the
corporation who also determines the compensation
to be paid to such employee. Locsin was elected by
the NCLPI Board, in accordance with the Amended
By-Laws of the corporation. Given Locsin’s status as
a corporate officer, the RTC, not the Labor Arbiter or
the NLRC, has jurisdiction to hear the legality of the
termination of his relationship with Nissan. A
corporate officers dismissal is always a corporate act,
or an intra-corporate controversy which arises
between a stockholder and a corporation so that RTC
should exercise jurisdiction based on Section 5(c) of
PD 902-A.
79
JURISDICTION OF METROPOLITAN, MUNICIPAL AND
MUNICIPAL CIRCUIT TRIAL COURT
Sections 33 to 35, BP No. 129, as amended by R.A.
No. 7691 and R.A. No. 11576
1. Mangaliang vs. Catubig-Pastoral (474 SCRA
153) XXX
FACTS:
On January 21, 1999, from 9:00 to 10:00 a.m.,
private respondent Apolinario Serquina, together
with Marco de Leon, Abner Mandapat and Manuel
de Guzman, was on board a tricycle driven by Jayson
Laforte. While in Pagal, San Carlos City, a dump truck
owned by petitioner Norma Mangaliag and driven by
her employee, petitioner Narciso Solano, coming
from the opposite direction, tried to overtake and
bypass a tricycle in front of it and thereby
encroached the left lane and sideswiped the tricycle
ridden by private respondent. Due to the gross
negligence, carelessness and imprudence of
petitioner Solano in driving the truck, private
respondent and his co-passengers sustained serious
injuries and permanent deformities. Petitioner
Mangaliag failed to exercise due diligence required
by law in the selection and supervision of her
employee. As a result, private respondent was
hospitalized and spent ₱71,392.00 as medical
expenses. Private respondent sustained a permanent
facial deformity due to a fractured nose and suffers
from severe depression as a result thereof, for which
he should be compensated in the amount of
₱500,000.00 by way of moral damages. As a further
result of his hospitalization, private respondent lost
income of ₱25,000.00 and even engaged the services
of counsel on a contingent basis equal to 25% of the
total award.
On July 21, 1999, petitioners filed their answer with
counterclaim denying that private respondent has a
cause of action against them. They attributed fault or
negligence in the vehicular accident on the tricycle
driver, Jayson Laforte, who was allegedly driving
without license.
Subsequently, on March 8, 2000, petitioners,
assisted by a new counsel, filed a motion to dismiss
on the ground of lack of jurisdiction over the subject
matter of the claim, alleging that the Municipal Trial
Court (MTC) has jurisdiction over the case since the
principal amount prayed for, in the amount of
₱71,392.00, falls within its jurisdiction.
ISSUE: where the amount of the demand in civil cases
Whether or not, the MTC or RTC has jurisdiction over exceeds ₱100,000.00, exclusive of interest, damages
the action. of whatever kind, attorney's fees, litigation expenses,
and costs, the exclusive jurisdiction thereof is lodged
with in the RTC. Under Section 3 of the same law,
HELD: where the amount of the demand in the complaint
MTC. It is necessary to stress that generally a direct does not exceed ₱100,000.00, exclusive of interest,
recourse to this Court is highly improper, for it damages of whatever kind, attorney's fees, litigation
violates the established policy of strict observance of expenses, and costs, the exclusive jurisdiction over
the judicial hierarchy of courts. Although this Court, the same is vested in the Metropolitan Trial Court,
the RTCs and the Court of Appeals (CA) have MTC and Municipal Circuit Trial Court. The
concurrent jurisdiction to issue writs of certiorari, jurisdictional amount was increased to ₱200,000.00,
prohibition, mandamus, quo warranto, habeas effective March 20, 1999, pursuant to Section 5 of
corpus and injunction, such concurrence does not R.A. No. 7691 and Administrative Circular No. 21-99.
give the petitioner unrestricted freedom of choice of
court forum. This Court is a court of last resort, and
must so remain if it is to satisfactorily perform the
functions assigned to it by the Constitution and
immemorial tradition. Note also that the judicial
hierarchy of courts is not an iron-clad rule. It
generally applies to cases involving warring factual
allegations. For this reason, litigants are required to
repair to the trial courts at the first instance to
determine the truth or falsity of these contending
allegations on the basis of the evidence of the
parties. Cases which depend on disputed facts for
decision cannot be brought immediately before
appellate courts as they are not triers of facts.
Therefore, a strict application of the rule of hierarchy
of courts is not necessary when the cases brought
before the appellate courts do not involve factual
but legal questions.

Private respondent argues that the defense of lack of

jurisdiction may be waived by estoppel through
active participation in the trial. Such, however, is not
the general rule but an exception, best characterized
by the peculiar circumstances in Tijam vs.
Sibonghanoy. In Sibonghanoy, the party invoking lack
of jurisdiction did so only after fifteen years and at a
stage when the proceedings had already been
elevated to the CA. Sibonghanoy is an exceptional
case because of the presence of laches, which was
defined therein as failure or neglect for an
unreasonable and unexplained length of time to do
that which, by exercising due diligence, could or
should have been done earlier; it is the negligence or
omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to
assert has abandoned it or declined to assert it.

Section 1 of Republic Act (R.A.) No. 7691, which took 2. Dolores Gayoso, et al vs Twenty-two Realty
effect on April 15, 1994, provides inter alia that Development Corporation 495 scra 295

80

The Court has repeatedly emphasized that municipal
trial courts, metropolitan trial courts, and municipal
circuit trial courts now retain jurisdiction over
ejectment cases if the question of possession cannot
be resolved without passing upon the issue of
ownership.
FACTS:
This case stemmed from a Complaint for Ejectment
filed by Twenty-Two Realty Development
Corporation (TTRDC), respondent, on December 12,
1996 with the Metropolitan Trial Court (MeTC),
Branch 60, Mandaluyong City against the above-
named petitioners.
The complaint alleges that on October 11, 1954,
Victoriano Gayoso (now deceased) sold to Prospero
Almeda a lot located on Mariveles corner Calbayog
Streets, Mandaluyong City.
After the sale, Almeda allowed Gayoso and his
children, herein petitioners, to stay on the property
as lessees, paying P20.00 a month. Later, Almeda's
heirs sold the lot to respondent TTRDC. Thus, on
February 19, 1996, the title to the property was
transferred in the name of respondent corporation.
However, petitioners have stopped paying rentals.
Respondent then sent letters dated September 12
and October 17, 1996 to petitioners demanding that
they vacate the premises, but they refused to do so.
This prompted respondent to file with the MeTC a
complaint for illegal detainer against them.
In their answer, petitioners denied specifically
TTRDC's allegations in its complaint. They claimed
that the MeTC has no jurisdiction over the case since
in their answer they are raising an issue of
ownership. They alleged that their father, the late
Victoriano Gayoso, sold the lot (a conjugal property)
to Almeda without the consent of their mother. The
sale, being void, Almeda could not have transferred
ownership of the lot to respondent corporation.
MeTC Ruling:
 Ordering the defendants
o to vacate the premises located at
Mariveles corner Calbayog Streets,
Mandaluyong City, and to
surrender the possession of the
same to the plaintiff;
81
o to pay the plaintiff the amount of
P4,000.00 representing their
unpaid rentals beginning February
1981 to December 1996 and the
amount of P20.00 per month every
month thereafter until the
premises shall have been vacated;
o to pay attorney's fees;
o to pay the costs of suit.
 B. dismissing the counterclaim.
 ruled that since petitioners failed to pay
rentals for more than three months, then
respondent has the right to evict them from
the premises.
On appeal, RTC ruling:
 affirmed the MeTC Decision, holding that
the refusal of petitioners to vacate the
property and pay the rents make out a clear
case of unlawful detainer over which the
MeTC has jurisdiction.
CA Ruling:
 affirmed in toto the RTC Decision
Hence the petition.
Petitioner’s argument:
 contend that since the issue of ownership of
the property in dispute is inextricably linked
with the issue of possession, the MeTC has
no jurisdiction over Civil Case No. 15340.
Respondent answer:
 maintains that the real issue is who
between the parties is entitled to
possession. Hence, the MeTC has
jurisdiction to hear and decide the case.
ISSUE: Whether or not MeTC has jurisdiction to hear
and decide the case.
RULING: YES. Petition denied.
It is basic that a court's jurisdiction is provided by
law. Section 33 of Batas Pambansa Blg. 129, as
amended, provides in part:
SEC. 33. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts in Civil Cases. - Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise:
(2) Exclusive original jurisdiction over cases of
forcible entry and unlawful detainer: Provided, That
when, in such cases, the defendant raises the
question of ownership in his pleadings and the
question of possession cannot be resolved without
deciding the question of ownership, the issue of
ownership shall be resolved only to determine the
issue of possession; (Emphasis supplied)cralawlibrary
Moreover, Section 18, Rule 70 of the 1997 Rules of
Civil Procedure, as amended, states that:
SEC. 18. Judgment conclusive only on possession, not
conclusive in actions involving title or ownership. -
The judgment rendered in an action for forcible
entry or detainer shall be conclusive with respect to
the possession only and shall in no wise bind the title
or affect the ownership of the land or building. Such
judgment shall not bar an action between the same
parties respecting title to the land or building.
Likewise, in Tala Realty Services Corporation v. Banco
Filipino Savings and Mortgage Bank,3 this Court
ruled:
All ejectment cases are covered by the Rule on
Summary Procedure and are within the jurisdiction
of the inferior courts regardless of whether they
involve questions of ownership. The courts in
ejectment cases may determine questions of
ownership whenever necessary to decide the
question of possession.
Verily, we hold that the Court of Appeals did not err
in holding that the MeTC of Mandaluyong City has
jurisdiction to hear and decide Civil Case No. 15340,
notwithstanding the issue of ownership raised by
petitioners in their answer.

The judgment or final order shall be appealable to

the appropriate Regional Trial Court which shall
decide the same on the basis of the entire record of
the proceedings had in the court of origin and such
memoranda and/or briefs as may be submitted by
the parties or required by the Regional Trial Court.

In Barba v. Court of Appeals,2 this Court held:

The Court has repeatedly emphasized that municipal

trial courts, metropolitan trial courts, and municipal
circuit trial courts now retain jurisdiction over
ejectment cases if the question of possession cannot
be resolved without passing upon the issue of
ownership. In forcible entry and unlawful detainer
cases, even if the defendant raises the question of
ownership in his pleadings and the question of
possession cannot be resolved without deciding the
issue of ownership, inferior courts, nonetheless,
have the undoubted competence to provisionally
resolve the issue of ownership for the sole purpose
of determining the issue of possession. Such
decision, however, does not bind the title or affect
the ownership of the land or building, neither shall it
bar an action between the same parties respecting
title to the land or building nor be held conclusive of
the facts therein found in a case between the same
parties upon a different cause of action involving
possession.

82
 ESTOPPEL
1. Tijam vs Sibonghanoy (23 scra 29) XXX
FACTS:
Tijam filed for recovery of P1,908 + legal interest
from Sibongahanoy. Defendants filed a counter bond
with Manila Surety and Fidelity Co (Surety).
Judgement was in favour of the plaintiffs, a writ of
execution was issued against the defendant.
Defendants moved for writ of execution against
surety which was granted. Surety moved to quash
the writ but was denied, appealed to CA without
raising the issue on lack of jurisdiction.
CA affirmed the appealed decision. Surety then filed
Motion to Dismiss on the ground of lack of
jurisdiction against CFI Cebu in view of the effectivity
of Judiciary Act of 1948 a month before the filing of
the petition for recovery. Act placed original
exclusive jurisdiction of inferior courts all civil actions
for demands not exceeding 2,000 exclusive of
interest. CA set aside its earlier decision and referred
the case to SC since it has exclusive jurisdiction over
"all cases in which the jurisdiction of any inferior
court is in issue.
: Other merits on the appeal : The surety insists that
the lower court should have granted its motion to
quash the writ of execution because the same was
issued without the summary hearing - Summary
hearing is "not intended to be carried on in the
formal manner in which ordinary actions are
prosecuted" (83 C.J.S. 792). It is, rather, a procedure
by which a question is resolved "with dispatch, with
the least possible delay, and in preference to
ordinary legal and regular judicial proceedings" (Ibid,
p. 790). What is essential is that "the defendant is
notified or summoned to appear and is given an
opportunity to hear what is urged upon him, and to
interpose a defense, after which follows an
adjudication of the rights of the parties - In the case
at bar, the surety had been notified of the plaintiffs'
motion for execution and of the date when the same
would be submitted for consideration. In fact, the
surety's counsel was present in court when the
motion was called, and it was upon his request that
the court a quo gave him a period of four days within
which to file an answer. Yet he allowed that period
to lapse without filing an answer or objection. The
surety cannot now, therefore, complain that it was
deprived of its day in court.

ISSUE: The orders appealed from are affirmed.

WON Surety bond is estopped from questioning the
jurisdiction of the CFI Cebu for the first time upon *now MTC
appeal.

HELD:
YES, SC believes that that the Surety is now barred
by laches from invoking this plea after almost fifteen
years before the Surety filed its motion to dismiss
raising the question of lack of jurisdiction for the first
time - A party may be estopped or barred from
raising a question in different ways and for different
reasons. Thus we speak of estoppel in pais, or
estoppel by deed or by record, and of estoppel by
laches. Laches, in a general sense is failure or
neglect, for an unreasonable and unexplained length
of time, to do that which, by exercising due
diligence, could or should have been done earlier -
Furthermore, it has also been held that after
voluntarily submitting a cause and encountering an
adverse decision on the merits, it is too late for the
loser to question the jurisdiction or power of the
court -"undesirable practice" of a party submitting
his case for decision and then accepting the
judgment, only if favorable, and attacking it for lack
of jurisdiction, when adverse.

83
 2. Calimlim vs Ramirez (118 scra 399) XXX
Doctrine:
The prevailing rule is that jurisdiction over the
subject matter may be raised at any stage of the
proceedings, even for the first time on appeal. Time-
honored principle is that the issue of jurisdiction is
not lost by waiver or by estoppel.
In order to avail of the defense of res judicata, it
must be shown, among others, that the judgment in
the prior action must have been rendered by a court
with the proper jurisdiction to take cognizance of the
proceeding in which the prior judgment or order was
rendered. If there is lack of jurisdiction over the
subject-matter of the suit or of the parties, the
judgment or order cannot operate as an adjudication
of the controversy.
The ruling in Sibonghanoy, that a party is estopped
from questioning the jurisdiction applies only to
exceptional circumstances. What is still controlling is
that jurisdiction over the subject matter of the action
is a matter of law and may not be conferred by
consent or agreement of the parties. (Sibonghanoy
case is the exception and not the general rule)
Res Judicata Elements:
(1) Former judgment or order must be final
(2) Judgment or order must be on the merits
(3) It must have been rendered by a court having
jurisdiction over the subject matter and the parties
(4) there must be, between the first and the second
action, identity of parties, of subject matter and
cause of action
Facts:
Sometime in 1961, a judgment for a sum of money
was rendered in favor of Independent Mercantile
Corporation against a certain Manuel Magali by the
Municipal Court of Manila  Judgment became final,
a writ of execution was issued on July 31, 1961
Notice of Levy made on September 21, 1961 on a
parcel of land registered in the name of "Domingo
Magali, married to Modesta Calimlim", specified that
the said levy was only against "all rights, title, action,
interest and participation of the defendant Manuel
Magali over the parcel of land
The Certificate of Sale executed by the Provincial
Sheriff on October 17, 1961 in favor of Independent
Mercantile Corporation (IMC) also stated that the
84
sale referred only to the rights and interest of
Manuel Magali (Manuel) over the land. Manuel is
one of the several children of Domingo Magali who
had died and Modesta Calimlim.  However, Sheriff
issued the final Deed of Sale on January 25, 1963,
erroneously stating that the sale was with respect to
"the parcel of land described in this title" and not
only over the rights and interest of Manuel in the
same.
The execution of the said final Deed of Sale was
annotated at the back of said title.  February 23,
1967, IMC filed a petition to compel Manuel to
surrender the owner's duplicate of TCT 9138 in order
that the same may be cancelled and a new one
issued in the name of the corporation.
Manuel failed to comply not being the registered
owner and title not being in his possession.
June 20, 1967, IMC filed an ex-parte petition to
declare TCT No. 9138 as cancelled and to issue a new
title in its name.
Petition was granted by the respondent Court and in
its Order dated July 13, 1967, it directed the issuance
of a new certificate of title in the name of the
Independent Mercantile Corporation and the
cancellation of TCT No. 9138.
By virtue of said Order, new title in the name of the
corporation, Identified as TCT No. 68568 was issued.
November 21, 1967, Modesta Calimlim (Modesta),
surviving spouse of Domingo Magali (Domingo),
upon learning that her husband's title over the
parcel of land had been cancelled, filed a petition
with the respondent Court, sitting as a cadastral
court, praying for the cancellation of TCT No. 68568
Respondent court dismissed the petition
Petitioners did not appeal the dismissal of the
petition instead, on January 11, 1971, they filed the
complaint praying for the cancellation of the
conveyances and sales that had been made with
respect to the property, covered by TCT No. 9138
previously registered in the name of Domingo,
married to Modesta. Defendant in said civil case was
private respondent Francisco Ramos (Francisco) who
claimed to have bought the property from IMC on
July 25, 1967. Francisco, however, failed to obtain a
title over the property in his name in view of the
existence of an adverse claim.

Francisco filed a Motion To Dismiss on the ground
that the same is barred by prior judgement or by
statute of limitations.
Respondent court, dismissed Civil Case on the
ground of estoppel by prior judgment on April 21,
1971. MR also denied Sept 2, 1971. Second MR was
also denied in Sept 29, 1971.
Hence, the SC Petition.
ISSUE:
WON the civil case is already barred on the ground
of estoppel by prior judgement? WON Res Judicata is
applicable?
RULING: No, it is not barred by estopped. Res
Judicata not applicable.
The petition filed by the petitioner in LRC Record No.
39492 for the cancellation of TCT No. 68568 is not
barred by prior judgment against the filing of the
Civil Case.
In order to avail of the defense of res judicata, it
must be shown, among others, that the judgment in
the prior action must have been rendered by a court
with the proper jurisdiction to take cognizance of the
proceeding in which the prior judgment or order was
rendered. If there is lack of jurisdiction over the
subject-matter of the suit or of the parties, the
judgment or order cannot operate as an adjudication
of the controversy.
The petition filed by the petitioners in LRC Record
No. 39492 was an apparent invocation of the
authority of the respondent Court sitting as a land
registration court, Although the said petition did not
state, reliance was apparently placed on Section 112
of the Land Registration Act.
It has been settled by consistent rulings of this Court
that a court of first instance, acting as a land
registration court, is a court of limited and special
jurisdiction. As such, its proceedings are not
adequate for the litigation of issues pertaining to an
ordinary civil action, such as, questions involving
ownership or title to real property.
The rule is that the jurisdiction of a court over the
subject-matter of the action is a matter of law and
may not be conferred by consent or agreement of
85
the parties. The lack of jurisdiction of a court may be
raised at any stage of the proceedings, even on
appeal.
In the order of the respondent Judge dated
September 29, 1971 denying the second motion for
reconsideration, he cited the case of Tijam vs.
Sibonghanoy, to uphold the view that the petitioners
are deemed estopped from questioning the
jurisdiction of the respondent Court in having taken
cognizance of the petition for cancellation of TCT No.
68568, they being the ones who invoked the
jurisdiction of the said Court to grant the affirmative
relief prayed for therein. The ruling in Sibonghanoy
may not be applied in the case. In Sibonghanoy, the
defense of lack of jurisdiction of the court that
rendered the questioned ruling was held to be
barred by estoppel by laches. It was ruled that the
lack of jurisdiction having been raised for the first
time in a motion to dismiss filed almost 15 years
after the questioned ruling had been rendered, such
a plea may no longer be raised for being barred by
laches.
As defined in said case, laches is "failure or neglect,
for an unreasonable and unexplained length of time,
to do that which, by exercising due diligence, could
or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to
assert has abandoned it or declined to assert it." The
petitioners in this case may not be faulted with
laches. When they learned that the title to the
property owned by them had erroneously and
illegally been cancelled and registered in the name
of another entity or person who had no right to the
same, they filed a petition to cancel the latter's title.
It is unfortunate that in pursuing said remedy, their
counsel had to invoke the authority of the
respondent Court as a cadastral court, instead of its
capacity as a court of general jurisdiction. Their
petition to cancel the title in the name of
Independent Mercantile Corporation was dismissed
upon a finding by the respondent Court that the
same was "without merit." No explanation was given
for such dismissal nor why the petition lacked merit.
There was no hearing, and the petition was resolved
solely on the basis of memoranda filed by the parties
which do not appear of record. It is even a possibility
that such dismissal was in view of the realization of
the respondent Court that, sitting as a cadastral
court, it lacked the authority to entertain the
petition involving as it does a highly controversial
issue. Upon such petition being dismissed, the
petitioners instituted Civil Case No. SCC-180 on
January 1, 1971, or only two and one-half years after
the dismissal of their petition in LRC Record No.
39492. Hence, the court sees no unreasonable delay
in the assertion by the petitioners of their right to
claim the property which rightfully belongs to them.
They can hardly be presumed to have abandoned or
waived such right by inaction within an unreasonable
length of time or inexcusable negligence. In short,
their filing of Civil Case No. SCC-180 which in itself is
an implied non-acceptance of the validity of the
proceedings had in LRC Record No. 39492 may not
be deemed barred by estoppel by laches.
WHEREFORE, the Orders appealed from are hereby
REVERSED and SET ASIDE. The Motion To Dismiss
filed by the private respondent in Civil Case No. SCC-
180 shall be deemed denied and the respondent
Court is ordered to conduct further proceedings in
the case. With costs against the private respondent.
3. Gonzaga vs Court of Appeals (394 scra 472)
XXX
FACTS:
86
Sometime in 1970, Sps. Gonzaga purchased a parcel
of land from private respondent Lucky Homes, Inc.,
situated in Iloilo and containing an area of 240
square meters. Said lot was specifically denominated
as Lot No. 19 under a TCT and was mortgaged to the
Social Security System (SSS) as security for their
housing loan.
Petitioners then started the construction of their
house, not on Lot No. 19 but on Lot No. 18, as Lucky
Homes Inc mistakenly identified Lot No. 18 as Lot
No. 19. Upon realizing its error, private respondent
informed petitioners of such mistake but the latter
offered to buy Lot No. 18 in order to widen their
premises. Thus, petitioners continued with the
construction of their house.
However, petitioners defaulted in the payment of
their housing loan from SSS. Consequently, Lot No.
19 was foreclosed by SSS and petitioners’ certificate
of title was cancelled and a new one was issued in
the name of SSS.
Sps. Gonzaga then offered to swap Lot Nos. 18 and
19 and demanded from Lucky Homes that their
contract of sale be reformed and another deed of
sale be executed with respect to Lot No. 18,
considering that their house was built therein.
However, private respondent refused. This
prompted petitioners to file, on June 13, 1996, an
action for reformation of contract and damages with
the Regional Trial Court of Iloilo City, Branch 36.
The RTC dismissed the complaint for lack of merit. It
held that when Lot No. 19 was foreclosed and sold at
public auction, the reformation, or the swapping of
Lot 18 and Lot 19, was no longer feasible considering
that Sps. Gonzaga were no longer the owners of Lot
19. Thus, Lucky Homes would be losing Lot 18
without any substitute therefore. Furthermore, the
RTC ruled:
"The logic and common sense of the situation lean
heavily in favor of the defendant. It is evident that
what plaintiff had bought from the defendant is Lot
19 covered by TCT No. 28254 which parcel of land
has been properly indicated in the instruments and
not Lot 18 as claimed by the plaintiff. The contracts
being clear and unmistakable, they reflect the true
intention of the parties, besides the plaintiff failed to
assail the contracts on mutual mistake, hence the
same need no longer be reformed.”
A writ of execution was issued. The petitioners filed
a motion to recall said writ on the ground that the
RTC lack jurisdiction as pursuant to PD 957 (The
Subdivision and Condominium Buyers Protective Petition for review is denied.
Decree), it was vested in the Housing and Land Use
Regulatory Board. Consequently, Sps. Gonzaga filed
a new complaint with the HLURB, and also a petition
for annulment of judgment with the CA, on the
ground of lack of jurisdiction.

The CA dismissed the petition, relying on the

doctrine of estoppel laid down in Tijam v.
Sibonghanoy.

ISSUE:
WON the Sps Gonzaga are estopped from
questioning the jurisdiction of the RTC to try the case

HELD:
Yes. The SC held that the doctrine in Tijam v.
Sibonghanoy, as reiterated in numerous cases, is still
controlling. In explaining the concept of jurisdiction
by estoppel, the Court quoted its decision in said
case, to wit:
"It has been held that a party cannot invoke the
jurisdiction of a court to secure affirmative relief
against his opponent and, after obtaining or failing to
obtain such relief, repudiate, or question that same
jurisdiction x x x x [T]he question whether the court
had jurisdiction either of the subject matter of the
action or of the parties was not important in such
cases because the party is barred from such conduct
not because the judgment or order of the court is
valid and conclusive as an adjudication, but for the
reason that such a practice can not be tolerated––
obviously for reasons of public policy."

Furthermore, the Court said that it was petitioners

themselves who invoked the jurisdiction of the court
a quo by instituting an action for reformation of
contract against private respondents. It must be
noted that in the proceedings before the trial court,
petitioners vigorously asserted their cause from start
to finish. Not even once did petitioners ever raise the
issue of the court’s jurisdiction during the entire
proceedings which lasted for two years. It was only
after the trial court rendered its decision and issued
a writ of execution against them in 1998 did
petitioners first raise the issue of jurisdiction ─ and it
was only because said decision was unfavorable to
them. Petitioners thus effectively waived their right
to question the court’s jurisdiction over the case 4. Manila Bankers vs Ng Kok Wei (418 scra
they themselves filed. 454) XXX

DISPOSITIVE PORTION: TOPIC:

87
 Jurisdiction: Exception to the general rule that
jurisdiction is not conferred by consent, silence
oracquiesce
– in and before May 1980, which made warranties as
estoppel by laches
FACTS:
Eddy Ng Kok Wei, respondent, is a Singaporean
businessman, purchased a condominium unit at
Valle Verde Terraces. Petitioner, through its
President, Mr. Antonio Puyat, executed a Contract to
Sell in favor of respondent which states that the unit
shall be substantially completed and delivered to the
respondent within 15 months from Feb. 8, 19989 or
on May 8, 1990, and that should there be no
substantial completion and failure to deliver the unit
on the date specified, a penalty of 1% of the total
amount paid by respondent shall be charged against
petitioner. Upon his third return to the Phil. and the
notices of delivery being sent to him despite the
uninhabitable condition of the unit, he was
constrained to demand payment in a letter dated
Nov. 21, 1990 for the damages he sustained but the
Corp. ignored his demand prompting him to file with
the RTC Makati a complaint for specific performance
and damages. The RTC found the Corp. liable for the
contractual penalty plus moral and exemplary
damages. The CA affirmed the RTC decision.
ISSUE/S:
WON the RTC has jurisdiction over the case.
RULING:
NO, it is the HLURB which has the exclusive
jurisdiction to hear and decide cases involving
specific performance of contractual and statutory
obligations filed by buyers of… condominium units
against the owner, developer, dealer, broker or
salesman (Section 1 (c) of PD No. 1344).
While it may be true that the trial court is without
jurisdiction over the case, petitioner’s active
participation in the proceedings estopped it from
assailing such lack of it. We have held that it is an
undesirable practice of a party participating in the
proceedings and submitting its case for decision and
then accepting the judgment, only if favorable, and
attacking it for lack of jurisdiction, when adverse.
5. BPI vs ALS Management (427 scra 564)
Facts:
88
BPI bought a condominium from ALS Management
Corporation. BPI alleged that ALS made and
disseminated brochures and other sales propaganda
to the facilities, improvements, infrastructures or
other forms of development of the condominium
units (known as ‘The Twin Towers’) it was offering
for sale to the public. Such warranties include the
installation of an intercom system and a closed-
circuit TV monitor, the provision of three toilets with
bath, a bar, and a balcony. Because of such
warranties, BPI was induced to buy the
condominium unit which is yet to be constructed.
In contravention of ALS’ warranties and of good
engineering practices, the condominium unit
purchased by BPI suffered from the following defects
and/or deficiencies: (1) the clearance in the walkway
at the balcony is not sufficient for passage; (2) the
anodized aluminum used in the door and windows
were damaged; (3) the kitchen counter
tops/splashboard suffered from cracks and were
mis-cut and misaligned; (4) the partition between
living and master’s bedroom was unpainted and it
had no access for maintenance due to aluminum
fixed glass cover; (5) the varifold divider, including
the bar and counter top cabinet were not installed;
(6) the toilets had no tiles; (7) no closed circuit TV
was installed; and (8) rainwater leaks inside or into
the condominium unit.’
ALS filed a complaint for collection of sum of money
for the registration. However, BPI refused to pay
because ALS failed to comply with their warranties.
The trial court and the Court of Appeals ruled in
favor of BPI. Hence, this petition.
ALS contended that the HLURB (Housing and Land
Use Regulatory Board) has jurisdiction, and not the
regular courts. It further contended that they cannot
be obliged to provide for the facilities they had
mentioned in the brochure because they had placed
a disclaimer on such.
Issues:
Whether or not the regular courts has jurisdiction.
Whether or not the developer is in clear violation of
its warranties and representations
Held:
First Issue
Section 1 of PD No 1344 provided that the National
Housing Authority (NHA) shall have exclusive
jurisdiction to hear and decide cases over claims
involving refund, cases involving specific
performance and any other claims filed by
subdivision lot or condominium unit buyer against
the project owner, developer, dealer, broker or
salesman. Pursuant to Executive Order No. 648, the
regulatory functions of the NHA were transferred to
the Human Settlements Regulatory Commission.
Thereafter, the functions of HSRC were transferred
to HLURB. Therefore, the HLURB has jurisdiction over
cases provided for under Section 1 of PD No. 1344.
Furthermore, the jurisdiction of the HLURB over
cases enumerated in Section 1 of PD No. 1344 is
exclusive.
Even if there has been a disclaimer on the part of the
respondent, the disclaimer should only apply to the
general concept of the project and not on the
specific facilities included therein. The failure to
provide for such facilities is a breach of warranties.
The brochure contained a disclaimer which says that
“[t]he particulars stated . . . as well as the details and
visuals shown . . . are intended to give a general idea
of the project to be undertaken, and as such, are not
to be relied [upon] as statements or representations
of fact.” This general disclaimer should apply only to
the general concept of the project that petitioner
aptly characterizes thus: ‘. . . Destined to reflect
condominium living at its very best’ and ‘its design . .
. will make the project the only one of its kind in the
Philippines.’

In this case, BPI’s counterclaim — being one for This disclaimer, however, should not apply to the
specific performance (correction of features and the amenities that the brochure
defects/deficiencies in the condominium unit) and promised to provide each condominium unit.
damages — falls under the jurisdiction of the HLURB Petitioner was thus in breach when it failed to
as provided by Section 1 of PD No. 1344. deliver a “closed-circuit TV monitor through which
residents from their apartments can see their
However, estoppel bars the petitioner from guests . .”
questioning the jurisdiction of the Court. The general
rule is that any decision rendered without
jurisdiction is a total nullity and may be struck down
at any time, even on appeal before this Court.
Indeed, the question of jurisdiction may be raised at
any time, provided that such action would not result
in the mockery of the tenets of fair play. As an
exception to the rule, the issue may not be raised if
the party is barred by estoppel.

Here, petitioner proceeded with the trial, and only

after a judgment unfavorable to it did it raise the
issue of jurisdiction. Thus, it may no longer deny the
trial court’s jurisdiction, for estoppel bars it from
doing so.

Second Issue
Yes. The brochure that was disseminated indicated
features that would be provided each condominium
unit; and that, under Section 19 of PD No. 957,
would form part of the sales warranties of
petitioner. Respondent relied on the brochure in its
decision to purchase a unit. Since the former failed
to deliver certain items stated therein, then there
was a clear violation of its warranties and 6. Metromedia Times Corp. vs Pastorin (45
representations. scra 320)

89
A party who does not raise the jurisdictional
question at the outset will be estopped to raise it
on appeal. However, a more circumspect analysis
would reveal that the cases cited by respondent do
not fall squarely within the issue and factual
circumstances of the instant case.
FACTS:
Johnny Pastorin was employed by Metromedia
Times Corporation on 10 December 1990 as a Field
Representative/Collector. His task entailed the
periodic collection of receivables #rom dealers of
petitioner’s newspapers.
Respondent, because of tardiness was supposedly
terminated by the petitioner company, but because
of the timely intervention of the union, the dismissal
was not effected.
He obtained a loan from one of the dealers whom he
dealt with, Gloria A. de Manuel (De Manuel), but
respondent reneged on the balance of his loan. De
Manuel wrote a letter dated 6 July 1998 to
petitioner, and seeking assistance for collection on
the remainder of the loan. She claimed that when
respondent became remissed on his personal
obligation, he stopped collecting periodically the
outstanding dues of De Manuel.
Petitioner sent a letter addressed to respondent,
requiring an explanation for the transaction with De
Manuel, as well as for his failure to pay back the loan
according to the conditions agreed upon, but offered
no definitive explanation for his failure to repay the
same.
Petitioner, through a Memorandum imposed the
penalty of suspension on respondent for 4 days,
from 27 August to 1 September 1998, for violating
Company Policy and ordered his transfer to the
Administration Department.
Respondent wrote a letter to petitioner, stating that
he wanted to sign a transfer memo before assuming
his new position.
 he was handed the Payroll Change Advice7
(PCA), indicating his new assignment to the
Traffic and Order Department of
Metromedia. Nonetheless, respondent
stopped reporting for work and sent
refused to accept the transfer.
Respondent duly filed a complaint for constructive
dismissal, non-payment of backwages and other
90
money claims with the labor arbiter, a copy of which
petitioner received on 28 September 1998. The
complaint was resolved in favor of respondent.
 Labor Arbiter Manuel P. Asuncion
concluded that respondent did not commit
insubordination or disobedience so as to
warrant his transfer, and that petitioner
was not aggrieved by respondent's failure
to settle his obligation with De Manuel.
Petitioner appealed at NLRC.
 raising as a ground the lack of jurisdiction of
the labor arbiter over respondent's
complaint. Significally, this issue was not
raised by petitioner in the proceedings
before the Labor Arbiter.
 the NLRC reversed the Labor Arbiter on the
ground that thee latter had no jurisdiction
over the case, it being a grievance issue
properly cognizable by the voluntary
arbitrator.
MR denied.
CA Ruling:
 reversed the Decision of NLRC, and
reinstated the earlier ruling of the Labor
Arbiter.
 ruled that the active participation of the
party against whom the action was brought,
coupled with his failure to object to the
jurisdiction of the court or quasi-judicial
body where the action is pending, is
tantamount to an invocation of that
jurisdiction and a willingness to abide by the
resolution of the case and will bar said party
from later on impugning the court or body's
jurisdiction
 MR denied.
ISSUE:
Whether or not Metromedia is estopped from
questioning the jurisdiction of the labor arbiter over
the subject matter of the case for the first time only
in their appeal before the NLRC.
RULING: NO, petitioner is not estopped from
assailing the jurisdiction of the labor arbiter before
the NLRC on appeal.
Respondent relied solely on estoppel to oppose
petitioner's claim of lack of jurisdiction on the part of
the labor arbiter. He adduced no other legal ground The rule that jurisdiction is conferred by law, and
in support of his contention that the Labor Arbiter does not depend upon the will of the parties, has no
had jurisdiction over the case. bearing thereon.

Thus, his claim falls flat in light of our
pronouncement, and more so considering the NLRC's
correct observation that jurisdiction over grievance
issues, such as the propriety of the reassignment of a
union member falls under the jurisdiction of the
voluntary arbitrator.
In this case, jurisdiction of the labor arbiter was
questioned as early as during appeal before the
NLRC, whereas in Marquez, the question of
jurisdiction was raised for the first time only before
this Court. The viability of Marquez as controlling
doctrine in this case is diminished owing to the
radically different circumstances in these two cases
The long-established rule is that jurisdiction over a
subject matter is conferred by law. Estoppel does not
apply to confer jurisdiction to a tribunal that has
none over a cause of action. Where it appears that
the court or tribunal has no jurisdiction, then the
defense may be interposed at any time, even on
appeal or even after final judgment. Moreover, the
principle of estoppel cannot be invoked to prevent
this court from taking up the question of jurisdiction.
Based on the foregoing considerations, it appears
that the issue of validity of complainant's
reassignment stemmed from the exercise of a
management prerogative which is a matter apt for
resolution by a Grievance Committee, the parties
having opted to consider such as a grievable issue.
Further, a review of the records would show that the
matter of reassignment is one not directly related to
the charge of complainant's having committed an act
which is inimical to respondents' interest, since the
latter had already been addressed to by
complainant's service of a suspension order. The
transfer, in effect, is one which properly falls under
Section 1, Article IV of the Collective Bargaining
Agreement and, as such, questions as to the
enforcement thereof is one which falls under the
jurisdiction of the labor arbiter.

People vs Casiano:

"The operation of the principle of estoppel on the

question of jurisdiction seemingly depends upon
whether the lower court actually had jurisdiction or
not. If it had no jurisdiction, but the case was tried
and decided upon the theory that it had jurisdiction,
the parties are not barred, on appeal, from assailing
such jurisdiction, for the same 'must exist as a
matter of law, and may not be conferred by consent
of the parties or by estoppel' (5 C.J.S., 861-863).
However, if the lower court had jurisdiction, and the
case was heard and decided upon a given theory,
such, for instance, as that the court had no
jurisdiction, the party who induced it to adopt such
theory will not be permitted, on appeal, to assume
an inconsistent position that the lower court had 7. Eristingcol vs Court of Appeals (582 scra
jurisdiction. Here, the principle of estoppel applies. 139)

91
FACTS:
Petitioner, owner of a residential lot in Urdaneta
Village, Makati City started constructing a house on
her lot but for alleged violation of its Construction
Rules and Regulations, respondent UVAI, an
association of homeowners at Urdaneta Village,
imposed on her a penalty of P400,000.00 and barred
her workers and contractors from entering the
village and working on her property. This prompted
petitioner to file the subject complaint before the
RTC. Respondents filed a motion to dismiss on
ground of lack of jurisdiction over the subject matter
arguing that it is the Home Insurance Guaranty
Corporation (HIGC) which has jurisdiction over intra-
corporate disputes involving homeowners
associations. Petitioner argues that the subject
matter of her complaint is properly cognizable by the
regular courts and need not be filed before a
specialized body or commission.
A scrutiny of the allegations contained in Eristingcol’s
complaint reveals that the nature of the question
subject of this controversy only superficially delves
into the validity of UVAI’s Construction Rules. The
complaint actually goes into the proper
interpretation and application of UVAI’s by-laws,
specifically its construction rules.
Essentially, the conflict between the parties arose as
Eristingcol, admittedly a member of UVAI, now
wishes to be exempt from the application of the
canopy requirement set forth in UVAI’s Construction
Rules. ***(E.O. No. 535, which amended Republic
Act No. 580 creating the HIGC, transferred to the
HIGC the regulatory and administrative functions
over homeowners’ associations originally vested
with the SEC as well as controversies arising from
intra-corporate or partnership relations. Thereafter,
with Republic Act No. 8763, the foregoing powers
and responsibilities vested in the HIGC, with respect
to homeowners’ associations, were transferred to
the HLURB.)

ISSUE:

Whether it is the RTC or the Housing and Land Use

Regulatory Board (HLURB)*** which has jurisdiction?

HELD: HLURB has jurisdiction. Well-settled in

jurisprudence is the rule that in determining which
body has jurisdiction over a case, we should consider
not only the status or relationship of the parties, but
also the nature of the question that is the subject of
their controversy. To determine the nature of an
action and which court has jurisdiction, courts must
look at the averments of the complaint or petition
and the essence of the relief prayed for. Ostensibly,
Eristingcol’s complaint, designated as one for
declaration of nullity, falls within the regular courts’
jurisdiction.

However, we have, on more than one occasion, held

that the caption of the complaint is not
determinative of the nature of the action. ACTIONS (Rule 1)

In General

92
 1. Cabrera vs Tiano (8 scra 542) XXX
FACTS:
Under date of June 20, 1957, in action for "Partition
and Recovery of Real Estate, with Damages" was
filed by Josefina and Cresencia against Tiano.
In the complaint, it was alleged that petitioners
were entitled to a portion of the land, since Josefina
did not sign the sale and Crescencia was a minor at
the time petitioners’ father sold the land to the
defendant; that defendant Tiano had usurped the
portions belonging to them, to their damage and
prejudice in the amount of P7,000.00, which
consisted of their share in the produce of the
property, during the period of defendant's
possession.
In answer, defendant claimed that the plaintiffs
herein knew of the sale and that he was not aware
of any defect in the title of his vendors. As a Special
Defense, defendant alleged that he was the absolute
owner of the land by acquisitive prescription of ten
(10) years, from the date of purchase.
The court a quo rendered the following judgment —
WHEREFORE, premises considered, the court hereby
renders judgment declaring that the plaintiffs are
entitled each to 1/8 of the property in question.
The trial court in the same decision, commissioned
the Deputy Provincial Sheriff, to partition the
property in question and render a report within 30
days. Defendant moved for a reconsideration of the
decision, contending that prescription had already
set in, and his (defendant's) title, had become
irrevocable, and that the award of damages had no
factual and legal basis. The motion for
reconsideration was denied on March 5, 1960. The
Commissioner's report, partitioning the property was
submitted on April 11, 1960. Defendant perfected his
appeal on May 9, 1960, and on May 14, 1960, the
same was given due course and elevated to this
Court.
In claiming that prescription had taken place,
defendant insisted that the period should be
93
counted from the date the summons was served on
him, which was on July 2, 1957. It was agreed,
however, that the complaint for the recovery of the
land in question was presented on June 20, 1957,
and the summons was sent out the following day.
The Civil Code, provides that—
The prescription of actions is interrupted when they
are filed before the court, when there is a written
extra-judicial demand by the creditors, and when
there is any written acknowledgment of the debt of
the debtor. (Art. 1155)
Defendant-appellant claims that he had already
acquired full ownership of the property in question
because the judicial summons, which could civilly
interrupt his possession (Art. 1123, N.C.C.), was
received by him only on July 2, 1957 and the sale in
question was made on July 2, 1947.
ISSUE:
1. WON the defendant acquired the property
by acquisitive prescription?
2. WON the SC have the authority to decide as
to questions of fact?
HELD:
1. NO. Conceding, for the purposes of
argument, that the article cited is applicable, still
appellant cannot avail himself of acquisitive
prescription, for the simple reason that no finding
was made by the trial court that his possession from
the time of the sale (July 2, 1947), was with just title,
in good faith, in the concept of an owner, public,
peaceful, adverse and uninterrupted (Arts. 1117 &
1118, N.C.C.).
Good faith is a question of fact which must be
proved (Art. 1127, N.C.C.). For the purposes of
acquisitive prescription, just title must also be
proved, it is never presumed (Art. 1131, N.C.C.). The
factual requisite of adverse possession do not
appear in the stipulation of facts and the trial court
did not make findings to this effect.
2. NO. (relevant sa remedial law): These
circumstances could and/or should have been
ventilated, had the appeal been taken to the Court
of Appeals. Defendant, however, having chosen to
appeal the decision directly to this Court, he is
deemed to have waived questions of fact and raised
only questions of law. There being no factual finding
by the lower court of the presence of the requisites
of acquisitive prescription this Court has to reject, as
did the trial court, said defense. Moreover, on July 2,
1957, when the summons was received, the ten (10)
years necessary for acquisitive prescription had not
yet elapsed. In fact, said period terminated on that
very day.1äwphï1.ñët
As to the award of damages, We find Ourselves
devoid of ample authority to review the same, since
it involves appreciation of facts. It cannot be denied,
as found by the lower court, that plaintiffs herein are
entitled to a share in the land. Verily, they should
also share in the produce, which, admittedly, was
enjoyed by the defendant-appellant herein.
WHEREFORE, the decision appealed from should be,
as it is hereby affirmed. Costs against appellant in
both instances.
2. LM Power Engineering Corp. vs Capitol
Industrial (399 scra 562) XXX
Facts:
On February 22, 1983, Petitioner LM Power
Engineering Corporation and Respondent Capitol
Industrial Construction Groups Inc. entered into a
94
"Subcontract Agreement" involving electrical work at
the Third Port of Zamboanga.
On April 25, 1985, respondent took over some of the
work contracted to petitioner. Allegedly, the latter
had failed to finish it because of its inability to
procure materials.
Upon completing its task, petitioner billed
respondent. However, the latter contested the
accuracy of the amount. Because of the dispute,
petitioner filed with the Regional Trial Court (RTC) of
Makati (Branch 141) a Complaint for the collection of
the amount representing the alleged balance due it
under the Subcontract. Instead of submitting an
Answer, respondent filed a Motion to Dismiss,
alleging that the Complaint was premature, because
there was no prior recourse to arbitration.
In its Order dated September 15, 1987, the RTC
denied the Motion on the ground that the dispute
did not involve the interpretation or the
implementation of the Agreement and was,
therefore, not covered by the arbitral clause.
The Court of Appeals (CA) reversed the RTC and
ordered the referral of the case to arbitration.
Hence, this Petition.
Issue: Whether or not there exists a
controversy/dispute between petitioner and
respondent regarding the interpretation and
implementation of the Sub-Contract Agreement
which requires prior recourse to voluntary
arbitration.
Ruling:
The controversy/dispute between the parties involve
the interpretation and implementation of the Sub-
Contract Agreement. Hence, prior recourse to
arbitration is required. The issue as to the correct
amount of petitioner’s advances and billable
accomplishments involves an evaluation of the
manner in which the parties completed the work,
the extent to which they did it, and the expenses
each of them incurred in connection therewith.
Arbitrators also need to look into the computation of
foreign and local costs of materials, foreign and local
advances, retention fees and letters of credit, and
taxes and duties as set forth in the Agreement.
These data can be gathered from a review of the
Agreement. The courts should liberally construe
arbitration clauses. Provided such clause is
susceptible of an interpretation that covers the
asserted dispute, an order to arbitrate should be
granted. Any doubt should be resolved in favor of
arbitration.
Liberal Construction of Rules
1. Medina Investigation vs CA (354 scra 765)
XXX
FACTS:
95
A decision was rendered against Arles Castares
(Arles), now deceased and represented by his heirs,
to pay damages for running over and causing injuries
to four-year old Wenceslao Mahilum, Jr. Petitioner
Jose Medina (Medina) was the representative of the
victim in the said case. To satisfy the judgment, the
sheriff levied Arles two parcels of land covered by
Tax Declaration No. 1107 and Tax Declaration No.
1106.
When the heirs of Arles failed to settle their
obligation, the lot covered by Tax Declaration No.
1107 was sold at public auction wherein Medina
emerged as the highest bidder. Medina applied for
the registration of the said lot. However, Andres
Castares (Andres), brother of Arles and representing
the heirs of the late Abundio Castares (Abundio),
filed an opposition thereto. Andres claimed that
after the death of his father Abundio, Tax
Declaration No. 1107 was cancelled and
consequently, a tax declaration was issued in his
favor. He insisted that he is the rightful owner of the
said portion of the land.
The RTC ruled in favor of Medina. On appeal, the CA
reversed the RTC and it also noted that there has
been no settlement yet of the estate of Abundio and
it was premature for Arles to have allocated unto
himself a distinct portion of the lot as his share in the
estate.
ISSUE: Whether or not Abundios heirs have an actual
right over the lot in dispute?
HELD: The petition is denied.
CIVIL LAW: heirs right of ownership over the
properties of the decedent; tax declaration not
sufficient proof of ownership
The appellate court is correct in stating that there
was no settlement of the estate of Abundio.There is
no showing that Lot 224 has already been
partitioned despite the demise of Abundio. It has
been held that an heirs right of ownership over the
properties of the decedent is merely inchoate as
long as the estate has not been fully settled and
partitioned. This means that the impending heir has
yet no absolute dominion over any specific property
in the decedents estate that could be specifically
levied upon and sold at public auction. Any
encumbrance of attachment over the heirs interests
in the estate, therefore, remains a mere probability,
and cannot summarily be satisfied without the final
distribution of the properties in the estate.
Therefore, the public auction sale of the property
covered by Tax Declaration No. 1107 is void because
the subject property is still covered by the Estate of
Abundio, which up to now, remains unpartitioned.
Arles was not proven to be the owner of the lot
under Tax Declaration No. 1107. It may not be amiss
to state that a tax declaration by itself is not
sufficient to prove ownership.
Petition is DENIED. The CA is AFFIRMED.
Non-application of Liberal Construction
1. Heirs of Spouses dela Cruz vs Heirs of
Quintos, Sr. (385 scra 471) XXX
RULING:
96
Petitioners claim that there should be a liberal
construction of the rules of procedure in order to
effect substantial justice and appeal to this Courts
exercise of equity jurisdiction. We are not
persuaded. There is no showing in this case of any
extraordinary circumstance which may justify a
deviation from the rule on timely filing of appeals. As
held in the case of Tupas vs. CA:
Rules of procedure are intended to ensure the
orderly administration of justice and the protection
of substantive rights in judicial and extrajudicial
proceedings. It is a mistake to suppose that
substantive law and adjective law are contradictory
to each other or, has often been suggested, that
enforcement of procedural rules should never be
permitted if it will result in prejudice to the
substantive rights of the litigants. This is not exactly
true; the concept is much misunderstood. As a
matter of fact, the policy of the courts is to give
effect to both kinds of law, as complementing each
other, in the just and speedy resolution of the
dispute between the parties. Observance of both
substantive and procedural rights is equally
guaranteed by due process, whatever the source of
such rights, be it the Constitution itself or only a
statute or a rule of court. (Limpot vs. CA, 170 SCRA
369)
In civil cases, the burden of proof is on the plaintiff
to establish his case by a preponderance of
evidence. If he claims a right granted or created by
law, he must prove his claim by competent evidence.
He must rely on the strength of his own evidence
and not on the weakness of that of his opponent.[18
The RTC had correctly ruled that petitioners failed to
show sufficient proof of ownership over the subject
land covered by TCT No. 173052 so as to entitle
them the return of the same.
Cause of Action (Rule 2)
1. Bachrach Motor Company vs Icarangal (68
Phil. 287) XXX
Petitioner: BACHRACH MOTOR CO., INC., is the
creditor. Defendant: ESTEBAN ICARAÑGAL is the
debor. ESTEBAN ICARAÑGAL with one Jacinto
Figueroa, executed a promissory note and in security
for its payment, executed a real estate mortgage on
a parcel of land. Defendant: Oriental Commercial
Co., Inc. who acquired the property which was the
subject of the mortgage and which has been levied
upon by the sheriff, at the public auction. NAME OF
THE ACTION: An action to foreclose the mortgage.
FACTS: On June 11, 1930, defendant herein, Esteban
Icarañgal, with one Jacinto Figueroa, for value
received, executed in favor of the plaintiff, Bachrach
Motor Co., Inc., a promissory note for P1,614, and in
security for its payment, said Esteban Icarañgal
executed a real estate mortgage on a parcel of land
in Pañgil, Laguna, which was duly registered on
August 5, 1931, in the registry of deeds of the
Province of Laguna. Thereafter, promissor’s
defaulted in the payment of the agreed monthly
installments; wherefore, plaintiff instituted in the
Court of First Instance of Manila an action for the
collection of the amount due on the note. Judgment
was rendered for the plaintiff. A writ of execution
was subsequently issued and, in pursuance thereof,
the provincial sheriff of Laguna, at the indication of
the plaintiff, levied on the properties of the
defendants, including that which has been
mortgaged by Esteban Icarañgal in favor of the
plaintiff. The other defendant herein, Oriental
Commercial Co., Inc., interposed a third-party claim,
alleging that by virtue of a writ of execution issued in
civil case No. 88253 of the municipal court of the City
of Manila, the property which was the subject of the
mortgage and which has been levied upon by the
sheriff, had already been acquired by it at the public
auction on May 12, 1933. By reason of this third-
party claim, the sheriff desisted from the sale of the
property and, in consequence thereof, the judgment
rendered in favor of the plaintiff remained
unsatisfied. Whereupon, plaintiff instituted an action
to foreclose the mortgage.
RULING OF LOWER COURTS: The trial court
dismissed the complaint and, from the judgment
thus rendered plaintiff took the present appeal.
ISSUE: Whether or not plaintiff-appellant is barred
from foreclosing the real estate mortgage after it has
elected to sue and obtain a personal judgment
against the defendant-appellee on the promissory
97
note for the payment of which the mortgage was
constituted as a security?
RULING: Yes, plaintiff-appellant is barred from
foreclosing the real estate mortgage. For non-
payment of a note secured by mortgage, the creditor
has a single cause of action against the debtor. This
single cause of action consists in the recovery of the
credit with execution of the security. In other words,
the creditor in his action may make two demands,
the payment of the debt and the foreclosure of his
mortgage. But both demands arise from the same
cause, the non-payment of the debt, and, for that
reason, they constitute a single cause of action.
Though the debt and the mortgage constitute
separate agreements, the latter is subsidiary to the
former, and both refer to one and the same
obligation. Consequently, there exists only one cause
of action for a single breach of that obligation.
Plaintiff, then, by applying the rule above stated,
cannot split up his single cause of action by filing a
complaint for payment of the debt, and thereafter
another complaint for foreclosure of the mortgage. If
he does so, the filing of the first complaint will bar
the subsequent complaint. By allowing the creditor
to file two separate complaints simultaneously or
successively, one to recover his credit and another to
foreclose his mortgage, we will, in effect, be
authorizing him plural redress for a single breach of
contract at so much cost to the courts and with so
much vexation and oppression to the debtor. The
creditor’s cause of action is not only single but also
indivisible, although the agreements of the parties,
evidenced by the note and the deed of mortgage,
may give rise to different remedies. The cause of
action should not be confused with the remedy
created for its enforcement. And considering, as we
have shown, that one of the two remedies available
to the creditor is as complete as the other, he cannot
be allowed to pursue both in violation of those
principles of procedure intended to secure simple,
speedy and inexpensive administration of justice.
2. Industrial Finance Corp. vs Apostol (177
scra 521) XXX
A mortagee who sues and obtains a personal
judgment against a mortgagor upon his credit waives
thereby his right to enforce the mortgage securing it.
By instituting a civil case to recover the unpaid
balance on the promissory note and obtaining a
judgment in its favor, the plaintiff is considered to
have abandoned his mortgage lien on the subject
property.
Escolin: In case of splitting of a single cause of action,
the ground for dismissal is res judicata.
Escolin: If there is one cause of action but two
remedies, the plaintiff should have pleaded
alternative remedies in his complaint.

FACTS:
Spouses Padilla bought on credit 3 units of Isuzu
trucks from Industrial Transport & Equipment. They
executed a prom note for the balance of the
purchase price. This was secured by a chattel
mortgage of said trucks and, as additional collateral,
a real estate mortgage on their land.

The Padillas failed to pay several installments on the

prom note, the assignee Industrial Finance Corp.
(IFC) sued them in the CFI for the recovery of the
unpaid balance including attys fees. CFI ruled on
16Apr75 in favor of IFC. On appeal, CA sustained the
CFI’s ruling except for modification of attys fees from
25% to 12% of the balance.

Meanwhile on 09Sep71 private respondents Juan

and Honorata Delmendo filed a complaint against
IFC, as principal party, and the Padillas, as formal
parties, in respondent CFI. The Delmendos alleged
that they were the transferees of the real property
which was mortgaged earlier by the Padillas to Ind’l
Transport. The Delmendos prayed for the
cancellation of the mortgaged lien annotated of the
TCT and the delivery to them by petitioner of the
owner’s copy of said title with damages and attys
fees, considering that IFC waived its rights over the
mortgage when it instituted a personal action
against the Padillas for collection of sum of money.

IFC moved for the dismissal of the complaint,

contending that is has not waived its right over the
mortgage lien. The Delmendos filed a motion for
summay judgment which the CFI granted. CFI ruled
in favor of the Delmendos. IFC filed a MfR which was
denied. Hence this petition.

HELD:
A mortgage creditor may elect to waive his security
and instead bring an ordinary action to collect with
the right to execute on all the properties of the
debtor, including the subject-matter of the Decena vs. Piquero (454 SCRA 672),
mortgage. If he fails in the collection suit, he can not G.R. No. 155736. March 31, 2005, Callejo Sr.
thereafter foreclose on the mortgage.

98
SPOUSES DANILO and CRISTINA DECENA,
Petitioners, vs. SPOUSES PEDRO and VALERIA
PIQUERO, Respondents.
FACTS:
Petitioners Sps. Danilo and Cristina Decena were the
owners of a parcel of land, with a house constructed
thereon, located in Parañaque. On September 7,
1997, petitioners and the respondents Sps. Pedro
and Valeria Piquero, executed a MOA in which
petitioners sold the property to the respondents for
P940,250 payable in six (6) installments via
postdated checks. It appears in the MOA that
petitioners obliged themselves to transfer the
property to the respondents upon the execution of
the MOA with the condition that if two of the
postdated checks would be dishonored by the
drawee bank, the respondents would be obliged to
reconvey the property to the petitioners. On May 17,
1999, the petitioners, then residents of Malolos,
Bulacan, filed a Complaint against the respondents
with the RTC of Malolos for the annulment of the
sale/MOA, recovery of possession and damages
alleging that they did not transfer the property to
and in the names of the respondents as vendees
because the first two checks drawn and issued by
them in payment for the purchase price of the
property were dishonored by the drawee bank, and
were not replaced with cash despite demands. They
declared in their complaint that the property subject
of the complaint valued at P6, 900,000. Respondents
filed a MD on the ground of improper venue and lack
of jurisdiction over the property subject matter of
the action. Respondents averred that the principal
action of the petitioners for the rescission of the
MOA, and the recovery of the possession of the
property is a real action and not a personal one;
hence, it should have been brought in the RTC of
Parañaque City, where the property subject matter
of the action was located, and not in the RTC of
Malolos, Bulacan, where the petitioners resided. In
opposition, the petitioners insisted that their action
for damages and attorney’s fees is a personal action
and not a real action; hence, it may be filed in the
RTC of Bulacan where they reside. They averred that
while their second cause of action for the recovery of
the possession of the property is a real action, the
same may, nevertheless, be joined with the rest of
their causes of action for damages, conformably with
Section 5(c), Rule 2 of the Rules of Court. By way of
reply, the respondents averred that Section 5(c),
Rule 2 of the Rules of Court applies only when one or
more of multiple causes of action falls within the
99
exclusive jurisdiction of the first level courts, and the
other or others are within the exclusive jurisdiction
of the RTC, and the venue lies therein.
On February 9, 2000, trial court denied the motion
for lack of merit. When the case was re-raffled to
Branch 10 of the RTC of Malolos, respondents filed
MR which the court granted and then ordered the
dismissal of the complaint. It ruled that the principal
action of the petitioners was a real action and should
have been filed in the RTC of Parañaque City where
the property subject matter of the complaint was
located. Hence, the present recourse.
ISSUE: W/N venue was properly laid by petitioners in
the RTC of Malolos.
HELD: NO. Section 5, Rule 2 of the Rules of Court
invoked by the petitioners does not apply. Under the
said Rule, a party may, in one pleading, assert, in the
alternative or otherwise, as many causes of action as
he may have against an opposing party subject to
the conditions therein enumerated, one of which is
Section 5(c) which reads: Joinder of causes of action.
--(c) Where the causes of action are between the
same parties but pertain to different venues or
jurisdiction, the joinder may be allowed in the
Regional Trial Court provided one of the causes of
action falls within the jurisdiction of said court and
the venue lies therein; … The petitioners, as plaintiffs
in the court a quo, had only one cause of action
against the respondents, namely, the breach of the
MOA upon the latter’s refusal to pay the first two
installments in payment of the property as agreed
upon, and turn over to the petitioners the
possession of the real property, as well as the house
constructed thereon occupied by the respondents.
The claim for damages for reasonable compensation
for the respondents’ use and occupation of the
property, in the interim, as well as moral and
exemplary damages suffered by the petitioners on
account of the breach of contract of the respondents
are merely incidental to the main cause of action,
and are not independent or separate causes of
action. The action of the petitioners for the
rescission of the MOA on account of the
respondents’ breach thereof and the latter’s failure
to return the premises subject of the complaint to
the petitioners, and the respondents’ eviction
therefrom is a real action. As such, the action should
have been filed in the proper court where the
property is located, namely, in Parañaque City,
conformably with Section 1, Rule 4 of the Rules of
Court. Since the petitioners, who were residents of
Malolos, Bulacan, filed their complaint in the said
RTC, venue was improperly laid; hence, the trial
court acted conformably with Section 1(c), Rule 16 of
the Rules of Court when it ordered the dismissal of
the complaint.
FACTS:
Petitioners Sps. Danilo and Cristina Decena were the
owners of a parcel of land, with a house constructed
thereon, located in Parañaque.
On September 7, 1997, petitioners and the
respondents Sps. Pedro and Valeria Piquero,
executed a MOA in which petitioners sold the
property to the respondents for P940,250 payable in
six (6) installments via postdated checks.
It appears in the MOA that petitioners obliged
themselves to transfer the property to the
respondents upon the execution of the MOA with
the condition that if two of the postdated checks
would be dishonored by the drawee bank, the
respondents would be obliged to reconvey the
property to the petitioners.
On May 17, 1999, the petitioners, then residents of
Malolos, Bulacan, filed a Complaint against the
respondents with the RTC of Malolos for the
annulment of the sale/MOA, recovery of possession
and damages alleging that they did not transfer the
property to and in the names of the respondents as
vendees because the first two checks drawn and
issued by them in payment for the purchase price of
the property were dishonored by the drawee bank,
and were not replaced with cash despite demands.
They declared in their complaint that the property
subject of the complaint valued at P6, 900,000.
Respondents filed a MD on the ground of improper
venue and lack of jurisdiction over the property
subject matter of the action.
Respondents averred that the principal action of the
petitioners for the rescission of the MOA, and the
recovery of the possession of the property is a real
action and not a personal one; hence, it should have
been brought in the RTC of Parañaque City, where
the property subject matter of the action was
located, and not in the RTC of Malolos, Bulacan,
where the petitioners resided.
100
In opposition, the petitioners insisted that their
action for damages and attorney’s fees is a personal
action and not a real action; hence, it may be filed in
the RTC of Bulacan where they reside. They averred
that while their second cause of action for the
recovery of the possession of the property is a real
action, the same may, nevertheless, be joined with
the rest of their causes of action for damages,
conformably with Section 5(c), Rule 2 of the Rules of
Court.
By way of reply, the respondents averred that
Section 5(c), Rule 2 of the Rules of Court applies only
when one or more of multiple causes of action falls
within the exclusive jurisdiction of the first level
courts, and the other or others are within the
exclusive jurisdiction of the RTC, and the venue lies
therein.
On February 9, 2000, trial court denied the motion
for lack of merit.
When the case was re-raffled to Branch 10 of the
RTC of Malolos, respondents filed MR which the
court granted and then ordered the dismissal of the
complaint. It ruled that the principal action of the
petitioners was a real action and should have been
filed in the RTC of Parañaque City where the
property subject matter of the complaint was
located.
Hence, the present recourse.
ISSUE: W/N venue was properly laid by petitioners in
the RTC of Malolos.
HELD: NO. Section 5, Rule 2 of the Rules of Court
invoked by the petitioners does not apply. Under the
said Rule, a party may, in one pleading, assert, in the
alternative or otherwise, as many causes of action as
he may have against an opposing party subject to
the conditions therein enumerated, one of which is
Section 5(c) which reads:
Joinder of causes of action. --(c) Where the causes of
action are between the same parties but pertain to
different venues or jurisdiction, the joinder may be
allowed in the Regional Trial Court provided one of
the causes of action falls within the jurisdiction of
said court and the venue lies therein; …
The petitioners, as plaintiffs in the court a quo, had
only one cause of action against the respondents,
namely, the breach of the MOA upon the latter’s
refusal to pay the first two installments in payment
of the property as agreed upon, and turn over to the
petitioners the possession of the real property, as
well as the house constructed thereon occupied by
the respondents.
The claim for damages for reasonable compensation
for the respondents’ use and occupation of the
property, in the interim, as well as moral and
exemplary damages suffered by the petitioners on
account of the breach of contract of the respondents
are merely incidental to the main cause of action,
and are not independent or separate causes of
action.
The action of the petitioners for the rescission of the
MOA on account of the respondents’ breach thereof
and the latter’s failure to return the premises subject
of the complaint to the petitioners, and the
respondents’ eviction therefrom is a real action.
As such, the action should have been filed in the
proper court where the property is located, namely,
in Parañaque City, conformably with Section 1, Rule
4 of the Rules of Court.
Since the petitioners, who were residents of
Malolos, Bulacan, filed their complaint in the said
RTC, venue was improperly laid; hence, the trial
court acted conformably with Section 1(c), Rule 16 of
the Rules of Court when it ordered the dismissal of
the complaint.
Perez vs. Hermano (463 SCRA 90), G.R. No. 147417,
July 8, 2005, Chico-Nazario, J.
101
SPS. VICTOR & MILAGROS PEREZ and CRISTINA
AGRAVIADOR AVISO, Petitioners, vs. ANTONIO
HERMANO, R e s p o n d e n t.
TOPIC: JOINDER OF CAUSES OF ACTION
NATURE OF THE CASE: This petition was filed after
the CA dismissed the petitioners’ original action for
certiorari for being filed out of time. The original
action filed with the CA questions the decision of the
RTC ruling that there was a misjoinder in the causes
of action in the civil case filed by the petitioners, and
consequently dropping respondent Hermano from
the said case.
FACTS: Petioner spouses and Aviso filed three
causes of action based on the following allegations.
Sometime in November 1997, the spouses Perez and
Aviso entered into a Contract to Sell with Zecson
Land Inc. as the buyer through its president Zenie
Sales-Contreras. The subject properties were five
parcels of land valued at P19, 104, 000. In the
agreement entered into by the parties, Zecson Land
Inc. shall pay a down payment to the spouses and
Aviso, another portion of the purchase price will be
given as cash advance upon the execution of the
contract, while the rest shall be used by Zecson as
payment for loans earlier contracted by the three
from the company. This is the first cause of action.
In the second cause of action, the spouses
Perez and Aviso contend that they were tricked to
sign other documents simultaneous with the
execution of the Contract to Sell. Two of the said
documents were mortgage deeds over the same 5
properties in favour of respondent Hermano, whom
they have never met. Sales-Contreras allegedly
explained to them that “the mortgage contracts
would merely serve to facilitate the payment of the
price agreed upon in their Contract to Sell.”
However, the spouses and Aviso assert that it was
never their intention to mortgage their properties to
Hermano and that they have never received a single
centavo from mortgaging their properties to him.
They now then seek a TRO against Hermano who
informed them that he would be foreclosing the
subject properties.
In their third cause of action, the spouses and
Aviso pray for damages against Zecson Land, Inc.
and/or Zenie Sales-Contreras, Atty. Perlita Vitan-Ele
and Antonio Hermano. They claim that they are
entitled to damages from the aforementioned
defendants for Zecson and Contreras’ failure to
comply with their obligations under their Contract to
Sell and in misleading and misrepresenting them into
mortgaging their properties to Hermano, who in
turn, had not paid them the proceeds thereof.
Thus, the first cause of action was for
enforcement of contract to sell entered into
between the spouses and Aviso and Zecson, the
second was for annulment or rescission of two
contracts of mortgage entered into between the
spouses and Aviso and Hermano, while the last one
was for damages against all the mentioned
defendants. A joinder was made on these causes of
action and a civil case for Enforcement of Contract
and Damages with Prayer for the Issuance of a
Temporary Restraining Order (TRO) and/or
Preliminary Injunction against Zescon Land, Inc.
and/or its President Zenie Sales-Contreras, Atty.
Perlita Vitan-Ele and against respondent herein
Antonio Hermano was filed before the RTC.
Hermano denied the spouses and Aviso’s
allegations through his Answer with Counterclaim.
Hermano also filed a “Motion with Leave to Dismiss
the Complaint or Ordered Severed for Separate
Trial" which was granted by the trial court on the
ground that there was a misjoinder in the causes of
action. As a consequence, Hermano was dropped
from the civil case. The spouses Perez and Aviso
moved for reconsideration but was also denied by
the trial court. So, they filed an original action for
certiorari before the CA.
The CA dismissed the petition "for having
been filed beyond the reglementary period pursuant
to Section 4, Rule 65 of the 1997 Rules on Civil
Procedure, as amended." The subsequent motion for
reconsideration filed by the petitioners was also
denied. Hence this petition.
ISSUE RELATED TO THE TOPIC: WON the trial court
erred in dropping Hermano in the civil action and
ruling that there was a misjoinder in the causes of
action.
HELD: Yes. The statutory intent behind the
provisions on joinder of causes of action is to
encourage joinder of actions which could reasonably
be said to involve kindred rights and wrongs,
although the courts have not succeeded in giving a
standard definition of the terms used or in
developing a rule of universal application. The
dominant idea is to permit joinder of causes of
action, legal or equitable, where there is some
substantial unity between them. While the rule
allows a plaintiff to join as many separate claims as
he may have, there should nevertheless be some
unity in the problem presented and a common
102
question of law and fact involved, subject always to
the restriction thereon regarding jurisdiction, venue
and joinder of parties. Unlimited joinder is not
authorized.
What the SC gathered from the trial court’s Orders
was that the trial court ruled that there was a
misjoinder in the civil case filed because it did not
comply with the conditions on joinder of parties. It is
well to remember that the joinder of causes of
action may involve the same parties or different
parties. If the joinder involves different parties, as in
this case, there must be a question of fact or of law
common to both parties joined, arising out of the
same transaction or series of transaction.
It can be deduced from the averments made in the
complaint that there are questions of fact and law
common to both Zecson Land, Inc. and Hermano
arising from a series of transaction over the same
properties.
There is the question of fact, for example, of
whether or not Zescon Land, Inc., indeed misled
petitioners to sign the mortgage deeds in favor of
respondent Hermano. There is also the question of
which of the four contracts were validly entered into
by the parties. Note that under Article 2085 of the
Civil Code, for a mortgage to be valid, it is imperative
that the mortgagor be the absolute owner of the
thing mortgaged. Thus, respondent Hermano will
definitely be affected if it is subsequently declared
that what was entered into by petitioners and
Zescon Land, Inc., was a Contract of Sale (as
evidenced by the Deed of Absolute Sale signed by
them) because this would mean that the contracts of
mortgage were void as petitioners were no longer
the absolute owners of the properties mortgaged.
Finally, there is also the question of whether or not
Zescon Land, Inc., as represented by Sales-Contreras,
and respondent Hermano committed fraud against
petitioners as to make them liable for damages.
Thus, the petition was granted, the Orders of the
RTC were annulled and set aside, and the RTC was
ordered to add respondent Antonio Hermano as one
of the defendants in Civil Case filed by spouses Perez
and Aviso.
Alba vs. CA (465 SCRA 495), GR NO. 164041, JULY
29, 2005,

FACTS: On 21 October 1996, respondent filed a
petition in RTC Manila for cancellation of entries in
the birth certificate of petitioner minor, to wit: (1)
minor’s surname ‘Herrera’; (2) his filiation as father;
and (3) marriage to minor’s mother, Armi, alleging
they are false and that he married only once with
Ezperanza Santos.
On 13 January 1997, the RTC issued an Amended
Order re scheduling the hearing of petition to 26
February 1997. Copy of which was published in
‘Today’ in its Jan 20, 27, and Feb 3, 1997 issues, and
were also sent to Armi at No. 418 Arquiza St., Ermita,
Manila (address per minor’s birth certificate), Local
Civil Registrar and Solicitor General. During the
hearing, only OSG appeared but filed no opposition,
while Armi was not present for she did not receive
the Order, the address provided being wrong. On 1
April 1997, the RTC granted the petition which
became final on 2 June 1997. On 24 November 2000,
petitioners filed a petition for annulment of
judgment with CA on the grounds of extrinsic fraud
and lack of jurisdiction over their person. Armi
averred that: (1) respondent knew all along of her
true address where they cohabited as husband of
wife, result of which is the minor; and (2) she knew
of the decision only on 26 February 1998; hence due
process was denied. On 27
February 2004, CA dismissed the petition. Motion for
reconsideration was denied hence, the instant
petition for certiorari. Issues: 1. Whether or not
jurisdiction over Armi’s person was NOT acquired;
and 2. Whether or not extrinsic fraud is present, to
warrant annulment of judgment. Ruling: NO. Petition
is Dismissed. Under Section 2, Rule 47 of the 1997
Revised Rules of Civil Procedure, judgments may be
annulled on the grounds of lack of jurisdiction and
extrinsic fraud.[19] Whether or not the trial court
acquired jurisdiction over the person of petitioner
and her minor child depends on the nature of private
respondents action, that is, in personam, in rem or
quasi in rem. An action in personam is lodged against
a person based on personal liability; an action in rem
is directed against the thing itself instead of the
person; while an action quasi in rem names a person
as defendant, but its object is to subject that persons
interest in a property to a corresponding lien or
obligation.[20] Hence, petitions directed against the
thing itself or the res,[21] which concerns the status
of a person,[22] like a petition for adoption,
[23]annulment of marriage,[24] or correction of
103
entries in the birth certificate,[25] as in the instant
case, are actions in rem. In an action in personam,
jurisdiction over the person of the defendant is
necessary for the court to validly try and decide the
case. In a proceeding in rem or quasi in rem,
jurisdiction over the person of the defendant is not a
prerequisite to confer jurisdiction on the court,
provided that the latter has jurisdiction over the res.
Jurisdiction over the res is acquired either (a) by the
seizure of the property under legal process, whereby
it is brought into actual custody of the law; or (b) as
a result of the institution of legal proceedings, in
which the power of the court is recognized and
made effective.[26]The service of summons or notice
to the defendant is not for the purpose of vesting
the court with jurisdiction but merely for satisfying
the due process requirements.[27] In the case at bar,
the filing with the trial court of the petition for
cancellation vested the latter jurisdiction over the
res. Substantial corrections or cancellations of
entries in civil registry records affecting the status or
legitimacy of a person may be effected through the
institution of a petition under Rule 108 of the
Revised Rules of Court, with the proper Regional
Trial Court.[28] Being a proceeding in rem,
acquisition of jurisdiction over the person of
petitioner is therefore not required in the present
case. It is enough that the trial court is vested with
jurisdiction over the subject matter. The service of
the order at No. 418 Arquiza St., Ermita, Manila and
the publication thereof in a newspaper of general
circulation in Manila, sufficiently complied with the
requirement of due process, the essence of which is
an opportunity to be heard. Said address appeared
in the birth certificate of petitioner minor as the
residence of Armi. Considering that the Certificate of
Birth bears her signature, the entries appearing
therein are presumed to have been entered with her
approval. Moreover, the publication of the order is a
notice to all indispensable parties, including Armi
and petitioner minor, which binds the whole world
to the judgment that may be rendered in the
petition. An in rem proceeding is validated
essentially through publication.[29] The absence of
personal service of the order to
Armi was therefore cured by the trial courts
compliance with Section 4, Rule 108, which requires
notice by publication, thus: SEC. 4. Notice and
publication. Upon the filing of the petition, the court
shall, by an order, fix the time and place for the
hearing of the same, and cause reasonable notice
thereof to be given to the persons named in the
petition. The court shall also cause the order to be
published once a week for three (3) consecutive
weeks in a newspaper of general circulation in the
province.
In Barco v. Court of Appeals, the trial court granted a
petition for correction/change of entries in a minors
birth certificate to reflect the name of the minors
real father as well as to effect the corresponding
change of her surname. In seeking to annul said
decision, the other children of the alleged father
claimed that they are indispensable parties to the
petition for correction, hence, the failure to implead
them is a ground to annul the decision of the trial
court. The Court of Appeals denied the petition
which was sustained by this Court on the ground,
inter alia, that while petitioner is indeed an
indispensable party, the failure to implead her was
cured by the publication of the order of hearing.
Thus Undoubtedly, Barco is among the parties
referred to in Section 3 of Rule 108. Her interest was
affected by the petition for correction, as any judicial
determination that June was the daughter of
Armando would affect her wards share in the estate
of her father. It cannot be established whether
Nadina knew of Mary Joys existence at the time she
filed the petition for correction. Indeed, doubt may
always be cast as to whether a petitioner under Rule
108 would know of all the parties whose interests
may be affected by the granting of a petition. For
example, a petitioner cannot be presumed to be
aware of all the legitimate or illegitimate offsprings
of his/her spouse or paramour. The fact that Nadina
amended her petition to implead Francisco and
Gustilo indicates earnest effort on her part to comply
with Section 3 as quoted above. Yet, even though
Barco was not impleaded in the petition, the Court
of Appeals correctly pointed out that the defect was
cured by compliance with Section 4, Rule 108, which
requires notice by publication, thus:
Section 4. Upon the filing of the petition, the court
shall, by order, fix the time and place for the hearing
of the same, and cause reasonable notice thereof to
be given to the persons named in the petition. The
court shall also cause the order to be published once
a week for three (3) consecutive weeks in a
newspaper of general circulation in the province.
The purpose precisely of Section 4, Rule 108 is to
bind the whole world to the subsequent judgment
on the petition. The sweep of the decision would
104
cover even parties who should have been impleaded
under Section 3, Rule 108, but were inadvertently
left out. The Court of Appeals correctly noted: The
publication being ordered was in compliance with,
and borne out by the Order of January 7, 1985. The
actual publication of the September 22, 1983 Order,
conferred jurisdiction upon the respondent court to
try and decide the case. While nobody appeared to
oppose the instant petition during the December 6,
1984 hearing, that did not divest the court from its
jurisdiction over the case and of its authority to
continue trying the case. For, the rule is well-settled,
that jurisdiction, once acquired continues until
termination of the case. Verily, a petition for
correction is an action in rem, an action against a
thing and not against a person. The decision on the
petition binds not only the parties thereto but the
whole world. An in rem proceeding is validated
essentially through publication. Publication is notice
to the whole world that the proceeding has for its
object to bar indefinitely all who might be minded to
make an objection of any sort against the right
sought to be established. It is the publication of such
notice that brings in the whole world as a party in
the case and vests the court with jurisdiction to hear
and decide it.[30] Furthermore, extrinsic fraud,
which was private respondents alleged concealment
of Armis present address,
was not proven. Extrinsic fraud exists when there is a
fraudulent act committed by the prevailing party
outside of the trial of the case, whereby the
defeated party was prevented from presenting fully
his side of the case by fraud or deception practiced
on him by the prevailing party. Here, Armi
contended that private respondent is aware of her
present address because they lived together as
husband and wife in the condominium unit from
1982 to 1988 and because private respondent
continued to give support to their son until 1998. To
prove her claim, she presented (1) private
respondents title over the condominium unit; (2)
receipts allegedly issued to private respondent for
payment of homeowners or association dues; (2) a
photocopy of a January 14, 1991 deed of sale of the
subject unit in favor of Armi; and (3) the subsequent
title issued to the latter. However, these documents
only tend to prove private respondents previous
ownership of the unit and the subsequent transfer
thereof to Armi, but not the claimed live-in
relationship of the parties. Neither does the sale
prove that the conveyance of the unit was part of
private respondents support to petitioner minor.
Indeed, intimate relationships and family relations
cannot be inferred from what appears to be an
ordinary business transaction. Although the January
14, 1991 deed of sale[31] stated that Armi resides at
1175 L. Guerrero St., Ermita, Manila, the same is not
sufficient to prove that private respondent has
knowledge of Armis address because the former
objected to the offer of the deed for being a mere
photocopy.[32] The counsel for petitioners even
admitted that they do not have the original of the
deed and that per certification of the Clerk of Court,
the Notary Public who notarized the deed of sale did
not submit a copy of the notarized document as
required by the rules.[33] The deed cannot thus be
the basis of ascribing knowledge of Armis address to
private respondent inasmuch as the authenticity
thereof was neither admitted by private respondent
nor proven by petitioners.
While Armi presented the alleged love letters/notes
from private respondent, they were only attached as
annexes to the petition and not formally offered as
evidence before the Court of Appeals. More
importantly, said letters/notes do not have probative
value because they were mere photocopies and
never proven to be an authentic writing of private
respondent. In the same vein, the affidavits[34] of
Armi and her sister, Corazon Espiritu, are of no
evidentiary weight. The basic rule of evidence is that
unless the affiants themselves are placed on the
witness stand to testify on their affidavits, such
affidavits must be rejected for being hearsay. Stated
differently, the declarants of written statements
pertaining to disputed facts must be presented at
the trial for cross-examination.[35] Inasmuch as Armi
and her sister were not presented before the Court
of Appeals to affirm the veracity of their affidavits,
the same are considered hearsay and without
probative value. Ei incumbit probotio qui dicit, non
qui negat. He who asserts, not he who denies, must
prove.[36] Armis claim that private respondent is
aware of her present address is anchored on the
assertion of a live-in relationship and support to her
son. Since the evidence presented by Armi is not
sufficient to prove the purported cohabitation and
support, it follows that private respondents
knowledge of Armis address was likewise not
proven. Thus, private respondent could not have
deliberately concealed from the court that which
was not shown to be known to him. The Court of
Appeals therefore correctly dismissed the petition
for annulment of judgment on the ground of failure
to establish extrinsic fraud. The proper remedy of a
105
party aggrieved by a decision of the Court of Appeals
in an action to annul a judgment of a Regional Trial
Court is a petition for review on certiorari under Rule
45 of the Revised Rules of Civil Procedure, where
only questions of law may be raised. The resort of
petitioner to the instant civil action for certiorari
under Rule 65 is therefore
erroneous. The special civil action of certiorari will
not be allowed as a substitute for failure to timely
file a petition for review under Rule 45, which should
be instituted within 15 days[37] from receipt of the
assailed decision or resolution. The wrong choice of
remedy thus provides another reason to dismiss this
petition.[38] Finally, petitioner failed to establish the
merits of her petition to annul the trial courts
decision. In an action for annulment of judgment,
the petitioner must convince the court that
something may indeed be achieved should the
assailed decision be annulled.[39] Under Article
176[40] of the Family Code as amended by Republic
Act (RA) No. 9255, which took effect on March 19,
2004, illegitimate children shall use the surname of
their mother, unless their father recognizes their
filiation, in which case they may bear the fathers
surname. In Wang v. Cebu Civil Registrar,[41] it was
held that an illegitimate child whose filiation is not
recognized by the father, bears only a given name
and his mothers surname. The name of the
unrecognized illegitimate child identifies him as such.
It is only when said child is recognized that he may
use his fathers surname, reflecting his status as an
acknowledged illegitimate child. In the present case,
it is clear from the allegations of Armi that petitioner
minor is an illegitimate child because she was never
married to private respondent. Considering that the
latter strongly asserts that he is not the father of
petitioner minor, the latter is therefore an
unrecognized illegitimate child. As such, he must
bear the surname of his mother.
FACTS: On 21 October 1996, respondent filed a
petition in RTC Manila for cancellation of entries in
the birth certificate of petitioner minor, to wit: (1)
minor’s surname ‘Herrera’; (2) his filiation as father;
and (3) marriage to minor’s mother, Armi, alleging
they are false and that he married only once with
Ezperanza Santos. On 13 January 1997, the RTC
issued an Amended Order re -scheduling the hearing
of petition to26 February 1997. Copy of which was
published in ‘Today’ in its Jan 20, 27, and Feb 3,1997
issues, andwere also sent to Armi at No. 418 Arquiza
St.,Ermita, Manila (address per minor’s birth
certificate), Local Civil Registrar and Solicitor
General. During the hearing, only OSG appeared but
filed no opposition, whileArmi was not present for
she did not receive the Order, the address provided
being wrong. On 1 April1997, the RTC granted the
petition which became final on 2 June 1997. On
24November 2000, petitionersfiled a petition for
annulment of judgment with CA on the grounds of
extrinsic fraud and lack of jurisdiction over their
person. Armi averred that: (1) respondent knew all
along of her true address wherethey cohabited as
husband of wife, result of which is the minor; and (2)
she knew of the decision onlyon26 February 1998;
hence due process was denied. On 27February 2004,
CA dismissed the petition. Motion for
reconsideration was denied hence, the
instantpetition forcertiorari.
ISSUES: 1. Whether or not jurisdiction over Armi’s
per
son was NOT acquired;
RULING: THE JURSIDICTION OVER ARMI’S PERSON
WAS ACQUIRED.
Under Section 2, Rule 47 of the 1997 Revised Rules
of CivilProcedure, judgments may be annulled on
thegrounds of lack of jurisdiction and extrinsic
fraud.Whether or not the trial court acquired
jurisdiction over the person of petitioner and her
minor childdepends on the nature of private
respondents action, that is, in personam, in rem or
quasi in rem. Anaction in personam is lodged against
a person based on personal liability; an action in rem
is directedagainst the thing itself instead of the
person; while an action quasi in rem names a person
as defendant,but its object is to subject that persons
interest in a property to a corresponding lien or
obligation.Hence, petitions directed against the thing
itself or the res, which concerns the status of a
person,[22] likea petition for adoption,
[23]annulment of marriage,[24] or correction of
entries in the birth certificate,[25]as in the instant
case, are actions in rem. In an action in personam,
jurisdiction over the person of thedefendant is
necessary for the court to validly try and decide the
case. In a proceeding in rem or quasi inrem,
jurisdiction over the person of the defendant is not a
prerequisite to confer jurisdiction on the court,… (…)
FACTS: On October 21, 1996 private respondent
Rosendo Herrera filed a petition for cancellation of
the following entries in the birth certificate of
Rosendo Alba Herrera Jr., to wit: (1) the surname
106
Herrera as appended in the name of the child; (2)
the reference to private respondent as the father of
the minor child; and (3) the alleged marriage of
private respondent to the child’s mother, Armi Alba
on August 4, 1982 in Mandaluyong City. He claimed
that the alleged entries are false and that it was only
on September 1996 that he learned of the existence
of the said birth certificate.
Private respondent alleged that he married only
once on June 28, 1965 with Ezperanza C. Santos and
never contracted marriage with Armi nor fathered
Rosendo Alba Herrera Jr. in support thereof he
presented certifications stating that he have no
record of marriage with Armi from the CR of
Mandaluyong City and the NSO.
On the scheduled hearing on February 26, 1997, the
counsel from the office of the Solicitor General
appeared but filed no opposition to the petition.
Armi was not present on said date.
The trial court rendered a decision which became
final and executor.
Armi and petitioner minor filed a petition for
annulment of judgment before the CA which it
dismissed holding that petitioner failed to prove that
private respondent employed fraud and purposely
deprived them of their day in court. Hence the
instant petition.
ISSUE: Whether or not an illegitimate child shall use
the surname of their mother.
RULED: Under Article 176 of the Family Code
illegitimate children shall use the surname of the
mother, unless their father recognizes their filiation,
in which case thay may bear the father’s surname.
In the case at bench it is clear that Armi was never
married to private respondent hence the petitioner
minor is an illegitimate child. Considering that
private respondent strongly asserts that he is not...
(..)
Danfoss, Inc. vs. Continental Cement Corp. (469
SCRA 505), G.R. NO. 143788.
September 9, 2005, Corona, J.
DANFOSS, INC., Petitioners, v. CONTINENTAL
CEMENT CORPORATION, Respondent.
TOPIC: UNDER CAUSE OF ACTION, IN CONTRAST
WITH THE BLOSSOM CASE, THIS IS A CASE WHERE
THE PRINCIPLE OF ANTICIPATORY BREACH CANNOT
BE APPLIED
NATURE OF THE CASE: The CA affirmed the decision
of the RTC that the CCC’s (herein respondent)
complaint for damages against Danfoss. So, the case
was elevated to the Supreme Court on appeal of the
said ruling of the CA and the CA’s denial for Danfoss’
motion for reconsideration.
FACTS: Mechatronics Instruments and Controls, Inc.
(MINCI) is an agent of Danfoss, Inc.’s products here
in the Philippines. On September 1997, CCC ordered
two unit 132 KW Danfoss Brand Frequency
Converter/Inverter from MINCI to be used in the
Finish Mill of its Cement Plant in Bulacan. In the
terms of conditions of the original purchase order,
the two unit Frequency Converter shall be delivered
by Danfoss within 8 to 10 weeks from the opening
of the letter of credit. The letter of credit opened by
CCC in favour of Danfoss on September 9, 1997.
On September 17, 1997, MINCI informed CCC
that its order are already ready for shipment and
MINCI requested to amend the letter of credit
changing the port of origin/loading from Singapore
to Denmark (Singapore is the Asian Regional Office
of Danfoss, the Head Office of the company is
Denmark). CCC complied and the port of origin in the
letter of credit was changed.
On November 6, 1997, MINCI relayed to CCC
that Danfoss Inc. was still checking the status of their
order. CCC replied that every delay in the delivery of
the order will cause loss to their company, so CCC
requested for early work out and immediate
shipment to avoid further loss.
But, on November 9, 1997, Danfoss Inc.
informed MINCI through fax, that the reason for the
delivery problems was that some of the supplied
components for the new VLT 5000 series (this may
be a part of the converter which is the subject thing
in this case or a machine to create the converter) did
not meet the agreed quality standard. So, Danfoss
was canvassing for another supplier for the said VLT
5000 series. In the fax, there was no clear message
as to when normal production will resume.
Upon receiving the relayed information, CCC
surmised that Danfoss would not be able to deliver
their order. There was also no definite commitment
107
of the delivery from Danfoss and MINCI, so CCC
informed MINCI that they intend to cancel its order.
The order was cancelled on November 13, 1997.
Hence the complaint for damages filed by CCC
with the RTC of Quezon City against Danfoss and
MINCI on November 5, 1998. In reply, Danfoss filed a
motion to dismiss the complaint.
CCC: Due to the “impending” delay in the delivery of
its order, it suffered more than P8 million and was
compelled to look for another supplier.
Danfoss: The case should be dismissed on the
ground that it did not state a cause of action.
1) The letter of credit was opened on September 9,
1997, so, since the agreed delivery period is 8 to 10
weeks from the opening of the letter of credit, the
due date is until November 19, 1997.
2) Although Danfoss was having a problem with its
supplier prior to CCC’s cancellation of its order, CCC
only surmised that Danfoss could not deliver within
the due date agreed upon.
3) Neither Danfoss nor CCC agreed to change the
date of delivery. Only the port of origin was changed
in the letter of credit. Danfoss has until November
19, 1997 to deliver the order, CCC cancelled the
order on November 13, 1997.
4) CCC never made an extrajudicial demand for the
delivery of its order on its due date as it cancelled
the order before the due date.
5) Damages sought for by CCC could not have
accrued yet since the order was cancelled before the
delivery was actually delayed.
RTC: Judgment in favor of CCC. According to the RTC:
“...the issue of whether or not the defendants incur
delay in the delivery of the equipment in question
within the period stipulated is a debatable question
which necessitates actual trial on the merits where
the parties have to adduce evidence in support of
their respective stance.
While the defendants contend that the
stipulated period of delivery had not lapsed yet
when the plaintiff cancelled its order of the two
equipments in question as the cancellation took
place seven (7) days before the expiry date of the
defendants’ obligation to deliver, the plaintiff’s
position is that the acts of the defendants had made
compliance with their obligation to deliver within the
period stipulated, impossible, hence, there was no
need for a demand as the law provides that “when
demand would be useless, as when the obligor has
rendered it beyond his power to perform.” The
plaintiff’s contention if properly and strongly
supported by evidence during the hearing of the
merits of the case may well negates (sic) the
defendant’s contrary stand.”
CA: Affirmed the decision of the RTC and denied the
Motion for Reconsideration of Danfoss.
ISSUE: WON there was a cause of action in the
complaint filed by CCC against Danfoss and WON the
principle of anticipatory breach can be applied in the
case.
HELD: No, there was no cause of action in the
complaint for damages filed by CCC.
“In order to sustain a dismissal on the ground of lack
of cause of action, the insufficiency must appear on
the face of the complaint. And the test of the
sufficiency of the facts alleged in the complaint to
constitute a cause of action is whether or not,
admitting the facts alleged, the court can render a
valid judgment thereon in accordance with the
prayer of the complaint. For this purpose, the
motion to dismiss must hypothetically admit the
truth of the facts alleged in the complaint.”
The RTC erred in ruling that “the issue of
whether or not the defendants incurred delay in the
delivery of the equipment within the period
stipulated was a debatable question.” How could
Danfoss be liable for damages when Danfoss had not
yet breached his obligation to deliver the order of
CCC, aside from the fact that the obligation was
already negated when CCC cancelled the order
before the prestation became due and demandable?
Thus, there was no breach and there was no damage
caused by Danfoss.
The principle of anticipatory breach cannot be
applied here because the obligation was single and
indivisible – to deliver two units of frequency
converter by November 19, 1997. There was no
showing that Danfoss refused to deliver, and on the
contrary, Danfoss made an effort to make good in its
obligation by looking for other suppliers who could
provide the parts needed to make the timely
delivery of the order. Thus, the case was
prematurely filed.
CCC’s fear that Danfoss might not be able to
deliver its order on time was not the cause of action
referred to by the Rules and jurisprudence.
108
PETITION GRANTED. THE CA’S DECISIONS ARE
REVERSED AND SET ASIDE.
FACTS: Mechatronics Instruments and Controls, Inc.
(MINCI) is an agent of Danfoss, Inc.’s products here
in the Philippines. On September 1997, CCC ordered
two unit 132 KW Danfoss Brand
FrequencyConverter/Inverter from MINCI to be used
in the Finish Mill of its Cement Plant in Bulacan. In
the termsof conditions of the original purchase
order, the two unit Frequency Converter shall be
delivered byDanfoss within 8 to 10 weeks from the
opening of the letter of credit. The letter of credit
opened by CCCin favour of Danfoss on September 9,
1997.On September 17, 1997, MINCI informed CCC
that its order are already ready for shipment and
MINCIrequested to amend the letter of credit
changing the port of origin/loading from Singapore
to Denmark(Singapore is the Asian Regional Office of
Danfoss, the Head Office of the company is
Denmark). CCCcomplied and the port of origin in the
letter of credit was changed.Upon receiving the
relayed information, CCC surmised that Danfoss
would not be able to deliver theirorder. There was
also no definite commitment of the delivery from
Danfoss and MINCI, so CCC informedMINCI that they
intend to cancel its order. The order was cancelled
on November 13, 1997.Hence the complaint for
damages filed by CCC with the RTC of Quezon City
against Danfoss and MINCIon November 5, 1998. In
reply, Danfoss filed a motion to dismiss the
complaint.
ISSUE: Whether there was a cause of action in the
complaint filed by respondent.
HELD: No, there was no cause of action in the
complaint for damages filed by CCC.
“In order to sustain a dismissal on the ground of lack
of cause of action, the insuff iciency must appear
onthe face of the complaint. And the test of the
sufficiency of the facts alleged in the complaint
toconstitute a cause of action is whether or not,
admitting the facts alleged, the court can render a
valid judgment thereon in accordance with the
prayer of the complaint. For this purpose, the
motion to dismiss must hypothetically admit the
truth of the facts alleged in the complaint.”
The RTC erred in ruling that “the issue of whether or
not the defendants incurred delay in the delivery of
the equipment within the period stipulated was a
debatable question.” How could Danfoss be liable for
damages when Danfoss had not yet breached his
obligation to deliver the order of CCC, aside from
thefact that the obligation was already negated
when CCC cancelled the order before the
prestationbecame due and demandable? Thus, there
was no breach and there was no damage caused by
Danfoss.The principle of anticipatory breach cannot
be applied here because the obligation was single
andindivisible – to deliver two units of frequency
converter by November 19, 1997. There was no
showingthat Danfoss refused to deliver, and on the
contrary, Danfoss made an effort to make good in
itsobligation by looking for other suppliers who could
provide the parts needed to make the timelydelivery
of the order. Thus, the case was prematurely filed.
CCC’s fear that Danfoss might not be able to deliver
its order on time was not the cause of action
referred to by the Rules and jurisprudence.
NM Rothschild & Sons (Australia) Limited vs.
Lepanto Consolidated Mining Company (661 SCRA
328), G.R. No. 175799, Leonardo-De Castro, J.
109
NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED,
Petitioner, v. LEPANTO CONSOLIDATED MINING
COMPANY,Respondent.
FACTS:
Respondent Lepanto Consolidated Mining Company
filed with the RTC of Makati City a Complaint against
petitioner NM Rothschild & Sons (Australia) Limited
praying for a judgment declaring the loan and
hedging contracts between the parties void for being
contrary to Article 2018 of the Civil Code of the
Philippines and for damages.
Upon respondents motion, the trial court authorized
respondents counsel to personally bring the
summons and Complaint to the Philippine Consulate
General in Sydney, Australia for the latter office to
effect service of summons on petitioner.
The petitioner prayed for the dismissal of the
Complaint on the following grounds: (a) the court
has not acquired jurisdiction over the person of
petitioner due to the defective and improper service
of summons; (b) the Complaint failed to state a
cause of action and respondent does not have any
against petitioner; (c) the action is barred by
estoppel; and (d) respondent did not come to court
with clean hands.
The RTC issued an Order denying the Motion to
Dismiss. According to the trial court, there was a
proper service of summons through the Department
of Foreign Affairs (DFA) on account of the fact that
the defendant has neither applied for a license to do
business in the Philippines, nor filed with the
Securities and Exchange Commission (SEC) a Written
Power of Attorney designating some person on
whom summons and other legal processes maybe
served. The trial court also held that the Complaint
sufficiently stated a cause of action. The other
allegations in the Motion to Dismiss were brushed
aside as matters of defense which can best be
ventilated during the trial.
Filed MR – denied.
Filed petition for certiorari with the CA alleging that
the RTC committed grave abuse of discretion in
denying its Motion to Dismiss.
CA dismissed the petition for certiorari
 ruled that since the denial of a Motion to
Dismiss is an interlocutory order, it cannot be the
subject of a Petition for Certiorari, and may only be
reviewed in the ordinary course of law by an appeal
from the judgment after trial.
 MR denied.
ISSUES:
I. Whether petitioner is a real party in interest - YES
II. Whether or not it was proper for the petitioner to
resort to a petition for certiorari with the CA.
III. Whether or not the lower courts correctly denied
the Motion to Dismiss – YES
HELD:
(1) Respondent points out that as of the date of the
filing of the Petition, there is no such corporation
that goes by the name NM Rothschild and Sons
(Australia) Limited. Petitioner claims that NM
Rothschild and Sons (Australia) Limited still exists as
a corporation under the laws of Australia under the
new name Investec Australia Limited. We find the
submissions of petitioner on the change of its
corporate name satisfactory and resolve not to
dismiss the present Petition for Review on the
ground of not being prosecuted under the name of
the real party in interest.
> The general rule as to corporations is that each
corporation must have a name by which it is to sue
and be sued and do all legal acts. The name of a
corporation in this respect designates the
corporation in the same manner as the name of an
individual designates the person
> A real party in interest is the party who stands to
be benefited or injured by the judgment in the suit,
or the party entitled to the avails of the suit.
> the party who filed the present Petition, having
presented sufficient evidence of its identity and
being represented by the same counsel as that of the
defendant in the case sought to be dismissed, is the
entity that will be benefited if this Court grants the
dismissal prayed for.
(2) We have held time and again that an order
denying a Motion to Dismiss is an interlocutory order
which neither terminates nor finally disposes of a
case as it leaves something to be done by the court
110
before the case is finally decided on the merits. The
general rule, therefore, is that the denial of a Motion
to Dismiss cannot be questioned in a special civil
action for Certiorari which is a remedy designed to
correct errors of jurisdiction and not errors of
judgment. However, we have likewise held that
when the denial of the Motion to Dismiss is tainted
with grave abuse of discretion, the grant of the
extraordinary remedy of Certiorari may be justified
The resolution of the present Petition therefore
entails an inquiry into whether the Court of Appeals
correctly ruled that the trial court did not commit
grave abuse of discretion in its denial of petitioners
Motion to Dismiss. A mere error in judgment on the
part of the trial court would undeniably be
inadequate for us to reverse the disposition by the
Court of Appeals.
(3) As correctly ruled by both the RTC and the CA,
the alleged absence of a cause of action, the alleged
estoppel on the part of petitioner, and the argument
that respondent is in pari delicto in the execution of
the challenged contracts, are not grounds in a
Motion to Dismiss as enumerated in Section 1, Rule
16 of the Rules of Court. Rather, such defenses raise
evidentiary issues closely related to the validity
and/or existence of respondents alleged cause of
action and should therefore be threshed out during
the trial.
As regards the allegation of failure to state a cause of
action, while the same is usually available as a
ground in a Motion to Dismiss, said ground cannot
be ruled upon in the present petition without going
into the very merits of the main case.
A cause of action is the act or omission by which a
party violates a right of another.
Elements:
(1) a right existing in favor of the plaintiff
(2) a duty on the part of the defendant to
respect the plaintiff's right
(3) an act or omission of the defendant in
violation of such right.
The trial court held that the Complaint in the case at
bar contains all the three elements of a cause of
action, i.e., it alleges that:
(1) plaintiff has the right to ask for the declaration of
nullity of the Hedging Contracts for being null and
void and contrary to Article 2018 of the Civil Code of
the Philippines;
(2) defendant has the corresponding obligation not
to enforce the Hedging Contracts because they are in
the nature of wagering or gambling agreements and
therefore the transactions implementing those
contracts are null and void under Philippine laws;
and
(3) defendant ignored the advice and intends to
enforce the Hedging Contracts by demanding
financial payments due therefrom.
In the case at bar, respondent asserts in the
Complaint that the Hedging Contracts are void for
being contrary to Article 2018[25] of the Civil Code.
Respondent claims that under the Hedging
Contracts, despite the express stipulation for
deliveries of gold, the intention of the parties was
allegedly merely to compel each other to pay the
difference between the value of the gold at the
forward price stated in the contract and its market
price at the supposed time of delivery. The
determination of whether or not the Complaint
stated a cause of action would therefore involve an
inquiry into whether or not the assailed contracts
are void under Philippine laws. This is, precisely, the
very issue to be determined. The trial court,
therefore, correctly denied the Motion to Dismiss on
this ground.
Petitioner alleges that the RTC has not acquired
jurisdiction over its person on account of the
improper service of summons. Summons was served
on petitioner through the DFA, with respondents
counsel personally bringing the summons and
Complaint to the Philippine Consulate General in
Sydney, Australia. Moreover, by seeking affirmative
reliefs from the trial court, petitioner is deemed to
have voluntarily submitted to the jurisdiction of said
court. A party cannot invoke the jurisdiction of a
court to secure affirmative relief against his
opponent and after obtaining or failing to obtain
such relief, repudiate or question that same
jurisdiction. Consequently, the trial court cannot be
considered to have committed grave abuse of
discretion amounting to lack or excess of jurisdiction
in the denial of the Motion to Dismiss on account of
failure to acquire jurisdiction over the person of the
defendant.
Undoubtedly, extraterritorial service of summons
applies only where the action is in rem or quasi in
rem, but not if an action is in personam.
111
On the other hand, when the defendant or
respondent does not reside and is not found in the
Philippines, and the action involved is in personam,
Philippine courts cannot try any case against him
because of the impossibility of acquiring jurisdiction
over his person unless he voluntarily appears in
court.
The Complaint in the case at bar is an action to
declare the loan and Hedging Contracts between the
parties void with a prayer for damages. It is a suit in
which the plaintiff seeks to be freed from its
obligations to the defendant under a contract and to
hold said defendant pecuniarily liable to the plaintiff
for entering into such contract. It is therefore an
action in personam, unless and until the plaintiff
attaches a property within the Philippines belonging
to the defendant, in which case the action will be
converted to one quasi in rem.
FACTS: The respondent Lepanto Consolidated Mining
Co. (Lepanto) filed a complaint with the RTC
ofMakati City against petitioner NM Rothschild &
Sons (Australia) Limited (Rothschild) praying for a
judgment declaring the loan and hedging contracts
between the parties void for being contrary to
Article2018 of the Civil Code of the Philippines and
for damages. Upon Lepanto’s (plaintiff’s) motion, the
trialcourt authorized Lepanto’s counsel to personally
bring the summons and Complaint to the
PhilippineConsulate General in Sydney, Australia for
the latter office to effect service of summons on
Rothschild(defendant). Subsequently, Rothschild
filed special appearance with motion to dismiss
claiming lack of jurisdiction of the court over person
of her person alleging defective and improper
summon, and there isno cause of action.
The trial court denied the motion to dismiss in
finding for Lepanto. Rothschild’s MR having been
denied went to the CA through a petition for
certiorari. The latter dismiss Rothschild’s petition for
certiorari in seeing the certiorari
an inappropriate remedy as the order of the trial
court beingan interlocutory order. Thus, Rothschild
went to SC by review on certiorari.
Lepanto filed opposition todismiss motion as
Rothschild is no real party in interest having changed
its registered name to InvesticAustralia Limited.
ISSUE:
1) WON a change in the name in the name of
the corporation as party in a Complaint render it no
real party in interest.

RULING: NO. The change of corporate name

satisfactorily does not dismiss the petition (or
complaint) forreview on the ground of not being
prosecuted under the name of the real party in
interest. While we stand by our pronouncement in
Philips Export on the importance of the corporate
name to the very existence ofcorporations and the
significance thereof in the corporation’s right to sue,
we shall not go so far as to dismiss a case filed by the
proper party using its former name when adequate
identification is presented.A real party in interest is
the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the
avails of the suit. The change of corporate name
does not make the party no real partyin interest
when the party who filed the present Petition,
having presented sufficient evidence of itsidentity
and being represented by the same counsel as that
of the defendant in the case sought to bedismissed,
is the entity that will be benefited if this Court grants
the dismissal prayed for.

112
RULE 3 (PARTIES TO CIVIL ACTION)
1. Alfred Hahn vs. CA (266 SCRA 537),
G.R. No. 113074; January 22, 1997,
Mendoza, J.
ALFRED HAHNvs. CA, andBAYERISCHE MOTOREN
WERKE AKTIENGESELLSCHAFT (BMWAG)
FACTS: Petitioner Alfred Hahn is a Filipino citizen
doing business under the name and style "Hahn-
Manila". On the other hand, private respondent
(BMW) is a nonresident foreign corporation existing
under the laws of the former Federal Republic of
Germany, with principal office at Munich, Germany.
On March 7, 1967, petitioner executed in favor of
private respondent a "Deed of Assignment with
Special Power of Attorney. Per the agreement, the
parties "continue[d] business relations as has been
usual in the past without a formal contract."
But on February 16, 1993, in a meeting with a BMW
representative and the president of Columbia
Motors Corporation (CMC), Jose Alvarez, petitioner
was informed that BMW was arranging to grant the
exclusive dealership of BMW cars and products to
CMC, which had expressed interest in acquiring the
same.
On February 24, 1993, petitioner received
confirmation of the information from BMW which, in
a letter, expressed dissatisfaction with various
aspects of petitioner's business, mentioning among
other things, decline in sales, deteriorating services,
and inadequate showroom and warehouse facilities,
and petitioner's alleged failure to comply with the
standards for an exclusive BMW dealer.
Nonetheless, BMW expressed willingness to
continue business relations with the petitioner on
the basis of a "standard BMW importer" contract,
otherwise, it said, if this was not acceptable to
petitioner, BMW would have no alternative but to
terminate petitioner's exclusive dealership effective
June 30, 1993.
Because of Hahn's insistence on the former business
relations, BMW withdrew on March 26, 1993 its
offer of a "standard importer contract" and
terminated the exclusive dealer relationship
effective June 30, 1993.
On April 29, 1993, BMW proposed that Hahn and
CMC jointly import and distribute BMW cars and
parts.
Hahn found the proposal unacceptable. On May 14,
1993, he filed a complaint for specific performance
113
and damages against BMW to compel it to continue
the exclusive dealership.
QC RTC issued TRO
 Summons and copies of the complaint were
served on the private respondent thru DTI
 the order, summons and copies of the
complaint and amended complaint were later sent
by the DTI to BMW via registered mail
 issued an order granting writ of preliminary
injunction
BMW moved to dismiss the case, contending that
the trial court did not acquire jurisdiction over it
through the service of summons on the Department
of Trade and Industry, because it (BMW) was a
foreign corporation and it was not doing business in
the Philippines.
 contended that the execution of the Deed
of Assignment was an isolated transaction;
 that Hahn was not its agent because the
latter undertook to assemble and sell BMW cars and
products without the participation of BMW and sold
other products; and
 that Hahn was an indentor or middleman
transacting business in his own name and for his own
account.
Trial court deferred resolution of the motion to
dismiss until after trial on the merits for the reason
that the grounds advanced by BMW in its motion did
not seem to be indubitable.
BMW filed a petition for certiorari with the CA
 The Court of Appeals enjoined the trial
court from hearing petitioner's complain
 rendered judgment finding the trial court
guilty of grave abuse of discretion in deferring
resolution of the motion to dismiss
ISSUE: Whether petitioner Alfred Hahn is the agent
or distributor in the Philippines of private
respondent BMW
(Whether or not BMW is not doing business in the
Philippines)
HELD: Alfred Hahn is an agent of BMW.
Court of Appeals held that petitioner Alfred Hahn
acted in his own name and for his own account and
not as agent or distributor in the Philippines of BMW
on the ground that "he alone had contacts with
individuals or entities interested in acquiring BMW
vehicles
 This arrangement shows an agency
An agent receives a commission upon the successful
conclusion of a sale. On the other hand, a broker
earns his pay merely by bringing the buyer and the
seller together, even if no sale is eventually made.
The Supreme Court held that agency is shown when
Hahn claimed he took orders for BMW cars and
transmits them to BMW. Then BMW fixes the down
payment and pricing charges and will notify Hahn of
the scheduled production month for the orders, and
reconfirm the orders by signing and returning to
Hahn the acceptance sheets.
The payment is made by the buyer directly to BMW.
Title to cars purchased passed directly to the buyer
and Hahn never paid for the purchase price of BMW
cars sold in the Philippines. Hahn was credited with a
commission equal to 14% of the purchase price upon
the invoicing of a vehicle order by BMW. Upon
confirmation in writing that the vehicles had been
registered in the Philippines and serviced by him,
Hahn received an additional 3% of the full purchase
price. Hahn performed after-sale services, including,
warranty services. for which he received
reimbursement from BMW. All orders were on
invoices and forms of BMW.
Moreover, the Court distinguished an agent from a
broker. The court ruled that an agent receives a
commission upon the successful conclusion of a sale.
On the other hand, a broker earns his pay merely by
bringing the buyer and the seller together, even if no
sale is eventually made.
FACTS:
Petitioner is a Filipino citizen doing business under
the name of “Hahn-Manila”. Private respondent
BMW is a non-resident corporation incorporated in
Germany. Petitioner executed in favor of private
respondent a “Deed of Assignment with a Special
Power ofAttorney” which constituted petitioner as
the exclusive dealer of private respondent as long as
the assignment of its trademark and device
subsisted. However, no formal contract was drawn
between the two parties.
Thereafter, petitioner was informed that BMW
was arranging to grant the exclusive dealership of
BMW cars and products to Columbia Motors Corp.
(CMC).
114
BMW expressed dissatisfaction with various aspect
of petitioner’s business but nonetheless also
expressed willingness to continue business
relations with petitioner on the basis of a
standard BMW contract otherwise, if said offer
was unacceptable to petitioner then BMW would
terminate petitioner’s exclusive dealership.
Petitioner refused BMWsoffer in which case BMW
withdrew its alternative offer and terminated
petitioner’s exclusive dealership.
Petitioner therefore filed an action for specific
performance and damages against BMW to compel
it to continue the exclusive dealership.
BMW moved to dismiss the case contending that the
trial court did not acquire jurisdiction over it
through the service of summons on DTI because
BMW is a foreign corporation and is not doing
business in the Philippines.
The trial court deferred the resolution of the motion
for dismissal until after trial on the merits for the
reason that the grounds advanced by BMW did not
seem indubitable. BMW appealed said order to the
CA.
The CA resolved that BMW was not doing business in
the country and therefore jurisdiction over it could
not have been acquired through the service of
summons on DTI and it dismissed the petition.
ISSUE: W/N BMW is doing business in the Philippines
so as to enable the court to acquire jurisdiction over
it through the service ofsummons on the DTI.
HEID: RA 7042 enumerates what acts are considered
as “doing business”. Section 3(d) enumerating such
acts includes the phrase “appointing representatives
or distributors in the Philippines” but not when the
representative or distributor “transacts” business in
his own name for his own account.
In the case at bar, petitioner is private respondent
BMW’s agent and not merely a broker. The record
reveals that private respondent exercised control
over petitioner’s activities as a dealer and made
regular inspections of petitioner’s premises to
enforce its standards.
Since BMW is considered as doing business in the
Philippines, the trial court validly acquired
jurisdiction over it by virtue of the service of
summons on the DTI. Furthermore, it is now
settled that, for purposes of having summons
served on a foreign corporation in accordance
with the Rules of Court, it is sufficient that it be
alleged in the complaint that the foreign
corporation is doing business in the Philippines.
The court need not go beyond the allegations in
the complaint in order to determine whether or not
it acquired jurisdiction. Such determination that the
foreign corporation is doing business in the
Philippines is only tentative and only for the purpose
of enabling the court to acquire jurisdiction. A
contrary determination may be made based on the
court’s findings or evidence presented.
115
2. Litonjua Group of Companies vs. Vigan
(360 SCRA 194), G.R. No. 143723. June
28, 2001, Gonzaga-Reyes, J.
LITONJUA GROUP OF COMPANIES, EDDIE LITONJUA
and DANILO LITONJUA, petitioners, vs. TERESITA
VIGAN, respondent.
FACTS:
1. TERESITA VIGAN’s version: She was hired by
the Litonjua Group of Companies on February 2,
1979 as telex operator. Later, she was assigned as
accounting and payroll clerk under the supervision of
Danilo Litonjua. She had been performing well until
1995, when Danilo Litonjua who was already
naturally a (sic) very ill-tempered, ill-mouthed and
violent employer, became more so due to business
problems. The incidents prompted Vigan to write
Danilo Litonjua letters asking why she was treated so
and what was her fault. Danilo Litonjua charged that
Vigan had been hysterical, emotional and created
scenes at the office. He even required her to secure
psychiatric assistance. But despite proof that she
was not suffering from psychosis or organic brain
syndrome as certified to by a Psychiatrist of Danilo
Litonjua’s choice still she was denied by the guards
entry to her work upon instructions again of
DaniloLitonjua. Left with no alternative, Vigan filed
this case for illegal dismissal, alleging she was
receiving a monthly salary of P8,000.00 at the time
she was unlawfully terminated.
2. Litonjuas version: They negate the existence
of the Litonjua Group of Companies and the
connection of Eduardo Litonjua thereto. They
contended that Vigan was employed by ACT Theater,
Inc., where DaniloLitonjua is a Director. They dispute
the charge of illegal dismissal for it was Vigan who
ceased to report for work despite notices and
likewise contest the P8,000.00 monthly salary
alleged by Vigan, claiming it was merely P6,850.00.
They claim that Vigan was a habitual absentee. Her
performance had been satisfactory, but then starting
March 15, 1996 she had become emotional,
hysterical, uncontrollable and created disturbances
at the office with her crying and shouting for no
reason at all. The incident was repeated on April 3,
1996, May 24, 1996 and on June 4, 1996. Thus
alarmed, on July 24, 1996 Vigan was required by
management to undergo medical and psychological
examination at the company’s expense and naming
three doctors to attend to her. Dr.Baltazar Reyes and
Dr. Tony Perlas of the Philippine General Hospital
and Dr. Lourdes Ignacio of the Medical Center
Manila. But they claim that Vigan refused to comply.
On August 2, 1996, Vigan again had another
breakdown, hysterical, shouting and crying as usual
for about an hour, and then she just left the
premises without a word. The next day, August 3,
1996, Saturday, she came to the office and explained
she was not feeling well the day before. After that
Vigan went AWOL and did not heed telegram notices
from her employer made on August 26, 1996 and on
September 9, 1996. She instead filed the instant suit
for illegal dismissal."
2. On June 10, 1997, Labor Arbiter Ernesto S. Dinopol
rendered his decision4 finding Vigan diseased and
unfit for work under Article 284 of the Labor Code
and awarded corresponding separation pay.
3. Vigan appealed the decision to the National Labor
Relations Commission which modified the arbiter’s
decision by ruling that Art. 284 of the Labor Code is
inapplicable in the instant case but affirmed the
legality of the termination of the complainant based
on her having effectively abandoned her job; the rest
of the decision was affirmed. Vigan moved for a
partial reconsideration which was denied in a
resolution dated August 7, 1998.
4. Vigan filed a petition for certiorari with the Court
of Appeals which reversed the NLRC Resolution. It
ordered the respondents jointly and severally to: (a)
Reinstate VIGAN if she so desires; or (b) pay her
separation compensation in the sum of P8,000.00
multiplied by her years of service counted from
February 2, 1979 up to the time this Decision
becomes final; and in either case to pay Vigan; (c) full
back wages from the time she was illegally dismissed
up to the date of the finality of this Decision; (d)
moral damages in the amount of P40,000.00; (e)
exemplary damages in the amount of P15,000.00;
and (f) attorney’s fees of P10,000.00.
5. Litonjuas filed their motion for reconsideration
which was denied. Hence, the filing of the instant
petition for review on certiorari. alleging the
following grounds:
ISSUE: WHETHER OR NOT “LITONJUA GROUP OF
COMPANIES", WHICH HAS NO JURIDICAL
PERSONALITY, BUT ONLY A GENERIC NAME TO
DESCRIBE THE VARIOUS COMPANIES WHICH THE
116
LITONJUA FAMILY HAS INTERESTS, CAN BE LEGALLY
CONSTRUED AS RESPONDENT’S EMPLOYER .
HELD: NO .
Petitioners allege that the Litonjua group of
companies cannot be a party to this suit for it is not a
legal entity with juridical personality but is merely a
generic name used to describe collectively the
various companies in which the Litonjua family has
business interest; that the real employer of
respondent Vigan was the ACT theater Incorporated
where Danilo Litonjua is a member of the Board of
Directors while Eddie Litonjua was not connected in
any capacity.
Only natural or juridical persons or entities
authorized by law may be parties to a civil action and
every action must be prosecuted and defended in
the name of the real parties in interest.
Petitioners’ claim that Litonjua Group of Companies
is not a legal entity with juridical personality hence
cannot be a party to this suit deserves consideration
since respondent failed to prove otherwise.
In fact, respondent Vigan’s own allegation in her
Memorandum supported petitioners’ claim that
Litonjua group of companies does not exist when she
stated therein that instead of naming each and every
corporation of the Litonjua family where she had
rendered accounting and payroll works, she simply
referred to these corporations as the Litonjua group
of companies, thus, respondent merely used such
generic name to describe collectively the various
corporations in which the Litonjua family has
business interest.
Considering the non-existence of the Litonjua group
of companies as a juridical entity and petitioner
Eddie Litonjua’s denial of his connection in any
capacity with the ACT Theater, the supposed
company where Vigan was employed, petitioner
Eddie Litonjuas should also be excluded as a party in
this case since respondent Vigan failed to prove
Eddie Litonjua’s participation in the instant case.
It is respondent Vigan, being the party asserting a
fact, who has the burden of proof as to such fact10
which however, she failed to discharge.
PANTRANCO North Express, Inc., and Alexander 19, Batas Pambansa
Buncan, Bilang 129, it is the sum of
versus the two claims that
Standard Insurance Company, Inc., and Martina determines the
Gicale, jurisdictional amount.
G.R. No. 140746, March 16, 2005  the total of the
Sandoval-Gutierrez, J.: two claims is
definitely more
FACTS: than P20,000.00
 Crispin Gicale was driving the passenger which at the time
jeepney owned by his mother Martina of the incident in
Gicale. question was the
 Alexander Buncan, on the other hand, was jurisdictional
driving a bus owned by Pantranco North amount of the
Express Inc. Regional Trial
o Both drivers were travelling along Court.
the National Highway of Talavera,  Contention that there was
Nueva Ecija in a rainy afternoon. misjoinder of parties
 Buncan was driving the bus northbound  does not affect
while Crispin was trailing behind. the jurisdiction of
 When the two vehicles were negotiating a the court nor is it
curve along the highway, the passenger bus a ground to
overtook the jeepney. In so doing, the dismiss the
passenger bus hit the left rear side of the complaint
jeepney and sped away  appellees Gicale’s
 Crispin reported the incident to the and insurance
Talavera Police Station and respondent company’s
Standard Insurance Co., Inc. (Standard), individual claims
insurer of the jeepney against appellees
o The total cost of the repair was (sic) arose from
P21,415.00, but respondent the same
Standard paid only P8,000.00. vehicular
o Martina Gicale shouldered the accident on
balance of P13,415.00. October 28, 1984
 Standard and Martina, respondents, involving
demanded reimbursement from petitioners appellant
Pantranco and its driver Alexander Buncan, Pantranco’s bus
but they refused. and appellee
 Respondents filed with the RTC of Manila a Gicale’s jeepney
complaint for sum of money  Filed MR – DENIED
 Both petitioners specifically denied the
allegations in the complaint Petitioner’s arguments:
o averred that it is the Metropolitan  that the trial court has no jurisdiction over
Trial Court, not the RTC, which has the case since the cause of action of each
jurisdiction over the case. respondent did not arise from the same
 RTC Ruling: transaction and that there are no common
o Rendered a decision in favour of questions of law and fact common to both
respondents parties
 On appeal to CA
o Affirmed RTC’s ruling
 under the Totality Rule Respondent answer:
provided for under Sec.  their individual claims arose out of the same
vehicular accident and involve a common

117
 question of fact and law. Hence, the RTC
has jurisdiction over the case.
ISSUE:
Whether or not there was a misjoinder of parties in
this case.
RULING: NO
Section 6, Rule 3 of the Revised Rules of
Court requires that:
 the right to relief arises out of the
same transaction or series of
transactions
 there is a question of law or fact
common to all the plaintiffs or
defendants
 such joinder is not otherwise
proscribed by the provisions of the
Rules on jurisdiction and venue
In this case, there is a single transaction
common to all, that is, Pantranco’s bus
hitting the rear side of the jeepney. There is
also a common question of fact, that is,
whether petitioners are negligent. There
being a single transaction common to both
respondents, consequently, they have the
same cause of action against petitioners.
To determine identity of cause of action, it
must be ascertained whether the same
evidence which is necessary to sustain the
second cause of action would have been
sufficient to authorize a recovery in the first
 Here, had respondents filed
separate suits against petitioners,
the same evidence would have
been presented to sustain the
same cause of action.
 Thus, the filing by both
respondents of the complaint with
the court below is in order. Such
joinder of parties avoids
multiplicity of suit and ensures the
convenient, speedy and orderly
administration of justice.
Section 5(d), Rule 2 – Joinder of Causes of
Action
 A party may in one pleading assert,
in the alternative or otherwise, as
many causes of action as he may
have against an opposing party,
subject to the following conditions:
(d) Where the claims in all the
causes of action are principally for
118
recovery of money the aggregate
amount claimed shall be the test of
jurisdiction.”
 The different causes of action
which are joined accrue in favour
of the same plaintiffs and against
the same defendants and that no
misjoinder of parties is involved.
On the issue of lumping together the claims
of Gicale and Standard
 TOTALITY RULE: Section 33 (1) of
B.P. Blg. 1299 which states, among
others, that "where there are
several claims or causes of action
between the same or different
parties, embodied in the same
complaint, the amount of the
demand shall be the totality of the
claims in all the causes of action,
irrespective of whether the causes
of action arose out of the same or
different transactions."
Respondents’ cause of action against
petitioners arose out of the same
transaction.
 Thus, the amount of the demand
shall be the totality of the claims.
 Respondent Standard’s claim is
P8,000.00, while that of
respondent Martina Gicale is
P13,415.00, or a total of
P21,415.00.
 Section 19 of B.P. Blg. 129
 the RTC has "exclusive
original jurisdiction over
all other cases, in which
the demand, exclusive of
interest and cost or the
value of the property in
controversy, amounts to
more than twenty
thousand pesos
(P20,000.00)."
 It is the RTC that has jurisdiction
over the instant case.
 It bears emphasis that
when the complaint was
filed, R.A. 7691 expanding
the jurisdiction of the
Metropolitan, Municipal
and Municipal Circuit Trial
Courts had not yet taken
 effect. It became effective BEATRIZ SIOK PING TANG, Petitioner, vs. SUBIC BAY
on April 15, 1994. DISTRIBUTION, INC., Respondent
WHEREFORE, the petition is DENIED G.R. No. 162575 December 15, 2010
PERALTA, J.:

FACTS:
 Petitioner is doing business under the name
and style of Able Transport.
 Respondent Subic Bay Distribution, Inc.
(SBDI) entered in two Distributorship
Agreements with petitioner and Able
Transport in April 2002.
 Under the Agreements, respondent, as
seller, will sell, deliver or procure to be
delivered petroleum products, and
petitioner, as distributor, will purchase,
receive and pay for its purchases from
respondent.
 By virtue of the provisions of the
distribution agreement, petitioner applied
for and was granted a credit line by the
United Coconut Planters Bank (UCPB),
International Exchange Bank (IEBank),
Security Bank Corporation (SBC) and Asia
United Bank (AUB) in favor of respondent
 All these banks separately executed several
undertakings setting the terms and
conditions governing the drawing of money
by respondent from these banks.
 Petitioner allegedly failed to pay her
obligations to respondent despite demand,
o thus, respondent tried to withdraw
from these bank undertakings.
 Petitioner then filed with the Regional Trial
Court (RTC) of Quezon City separate
petitions3 against the banks for declaration
of nullity of the several bank undertakings
and domestic letter of credit which they
issued with the application for the issuance
of a temporary restraining order (TRO) and
writ of preliminary injunction.
o said contracts are oppressive,
unreasonable and unconscionable
on the ground, among others, that
the prevailing market rate with
which petitioner will be charged of
as interests and penalties is
exorbitant rendering it against
public morals and policy
 The court then issued an Order granting the
TRO and requiring petitioner to implead
respondent as an indispensable party
 RTC ruling:

119
 o a Writ of Preliminary Injunction be
issued restraining and enjoining
herein Respondent UCPB, IEB, SB
and AUB from releasing any funds
to SBDI
 Respondent filed with the CA a petition for
certiorari with prayer for the issuance of a
TRO and writ of preliminary injunction
against respondent Judge Pizarro and
petitioner.
 CA Ruling:
o issued a Resolution granting the
TRO
o The writ of preliminary injunction
issued by the lower court is hereby
LIFTED
 Hence the petition
Petitioner’s arguments:
 CA decision is void for want of authority of
the CA to act on the petition as the banks
should have been impleaded for being
indispensable parties, since they are the
original party respondents in the RTC
Respondent’s answers:
 contends that the banks which issued the
bank undertakings and letter of credit are
not indispensable parties in the petition for
certiorari filed in the CA
ISSUE:
Whether or not the banks are indispensable parties,
thus, should have been impleaded in the petition for
certiorari filed by respondent in the CA
RULING: NO.
The banks are not indispensable parties in
the petition for certiorari which respondent
filed in the CA assailing the RTC Order dated
December 17, 2002
Circumstances:
 First: During the hearing of
petitioner's prayer for the issuance
of a TRO, the RTC, in open court,
elicited from the lawyer-
representatives of the four banks
their position in the event of the
issuance of the TRO, and all these
representatives invariably replied
120
that they will abide and/or submit
to the sound judgment of the court
 Second. When the RTC issued its
Order dated December 17, 2002
granting the issuance of the writ of
preliminary injunction, the banks
could have challenged the same if
they believe that they were
aggrieved by such issuance.
However, they did not, and such
actuations were in consonance
with their earlier position that they
would submit to the sound
judgment of the RTC.
 Third. When respondent filed with
the CA the petition for certiorari
with prayer for the issuance of a
TRO and writ of preliminary
injunction, and a TRO was
subsequently issued, copies of the
resolution were also sent14 to the
banks, although not impleaded, yet
the latter took no action to
question their non-inclusion in the
petition
 Fourth. When the CA rendered its
assailed Decision nullifying the
injunction issued by the RTC, and
copies of the decision were
furnished these banks, not one of
these banks ever filed any pleading
to assail their non-inclusion in the
certiorari proceedings.
Indeed, the banks have no interest in the
issuance of the injunction, but only the
petitioner.
 The banks' interests as defendants
in the petition for declaration of
nullity of their bank undertakings
filed against them by petitioner in
the RTC are separable from the
interests of petitioner for the
issuance of the injunctive relief.
An indispensable party
o is a party who has such an interest
in the controversy or subject
matter that a final adjudication
cannot be made, in his absence,
without injuring or affecting that
interest, a party who has not only
an interest in the subject matter of
the controversy, but also has an
interest of such nature that a final
 decree cannot be made without In this case, there is no doubt that it is only
affecting his interest or leaving the the petitioner who is the person interested
controversy in such a condition in sustaining the proceedings in court since
that its final determination may be she was the one who sought for the
wholly inconsistent with equity and issuance of the writ of preliminary
good conscience injunction to enjoin the banks from
o is a person in whose absence there releasing funds to respondent.
cannot be a determination o Thus, it is only petitioner who
between the parties already before should be joined as party
the court which is effective, defendant with the judge and who
complete, or equitable should defend the judge's issuance
o is one who must be included in an of injunction.
action before it may properly go WHEREFORE, the petition is DENIED
forward.
A person is not an indispensable party
o if his interest in the controversy or
subject matter is separable from
the interest of the other parties, so
that it will not necessarily be
directly or injuriously affected by a
decree which does complete
justice between them
o if his presence would merely
permit complete relief between
him and those already parties to
the action, or if he has no interest
in the subject matter of the action
o It is not a sufficient reason to
declare a person to be an
indispensable party that his
presence will avoid multiple
litigation
Certiorari, as a special civil action, is an
original action invoking the original
jurisdiction of a court to annul or modify the
proceedings of a tribunal, board or officer
exercising judicial or quasi-judicial
functions.
o It is an original and independent
action that is not part of the trial or
the proceedings on the complaint
filed before the trial court.
o in filing the petition for certiorari,
respondent should join as party
defendant with the court or judge,
the person interested in sustaining
the proceedings in the court, and it
shall be the duty of such person to
appear and defend, both in his
own behalf and in behalf of the
court or judge affected by the
proceedings

121

Divinagracia vs Parilla
GR No. 196750, March 11, 2015
Perlas-Bernabe, J:
FACTS:
 Conrado Nobleza, Sr. (Conrado, Sr.) owned
a 313-square meter parcel of land in Iloilo
City denominated as Lot 133-B-1-A and
covered by Transfer Certificate of Title (TCT)
No. T-12255 (subject land)
 During his lifetime, he contracted two
marriages:
o (a) the first was with Lolita Palermo
with whom he had two (2)
children, namely, Cresencio and
Conrado, Jr
o (b) the second was with Eusela
Niangar with whom he had seven
(7) children, namely, Mateo, Sr.,
Coronacion, Cecilia, Celestial,
Celedonio, Ceruleo, and Cebeleo,
Sr
o begot three (3) illegitimate
children, namely, Eduardo, Rogelio,
and Ricardo
o Mateo, Sr. pre-deceased Conrado,
Sr.
 survived by his children
Felcon, Landelin, Eusela,
Giovanni, Mateo, Jr., Tito,
and Gaylord.
o Cebeleo, Sr. also pre-deceased
 survived by his wife,
Maude, and children
Cebeleo, Jr. and Neobel.
 According to Santiago, upon Conrado, Sr.’s
death, Cresencio, Conrado, Jr., Felcon (in
representation of his father, Mateo, Sr., and
his siblings), Coronacion, Celestial, Cecilia,
Rogelio, Eduardo, and Ricardo sold their
respective interests over the subject land to
Santiago
o Embodied in a Deed of Extrajudicial
Settlement or Adjudication with
Deed of Sale
 however, not signed by
the other heirs who did
not sell their respective
shares, namely, Ceruleo,
122
Celedonio, and Maude (in
representation of his
husband, Cebeleo, Sr., and
their children)
 Same parties executed a Supplemental
Contract
o Santiago was not able to have TCT
No. T-12255 cancelled and the
subject document registered
because of Ceruleo, Celedonio, and
Maude’s refusal to surrender the
said title.
 This prompted Santiago to file a complaint
for judicial partition and for receivership
 Ceruleo, Celedonio, and Maude maintained
that Santiago had no legal right to file an
action for judicial partition nor compel them
to surrender because:
o Santiago did not pay the full
purchase price of the shares sold
to him
o the subject land is a conjugal asset
of Conrado Sr. and Eusela Niangar
and, thus, only their legitimate
issues may validly inherit the same.
 RTC Ruling:
o ordered the partition of the subject
land between Santiago, and
Ceruleo, Celedonio, Maude, and
the heirs of Mateo, Sr. (i.e., Felcon,
et al.)
o issuance of a new owner’s
duplicate certificate in favor of
Santiago and the group of Ceruleo,
Celedonio, Maude, and the heirs of
Mateo, Sr.
o held that Santiago did not validly
acquire Mateo, Sr.’s share over the
subject land, considering that
Felcon admitted the lack of
authority to bind his siblings with
regard to Mateo, Sr.’s share
thereon.
o On reconsideration of respondents
herein:
 RTC issued an Order dated
further ordering Santiago
to comply with the
provisions of the
Supplemental Contract by
paying the amount of
P337,887.73 upon the
 partition of the subject
land.
 Respondents appealed to CA
 CA Ruling:
o set aside the RTC Rulings
o dismissed Santiago’s complaint for
judicial partition
o held that Felcon’s siblings, as well
as Maude’s children, are
indispensable parties to the judicial
partition of the subject land and,
thus, their non-inclusion as
defendants in Santiago’s complaint
would necessarily result in its
dismissal.
 Heirs of Santiago filed a MR – DENIED.
ISSUE:
Whether or not the CA correctly:
(a) Ruled that the Felcon’s siblings and
Cebeleo, Sr. and Maude’s children are
indispensable parties to Santiago’s
complaint for judicial partition. - YES
(b) dismissed Santiago’s complaint for his
failure to implead said omitted heirs. - NO
RULING: Petition is partly meritorious.
An indispensable party
 is one whose interest will be
affected by the court’s action in
the litigation, and without whom
no final determination of the case
can be had.
 The party’s interest in the subject
matter of the suit and in the relief
sought are so inextricably
intertwined with the other parties’
that his legal presence as a party to
the proceeding is an absolute
necessity.
 In his absence, there cannot be a
resolution of the dispute of the
parties before the court which is
effective, complete, or equitable.
 Thus, the absence of an
indispensable party renders all
subsequent actions of the court
null and void, for want of authority
to act, not only as to the absent
parties but even as to those
present.
123
With regard to actions for partition, Section
1, Rule 69 of the Rules of Court requires
that all persons interested in the property
shall be joined as defendants
 Thus, all the co-heirs and persons
having an interest in the property
are indispensable parties; as such,
an action for partition will not lie
without the joinder of the said
parties.
In the instant case, records reveal that
Conrado, Sr. has the following heirs,
legitimate and illegitimate, who are entitled
to a pro-indiviso share in the subject land
 Conrado, Jr., Cresencio, Mateo, Sr.,
Coronacion, Cecilia, Celestial,
Celedonio, Ceruleo, Cebeleo, Sr.,
Eduardo, Rogelio, and Ricardo.
However, both Mateo, Sr. and
Cebeleo, Sr. pre-deceased
Conrado, Sr.
 thus, pursuant to the rules on
representation under the Civil
Code,33 their respective interests
shall be represented by their
children, namely:
 (a) for Mateo, Sr.: Felcon,
Landelin, Eusela,
Giovanni, Mateo, Jr., Tito,
and Gaylord; and (b) for
Cebeleo, Sr.: Cebeleo, Jr.
and Neobel.
The aforementioned heirs – whether in
their own capacity or in representation of
their direct ascendant – have vested rights
over the subject land and, as such, should
be impleaded as indispensable parties in an
action for partition thereof.
However, a reading of Santiago’s complaint
shows that:
 as regards Mateo, Sr.’s interest,
only Felcon was impleaded,
excluding therefrom his siblings
and co-representatives.
 with regard to Cebeleo, Sr.’s
interest over the subject land, the
complaint impleaded his wife,
Maude, when pursuant to Article
97235 of the Civil Code, the proper
representatives to his interest
should have been his children,
Cebeleo, Jr. and Neobel.
  Verily, Santiago’s omission
of the aforesaid heirs
renders his complaint for
partition defective.
The absence of the aforementioned
indispensable parties in the instant
complaint for judicial partition renders all
subsequent actions of the RTC null and void
for want of authority to act, not only as to
the absent parties, but even as to those
present.
 Therefore, the CA correctly set
aside the November 29, 2002
Decision and the April 4, 2003
Order of the RTC.
the CA erred in ordering the dismissal of the
complaint on account of Santiago’s failure
to implead all the indispensable parties in
his complaint
 Heirs of Mesina v. Heirs of Fian, Sr.:
 in instances of non-
joinder of indispensable
parties, the proper
remedy is to implead
them and not to dismiss
the case
 The non-joinder of
indispensable parties is
not a ground for the
dismissal of an action. At
any stage of a judicial
proceeding and/or at such
times as are just, parties
may be added on the
motion of a party or on
the initiative of the
tribunal concerned. If the
plaintiff refuses to
implead an indispensable
party despite the order of
the court, that court may
dismiss the complaint for
the plaintiff’s failure to
comply with the order.
 The remedy is to implead
the non-party claimed to
be indispensable
In view of the foregoing, the correct course
of action in the instant case is to order its
remand to the RTC for the inclusion of those
indispensable parties who were not
impleaded and for the disposition of the
case on the merits
124
WHEREFORE, the petition is PARTLY
GRANTED
Vda. De Salazar vs CA
G.R. No. 121510, November 23, 1995
Hermosisima, Jr., J.:
FACTS:
 On July 23, 1970, both private respondents
Primitive Nepomuceno and Emerenciana
Nepomuceno filed separate complaints with
the then Court of Agrarian Relations of
Malolos, Bulacan, for ejectment on the
ground of personal cultivation and
conversion of land for useful non-
agricultural purposes against petitioner's
deceased husband, Benjamin Salazar.
 the trial court rendered its joint decision3 in
favor of private respondents
 An appeal therefrom was interposed in the
name of petitioner's deceased husband on
the ground that private respondents herein
failed to satisfy the requirements pertaining
to personal cultivation and conversion of
the landholdings into non-agricultural uses.
o The Court of Appeals rejected such
contention upon finding that the
record was replete with evidence
justifying private respondents'
assertion of their right of
cultivation and conversion of their
landholdings
 Almost a year after the termination of that
appeal, the same trial court decision subject
thereof was once again assailed before the
Court of Appeals through a petition for
annulment of judgment.
 petitioner assailed the same trial court
decision as having been rendered by a court
that did not have jurisdiction over her and
the other heirs of her deceased husband
o because notwithstanding the fact
that her husband had already died
on October 3, 1991, the trial court
still proceeded to render its
decision on August 23, 1993
without effecting the substitution
of heirs in accordance with Section
 17, Rule 3, of the Rules of Court
thereby depriving her of her day in
court.
 CA ruled in favor of the validity of the
challenged decision
 Petitioner filed a motion for reconsideration
of the decision of the appellate court
reiterating the trial court's lack of
jurisdiction over the heirs of petitioner's
deceased husband as a consequence of the
failure of the trial court to effectuate a valid
substitution of heirs.
o DENIED
ISSUE:
Whether or not trial court's failure to effectuate a
substitution of heirs before its rendition of judgment
render such judgment jurisdictionally infirm.
RULING: NO.
The need for substitution of heirs is based
on the right to due process accruing to
every party in any proceeding
The rationale underlying this requirement in
case a party dies during the pendency of
proceedings of a nature not extinguished by
such death, is that
o the exercise of judicial power to
hear and determine a cause
implicitly presupposes in the trial
court, amongst other essentials,
jurisdiction over the persons of the
parties.
o That jurisdiction was inevitably
impaired upon the death of the
protestee pending the proceedings
below such that unless and until a
legal representative is for him duly
named and within the jurisdiction
of the trial court, no adjudication in
the cause could have been
accorded any validity or binding
effect upon any party, in
representation of the deceased,
without trenching upon the
fundamental right to a day in court
which is the very essence of the
constitutionally enshrined
guarantee of due process.
a party having died in an action that
survives, the trial held by the court without
appearance of the deceased's legal
125
representative or substitution of heirs and
the judgment rendered after such trial, are
null and void because the court acquired no
jurisdiction over the persons of the legal
representatives or of the heirs upon whom
the trial and the judgment would be binding
o failure to make the substitution is a
jurisdictional defect, it should be
noted that the purpose of this
procedural rule is to comply with
due process requirements
o The original party having died, he
could not continue to defend
himself in court despite the fact
that the action survived him. For
the case to continue, the real party
in interest must be substituted for
the deceased. The real party in
interest is the one who would be
affected by the judgment.
In the instant case, the heirs are the proper
substitutes.
o Substitution gives them the
opportunity to continue the
defense for the deceased.
o Substitution is important because
such opportunity to defend is a
requirement to comply with due
process.
o Such substitution consists of
making the proper changes in the
caption of the case which may be
called the formal aspect of it.
o Such substitution also includes the
process of letting the substitutes
know that they shall be bound by
any judgment in the case and that
they should therefore actively
participate in the defense of the
deceased
in the case at bench, the defendant in an
ejectment case having died before the
rendition by the trial court of its decision
therein, its failure to effectuate a formal
substitution of heirs before its rendition of
judgment, does not invalidate such
judgment where the heirs themselves
appeared before the trial court, participated
in the proceedings therein, and presented
evidence in defense of deceased defendant,
it undeniably being evident that the heirs
themselves sought their day in court and
exercised their right to due process.
Respondent Court of Appeals also correctly
ruled that ejectment, being an action
involving recovery of real property, is a real
action which as such, is not extinguished by
the defendant's death.
While it is true that a decision in an action
for ejectment is enforceable not only
against the defendant himself but also
against members of his family, his relatives,
and his privies who derived their right of
possession from the defendant and his
successors-in-interest, it had been
established that petitioner had, by her own
acts, submitted to the jurisdiction of the
trial court.
o She is now estopped to deny that
she had been heard in defense of
her deceased husband in the
proceedings therein. As such, this
petition evidently has no leg to
stand on.
WHEREFORE, the instant petition is
dismissed for lack of merit

126

THEODORE and NANCY ANG, represented by
ELDRIGE MARVIN B. ACERON, Petitioners,
vs.
SPOUSES ALAN and EM ANG, Respondents.
G.R. No. 186993, August 22, 2012
Reyes, J.:
FACTS:
 spouses Alan and Em Ang (respondents)
obtained a loan in the amount of Three
Hundred Thousand U.S. Dollars
(US$300,000.00) from Theodore and Nancy
Ang (petitioners)
o respondents failed to pay the
petitioners, despite repeated
demands
 the petitioners sent the respondents a
demand letter asking them to pay their
outstanding debt
o Notwithstanding the receipt of the
said demand letter, the
respondents still failed to settle
Petitioner’s arguments:
their loan obligation.
 petitioners, who were then residing in Los
Angeles, California, United States of
America (USA), executed their respective
Special Powers of Attorney6 in favor of
Attorney Eldrige Marvin B. Aceron (Atty.
Aceron) for the purpose of filing an action in
court against the respondents
 Atty. Aceron, in behalf of the petitioners,
filed a Complaint7 for collection of sum of
money with the RTC of Quezon City against
the respondents.
 the respondents moved for the dismissal of
the complaint filed by the petitioners on the
Respondent’s answer:
grounds of improper venue and
prescription.
o Insisting that the venue of the
petitioners’ action was improperly
laid, the respondents asserted that
the complaint against them may
only be filed in the court of the
place where either they or the
petitioners reside.
o averred that they reside in Bacolod
City while the petitioners reside in
Los Angeles, California, USA.
o Thus, the respondents maintain,
the filing of the complaint against
them in the RTC of Quezon City
was improper.
 RTC Ruling:
o issued an Order denying the
respondents’ motion to dismiss
o Atty. Eldrige Marvin Aceron as her
duly appointed attorney-in-fact
address is in Quezon City, hence,
being the plaintiff, venue of the
action may lie where he resides
 Respondent’s filed MR – DENIED
 CA Ruling:
o annulled and set aside the Orders
of the RTC of Quezon City
o directed the dismissal of the
complaint filed by the petitioners.
o complaint below should have been
filed in Bacolod City and not in
Quezon City.
 their complaint for collection of sum of
money against the respondents may be
filed in the RTC of Quezon City.
 Invoking Section 3, Rule 3 of the Rules of
Court, they insist that Atty. Aceron, being
their attorney-in-fact, is deemed a real
party in interest in the case below and can
prosecute the same before the RTC.
 assert, the said complaint for collection of
sum of money may be filed in the court of
the place where Atty. Aceron resides, which
is the RTC of Quezon City.
 petitioners are proscribed from filing their
complaint in the RTC of Quezon City.
 They assert that the residence of Atty.
Aceron, being merely a representative, is
immaterial to the determination of the
venue of the petitioners’ complaint.

127

ISSUE:
Whether or not Atty. Aceron, petitioner’s attorney-
in-fact, is deemed a real party in interest and can
prosecute the same before the RTC.
RULING: NO.
Atty. Aceron is not a real party in interest in
the case below; thus, his residence is
immaterial to the venue of the filing of the
complaint.
Section 2, Rule 3 of the Rules of Court
reads:
o Sec. 2. Parties in interest. – A real
party in interest is the party who
stands to be benefited or injured by
the judgment in the suit, or the
party entitled to the avails of the
suit. Unless otherwise authorized
by law or these Rules, every action
must be prosecuted or defended in
the name of the real party in
interest. (Emphasis ours)
Interest within the meaning of the Rules of
Court
o means material interest or an
interest in issue to be affected by
the decree or judgment of the
case, as distinguished from mere
curiosity about the question
involved.
o A real party in interest is the party
who, by the substantive law, has
the right sought to be enforced
it is clear that Atty. Aceron is not a real
party in interest in the case below as he
does not stand to be benefited or injured by
any judgment therein.
o He was merely appointed by the
petitioners as their attorney-in-fact
for the limited purpose of filing and
prosecuting the complaint against
the respondents.
o Such appointment, however, does
not mean that he is subrogated
into the rights of petitioners and
ought to be considered as a real
party in interest.
Being merely a representative of the
petitioners, Atty. Aceron in his personal
128
capacity does not have the right to file the
complaint below against the respondents.
o He may only do so, as what he did,
in behalf of the petitioners – the
real parties in interest.
o To stress, the right sought to be
enforced in the case below belongs
to the petitioners and not to Atty.
Aceron.
o Clearly, an attorney-in-fact is not a
real party in interest
Reliance on Section 3, Rule 3 of the Rules of
Court to support their conclusion that Atty.
Aceron is likewise a party in interest in the
case below – MISPLACED
o Sec. 3. Representatives as parties. –
Where the action is allowed to be
prosecuted and defended by a
representative or someone acting
in a fiduciary capacity, the
beneficiary shall be included in the
title of the case and shall be
deemed to be the real property in
interest. A representative may be a
trustee of an expert trust, a
guardian, an executor or
administrator, or a party
authorized by law or these Rules.
An agent acting in his own name
and for the benefit of an
undisclosed principal may sue or be
sued without joining the principal
except when the contract involves
things belonging to the principal.
(Emphasis ours)
o Nowhere in the rule cited above is
it stated or, at the very least
implied, that the representative is
likewise deemed as the real party
in interest. The said rule simply
states that, in actions which are
allowed to be prosecuted or
defended by a representative, the
beneficiary shall be deemed the
real party in interest and, hence,
should be included in the title of
the case.
The petitioners’ complaint should have been filed in
the RTC of Bacolod City, the court of the place where
the respondents reside, and not in RTC of Quezon
City
 petitioners’ complaint for collection of sum
of money against the respondents is a
personal action as it primarily seeks the
enforcement of a contract
 can file it:
o where he himself or any of them
resides
o where the defendant or any of the
defendants resides or may be
found.
 However, if the plaintiff does not reside in
the Philippines, the complaint in such case
may only be filed in the court of the place
where the defendant resides.
o Here, the petitioners are residents
of Los Angeles, California, USA
while the respondents reside in
Bacolod City.
o Applying the foregoing principles,
the petitioners’ complaint against
the respondents may only be filed
in the RTC of Bacolod City – the
court of the place where the
respondents reside. The
petitioners, being residents of Los
Angeles, California, USA, are not
given the choice as to the venue of
the filing of their complaint.
WHEREFORE, the petition is denied.
129
State Investment House, Inc. vs Court of Appeals
GR No. 106795, November 16, 1999
Gonzaga-Reyes, J.:
FACTS:
 Defendant CBY (Cheng Ban Yek Co.)is a
domestic corporation engaged in the
business of manufacturing edible oil
o incurred millions of pesos of
obligations with plaintiff SIHI and
many other creditors, including
defendant Allied Banking
Corporation (ALLIED for short)
 defendant CBY, plaintiff SIHI, and other
creditors of CBY entered into an Agreement
for the restructuring of CBY's existing
obligations to its creditors, but excluding
defendant ALLIED and several other
creditors who did not sign said Agreement
 To secure the prompt and full payment of
all amounts owed by CBY to its creditors
who participated in said Agreement, the
parties thereto executed a Mortgage
Indenture
 CBY defaulted in the payment of its
obligations rendering all it’s obligations due
and payable
 SIHI notified the Creditors' Committee of
CBY that it would institute proceedings for
the enforcement of the remedies granted
under the Mortgage Indenture
 Creditors' Committee authorized SIHI to
institute the appropriate foreclosure
proceedings provided that the proceeds of
the foreclosure sale would be distributed
and applied to all of CBY's obligations under
the terms of the Agreement
 plaintiff SIHI filed with the respondent court
against CBY, FOUR SEAS, and Alfredo Ching,
and impleading twenty-two (22) other
 creditors of CBY including herein petitioner
ALLIED, allegedly because they hold inferior
or subordinate mortgage rights to the
properties sought to be foreclosed
 defendant ALLIED denied that its interests
in the mortgaged properties in question are
subordinate in right to that of plaintiff SIHI
o alleged that it was not a party to
the Agreement
 plaintiff SIHI, for the consideration of P33
million, entered into a Deed of Assignment
with FIL-NIPPON transferring to the latter all
its rights, interests, claims, and causes of
action arising out of the Agreement
o FIL-NIPPON also agreed to assume
all the obligations of SIHI as party-
plaintiff in said civil case
 Thereafter, FIL-NIPPON filed a "Motion for
Substitution of Party Plaintiff" in lieu of
plaintiff SIHI
 Motion was opposed by defendant ALLIED
o on the grounds that it has a
counterclaim against SIHI arising
from irregularities, excesses,
abuses and inimical acts
committed by it in managing
defendant CBY;
o that as long as said counterclaim
has not been finally resolved, the
substitution of plaintiff SIHI would
be improper; and that if at all, FIL-
NIPPON can intervene and be a co-
plaintiff
 RTC ruling:
o granted the motion for substitution
o MR denied
 Allied filed a petition for certiorari in the CA
o granted the petition and ordered
SIHI to continue as plaintiff
Respondent court ruled that even without
substitution Fil-Nippon, as assignee of all of
SIHI's rights, interests claims and causes of
action arising out of the Agreement, would
be bound by any judgment for or against
SIHI.
o Allied had a counterclaim for
damages against SIHI of not less
than P50 million
o SIHI had no choice but to actively
participate in C. C. No. 59449 in
order to defend its assignee Fil-
130
Nippon against Allied's permissive
counterclaim
o Fil-Nippon cannot be substituted as
debtor under said counterclaim
without its consent in view of
Article 1293 of the Civil Code which
provides that novation which
consists in substituting a new
debtor in the place of the original
one cannot be made without the
consent of the creditor.
ISSUE:
Whether or not CA erred in ruling that the
substitution of SIHI by its assignee Fil-Nippon is
improper.
RULING: NO.
The rule on substitution of parties in case of
transfer of interest is found in Section 19,
Rule 3, which states:
o Sec. 19. Transfer of Interest — In
case of any transfer of interest, the
action may be continued by or
against the original party, unless
the court upon motion directs the
person to whom the interest is
transferred to be substituted in the
action or joined with the original
party.
Respondent court ruled that even without
substitution Fil-Nippon, as assignee of all of
SIHI's rights, interests claims and causes of
action arising out of the Agreement, would
be bound by any judgment for or against
SIHI.
o Allied had a counterclaim for
damages against SIHI of not less
than P50 million
o SIHI had no choice but to actively
participate in C. C. No. 59449 in
order to defend its assignee Fil-
Nippon against Allied's permissive
counterclaim
o Fil-Nippon cannot be substituted as
debtor under said counterclaim
without its consent in view of
Article 1293 of the Civil Code which
provides that novation which
consists in substituting a new
debtor in the place of the original
 one cannot be made without the o the assignment cannot bind or
consent of the creditor. prejudice Allied who did not
consent to the assignment
It has been held that a transferee pendente o The counterclaim for actual, moral
lite does not have to be included or and other damages should be
impleaded by name in order to be bound by pursued and enforced against the
the judgment because the action or suit real party-in-interest, which is SIHI,
may be continued for or against the original which cannot be discharged from
party or the transferor and still be binding the case over the opposition of
on the transferee. Allied.
o a transferee pendente lite is a WHEREFORE, petition is DENIED.
proper party in the case but it is
not an indispensable party.
Respondent court did not err in ruling that
SIHI should continue to be the plaintiff, and
Fil-Nippon should be impleaded as co-
plaintiff.
o there is a counterclaim for
damages contained in Allied Bank's
Answer arising from the alleged
inimical acts committed by SIHI in
manipulating the operations of CBY
that drained the latter's resources
to the prejudice of its creditors.
 counterclaim for damages
is severable and
independent of SIHI's
cause of action under the
Agreement dated
December 28, 1982
entered into by SIHI, CBY
and other creditors of CBY
for the restructuring of
CBY's existing obligations.
Thus, although Fil-Nippon became an
assignee of all of SIHI's rights, interests,
claims, and causes of action arising out of
the Agreement, the counterclaim for actual
and moral damages and attorney's fees filed
by Allied Bank was in no way contemplated
in the assignment. It was accordingly error
to discharge SIHI as original plaintiff from
the case.

The Court of Appeals also correctly pointed

out that Fil-Nippon could not be substituted
as debtor of Allied with respect to the
counterclaim for damages without the
latter's consent
o Fil-Nippon, as transferee of SIHI's
interests pendente lite, is not even
an indispensable party in the case.

131
 RULE 4 (VENUE)
1. Fortune Motors vs. CA (178 SCRA 564)
2. Clavecilla vs. Antillon (19 SCRA 379)
3. Young Auto Supply vs. CA (223 SCRA 670)
4. Lizares vs. Caluag (4 SCRA 746)
5. Esuerte vs. CA (193 SCRA 541)
6. Capati vs. Ocampo (113 SCRA 794)

7. Unimasters vs. CA (267 SCRA 759)

8. Dacoycoy vs. CA (195 SCRA 641)
9. Davao Light & Power vs. CA (363 SCRA 396)
10. Mangila vs. CA (387 SCRA 162)
11. Chua vs. Total Office Products and Services
(Topros), Inc. (471 SCRA 500)
12. Briones vs. Court of Appeals (746 SCRA 240)

132
 RULE 4 (VENUE) property or any part thereof lies. (Enriquez v.
1. Fortune Motors vs. CA (178 SCRA 564), G. R. Macadaeg, 84 Phil. 674,1949; Garchitorena v.
No. 76431 October 16, 1989, Para, J. Register of Deeds, 101 Phil. 1207, 1957) Personal
FORTUNE MOTORS, (PHILS.) INC., petitioner, vs. actions upon the other hand, may be instituted in
THE HONORABLE COURT OF APPEALS, the Court of First Instance where the defendant or
METROPOLITAN BANK and TRUST COMPANY, any of the defendants resides or may be found, or
where the plaintiff or any of the plaintiffs resides, at
respondents, Paras, J.
the election of the plaintiff (Sec. 1, Rule 4, Revised
Rules of Court). A prayer for annulment or rescission
FACTS: On March 1982 to January 1984, private
of contract does not operate to efface the true
respondent extended various loans to petitioner
objectives and nature of the action which is to
amounting to P34.15K secured by a real estate
recover real property. (Inton, et al., v. Quintan, 81
mortgage on petitioner’s building and lot in Makati.
Phil. 97, 1948)
Petitioner was not able to pay. Thus, respondent had
the mortgaged property sold at public auction for
An action for the annulment or rescission of a sale of
P47.8K, respondent being the highest bidder.
real property is a real action. Its prime objective is to
Certificate of sale was registered on 24 October
recover said real property. (Gavieres v. Sanchez, 94
1984. On 21 October 1985, or three days before the
Phil. 760,1954) An action to annul a real estate
expiration of the redemption period, petitioner filed
mortgage foreclosure sale is no different from an
a complaint for annulment of the extrajudicial
action to annul a private sale of real property.
foreclosure sale in RTC Manila alleging inter alia that
(Munoz v. Llamas, 87 Phil. 737,1950) While it is true
it was premature because the loan was not yet due.
that petitioner does not directly seek the recovery of
Respondent moved to dismiss on the ground that
title or possession of the property in question, his
the venue of the action was improperly laid in
action for annulment of sale and his claim for
Manila for the property mortgaged is situated in
damages are closely intertwined with the issue of
Makati. Petitioner opposed alleging that its action "is
ownership of the building which, under the law, is
a personal action" and that "the issue is the validity
considered immovable property, the recovery of
of the extrajudicial foreclosure proceedings". On 28
which is petitioner's primary objective. The prevalent
May 1986, RTC Manila denied its motion to
doctrine is that an action for the annulment or
dismissal. On 11 June 1986, respondent filed a
rescission of a sale of real property does not operate
petition for certiorari and prohibition in CA. On 30
to efface the fundamental and prime objective and
July 1986, the CA granted the petition dismissing the
nature of the case, which is to recover said real
complaint without prejudice to its being filed in the
property. It is a real action. Respondent Court,
proper venue. When petitioner’s motion for
therefore, did not err in dismissing the case on the
reconsideration was denied on 30 October 1986, it
ground of improper venue (Sec. 2, Rule 4) which was
filed the present petition for review on certiorari.
timely raised (Sec. 1, Rule 16). (Punzalan, Jr. v. Vda.
de Lacsamana, 121 SCRA 336, [1983]). Thus, as aptly
ISSUE: Whether or not the action for annulment of
decided by the Court of Appeals in a decision penned
the real estate mortgage extrajudicial foreclosure
by then Court of Appeals Associate Justice now
sale is a personal action for venue purposes.
Associate Justice of the Supreme Court Carolina C.
Griño-Aquino, the pertinent portion reads: "Since an
RULING: NO. Petition is Denied In a real action, the
extrajudicial foreclosure of real property results in a
plaintiff seeks the recovery of real property, or as
conveyance of the title of the property sold to the
indicated in Sec. 2 (a) of Rule 4, a real action is an
highest bidder at the sale, an action to annul the
action affecting title to real property, or for the
foreclosure sale is necessarily an action affecting the
recovery of possession, or for the partition or
title of the property sold. It is therefore a real action
condemnation of, or foreclosure of a mortgage on
which should be commenced and tried in the
real property. (Comments on the Rules of Court by
province where the property or part thereof lies." -
Moran, Vol. 1, p. 122) Real actions or actions
Digested
affecting title to, or for the recovery of possession, or
for the partition or condemnation of, or foreclosure
of mortgage on real property, must be instituted in
the Court of First Instance of the province where the

133
2. Clavecilla vs. Antillon (19 SCRA 379), G.R. No. L-
22238, February 18, 1967, Regala, J.
CLAVECILLIA RADIO SYSTEM, petitioner-appellant,
vs. HON. AGUSTIN ANTILLON, as City Judge of the
Municipal Court of Cagayan de Oro City and NEW
CAGAYAN GROCERY, respondents-appellees.
FACTS: The New Cagayan Grocery filed a complaint
against CRS for some irregularities in the
transmission of a message which changed the
context and purport causing damages. The complaint
was filed in the City Court of Cagayan de Oro.
ISSUE: Whether the action will prosper?
HELD: No. The action was based on tort and not
upon a written contract and as such, under the Rules
of Court, it should be filed in the municipality where
the defendant or any of the defendants resides or
may be served with summons.
Settled is the principle in corporation law
that the residence of a corporation is the place
where the principal office is established. Since it is
not disputed that CRS has its principal office in
Manila, it follows that the suit against it may
properly be filed in the City of Manila.
The fact that CRS maintains branch office in
some parts of the country does not mean that it can
be sued in any of these places. To allow such would
create confusion and work untold inconveniences to
the corporation.
FACTS:
 Bacolod branch office of Clavecilla Radio System
received the following message for transmittal
thru its branchoffice at Cagayan de
Oro:“NECAGRO CAGAYANDEORO
(CLAVECILLA)REURTEL WASHED NOT AVAILABLE
REFINED TWENTY FIFTY IF AGREEABLE SHALL
SHIP LATERREPLY POHANG”
 The Cagayan de Oro Branch omitted, in
delivering the same to the New Cagayan
Grocery, the word “NOT” betweenthe words
“WASHED” and “AVAILABLE,” thus changing
entirely the contents and purport of the same
and causing the said addressee to suffer
damages.
 New Cagayan Grocery filed a case against
Clavecilla, After service of summon, Clavecilla
filed a motion to dismissthe complaint on the
grounds that it states no cause of action and
134
that the venue is improperly laid. City Judge
deniedthe motion to dismiss for lack of merit.
 Clavecilla filed a petition for prohibition with
preliminary injunction with CFI (Misamis
Oriental) praing that CityJudge (Antillon) be
enjoined from further proceeding on the ground
of improper venue.
 CFI held that the Clavecilla Radio System may be
sued either in Manila where it has its principal
office or in Cagayande Oro City where it may be
served with summons through the Manager of
its branch office in said City.
ISSUE(S): Whether or not the case is filed in the
proper venue
HELD: No. The case against Clavecilla Radio System
should filed in Manila where it holds its principal
office.
RATIO:
 The case for damages filed with the city court is
based upon tort and not upon a written
contract. The New Rules of Court provides that
when “the action is not upon a written contract,
then in the municipality where the defendant or
any of the defendants resides ormay be served
with summons.”
 Residence of a corporation is the place where its
principal office is established. Since Clavecilla
has its principal office in Manila, it follows that
the suit against it may properly be filed in the
City of Manila“May be served with
summons”does not apply when the defendant
resides in the Philippines (Cohen vs.Benguet
Commercial Co.)
 The fact that it maintains branch offices in some
parts of the country does not mean that it can
be sued in any ofthese places. To allow an action
to be instituted in any place where a corporate
entity has its branch offices wouldcreate
confusion and work untold inconvenience to the
corporation.
CASE LAW/ DOCTRINE: RESIDENCE of a corporation
is the place where its principal office is established.
DISSENTING/CONCURRING OPINION(S):
3. Young Auto Supply vs. CA (223 SCRA 670), G.R. that his motion for reconsideration did not toll the
No. 104175 June 25, 1993, Quiason, J. running of the period to file his answer. On 3 May
YOUNG AUTO SUPPLY CO. AND NEMESIO GARCIA, 1991, Roxas filed an unverified Motion to Lift the
petitioners, vs. THE HONORABLE COURT OF Order of Default which was not accompanied with
APPEALS (THIRTEENTH DIVISION) AND GEORGE the required affidavit of merit. But without waiting
for the resolution of the motion, he filed a petition
CHIONG ROXAS, respondents.
for certiorari with the Court of Appeals. The Court of
Appeals dismissal of the complaint on the ground of
FACTS: On 28 October 1987, Young Auto Supply Co.
improper venue. A subsequent motion for
Inc. (YASCO) represented by Nemesio Garcia, its
reconsideration by YASCO was to no avail. YASCO
president, Nelson Garcia and Vicente Sy, sold all of
and Garcia filed the petition.
their shares of stock in Consolidated Marketing &
Development Corporation (CMDC) to George C.
ISSUE: Whether the venue for the case against
Roxas. The purchase price was P8,000,000.00
YASCO and Garcia in Cebu City was improperly laid.
payable as follows: a down payment of
P4,000,000.00 and the balance of P4,000,000.00 in
HELD: A corporation has no residence in the same
four postdated checks of P1,000,000.00 each.
sense in which this term is applied to a natural
Immediately after the execution of the agreement,
person. But for practical purposes, a corporation is in
Roxas took full control of the four markets of CMDC.
a metaphysical sense a resident of the place where
However, the vendors held on to the stock
its principal office is located as stated in the articles
certificates of CMDC as security pending full
of incorporation. The Corporation Code precisely
payment of the balance of the purchase price. The
requires each corporation to specify in its articles of
first check of P4,000,000.00, representing the down
incorporation the "place where the principal office of
payment, was honored by the drawee bank but the
the corporation is to be located which must be
four other checks representing the balance of
within the Philippines." The purpose of this
P4,000,000.00 were dishonored. In the meantime,
requirement is to fix the residence of a corporation
Roxas sold one of the markets to a third party. Out of
in a definite place, instead of allowing it to be
the proceeds of the sale, YASCO received
ambulatory. Actions cannot be filed against a
P600,000.00, leaving a balance of P3,400,000.00.
corporation in any place where the corporation
Subsequently, Nelson Garcia and Vicente Sy
maintains its branch offices. The Court ruled that to
assigned all their rights and title to the proceeds of
allow an action to be instituted in any place where
the sale of the CMDC shares to Nemesio Garcia. On
the corporation has branch offices, would create
10 June 1988, YASCO and Garcia filed a complaint
confusion and work untold inconvenience to said
against Roxas in the Regional Trial Court, Branch 11,
entity. By the same token, a corporation cannot be
Cebu City, praying that Roxas be ordered to pay
allowed to file personal actions in a place other than
them the sum of P3,400,000.00 or that full control of
its principal place of business unless such a place is
the three markets be turned over to YASCO and
also the residence of a co-plaintiff or a defendant.
Garcia. The complaint also prayed for the forfeiture
With the finding that the residence of YASCO for
of the partial payment of P4,600,000.00 and the
purposes of venue is in Cebu City, where its
payment of attorney's fees and costs. Failing to
submit his answer, and on 19 August 1988, the trial
principal place of business is located, it becomes
court declared Roxas in default. The order of default
unnecessary to decide whether Garcia is also a
was, however, lifted upon motion of Roxas. On 22
resident of Cebu City and whether Roxas was in
August 1988, Roxas filed a motion to dismiss. After a
estoppel from questioning the choice of Cebu City as
hearing, wherein testimonial and documentary
the venue. The decision of the Court of Appeals was
evidence were presented by both parties,
set aside.
the trial court in an Order dated 8 February 1991
denied Roxas' motion to dismiss. After receiving said
order, Roxas filed another motion for extension of
time to submit his answer. He also filed a motion for
reconsideration, which the trial court denied in its
Order dated 10 April 1991 for being pro-forma.
Roxas was again declared in default, on the ground

135
4. Lizares vs. Caluag (4 SCRA 746), G.R. No. L-
17699, March 30, 1962, Concepcion, J.
DR. ANTONIO A. LIZARES, INC., petitioner, vs. HON.
HERMOGENES CALUAG, as Judge of the Court of
First Instance of Quezon City,
and FLAVIANO CACNIO, respondents.

Facts: Flaviano Cacnio alleged that he brought from

petitioner Lizares on installment Lot 4, Block 1 of
theSinkang Subdivision in Bacolod City. Cacnio
received a letter of demand from Lizares
representingarrears in the payment of installment
plus regular and overdue interest. Cacnio then sent a
check drawnby one Antonio Bernardo in favor of
Lizares. But according to Cacnio, Lizares refused the
check andreturned it. Cacnio instituted a civil case in
the CFI of Quezon City, praying for compensatory
damages plus attorney’s fees.

Petitioner Lizares moved to dismiss the case

on the ground that the venue is improperly laid, for
theaction affects title to or possession of real
property locates in Bacolod City which was the
subject matterof the contract. This was denied by
the respondent court upon the ground that the
action was inpersonam.

ISSUE: Whether or not the venue was properly laid

HELD: Negative. Although the immediate remedy

sought by Cacnio is to compel petitioner to accept
payment made by the former, it is obvious that this
relief is merely the first step to establish Cacnio’stitle
to the property. Moreover, Cacnio’s complaint is a
means resorted to by him in order that he
couldretain the possession of said property. In short,
venue in the main case was improperly laid and the
CFIof QC should have properly granted the motion to
dismiss.

136
5. Esuerte vs. CA (193 SCRA 541), G.R. No. L-
53485, February 6, 1991, Medialdea, J.
PATRIA ESUERTE and HERMINIA JAYME,
petitioners, vs. HON. COURT OF APPEALS (Eleventh
Division), HON. RAFAEL T. MENDOZA, Judge, Branch
VI, Court of First Instance of Cebu and MA. BEVERLY
TAN, respondents.
FACTS:
 An action for damages was filed by private
respondent Beverly Tanagainst petitioners
Patria Esuerte and Herminia Jayme with the CFI
ofCebu.
 On September 22,23 and 27, 1978, Tan, a Junior
Resident Physicianof Corazon Locsin-
Montelibano Memorial Hospital, Bacolod
City,without any justifiable reason shouted at,
humiliated and insultedEsuerte, Head Nurse,
Medicare Department of said hospital and as
aresult of said incident, Esuerte complained to
the Chief of theHospital, Dr. Motus, in writing.
 Other petitioner, Jayme, who was one of those
who were present atthe time of the incident
also sent a letter to Dr. Motus, informing him
ofwhat she had witnessed.
 As a result thereof, Tan was advised to explain in
writing but insteadof explaining only her side of
the incident also complained againstEsuerte and
Jayme.
 The Discipline and Grievance Committee of the
hospital, conducted afact-finding investigation
and later, Dr. Motus issued
resolutiontransmitting the records to the
Regional Health Office in Jaro, IloiloCity.
 Esuerte and Jayme filed a motion to dismiss the
complaint on theground of improper venue and
for being premature for failure of Tan toexhaust
administrative remedies.
 On Jan. 2, 1979, the trial court denied the
motion to dismiss. Themotion for
reconsideration was likewise denied.
 Esuerte and Jayme filed a petition for certiorari
and prohibition with aprayer for preliminary
injunction with the Court of Appeals.
 On Sept. 18, 1979, the petition was dismissed
without pronouncementas to costs. The motion
for reconsideration was likewise denied forlack
of merit.
 It is the contention of Esuerte and Jayme that
the proper venue of theaction filed by Tan
should be Bacolod City and not Cebu City. At
thetime of the filing of her action in court, Tan
was actually residing andmay be found in
Bacolod City. In fact, in her statement of assets
andliabilities, she declared that she is a resident
of Bacolod City.
ISSUE: Whether or not the venue of private
respondent Tan's action was improperlylaid.
HELD: YES! Section 2(b), Rule 4 of the Rules of Court
provides:
Sec. 2. Venue in Courts of First Instance.— x x x x x x
x x x(b) Personal Actions.—
All other actions may be commenced and
triedwhere the defendants or any of the defendants
resides or may be found, orwhere the plaintiff or any
of the plaintiffs resides, at the election of
theplaintiff.The choice of venue for personal actions
cognizable by the Regional TrialCourt is given to the
plaintiff but not to the plaintiff's caprice because
thematter is regulated by the Rules of Court.The rule
on venue, like other procedural rules, are designed
to insure a justand orderly administration of justice
or the impartial and evenhandeddetermination of
every action and proceeding. The option of the
plaintiff inpersonal actions cognizable by the
Regional Trial Court is either the placewhere the
defendant resides or may be found or the place
where theplaintiff resides. If plaintiff opts for the
latter, he is limited to that place."Resides" in the
rules on venue on personal actions means the place
ofabode, whether permanent or temporary, of the
a plaintiff or defendants asdistinguished from
"domicile" which denotes a fixed permanent
residence.Venue of personal actions should be at the
place of abode or place whereplaintiffs actually
reside, not in domicile or legal residence.There is no
question that private respondent as plaintiff in the
Civil Case is alegal resident of Cebu City. Her parents
live there.
However, it cannot alsobe denied that at
the time of her filing of the complaint
againstpetitioners, she was a temporary resident of
Bacolod City.
She was thenemployed with the Corazon Locsin
Montelibano Memorial Hospital, BacolodCity, as
resident physician. Moreover, the acts complained of
were committedin Bacolod City. The private
respondents were all residents of Bacolod City atthe
time of the bringing of the action. Though Tan's
employment was onlytemporary there was no
showing when this employment will end.
Justicewould be better served if the complaint were
137
heard and tried in Bacolod Citywhere all the parties
resided.

138
6. Capati vs. Ocampo (113 SCRA 794), G.R. No. L-
28742. April 30, 1982, Escolin, J.
VIRGILIO CAPATI, Plaintiff-Appellant, v. DR. JESUS P.
OCAMPO, Defendant-Appellee.
FACTS: Plaintiff Virgilio Capati, a resident of Bacolor,
Pampanga, was the contractor of the Feati Bank for
the construction of its building in Iriga, Camarines
Sur. He entered into a sub-contract with the
defendant Jesus Ocampo, a resident of Naga City
where he undertook to construct the vault walls,
exterior walls and columns of the said Feati building
in accordance with the specifications indicated
therein. Defendant further bound himself to
complete said construction on or before June 5,
1967. To emphasize this time frame Ocampo affixed
his signature below the following stipulation in bold
letters: “TIME IS ESSENTIAL, TO BE FINISHED 5 JUNE’
67.” At the back of the contract which reads: “14.
That all actions arising out, or relating to this
contract may be instituted in the Court of First
Instance of the City of Naga.” Claiming that
defendant finished the construction in question only
on June 20, 1967, plaintiff filed in the Court of First
Instance of Pampanga an action for recovery of
consequential damages. Ocampo (defendant) filed a
motion to dismiss the complaint on the ground that
venue of action was improperly laid. Capati (plaintiff)
filed an opposition to the motion, claiming that their
agreement to hold the venue in the Court of First
Instance of Naga City was merely optional to both
contracting parties. CFI of Pampanga decided that it
is an improper venue.
ISSUE: WON the venue of action was improper (CFI
of Pampanga)? NO, it made use of the word “may”,
hence only directory.
HELD: It is well settled that the word “may” is merely
permissive and operates to confer discretion upon a
party. Under ordinary circumstances, the term “may
be” connotes possibility; it does not connote
certainty. “May” is an auxillary verb indicating
liberty, opportunity, permission or possibility. The
stipulation as to venue in the contract in question is
simply permissive. By the said stipulation, the parties
did not agree to file their suits solely and exclusively
with the Court of First Instance of Naga. They merely
agreed to submit their disputes to the said court,
without waiving their right to seek recourse in the
court specifically indicated in Section 2 (b), Rule 4 of
the Rules of Court. Since the complaint has been
139
filed in the Court of First Instance of Pampanga,
where the plaintiff resides, the venue of action is
properly laid in accordance with Section 2 (b), Rule 4
of the Rules of Court.
FACTS: We set aside the order of the Court of First
Instance of Pampanga in Civil Case No. 3188 which
dismissed the plaintiff's complaint on ground of
improper venue.
On May 23, 1967, plaintiff entered into a
sub-contract with the defendant Dr. Jesus Ocampo, a
resident of Naga City,... whereby the latter, in
consideration of the amount of P2,200.00,
undertook to construct the vault walls, exterior walls
and columns of the said Feati building in accordance
with the specifications indicated therein.
Claiming that defendant finished the
construction in question only on June 20, 1967,
plaintiff filed in the Court of First Instance of
Pampanga an action for recovery of consequential
damages in the sum of P85,000.00 with interest, plus
attorney's fees and costs. The... complaint alleged
inter alia that "due to the long unjustified delay
committed by defendant, in open violation of his
express written agreement with plaintiff, the latter
has suffered great irreparable loss and damage x x x.
Plaintiff filed an opposition to the motion,
claiming that their agreement to hold the venue in
the Court of First Instance of Naga City was merely
optional to both contracting parties.
Plaintiff filed an opposition to the motion,
claiming that their agreement to hold the venue in
the Court of First Instance of Naga City was merely
optional to both contracting parties. In support
thereof, plaintiff cited the use of the word "may" in
relation with the... institution of any action arising
out of the contract.
Hence, this appeal.
ISSUES: he rule on venue of personal actions
cognizable by the courts of first instance is found in
Section 2(b), Rule 4 of the Rules of Court, which
provides that such "actions may be commenced and
tried where the defendant or any of the defendants
resides or may be found, or where... the plaintiff or
any of the plaintiffs resides, at the election of the
plaintiff," The said section is qualified by the
following provisions of Section 3 of the same rule:
RULING: he rule on venue of personal actions
cognizable by the courts of first instance is found in
Section 2(b), Rule 4 of the Rules of Court, which
provides that such "actions may be commenced and
tried where the defendant or any of the defendants
resides or may be found, or where... the plaintiff or Since the complaint has been filed in the Court of
any of the plaintiffs resides, at the election of the First Instance of Pampanga, where the plaintiff
plaintiff," The said section is qualified by the resides, the venue of action is properly laid in
following provisions of Section 3 of the same rule accordance with Section 2(b), Rule 4 of the Rules of
Court.
The rule on venue of personal actions cognizable by
the courts of first instance is found in Section 2(b), WHEREFORE, the order appealed from is hereby set
Rule 4 of the Rules of Court, which provides that aside. Let the records be returned to the court of
such "actions may be commenced and tried where origin for further proceedings. Costs against
the defendant or any of the defendants resides or defendant-appellee.
may be found, or where... the plaintiff or any of the
plaintiffs resides, at the election of the plaintiff," The SO ORDERED.
said section is qualified by the following provisions of
Section 3 of the same rule:... thus called upon to rule
on the issue as to whether the stipulation of... the
parties on venue is restrictive in the sense that any
litigation arising from the contract can be filed only
in the court of Naga City, or merely permissive in
that the parties may submit their disputes not only in
Naga City but also in the court where the defendant
or the... plaintiff resides, at the election of the
plaintiff, as provided for by Section 2(b), Rule 4 of
the Rules of Court.
Under ordinary circumstances, the term "may be"
connotes possibility; it does not connote certainty.
"May" is an auxiliary verb indicating liberty,
opportunity,... permission or possibility.[1]... a case
involving the interpretation of a stipulation as to
venue along lines similar to the present one, it was
held that the agreement of the parties which
provided that "all legal actions arising out of this...
contract x x x may be brought in and submitted to
the jurisdiction of the proper courts in the City of
Manila," is not mandatory.

We hold that the stipulation as to venue in the

contract in question is simply permissive. By the said
stipulation, the parties did not agree to file their
suits solely and exclusively with the Court of First
Instance of Naga. They merely agreed to submit their
disputes to... the said court, without waiving their
right to seek recourse in the court specifically
indicated in Section 2(b), Rule 4 of the Rules of
Court.

By the said stipulation, the parties did not agree to

file their suits solely and exclusively with the Court of
First Instance of Naga. They merely agreed to submit
their disputes to... the said court, without waiving
their right to seek recourse in the court specifically
indicated in Section 2(b), Rule 4 of the Rules of
Court.

140
 Tacloban while the
Unimasters Conglomeration Inc. vs CA defendant ** (KUBOTA) is
G.R. No. 119657, February 7, 1997 holding its principal place
Narvasa, C.J.: of business in Quezon
City. The proper venue
FACTS: therefore pursuant to
 Kubota Agri-Machinery Philippines, Inc. Rules of Court would
(hereafter, simply KUBOTA) and Unimasters either be Quezon City or
Conglomeration, Inc. (hereafter, simply Tacloban City at the
UNIMASTERS) entered into a "Dealership election of the plaintiff.
Agreement for Sales and Services" of the Quezon City and Manila
former's products in Samar and Leyte (sic), as agreed upon by
Provinces. the parties in the
 The contract contained, among others: Dealership Agreement,
o 1) a stipulation reading: "** All are additional places
suits arising out of this Agreement other than the place
shall be filed with / in the proper stated in the Rules of
Courts of Quezon City," Court. The filing,
 Five years later: therefore, of this
o UNIMASTERS filed an action in the complaint in the Regional
Regional Trial Court of Tacloban Trial Court in Tacloban
City against KUBOTA, a certain City is proper."
Reynaldo Go, and Metropolitan  KUBOTA appealed:
Bank and Trust Company-Tacloban o (1) the RTC had "no jurisdiction to
Branch (hereafter, simply take cognizance of **
METROBANK) for damages for (UNIMASTERS') action considering
breach of contract, and injunction that venue was improperly laid,"
with prayer for temporary o (2) UNIMASTERS had in truth
restraining order "failed to prove that it is entitled to
 Trial Court: the ** writ of preliminary
o issued a restraining order enjoining injunction;" and
METROBANK from "authorizing or o (3) the RTC gravely erred "in
effecting payment of any alleged denying the motion to dismiss."
obligation of ** (UNIMASTERS) to  Appellate Court
defendant ** KUBOTA o agreed with KUBOTA
o The Court also set the application  the stipulation respecting
for preliminary injunction for venue in its Dealership
hearing on January 10, 1994 Agreement with
 KUBOTA filed two motions: UNIMASTERS did in truth
o dismissal of the case on the ground limit the venue of all suits
of improper venue arising thereunder only
o transfer of the injunction hearing and exclusively to "the
to January 11, 1994 because its proper courts of Quezon
counsel was not available on City."
January 10 due to a prior  Filed MR – turned down by CA.
commitment before another court.
 TRIAL COURT: ISSUE:
o authorized the issuance of the WON the venue stipulations in a contract has the
preliminary injunction effect of limiting the venue to a specified place
o denied motion to dismiss
 holding its principal place RULING: NO.
of business in the City of

141
The Polytrade doctrine was applied in the
case at bar.
o This doctrine enunciated that as
long as the stipulation does not set
forth qualifying or restrictive words
to indicate that the agreed place
alone and none other is the venue
of the action, the parties do not
lose the option of choosing the
venue.
o Absence of qualifying or restrictive
words, venue stipulations in a
contract should be considered
merely as agreement on additional
forum, not as limiting venue to the
specified place.
Unless the parties make very clear, by
employing categorical and suitably limiting
language, that they wish the venue of
actions between them to be laid only and
exclusively at a definite place, and to
disregard the prescriptions of Rule 4,
agreements on venue are not to be
regarded as mandatory or restrictive, but
merely permissive, or complementary of
said rule.
o Absent additional words and
expressions definitely and
unmistakably denoting the parties'
desire and intention that actions
between them should be
ventilated only at the place
selected by them, Quezon City -- or
other contractual provisions clearly
evincing the same desire and
intention -- the stipulation should
be construed, not as confining suits
between the parties only to that
one place, Quezon City, but as
allowing suits either in Quezon City
or Tacloban City, at the option of
the plaintiff.
The record of the case at bar discloses that
UNIMASTERS has its principal place of
business in Tacloban City, and KUBOTA, in
Quezon City.
o Under Rule 4, the venue of any
personal action between them is
"where the defendant or any of
the defendants resides or may be
142
found, or where the plaintiff or any
of the plaintiffs resides, at the
election of the plaintiff."
 In other words, Rule 4
gives UNIMASTERS the
option to sue KUBOTA for
breach of contract in the
Regional Trial Court of
either Tacloban City or
Quezon City.
But the contract between them provides
that " ** All suits arising out of this
Agreement shall be filed with/in the proper
Courts of Quezon City," without mention of
Tacloban City.
o The question is whether this
stipulation had the effect of
effectively eliminating the latter as
an optional venue and limiting
litigation between UNIMASTERS
and KUBOTA only and exclusively
to Quezon City.
Rule 4 of the Rules of Court sets forth the
principles generally governing the venue of
actions, whether real or personal, or
involving persons who neither reside nor
are found in the Philippines or otherwise.
Agreements on venue are explicitly allowed.
o "By written agreement of the
parties the venue of an action may
be changed or transferred from
one province to another."
 Parties may by stipulation
waive the legal venue and
such waiver is valid and
effective being merely a
personal privilege, which
is not contrary to public
policy or prejudicial to
third persons.
It is a general principle that a person may
renounce any right which the law gives
unless such renunciation would be against
public policy.
Written stipulations as to venue may be
restrictive in the sense that the suit may be
filed only in the place agreed upon, or
merely permissive in that the parties may
file their suit not only in the place agreed
upon but also in the places fixed by law
(Rule 4, specifically).
As in any other agreement, what is essential
is the ascertainment of the intention of the
parties respecting the matter.
stipulations designating venues other than
those assigned by Rule 4 should be
interpreted as designed to make it more
convenient for the parties to institute
actions arising from or in relation to their
agreements; that is to say, as simply adding
to or expanding the venues indicated in said
Rule.
143
Dacoycoy vs Intermediate Appellate Court
G.R. No. 74854, April 2, 1991
Fernan, C.J.:
FACTS:
 petitioner Jesus Dacoycoy, a resident of
Balanti, Cainta, Rizal, filed before the
Regional Trial Court, Branch LXXI, Antipolo,
Rizal, a complaint against private
respondent Rufino de Guzman
o praying for the annulment of two
(2) deeds of sale involving a parcel
of Riceland in Pangasinan
o the surrender of the produce
thereof
o damages for private respondent's
refusal to have said deeds of sale
set aside upon petitioner's
demand.
 before summons could be served on private
respondent
o the RTC Executive Judge issued an
order requiring counsel for
petitioner to confer with
respondent trial judge on the
matter of venue.
 TRIAL COURT
o dismissed the complaint on the
ground of improper venue
o found that petitioner's action is a
real action as it sought not only the
annulment of the aforestated
deeds of sale but also the recovery
of ownership of the subject parcel
of riceland located in Estanza,
Lingayen, Pangasinan, which is
outside the territorial jurisdiction
of the trial court.
 Petitioner appealed to CA
 CA affirmed the order of dismissal of his
complaint.
 Filed petition for review:
Petitioner argument:
 asserts, without the defendant objecting
that the venue was improperly laid, the trial
 court is powerless to dismiss the case motu
proprio.
Private Respondent answer:
 maintains that the dismissal of petitioner's
complaint is proper because the same can
"readily be assessed as (a) real action."
 asserts that "every court of justice before
whom a civil case is lodged is not even
obliged to wait for the defendant to raise
that venue was improperly laid
 The court can take judicial notice and motu
proprio dismiss a suit clearly denominated
as real action and improperly filed before it.
. . . the location of the subject parcel of land
is controlling pursuant to Sec. 2, par. (a),
Rule 4 of the New Rules of Court
ISSUE:
May the trial court motu proprio dismiss a complaint
on the ground of improper venue?
RULING: NO. The motu proprio dismissal of
petitioner's complaint by respondent trial court on
the ground of improper venue is plain error,
obviously attributable to its inability to distinguish
between jurisdiction and venue.
Questions or issues relating to venue of
actions are basically governed by Rule 4 of
the Revised Rules of Court.
o the laying of venue is procedural
rather than substantive
o relates to the jurisdiction of the
court over the person rather than
the subject matter.
o Provisions relating to venue
establish a relation between the
plaintiff and the defendant and not
between the court and the subject
matter.
o Venue relates to trial not to
jurisdiction, touches more of the
convenience of the parties rather
than the substance of the case
o Jurisdiction treats of the power of
the court to decide a case on the
merits; while venue deals on the
locality, the place where the suit
may be had
144
In the instant case, even granting for a
moment that the action of petitioner is a
real action, respondent trial court would
still have jurisdiction over the case, it being
a regional trial court vested with the
exclusive original jurisdiction over "all civil
actions which involve the title to, or
possession of, real property, or any interest
therein . . ." in accordance with Section 19
(2) of Batas Pambansa Blg. 129.
With respect to the parties, there is no
dispute that it acquired jurisdiction over the
plaintiff Jesus Dacoycoy, the moment he
filed his complaint for annulment and
damages.
Respondent trial court could have acquired
jurisdiction over the private respondent,
either by:
o his voluntary appearance in court
and his submission to its authority,
or
o by the coercive power of legal
process exercised over his person.
Dismissing the complaint on the ground of
improper venue is certainly not the
appropriate course of action at this stage of
the proceeding, particularly as venue, in
inferior courts as well as in the courts of
first instance (now RTC), may be waived
expressly or impliedly.
Where defendant fails to challenge timely
the venue in a motion to dismiss as
provided by Section 4 of Rule 4 of the Rules
of Court, and allows the trial to be held and
a decision to be rendered, he cannot on
appeal or in a special action be permitted to
challenge belatedly the wrong venue, which
is deemed waived
Thus, unless and until the defendant objects
to the venue in a motion to dismiss, the
venue cannot be truly said to have been
improperly laid, as for all practical intents
and purposes, the venue, though technically
wrong, may be acceptable to the parties for
 whose convenience the rules on venue had the action," obviously refers to the date of the filing
been devised. of the complaint — which, as above pointed out, is
the date that marks "the commencement of the
action;" and the reference plainly is to a time before
WHEREFORE, the decision of the summons is served on the defendant, or even before
Intermediate Appellate Court is hereby summons issues.
nullified and set aside.
Davao Light and Power, Inc. vs CA FACTS:
G.R. No. 93262, December 29, 1991  On May 2, 1989 Davao Light & Power Co.,
Narvasa, J.: Inc. (hereafter, simply Davao Light) filed a
verified complaint for recovery of a sum of
SYLLABUS money and damages against Queensland
Hotel, etc. and Teodorico Adarna
1. REMEDIAL LAW; ACTIONS; JURISDICTION; HOW o The complaint contained an ex
ACQUIRED. — An action or proceeding is parte application for a writ of
commenced by the filing of the complaint or other preliminary attachment.
initiatory pleading. By that act, the jurisdiction of the  On May 3, 1989 Judge Nartatez issued an
court over the subject matter or nature of the action Order granting the ex parte application and
or proceeding is invoked or called into activity; and it fixing the attachment bond at
is thus that the court acquires jurisdiction over said P4,600,513.37.
subject matter or nature of the action. And it is by  On May 11, 1989 the writ of attachment
that self-same act of the plaintiff (or petitioner) of issued.
filing the complaint (or other appropriate pleading)  On May 12, 1989, the summons and a copy
— by which he signifies his submission to the court’s of the complaint, as well as the writ of
power and authority — that jurisdiction is acquired attachment and a copy of the attachment
by the court over his person. On the other hand, bond, were served on defendants
jurisdiction over the person of the defendant is Queensland and Adarna;
obtained, as above stated, by the service of o and pursuant to the writ, the
summons or other coercive process upon him or by sheriff seized properties belonging
his voluntary submission to the authority of the to the latter.
court.  On September 6, 1989, defendants
Queensland and Adarna filed a motion to
2. ID.; PROVISIONAL REMEDIES; PRELIMINARY discharge the attachment for lack of
ATTACHMENT; DEFINED. — A preliminary jurisdiction
attachment may be defined, paraphrasing the Rules o at the time the order of
of Court, as the provisional remedy in virtue of which attachment was promulgated and
a plaintiff or other proper party may, at the the attachment writ issued, the
commencement of the action or at any time Trial Court had not yet acquired
thereafter, have the property of the adverse party jurisdiction over the cause and
taken into the custody of the court as security for over the persons of the
the satisfaction of any judgment that may be defendants.
recovered. It is a remedy which is purely statutory in  On September 14, 1989, Davao Light filed
respect of which the law requires a strict an opposition to the motion to discharge
construction of the provisions granting it. Withal no attachment.
principle, statutory or jurisprudential, prohibits its  On September 19, 1989, the Trial Court
issuance by any court before acquisition of issued an Order denying the motion to
jurisdiction over the person of the defendant. discharge.
 Queensland and Adarna filed a special civil
3. ID.; ID.; ID.; PHRASE "AT THE COMMENCEMENT action of certiorari in the CA
OF THE ACTION," CONSTRUED. — Rule 57 in fact o annulled by the Court of Appeals
speaks of the grant of the remedy "at the  the Court does not
commencement of the action or at any time acquire jurisdiction over
thereafter." The phrase, "at the commencement of

145
 the person of the o And it is by that self-same act of
defendant until he in duly the plaintiff (or petitioner) of filing
summoned or voluntarily the complaint (or other
appears, and adding the appropriate pleading) — by which
phrase that it be issued he signifies his submission to the
‘ex parte’ does not confer court’s power and authority — that
said jurisdiction before jurisdiction is acquired by the court
actual summons had been over his person.
made, nor retroact
jurisdiction upon  On the other hand,
summons being made. jurisdiction over the
ISSUE: person of the defendant is
Whether or not a writ of preliminary attachment obtained, as above stated,
may issue ex parte against a defendant before by the service of
acquisition of jurisdiction of the latter's person by summons or other
service of summons or his voluntary submission to coercive process upon
the Court's authority. him or by his voluntary
submission to the
RULING: YES. authority of the court
It is incorrect to theorize that after an action
or proceeding has been commenced and Here,
jurisdiction over the person of the plaintiff o After the complaint is filed,
has been vested in the court, but before the summons issues to the defendant,
acquisition of jurisdiction over the person of the summons is then transmitted
the defendant (either by service of to the sheriff, and finally, service of
summons or his voluntary submission to the the summons is effected on the
court’s authority), nothing can be validly defendant in any of the ways
done by the plaintiff or the court. authorized by the Rules of Court.

It is wrong to assume that the validity of o There is thus ordinarily some

acts done during this period should be appreciable interval of time
dependent on, or held in suspension until, between the day of the filing of the
the actual obtention of jurisdiction over the complaint and the day of service of
defendant’s person. The obtention by the summons of the defendant.
court of jurisdiction over the person of the  During this period,
defendant is one thing; quite another is the different acts may be
acquisition of jurisdiction over the person of done by the plaintiff or by
the plaintiff or over the subject-matter or the Court, which are of
nature of the action, or the res or object unquestionable validity
thereof. and propriety.
 Among these, for
example, are:
An action or proceeding is commenced by o the
the filing of the complaint or other initiatory appoint
pleading. ment of
o By that act, the jurisdiction of the a
court over the subject matter or guardian
nature of the action or proceeding ad litem,
is invoked or called into activity; o the
o and it is thus that the court grant of
acquires jurisdiction over said authorit
subject matter or nature of the y to the
action.

146
 plaintiff law requires a strict construction of
to the provisions granting it.
prosecut
e the Rule 57 in fact speaks of the grant of the
suit as a remedy "at the commencement of the
pauper action or at any time thereafter."
litigant, o The phrase, "at the
o the commencement of the action,"
amendm obviously refers to the date of the
ent of filing of the complaint — which, as
the above pointed out, is the date that
complai marks "the commencement of the
nt by action;" and the reference plainly
the is to a time before summons is
plaintiff served on the defendant, or even
as a before summons issues.
matter
of right o What the rule is saying quite
without clearly is that after an action is
leave of properly commenced — by the
court, filing of the complaint and the
o authoriz payment of all requisite docket and
ation by other fees — the plaintiff may
the apply for and obtain a writ of
Court of preliminary attachment upon
service fulfillment of the pertinent
of requisites laid down by law, and
summon that he may do so at any time,
s by either before or after service of
publicati summons on the defendant.
on,
o the
dismissa the Court reiterates and reaffirms the
l of the proposition that writs of attachment may
action properly issue ex parte provided that the
by the Court is satisfied that the relevant requisites
plaintiff therefor have been fulfilled by the
on mere applicant, although it may, in its discretion,
notice. require prior hearing on the application
with notice to the defendant; but that levy
A preliminary attachment on property pursuant to the writ thus issued
o the provisional remedy in virtue of may not be validly effected unless
which a plaintiff or other proper preceded, or contemporaneously
party may, at the commencement accompanied, by service on the defendant
of the action or at any time of summons, a copy of the complaint (and
thereafter, have the property of of the appointment of guardian ad litem, if
the adverse party taken into the any), the application for attachment (if not
custody of the court as security for incorporated in but submitted separately
the satisfaction of any judgment from the complaint), the order of
that may be recovered. attachment, and the plaintiff's attachment
o It is a remedy which is purely bond
statutory in respect of which the WHEREFORE, the petition is GRANTED

147

Mangila vs CA
G.R. No. 125027, August 12, 2002
Carpio, J.:
FACTS:
 Petitioner is an exporter of sea foods and
doing business under the name and style of
Seafoods Products.
 Private respondent Loreta Guina is the
President and General Manager of Air Swift
International, a single registered
proprietorship engaged in the freight
forwarding business.
 Petitioner contracted the freight forwarding
services of private respondent for shipment
of petitioner’s products to Guam (USA)
where petitioner maintains an outlet
 Petitioner agreed to pay private respondent
cash on delivery
o failed to pay private respondent
shipping charges despite several
demands
 private respondent filed before the
Regional Trial Court of Pasay City for
collection of sum of money.
 sheriff filed his Sheriff’s Return showing that
summons was not served on petitioner.
o petitioner had left the Philippines
for Guam
 trial court issued a Writ of Preliminary
Attachment.
o Sheriff Alfredo San Miguel of RTC
Pampanga served on petitioner’s
household help in San Fernando,
Pampanga, the Notice of Levy with
the Order, Affidavit and Bond
 petitioner filed an Urgent Motion to
Discharge Attachment8 without submitting
herself to the jurisdiction of the trial court
o claimed the court had not acquired
jurisdiction over her person
 trial court granted the Motion to Discharge
Attachment
 private respondent applied for an alias
summons
148
o summons was finally served on
petitioner
 petitioner filed a Motion to Dismiss the
Complaint on the ground of improper venue
o Private respondent’s invoice for
the freight forwarding service
stipulates that "if court litigation
becomes necessary to enforce
collection xxx the agreed venue for
such action is Makati, Metro
Manila."
 Private respondent filed an Opposition
asserting that although "Makati" appears as
the stipulated venue, the same was merely
an inadvertence by the printing press
o claimed that petitioner knew that
private respondent was holding
office in Pasay City and not in
Makati.
 Lower court denied the Motion to Dismiss
o MR denied.
 CA Ruling:
o affirming the decision of the trial
court
o upheld the validity of the issuance
of the writ of attachment and
sustained the filing of the action in
the RTC of Pasay
ISSUE:
Whether or not there was improper venue.
Petitioner assails the filing of this case in the RTC of
Pasay and points to a provision in private
respondent’s invoice which contains the following:
"3. If court litigation becomes necessary to enforce
collection, an additional equivalent (sic) to 25% of
the principal amount will be charged. The agreed
venue for such action is Makati, Metro Manila,
Philippines."
Based on this provision, petitioner contends that the
action should have been instituted in the RTC of
Makati and to do otherwise would be a ground for
the dismissal of the case.
RULING: YES. Resolve to dismiss the case on the
ground of improper venue but not for the reason
stated by petitioner.
The Rules of Court provide that parties to
an action may agree in writing on the venue
on which an action should be brought.
o However, a mere stipulation on the
venue of an action is not enough to
preclude parties from bringing a
case in other venues
 The parties must be able
to show that such
stipulation is exclusive.
o Thus, absent words that show the
parties’ intention to restrict the
filing of a suit in a particular place,
courts will allow the filing of a case
in any venue, as long as
jurisdictional requirements are
followed.
 Venue stipulations in a
contract, while considered
valid and enforceable, do
not as a rule supersede
the general rule set forth
in Rule 4 of the Revised
Rules of Court.
 In the absence of
qualifying or restrictive
words, they should be
considered merely as an
agreement on additional
forum, not as limiting
venue to the specified
place.
In the instant case, the stipulation does not
limit the venue exclusively to Makati.
o There are no qualifying or
restrictive words in the invoice that
would evince the intention of the
parties that Makati is the "only or
exclusive" venue where the action
could be instituted.
o Thus, Makati is not the only venue
where this case could be filed.
Pasay is not the proper venue for this case.
o Under the 1997 Rules of Civil
Procedure, the general rule is
venue in personal actions is "where
the defendant or any of the
defendants resides or may be
found, or where the plaintiff or any
149
of the plaintiffs resides, at the
election of the plaintiff."
 The exception to this rule
is when the parties agree
on an exclusive venue
other than the places
mentioned in the rules.
 exception is not
applicable in this
case.
 Hence, following
the general rule,
the instant case
may be brought
in the place of
residence of the
plaintiff or
defendant, at the
election of the
plaintiff (private
respondent
herein).
In the instant case, the residence of private
respondent (plaintiff in the lower court) was
not alleged in the complaint.
o Rather, what was alleged was the
postal address of her sole
proprietorship, Air Swift
International.
o It was only when private
respondent testified in court, after
petitioner was declared in default,
that she mentioned her residence
to be in Better Living Subdivision,
Parañaque City.
Here, it was established in the lower court
that petitioner resides in San Fernando,
Pampanga while private respondent resides
in Parañaque City.
o However, this case was brought in
Pasay City, where the business of
private respondent is found.
o This would have been permissible
had private respondent’s business
been a corporation
o However, as admitted by private
respondent in her Complaint in the
lower court, her business is a sole
proprietorship, and as such, does
 not have a separate juridical
personality that could enable it to
file a suit in court

A sole proprietorship does not possess a

juridical personality separate and distinct
from the personality of the owner of the
enterprise.
o The law merely recognizes the
existence of a sole proprietorship
as a form of business organization
conducted for profit by a single
individual and requires its
proprietor or owner to secure G.R. No. 204444 January 14, 2015
licenses and permits, register its
business name, and pay taxes to VIRGILIO C. BRIONES, Petitioner,
the national government. vs.
o The law does not vest a separate COURT OF APPEALS and CASH ASIA CREDIT
legal personality on the sole CORPORATION, Respondents.
proprietorship or empower it to
file or defend an action in court Perlas-Bernabe, J.:

The Facts
Thus, not being vested with legal
personality to file this case, the sole
2010
proprietorship is not the plaintiff in this case
but rather Loreta Guina in her personal  Petitioner Briones filed a complaint for
capacity.
Nullity of Mortgage Contract, Promissory
o it is the residence of private
Note, Loan Agreement, Foreclosure of
respondent Guina, the proprietor
Mortgage, Cancellation of Transfer
with the juridical personality,
which should be considered as one Certificate of Title (TCT) No. 290846, and
of the proper venues for this case. Damages against Cash Asia before the RTC.
o He alleged that:
Private respondent should have filed this  he is the owner of the
case either in San Fernando, Pampanga subject property (TCT No
(petitioner’s residence) or Parañaque 160689)
(private respondent’s residence).  his sister informed him
o Since private respondent that his property had
(complainant below) filed this case been foreclosed and a
in Pasay, we hold that the case writ of possession had
should be dismissed on the ground already been issued in
of improper venue. favor of Cash Asia
 Upon investigation, Briones discovered that:
WHEREFORE, the petition is GRANTED on
o 2007
the grounds of improper venue and
invalidity of the service of the writ of  he executed a promissory
attachment. note, loan agreement, and
deed of real estate
mortgage covering the
subject property (subject
contracts) in favor of Cash
Asia in order to obtain a

150
 loan from the latter (in  Briones filed an opposition
the amount of o Asserting that he should not be
₱3,500,000.00) covered by the venue stipulation in
 the loan was left unpaid, the subject contracts as he was
Cash Asia proceeded to never a party therein.
foreclose his property. o And that his signatures on the said
 Briones claimed that: contracts were forgeries
o he never contracted any loans
from Cash Asia as he has been
living and working in Vietnam The RTC Ruling
(since October 31, 2007)
 denied Cash Asia’s motion to dismiss for
o he only went back to the
lack of merit.
Philippines to spend the holidays
o opined that the parties must be
with his family (on December 28,
afforded the right to be heard in
2007 until January 3, 2008)
view of the substance of Briones’s
o during his brief stay in the
cause of action against Cash Asia as
Philippines, nobody informed him
stated in the complaint.
of any loan agreement entered
 Cash Asia moved for reconsideration
into with Cash Asia.
o but also denied
 Briones assailed the validity of the foregoing
o Thus, filed a petition for certiorari
contracts claiming his signature to be
before the CA.
forged.
The CA Ruling

 CA annulled the RTC Orders

 Cash Asia filed a Motion to Dismiss
 dismissed Briones’s complaint
o praying for the outright dismissal
o held that the RTC gravely abused
of Briones’s complaint on the
its discretion in denying Cash Asia’s
ground of improper venue.
motion to dismiss
o They pointed out the venue
o considering that the subject
stipulation in the subject contracts
contracts clearly provide that
stating that:
actions should be exclusively filed
 "all legal actions arising
before the courts of Makati City
out of this notice in
only
connection with the Real
 CA concluded that Briones’s complaint
Estate Mortgage subject
should have been dismissed outright on the
hereof shall only be
ground of improper venue, this,
brought in or submitted to
notwithstanding Briones’s claim of forgery.
the jurisdiction of the
 Briones moved for reconsideration, but was
proper court of Makati
denied
City."
o They contended that all actions
arising out of the subject contracts
may only be exclusively brought in Hence, this petition.
the courts of Makati City
o Therefore, Briones’s complaint
should be dismissed for having
The Issue Before the Court
been filed in the City of Manila.

151
The primordial issue for the Court’s resolution is
WHETHER OR NOT THE CA GRAVELY ABUSED ITS
DISCRETION IN ORDERING THE OUTRIGHT
DISMISSAL OF BRIONES’S COMPLAINT ON THE
GROUND OF IMPROPER VENUE. -YES
The Court’s Ruling
The petition is meritorious.
At the outset, the Court stresses that "[t]o justify the
grant of the extraordinary remedy of certiorari, [the
petitioner] must satisfactorily show that the court or
quasi-judicial authority gravely abused the discretion
conferred upon it. Grave abuse of discretion
connotes judgment exercised in a capricious and
whimsical manner that is tantamount to lack of
jurisdiction.
To be considered ‘grave,’ discretion must be
exercised in a despotic manner by reason of passion
or personal hostility, and must be so patent and
gross as to amount to an evasion of positive duty or
to a virtual refusal to perform the duty enjoined by
or to act at all in contemplation of law." 32 Guided by
the foregoing considerations, the Court finds that
the CA gravely abused its discretion in ordering the
outright dismissal of Briones’s complaint against
Cash Asia, without prejudice to its re-filing before
the proper court in Makati City.
Rule 4 of the Rules of Court governs the rules on
venue of civil actions, to wit:
Rule 4
VENUE OF ACTIONS
SECTION 1. Venue of real actions. — Actions
affecting title to or possession of real property, or
interest therein, shall be commenced and tried in
the proper court which has jurisdiction over the area
wherein the real property involved, or a portion
thereof, is situated.
Forcible entry and detainer actions shall be
commenced and tried in the municipal trial court of
the municipality or city wherein the real property
involved, or a portion thereof, is situated.
152
SEC. 2. Venue of personal actions. — All other
actions may be commenced and tried where the
plaintiff or any of the principal plaintiffs resides, or
where the defendant or any of the principal
defendants resides, or in the case of a non-resident
defendant where he may be found, at the election of
the plaintiff.
SEC. 3. Venue of actions against nonresidents. — If
any of the defendants does not resideand is not
found in the Philippines, and the action affects the
personal status of the plaintiff, or any property of
said defendant located in the Philippines,the action
may be commenced and tried in the court of the
place where the plaintiff resides, or where the
property or any portion thereof is situated or found.
SEC. 4. When Rule not applicable. — This Rule shall
not apply –
(a) In those cases where a specific rule or law
provides otherwise; or
(b) Where the parties have validly agreed in writing
before the filing of the action on the exclusive venue
thereof.
GN:
 the venue of real actions is the court which
has jurisdiction over the area wherein the
real property involved, or a portion thereof,
is situated;
 the venue of personal actions is the court
which has jurisdiction where the plaintiff or
the defendant resides, at the election of the
plaintiff.
XCN:
 Legaspi v. Rep. of the Phils.
o instructs that the parties, thru a
written instrument, may either
introduce another venue where
actions arising from such
instrument may be filed, or restrict
the filing of said actions in a certain
exclusive venue
 o however, they are not precluded  the complaint may be
from agreeing in writing on an properly dismissed on the
exclusive venue, as qualified by ground of improper
Section 4 of the same rule. venue.
o Written stipulations as to venue o therefore, a complaint directly
may be restrictive in the sense that assailing the validity of the written
the suit may be filed only in the instrument itself should not be
place agreed upon, or merely bound by the exclusive venue
permissive in that the parties may stipulation contained therein and
file their suit not only in the place should be filed in accordance with
agreed upon but also in the places the general rules on venue.
fixed by law.
o what is essential is the
ascertainment of the intention of
 In this case
the parties respecting the matter.
o the venue stipulation found in the
subject contracts is indeed
restrictive in nature
 As regards restrictive stipulations on venue  considering that it
o it must be shown that such effectively limits the
stipulation is exclusive. venue of the actions
o absence of qualifying or restrictive arising therefrom to the
words, the stipulation should be courts of Makati City.
deemed as merely an agreement o However, it must be emphasized
on an additional forum, not as that Briones' s complaint directly
limiting venue to the specified assails the validity of the subject
place. contracts, claiming forgery in their
 Example: execution.
 "Exclusively,"  Thus, Briones cannot be
 "Waiving for this expected to comply with
purpose any the aforesaid venue
other venue," stipulation, as his
 "shall only" compliance therewith
preceding the would mean an implicit
designation of recognition of their
venue, validity.
 "to the exclusion  Hence, pursuant to the
of the other general rules on venue,
courts," Briones properly filed his
 or words of complaint before a court
similar import in the City of Manila
where the subject
property is located.
 Therefore, CA patently erred and hence
 Also, in cases where the complaint assails committed grave abuse of discretion in
only the terms, conditions, and/or coverage dismissing Briones's complaint on the
of a written instrument and not its validity ground of improper venue.
o the exclusive venue stipulation
contained therein shall still be WHEREFORE, the petition is GRANTED. Accordingly,
binding on the parties, the Decision dated March 5, 2012 and the Resolution

153
dated October 4, 2012 of the Court of Appeals in CA-
G.R. SP No. 117474 are hereby ANNULLED and SET
ASIDE. The Orders dated September 20, 2010 and
October 22, 2010 of the Regional Trial Court of
Manila, Branch 173 in Civil Case No. 10-124040 are
REINSTATED.
SO ORDERED.
Chua vs Total Office Products and Services, Inc.
G.R. NO. 152808, September 30, 2005
Quisumbing, J.:
FACTS:
 On December 28, 1999, respondent Total
Office Products and Services, Inc., (TOPROS)
lodged a complaint for annulment of
contracts of loan and real estate mortgage
against herein petitioner Antonio T. Chua
before the Regional Trial Court of Pasig City.
o sought to annul a loan contract
allegedly extended by petitioner to
respondent TOPROS in the amount
of ten million four hundred
thousand pesos (P10,400,000) and
the accessory real estate mortgage
contract covering two parcels of
land situated in Quezon City as
collateral.
 TOPROS was represented by its president
John Charles Chang, Jr.
 However, TOPROS alleged that the
purported loan and real estate mortgage
contracts were fictitious, since it never
authorized anybody, not even its president,
to enter into said transaction.
 petitioner filed a motion to dismiss on the
ground of improper venue.
o contended that the action filed by
TOPROS affects title to or
possession of the parcels of land
subject of the real estate mortgage
o should have been filed in the
Regional Trial Court of Quezon City
where the encumbered real
properties are located, instead of
Pasig City where the parties reside.
 Judge Pahimna issued an order denying the
motion to dismiss
o action to annul the loan and
mortgage contracts is a personal
action and thus, the venue was
154
properly laid in the RTC of Pasig
City where the parties reside.
 MR denied.
 petitioner filed with the Court of Appeals a
special civil action for certiorari
 CA Ruling
o dismissed said petition
o an action for the cancellation of a
real estate mortgage is a personal
action if the mortgagee has not
foreclosed the mortgage and the
mortgagor is in possession of the
premises, as neither the
mortgagor's title to nor possession
of the property is disputed.
 MR denied.
ISSUE:
Whether an action to annul a loan and mortgage
contract duly alleged as 'fictitious' for being with
absolutely no consideration is a personal action or
real action.
RULING: Yes, it is a personal action.
Well-settled is the rule that an action to
annul a contract of loan and its accessory
real estate mortgage is a personal action.
o In a personal action, the plaintiff
seeks the recovery of personal
property, the enforcement of a
contract or the recovery of
damages.
o In contrast, in a real action, the
plaintiff seeks the recovery of real
property, or, as indicated in
Section 2 (a), Rule 4 of the then
Rules of Court, a real action is an
action affecting title to real
property or for the recovery of
possession, or for partition or
condemnation of, or foreclosure of
mortgage on, real property.
In the instant case, ownership of the parcels
of land subject of the questioned real estate
mortgage was never transferred to
petitioner, but remained with TOPROS.
Thus, no real action for the recovery of real
property is involved. This being the case,
 TOPROS' action for annulment of the
contracts of loan and real estate mortgage
remains a personal action.
o SEC. 2 (b) Personal actions. - All
other actions may be commenced
and tried where the defendant or
any of the defendants resides or
may be found, or where the
plaintiff or any of the plaintiffs
resides, at the election of the
plaintiff.
In the same vein, the action for annulment
of a real estate mortgage in the present
case must fall under Section 2 of Rule 4, to
wit:
o SEC. 2. Venue of personal actions. -
All other actions may be
commenced and tried where the
plaintiff or any of the principal
plaintiffs resides, or where the
defendant or any of the principal
defendants resides, or in the case
of a non-resident defendant where
he may be found, at the election of
the plaintiff.14
Thus, Pasig City, where the parties reside, is
the proper venue of the action to nullify the
subject loan and real estate mortgage
contracts. The Court of Appeals committed
no reversible error in upholding the orders
of the Regional Trial Court denying
petitioner's motion to dismiss the case on
the ground of improper venue.
Sub-issue:
Whether in an action to annul a loan and mortgage
contract duly alleged as 'fictitious' for being with
absolutely no consideration, the person alleged to
have '[lacked] authority' to enter into said contracts
is an indispensable party?
John Charles Chang, Jr., is not an
indispensable party
o Section 7, Rule 3 of the Revised Rules of
Court provides:
155
o SEC. 7. Compulsory joinder of
indispensable parties. - Parties
in interest without whom no
final determination can be had
of an action shall be joined
either as plaintiffs or
defendants.
The presence of indispensable parties is
necessary to vest the court with jurisdiction.
o The absence of an indispensable
party renders all subsequent
actuations of the court null and
void, because of that court's want
of authority to act, not only as to
the absent parties but even as to
those present.
o Thus, whenever it appears to the
court in the course of a proceeding
that an indispensable party has not
been joined, it is the duty of the
court to stop the trial and order
the inclusion of such party
A person is not an indispensable party,
however, if his interest in the controversy
or subject matter is separable from the
interest of the other parties, so that it will
not necessarily be directly or injuriously
affected by a decree which does complete
justice between them.
Here, although it is Chang's signature that
appears on the assailed real estate
mortgage contract, his participation is
limited to being a representative of
TOPROS, allegedly without authority.
o The document which constitutes as
the contract of real estate
mortgage clearly points to
petitioner and TOPROS as the sole
parties-in-interest to the
agreement as mortgagee and
mortgagor therein, respectively.
o Any rights or liabilities arising from
the said contract would therefore
bind only the petitioner and
TOPROS as principal parties.
o Chang, acting as mere
representative of TOPROS,
acquires no rights whatsoever, nor
does he incur any liabilities, arising
 from the said contract between
petitioner and TOPROS.
 Certainly, in our view, the
only indispensable parties
to the mortgage contract
are petitioner and
TOPROS alone.
WHEREFORE, the petition is DENIED
o CA decision affirmed

RULE 6 - Pleadings - Kinds of Pleadings (Rule 6, as

amended by A.M. No. 19-10-20-SC)

1. Singapore Airlines vs. CA (243 SCRA 143)

2. Alday vs. FGU Insurance Corp. (350 SCRA 113)
3. Lafarge Cement Philippines, Inc., et al. vs.
Continental Cement Corporation, et al. (443
SCRA 522)

RULE 7
4. Wee vs. Galvez (436 SCRA 96)
5. Heirs of Francisco Retuya vs. Court of Appeals
(647 SCRA 299)

Rule 8
6. Fluor Daniel vs. E. B. Villarosa (528 SCRA 321)
7. Ramos vs. Peralta (203 SCRA 412)
8. Lee Bun Ting vs. Aligaen (76 SCRA 416)
9. Guerrero vs. RTC Ilocos (229 SCRA 274)
10. Borje vs. CFI (88 SCRA 576)
11. Lu Ym vs. Nabua (452 SCRA 298)
12. Aquino vs. Aure (546 SCRA 71)
13. Heirs of Dr. Mariano Favis, Sr. vs. Gonzales (713
SCRA 568)

156
 RULE 6 - Pleadings - Kinds of Pleadings (Rule 6, as
amended by A.M. No. 19-10-20-SC)
1. Singapore Airlines vs. CA (243 SCRA 143), G.R.
No. 107356 March 31, 1995, Romero, J.
FACTS: Rayos was an overseas contract worker
who had a renewed contract with theArabian
American Oil Company (Aramco). As part of
Aramco's policy, its employeesreturning to Dhahran,
Saudi Arabia from Manila are allowed to claim
reimbursement foramounts paid for excess
baggage of up to 50 kilograms, as long as it is
properlysupported by receipt. On April 1980, Rayos
took a Singapore Airlines (SIA) flight to report for his
newassignment, with a 50-kilogram excess baggage
for which he paid P4,147.50. Aramcoreimbursed said
amount upon presentation of the excess baggage
ticket.
In December 1980, Rayos learned that he was one
of several employees beinginvestigated by Aramco
for fraudulent claims. He immediately asked his wife
to seek awritten confirmation from SIA that he
indeed paid for an excess baggage of
50kilograms. On December 10, 1980, SIA's manager,
Johnny Khoo, notified Beatriz oftheir inability to
issue the certification requested because their
records showed that onlythree kilograms were
entered as excess and accordingly charged.
SIA issued thecertification requested by the
spouses Rayos only on April 8, 1981, after its
investigationof the anomaly and after Beatriz,
assisted by a lawyer, threatened it with a lawsuit.
Thisdelay caused Rayo’s contract with Aramco not
being renewed. Rayo sues SIA. SIA blames PAL, SIA
claimed that it was not liable to the Rayosesbecause
the tampering was committed by its handling agent,
Philippine Airlines (PAL).SIA files a 3rd party
complaint against PAL. PAL answers that the
tampering wasSingapore’s fault. Judge rules for
Rayo on the main case, and for Singapore in the
3rdparty complaint. Judgment for Rayo became final.
PAL appeals the 3rd party complaintclaiming for
the first time that Rayo was not entitled to
damages from Singaporebecause his contract
with Aramco was not renewed because of his
unsatisfactoryperformance.
ISSUE: Whether or not PAL can validly assail for the
first time on appeal the trial court'sdecision
sustaining the validity of Rayo’s complaint against
SIA if PAL did not raise thisissue in the lower court.
157
HELD: Judgment for Rayo being final, PAL may not
question it. A 3rd-party defendant is allowed to set
up in his answer the defenses which the 3rd-
party plaintiff (original defendant) has or may have
against the original plaintiff's claim. However, he
must doso in his 3rd party answer, and not raise it
for the 1st time on appeal. PAL should have raised in
its 3rd party answer everything that it may
conceivably interpose by way of itsdefense, including
specific denials of allegations in the main complaint
which implicatedit along with Singapore.
FACTS: Sancho Rayos was an overseas contract
worker who had a renewed contract with the
Arabian American Oil Company (Aramco) for the
period covering April 16, 1980, to April 15, 1981. Part
of Aramco's policy to its employees returning to
Dhahran, Saudi Arabia from Manila are allowed to
claim reimbursement for amounts paid for excess
baggage of up to 50 kilograms, as long as it is
properly supported by receipt. April 1980 - Rayos
took a Singapore Airlines (SIA) flight to report for his
new assignment, with a 50-kilogram excess baggage
for which he paid P4,147.50. Aramco reimbursed
said. amount upon presentation of the excess
baggage ticket. December 1980 - Rayos learned that
he was one of several employees being investigated
by Aramco for fraudulent claim and asked his wife
Beatriz in Manila to seek a written confirmation from
SIA that he indeed paid for an excess baggage of 50
kilograms. In SIA’s records- mager Johnny Koo
notified Beatriz who was assisted by a lawyer and
threatened them of filing a lawsuit, that SIA is unable
to issue certification requested by the spouses citing
that only 3 kilograms were entered as excess and not
50 kilograms April 1981 - Aramco gave Rayos his
travel documents without a return visa. His
employment contract was not renewed. August 1981
- spouses Rayos, sued SIA for damages stating his
non renewal was caused by SIA. SIA claimed that it
was not liable to the Rayoses because the tampering
was committed by its handling agent, Philippine
Airlines (PAL) and filed a Third party complaint
against PAL. PAL - countered that its personnel did
not collect any charges for excess baggage; that it
had no participation in the tampering of any excess
baggage ticket; and that if any tampering was made,
it was done by Singapore Airline’s personnel. RTC –
rendered Judgement in favor of plaintiff Rayoses and
held Singapore airlines liable for damages -
On 3rd party complaint, PAL was also liable to the
Rayoses
All parties appealed to the CA SIA’s appeal –
dismissed for non payment of docket fees Rayos –
withdrew appeal when SIA satisfied judgment of RTC
and paid P802, 435.00 On the appeal of PAL -
claimed that the spouses Rayos had no valid claim
against SIA because it was the inefficiency of Rayos
which led to the nonrenewal of his contract with
Aramco, and not the alleged tampering of his excess
bagged ticket. Petitioner SIA argued that the only
issue in the said appeal is whether or not it was
entitled to reimbursement from PAL, ( citing the case
of Firestone Tire and Rubber Company of the
Philippines v. Tempongko). SIA set up the defense
that the excess baggage ticket was indeed tampered
with but it was
committed by PAL's personnel. Appellate court
granted PAL's appeal and absolved it from any
liability to SIA.
ISSUE: WHETHER OR NOT PETITIONER IS ENTITLED
TO REIMBURSEMENT
RULING: YES There is no question that a third-party
defendant is allowed to set up in his answer the
defenses which the third-party plaintiff (original
defendant) has or may have to the plaintiff's claim.
There are, however, special circumstances present in
this case which preclude third-party defendant PAL
from benefiting from the said principle. However,
while the third-party defendant; would benefit from
a victory by the third-party plaintiff against the
plaintiff, this is true only when the third-party
plaintiff and third-party defendant have non-
contradictory defenses. Here, the defendant and
third-party defendant had no common defense
against the plaintiffs' (Rayos) complaint, and they
were even blaming each other for the fiasco. One of
the defenses available to SIA was that the plaintiffs
had no cause of action, that is, it had no valid claim
against SIA. SIA investigated the matter and
discovered that tampering was, indeed, committed,
not by its personnel but by PAL's. This became its
defense as well as its main cause of action in the
third-party complaint it filed against PAL.
raised the same in its answer to the main complaint,
or directly by so stating in unequivocal terms in its
answer to SIA's complaint that SIA and PAL were
both blameless PAL opted to deny any liability which
it imputed to SIA's personnel. It was only on appeal
— in a complete turn around of theory — that PAL
raised the issue of no valid claim by the plaintiff
against SIA. This simply cannot be allowed. A third
party complaint involves an action separate and
distinct from, although related to the main
complaint. A third party defendant who feels
aggrieved by some allegations in the main complaint
should, should aside from answering the third party
complaint, also answer the main complaint. In the
case at bar, appellate court was in error when it
opined that SIA's answer inured to the benefit of PAL
for the simple reason that the complaint and the
third-party complaint are actually two separate cases
involving the same set of facts which is allowed by
the court to be resolved in a single proceeding only
to avoid a multiplicity of actions. Such a proceeding
obviates the need of trying two cases, receiving the
same or similar evidence for both, and enforcing
separate judgments therefore. While such a
complaint speaks of a single suit, a third-party
complaint involves an action separate and distinct
from, although related to the main complaint. A
third-party defendant who feels aggrieved by some
allegations in the main complaint should, aside from
answering the third-party complaint, also answer the
main complaint.

PAL could have used the defense that the plaintiffs

had no valid claim against it or against SIA. This could
be done indirectly by adopting such a defense in its
answer to the third-party complaint if only SIA had

158
2. Evangline Alday vs. FGU Insurance Corp. (350 Meanwhile, the compulsory counterclaim of
SCRA 113), G.R. No. 138822, January 23, 2001, petitioner for damages based on the filing by
Gonzaga-Reyes, J. respondent of an allegedly unfounded and malicious
suit need not be answered since it is inseparable
FACTS: FGU filed a complaint for sum of money from the claims of respondent. If respondent were
against Alday amounting to P114k. Alday filed her to answer the compulsory counterclaim of
Answer by way of counterclaim and asserted that it petitioner, it would merely result in the former
is FGU who owes them P104k and for premium pleading the same facts raised in its complaint.
reserves of P500k. She also prayed for attorney’s
fees, litigation expenses, moral damages and 1.
exemplary damages for the allegedly unfounded
actions filed by FGU. FGU then moved to strike out
Alday’s answer and to declare her in default for filing
the answer out of time. The motion was denied. FGU
again moved to dismiss Alday’s counterclaim by
contending that the trial court never acquired
jurisdiction over the same because of non-payment
of docket fees. Alday also in response, asked the RTC
to declare her counterclaim as exempt from
payment of docket fees since it is compulsory and
that FGU be declared in default for failing to answer
such counterclaim.

RTC dismissed Alday’s counterclaim it being merely

permissive and that failure to pay the docket fees
prevented the court from acquiring jurisdiction over
the same. CA sustained the RTC.

ISSUE: WON counterclaim of petitioner exempt from

the payment of docket fees and therefore the court
acquired jurisdiction over the same

HELD: NO. The counterclaim being permissive, in

order for the trial court to acquire jurisdiction over
the same, petitioner is bound to pay the prescribed
docket fees. It is not simply the filing of the
complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee that vests a
trial court with jurisdiction over the subject-matter
or nature of the action. Where the filing of the
initiatory pleading is not accompanied by payment of
the docket fee, the court may allow payment of the
fee within a reasonable time but in no case beyond
the applicable prescriptive or reglementary period.
The same rule applies to permissive counterclaims,
third-party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee
prescribed therefor is paid. The court may allow
payment of said fee within a reasonable time but
also in no case beyond its applicable prescriptive or
reglementary period.

159
3. Lafarge Cement Philippines, Inc., et al. vs.
Continental Cement Corporation, et al. (443
SCRA 522), G.R. NO. 155173 : November 23,
2004, Panganiban, J.
FACTS
• Petitioner Lafarge Cement Philippines agreed to
purchase the cement business of Respondent
Continental Cement Corporation (CCC). Both parties
entered into a Sale and Purchase Agreement (SPA).
At the time of the foregoing transactions, petitioners
were well aware that CCC had a case pending with
the Supreme Court (Asset Privatization Trust (APT) v.
Court of Appeals and Continental Cement
Corporation). • Under Clause 2 (c) of the SPA, the
parties allegedly agreed to retain from the purchase
price a portion of the contract price in anticipation of
the liability related to the pending case of CCC.
However, upon the finality of the decision, Lafarge
refused to apply the sum to the payment to APT.
• CCC filed before the Regional Trial Court a
"Complaint with Application for Preliminary
Attachment" against petitioners. (Civil Case No. Q-
00-41103) • Petitioners moved to dismiss the
Complaint on the ground that it violated the
prohibition on forum-shopping. Respondent CCC had
allegedly made the same claim it was raising in Civil
Case No. Q-00-41103 in another action, which
involved the same parties and which was filed earlier
before the International Chamber of Commerce. The
RTC denied the motion to dismiss. • Petitioners
answered and denied the allegations in the
Complaint. They prayed — by way of compulsory
counterclaims against Respondent CCC, its majority
stockholder and president Gregory T. Lim, and its
corporate secretary Anthony A. Mariano — for the
sums of (a) P2,700,000 each as actual damages, (b)
P100,000,000 each as exemplary damages, (c)
P100,000,000 each as moral damages, and (d)
P5,000,000 each as attorney's fees plus costs of suit.
Petitioners alleged that CCC, through Lim and
Mariano, had filed the "baseless" Complaint in Civil
Case No. Q-00-41103 and procured the Writ of
Attachment in bad faith. • The Regional Trial Court of
Quezon City (Branch 80) dismissed petitioners'
counterclaims for several reasons, among which
were the following: a) the counterclaims against
Respondents Lim and Mariano were not compulsory;
ISSUE: Whether or not the RTC gravely erred in
ruling that (i) petitioners' counterclaims against
Respondents Lim and Mariano are not compulsory;
160
HELD
• YES. The "compelling test of compulsoriness"
characterizes a counterclaim as compulsory if there
should exist a "logical relationship" between the
main claim and the counterclaim. There exists such a
relationship when conducting separate trials of the
respective claims of the parties would entail
substantial duplication of time and effort by the
parties and the court; when the multiple claims
involve the same factual and legal issues; or when
the claims are offshoots of the same basic
controversy between the parties.
The recovery of petitioners' counterclaims is
contingent upon the case filed by respondents; thus,
conducting separate trials thereon will result in a
substantial duplication of the time and effort of the
court and the parties. Since the counterclaim for
damages is compulsory, it must be set up in the
same action; otherwise, it would be barred forever.
If it is filed concurrently with the main action but in a
different proceeding, it would be abated on the
ground of litis pendentia; if filed subsequently, it
would meet the same fate on the ground of res
judicata.
DISPOSITIVE PORTION WHEREFORE, the Petition is
GRANTED and the assailed Orders REVERSED. The
court of origin is hereby ORDERED to take
cognizance of the counterclaims pleaded in
petitioners' Answer with Compulsory Counterclaims
and to cause the service of summons on
Respondents Gregory T. Lim and Anthony A.
Mariano. No costs.
DOCTRINE
The "compelling test of compulsoriness"
characterizes a counterclaim as compulsory if there
should exist a "logical relationship" between the
main claim and the counterclaim.
 RULE 7
4. Wee vs. Galvez (436 SCRA 96), G.R. No. 147394,
August 11, 2004, Quisumbing, J.
FACTS: Petitioner Rosemarie Wee and respondent
Rosario D. Galvez are sisters. Rosemarie lives with
husband Manuel in Bataan. Rosario lives in New
York, USA. They entered into an agreement whereby
Rosario would send Rosemarie US$20,000, half of
said amount to be deposited in a savings account
while the balance could be invested in the money
market. The interest to be earned therefrom would
be given to Rosario's son, Manolito Galvez, as his
allowance - In accordance with her agreement with
Rosario, Rosemarie gave Manolito his monthly
allowance ranging from P2,000 to P4,000 a month
from 1993 to January 1999. However, sometime in
1995, Rosario asked for the return of the US$20,000
and for an accounting. Rosemarie promised to
comply with the demand but failed to do so. A
written demand was sent to her. When Rosemarie
did not comply, Rosario filed a suit against her. - The
Wees moved to dismiss the case based on the
following grounds: (1) the lack of allegation in the
complaint that earnest efforts toward a compromise
had been made in accordance with Article 1515 of
the Family Code; (2) failure to state a valid cause of
action, the action being premature in the absence of
previous earnest efforts toward a compromise; and
(3) the certification against forum shopping was
defective, having been executed by an attorney-in-
fact and not the plaintiff. - Rosario amended her
complaint to add that “Earnest efforts towards have
been made but the same have failed” (mali talaga
yung sinulat nila). The trial court accepted the
amended complaint and dismissed the Wee’s motion
to dismiss. Wee moved for an MFR. It was also
denied. - The Wee couple brought the matter to the
Court of Appeals via a special civil action for
certiorari, prohibition, and mandamus. It was also
denied. The Court of Appeals held that the
complaint, as amended, sufficiently stated a cause of
action. It likewise held that the questioned
certification against forum shopping appended
thereto was not so defective as to
Kempeen Brian Bernadas LO3, Uno-r School of Law
Civil Procedure Cause of Action
warrant the dismissal of the complaint. An MFR was
filed but was likewise denied.
161
PROCEDURAL ISSUE: WON the amended complaint
before the RTC states a cause of action
RULING: Yes. Rationale: It is true that the lead
sentence of paragraph 9-A, may be incomplete or
even grammatically incorrect as there might be a
missing word or phrase, but to our mind, a lacking
word like "compromise" could be supplied by the
rest of the paragraph. Petitioners submit that the
amended complaint violates Rule 8, Section 133 of
the 1997 Rules of Civil Procedure, as there is no plain
and direct statement of the ultimate facts on which
the plaintiff relies for her claim. Specifically,
petitioners contend that the allegation in paragraph
9-A of the amended complaint that "Earnest efforts
towards have been made but the same have failed"
is clearly insufficient. The sentence is incomplete,
thus requires the reader of the pleading to engage in
deductions or inferences in order to get a complete
sense of the cause of action, according to
petitioners. -Respondent rebuts by stating that the
amended complaint as well as the annexes attached
to the pleadings should be taken in their entirety.
Thus taken together, in their entirety, the amended
complaint and the attachments to the original
complaint, clearly show that a sufficient cause of
action as it is shown and stated that earnest efforts
towards a compromise have been made, according
to respondent. -A paragraph is "a distinct section or
subdivision of a written or printed composition that
consists of from one to many sentences, forms a
rhetorical unit. As a "short composition consisting of
a group of sentences dealing with a single topic," a
paragraph must necessarily be construed in its
entirety in order to properly derive the message
sought to be conveyed.
Kempeen Brian Bernadas LO3, Uno-r School of Law
Civil Procedure Cause of Action
In the instant case, paragraph 9-A of the Amended
Complaint deals with the topic of efforts made by
the respondent to reach a compromise between the
parties. Hence, it is in this light that the defective
lead sentence must be understood or construed. -
Having examined the Amended Complaint in its
entirety as well as the documents attached thereto,
following the rule that documents attached to a
pleading are considered both as evidence and as part
of the pleading, we find that the respondent has
properly set out her cause of action.
5. Heirs of Francisco Retuya vs. Court of Appeals
(647 SCRA 299)
FACTS:
• Severo Retuya (Severo) and Maxima Mayol
Retuya (Maxima) werehusband and wife
without any children.
• Severo left several parcels of land registered
under his name whichare located in Mandaue
City.
• Severo died intestate, survived by his wife
Maxima and by Severo'sfull blood brothers and
sisters, namely, Nicolas, Francisco,
Quintin ,Eulogio, Ruperto, Epifania, Georgia and
the Heirs of Juan Retuya(Severo’s brother who
had died earlier), as well as Severo's half-blood
siblings, namely, Romeo, Leona, Rafaela,
Fidela,Severina and Martina.
• Sometime in 1971, Maxima also died intestate,
survived by hersiblings, namely, Fructuoso,
Daniel, Benjamin, Lorenzo, Concepcionand
Teofila.
• In 1996, Severo and Maxima's siblings and their
nephews andnieces, herein petitioners, filed
with the RTC of Mandaue City, anaction for
judicial partition of the real properties
registered underthe names of Severo and
Maxima, and the accounting of therentals
derived there from against Severo's two other
brothers,respondents Nicolas and his son
Procopio Villanueva, and Eulogio,who was
represented by the latter's heirs.
• RTC declared the heirs of EULOGIO Retuya as
owners of 1/16 shareof Severo to the ½ of the
subject properties representing theshares of
Severo, which he inherited from his father and
later onsold to Eulogio.
• Petitioners filed with the CA a petition for
annulment of Judgmentof the RTC, claiming that
the question order was a patent nullity forwant
of jurisdiction and lack of due process.
• CA dismissed the petition.
o
Three of the petitioners did not sign the certificate of
non-forum shopping.
o
Payment of docket fee was short of P480.00.
• Parties filed for a motion for reconsideration but
was dismissed bythe CA on the ground that the
petitioners failed to comply with thecertification
of non-forum shopping due to their alleged
162
dishonestyby claiming that on of the principal
parties signed the saidcertification when if fact
he passed away before the petition wasfiled.
ISSUE: WON CA erred in dismissing the petition(s).
HELD/RATIO: NO. The decisions of the CA are
AFFIRMED.
• Petitioners’ actuation showed their lack of
forthrightness to the CA which the latter
correctly found to be a dishonest act
committedagainst it.
o There was a signature above the typewritten name
of Quintin.
O Written below the signature of Quintin was CTC
No. 06570132,issued on January 8, 2003 in Mandaue
City.
O It would appear that Quintin, who was already
dead at the time the petition was filed, had signed
the verification andcertification of non-forum
shopping and he was even inpossession of a CTC.
• CA correctly denied the motion for
Reconsideration on the groundthat the Atty.
Dela Cerna, representative of the party had no
right to represent the petitioners.
o Section 26, Rule 138 of the Rules of Court on the
requirementsof a valid substitution of counsel:
 The filing of a written application for substitution;
 The client’s written consent;
 The consent of the substituted lawyer if such
consent canbe obtained;
 and, in case such written consent cannot be
procured, aproof of service of notice of such motion
on the attorney tobe substituted in the manner
required by the Rules.
O In this case, petitioners failed to comply with the
aboverequirements.
 Rule 8
6. Fluor Daniel vs. E. B. Villarosa (528 SCRA 321),
G.R. No. 159648, July 27, 2007, Quisumbing, J.
FLUOR DANIEL, INC.-PHILIPPINES, Petitioner, vs.
E.B. VILLAROSA & PARTNERS CO., LTD.,
Respondent.
DOCTRINE: The complaint may be dismissed for lack
of cause of action if it is obvious from the complaint
and itsannexes that the plaintiff is not entitled to any
relief.
FACTS: Petitioner Fluor Daniel, Inc.-Philippines [FDIP]
entered into an agreement with Fil-Estate
Properties, Inc.[Fil-Estate] for the construction of the
Fairways & Bluewater, Newcoast Island Resort in
Boracay Island.- FDIP engaged with E.B. Villarosa &
Partners Co., Ltd. [respondent] as one of the
contractors to provide servicesfor the said project.
They executed separate contracts for: (1) civil
structure and architecture; (2) plumbing and fire
protection; and (3) millworks. Each contract has a
recurring provision which states: Payment of the
billings shall besubject to the timely receipt of similar
payments from the client by FDIP.- However, Fil-
Estate failed to satisfy petitioner monthly progress
billing. Hence, petitioner did not pay respondent.-
FDIP suspended the project and issued a notice of
suspension of work to Villarosa. Thus, the latter
demanded payment for suspension cost and works
so far performed.- Villarosa, believing that FDIP was
in bad faith, filed a complaint with RTC of Makati City
for sum of money anddamages. FDIP however filed a
motion to dismiss on the ground that the complaint
failed to state a cause of action.- Trial Court denied
the motion to dismiss as well as the motion for
reconsideration. The court declared that thefiling of
the last pleading and the consequent joinder of
issues has ripened the case for pre-trial.-
Subsequently, trial court granted Villarosa’s motion
to amend complaint with leave of court. But it
denied FDIP’smotion to suspend proceedings.- FDIP
filed with the Court of Appeals a special civil action
for certiorari. CA affirmed orders of lower
courtdenying the motion to dismiss and the
reconsideration thereof. Hence, this petition for
review on certiorari.- Petitioner contended that: (1)
the complaint failed to state the operative facts
which would give rise to a cause of action against it;
(2) the annexes attached to respondent’s complaint
show its admission that payment of its billingswas
subject to the condition of timely receipt of similar
163
payments and that those annexes should be
considered indetermining respondent’s cause of
action.- Respondent argued that: (1) the three
elements of a cause of action are all present
[namely: (i) legal right of respondent to demand
payment from petitioner; (ii) obligation of petitioner
to pay respondent; and (iii) failure of petitioner to
pay respondent]; (2) the annexes attached to the
complaint bear no relevance, not having been
admitted by stipulation.
ISSUE: WON the complaint, taken with the annexed
contracts attached to it, has insufficient allegations
of all theoperative facts which would give rise to a
cause of action against FDIP. [Yes, there is
insufficient allegations-> nocause of action-> motion
to dismiss shall be granted.]
HELD/RATIO: The essential elements of a cause of
action are as follows: 1) A right in favor of the
plaintiff bywhatever means and under whatever law
it arises or is created; 2) An obligation on the part of
the defendant not toviolate such right; and 3) An act
or omission on the part of the defendant in violation
of the right of the plaintiff or constituting a breach of
the obligation of the defendant to the plaintiff for
which the latter may maintain an actionfor recovery
of damages or other relief. The occurrence of the
last element that a cause of action arises gives the
plaintiff a right to file an action in court for recovery
of damages or other relief. The test of sufficiency of
factsalleged in the complaint as constituting a cause
of action is whether or not admitting the facts
alleged, the courtcould render a valid verdict in
accordance with the prayer of the complaint. In
determining sufficiency of cause of action, the court
takes into account only the material allegations of
the complaint and no other; but in some cases,the
court considers the documents attached to the
complaint to truly determine sufficiency of cause of
action.- We have ruled that a complaint should not
be dismissed for insufficiency of cause of action if it
appears clearlyfrom the complaint and its
attachments that the plaintiff is entitled to relief. The
converse is also true. The complaintmay be
dismissed for lack of cause of action if it is obvious
from the complaint and its annexes that the plaintiff
isnot entitled to any relief. In this case, we note that
records show that recurring in each of the three
contracts is the provision that payment by petitioner
shall be subject to its timely receipt of similar
payments from Fil-Estate. Ontheir face, the said
attached contracts clearly require a specific
condition before petitioner may be held liable for
payment.
The complaint, however, failed to state that the said
condition had been fulfilled. Without the
saidcondition having taken place, petitioner cannot
be said to have breached its obligation to pay

164
7. Ramos vs. Peralta (203 SCRA 412), G.R. No. L-
45107 November 11, 1991, Fernan, C.J.
BENEDICTO RAMOS, petitioner, vs. HON. ELVIRO L.
PERALTA, Presiding Judge, Branch XVII, Court of
First Instance of Manila, SPOUSES JUVENCIO
ORTANEZ and JULIANA S. ORTANEZ, MINDANAO
INSURANCE CO., INC. and P. R. ROMAN, INC.,
respondents.
Petitioner started occupying the Salgado fishpond in
1964 by virtue of a lease contract executed inhis
favor by private respondents spouses Juvencio and
Juliana Ortanez.Unknown to petitioner, title 1 to said
property was in the name of Philippine International
Surety Co.,Inc., a corporation founded, organized
and 99.5%-owned by the Salgado spouses, said
corporationwas placed under receivership and
liquidation respondent P. R. Roman, Inc. purchased
the Salgado fishpond for P950,000.00. The deed of
salewas signed by the receiver and duly approved by
the liquidation court.
due to this development, the spouses Ortanez
refused to accept from petitioner the advance
rentalson the fishpond due on March 15, 1976 in the
amount of P30,000.00.
petitioner received a letter from Don Pablo R. Roman
informing him of the latter's acquisition of
thefishpond and intention to take possession thereof
on May 16, 1976. In his letter-reply,
petitionerreminded Mr. Roman of his lease contract
over the fishpond and refused to consent to the
intendedtake over. Notwithstanding petitioner's
objection, P. R. Roman, Inc. took over possession of
thefishpond.
Petitioner filed before the CFI of Manila the
aforesaid complaint, docketed as Civil Case
No.103647, against private respondents Juvencio
and Juliana Ortanez, Mindanao Insurance and P.
R.Roman, Inc. for consignation of the sum of
P70,000.00 representing advance rentals on the
fishpondin the amounts of P30,000.00 and
P40,000.00 respectively due on March 15, 1976 and
June 15,1976, which he had previously tendered to,
but refused by the spouses Ortanez and Pablo
Roman.P. R. Roman, Inc. filed a motion to dismiss on
the grounds that venue was improperly laid,
thecomplaint states no cause of action and the court
has no jurisdiction over the subject of the action
orsuit. In its motion to dismiss, P. R. Roman, Inc.
165
cited the pendency before the then CFI of Bataan
ofCivil Case No 4102 instituted by P.R. Roman, Inc.
against petitioner Benedicto Ramos on August13,
1976 to quiet its title over the Salgado fishpond.
CFI Dismissed the case. Hence this petition. Under
the rules and jurisprudence, for litis pendentia to be
invoked as a ground for the dismissal of an action,
the concurrence of thefollowing requisites is
necessary: (a) Identity of parties or at least such as
represent the same interest in both actions; (b)
Identity ofrights asserted and relief prayed for, the
relief being founded on the same facts; and (c) The
identity in the two cases should be suchthat the
judgment that may be rendered in one would,
regardless of which party is successful, amount to
res judicata in the other.
Anent the second element, we agree with private
respondents' observation that petitioner's
approachto his consignation case is quite
constricted. His contention that the only issue in a
consignationcase is whether or not the defendant is
willing to accept the proffered payment is true only
wherethere is no controversy with respect to the
obligation sought to be discharged by such payment.
Hisconsignation case, however, is not as simple.
While ostensibly, the immediate relief sought for in
hisconsignation case is to compel therein defendants
to accept his advance rentals, the ultimatepurpose
of such action is to compel the new owner of the
fishpond to recognize his leasehold rightsand right of
occupation. In the last analysis, therefore, the issue
involved in Civil Case No. 103647 isthe right of
possession over the fishpond intertwined with the
validity and effectivity of the leasecontract.SC
AFFIRMED CFI.
8. Lee Bun Ting vs. Aligaen (76 SCRA 416), GR No.
L-30523, April 22, 1977, Antonio, J:
FACTS:
In the case of Rafael Dinglasan, et al vs Lee Bun Ting,
decided by the SC with the same set of private
parties, it was found that private respondents sold to
herein petitioner a parcel of land located in Roxas
City, Capiz through a conditional sale.
Lee, the buyer, on the other hand avers that it was
an absolute sale.
Both the trial court and CA ruled in favor of buyer
Lee. The SC found that Lee is normally not allowed to
purchase the property on the count of the
constitutional prohibition (Section 5. Save in case of
hereditary succession, no private agricultural land
shall be transferred or assigned except to individuals,
corporations, or associations qualified to acquire or
hold lands of the public domain in the Philippines. –
Article 13, 1935 Constitution)
But since it was also found out that the buyers
(private respondents) are in pari delicto for selling
the property in spite of the constitutional prohibition
they are proscribed from assailing the sale made
between them and herein private respondents.
12 years after the said case was promulgated, the
present case for the recovery of the lot was
instituted with the same contention of the
respondents Dinglasan that the sale should be null
and void on account of the constitutional prohibition
and prayed that plaintiffs be declared as the rightful
and legal owners of the property in question.
A motion to dismiss was filed by petitioners in this
case on the ground of res judicata alleging that the
decision in the case of "Rafael Dinglagan, et al. vs.
Lee Bun Ting, et al.", supra, promulgated on June 27,
1956, has definitely settled the issues between the
parties. An opposition thereto was filed by plaintiffs,
with the averment that the decision in the prior case
cannot be pleaded in bar of the instant action
because of new or additional facts or grounds of
recovery and because of change of law or
jurisprudence.
Respondent Court denied the motion to dismiss.
166
A motion for reconsideration of the foregoing Order
was filed by defendants, alleging that their reply to
plaintiffs' opposition to the motion to dismiss was
not even considered by the court a quo because the
Order was issued before said reply Could reach the
court
 asserted that the Philippine Banking
Corporation vs. Lui She case had the effect
of annulling and setting aside only the
contracts subject matter thereof "and no
other contracts, certainly not contracts
outside the issues in said judgment as that
in the instant case", and of ordering the
return only of the lands involved in said
case, and not the land subject of the
present action. Moreover, it was averred
that "Nowhere in the majority opinion nor
in the concurring opinion in said decision of
Philippine Banking Corporation vs. Lui She
does there appear any statement which
would have the effect of reopening and
changing previously adjudicated rights of
parties and finally settled cases" and that
the principle enunciated in such case
"should apply after, not on or before,
September 12, 1967"
MR denied.
ISSUE:
Whether the questions which were decided in Rafael
Dinglagan, et al. vs. Lee Bun Ting et al., supra, could
still be relitigated in Civil Case No. V-3064 in view of
the subsequent decision of this Court in Philippine
Banking Corporation vs. Lui She, supra
RULING: NO
The decision of this Court in G. R. No. L-5996, "Rafael
Dinglasan, et al. vs. Lee Bun Ting, et al." constitutes a
bar to Civil Case No. V-3064 before the respondent
court. Said Civil case, therefore, should have been
dismissed because it is a mere relitigation of the
same issues previously adjudged with finality, way
back in 1956, between the same parties or their
privies and concerning the same subject matter. We
have consistently held that the doctrine of res
judicata applies where, between a pending action
and one which has been finally and definitely settled,
there is Identity of parties, subject matter and cause
of action.
The ultimate analysis in Civil Case No. V-3064 is but
an attempt to reopen the issues which were resolved
in the previous case. Contrary to the contentions of
private respondents, there has been no change in
the facts or in the conditions of the parties. Neither
do We find Our ruling in the Philippine Banking
Corporation case applicable to the case at bar,
considering the rule that posterior changes in the
doctrine of this Court cannot retroactively be applied
to nullify a prior final ruling in the same proceeding
where the prior adjudication was had, whether the
case should be civil or criminal in nature. The
determination of the questions of fact and of law by
this Court on June 27, 1956 in case No. L-5996 has
become the law of the case, and may not now be
disputed or relitigated by a reopening of the same
questions in a subsequent litigation between the
same parties and their privies the same subject
matter.
Reasons of public policy, judicial orderliness,
economy and judicial time and the interests of
litigants, as well as the peace and order of society, all
require that stability be accorded the solemn and
final judgments of the courts or tribunals of
competent jurisdiction. There can be no question
that such reasons apply with greater force on final
judgments of the highest Court of the land.
WHEREFORE, certiorari is granted, the Orders
complained of are hereby annulled and set aside,
and respondent Judge is directed to issue an Order
dismissing Civil Case No. V-3064.
167
9. Guerrero vs. RTC Ilocos (229 SCRA 274), G.R.
No. 109068 January 10, 1994, Bellosillo, J.:
Facts:
Admittedly, the complaint does not allege that
the parties exerted earnest efforts towards a
compromise and that the same failed. However,
private respondent Pedro G. Hernando
apparently overlooked this alleged defect since
he did not file any motion to dismiss nor attack
the... complaint on this ground in his answer. It
was only on 7 December 1992, at the pre-trial
conference, that the relationship of petitioner
Gaudencio Guerrero and respondent Hernando
was noted by respondent Judge Luis B. Bello, Jr.,
they being married to half-sisters hence are...
brothers-in-law, and on the basis thereof
respondent Judge gave petitioner five (5) days
"to file his motion and amended complaint" to
allege that the parties were very close relatives,
their respective wives being sisters, and that the
complaint to be maintained should allege... that
earnest efforts towards a compromise were
exerted but failed. Apparently, respondent
Judge considered this deficiency a jurisdictional
defect.
On 11 December 1992, Guerrero moved to
reconsider the 7 December 1992 Order claiming
that since brothers by affinity are not members
of the same family, he was not required to exert
efforts towards a compromise. Guerrero
likewise argued that Hernando was precluded
from raising... this issue since he did not file a
motion to dismiss nor assert the same as an
affirmative defense in his answer.
On 22 December 1992, respondent Judge
denied the motion for reconsideration holding
that "[f]ailure to allege that earnest efforts
towards a compromise is jurisdictional such that
for failure to allege same the court would be
deprived of its jurisdiction to take cognizance
of... the case." He warned that unless the
complaint was amended within five (5) days the
case would be dismissed.

On 29 January 1993, the 5-day period having
expired without Guerrero amending his
complaint, respondent Judge dismissed the
case, declaring the dismissal however to be
without prejudice.
Issues:
(a) whether brothers by affinity are considered
members of the same family contemplated in
Art. 217, par. (4), and Art. 222 of the New Civil
Code, as well as... under Sec. 1, par. (j), Rule 16,
of the Rules of Court requiring earnest efforts
towards a compromise before a suit between
them may be instituted and maintained; and, (b)
whether the absence of an allegation in the
complaint that earnest efforts towards a
compromise were... exerted, which efforts
failed, is a ground for dismissal for lack of
jurisdiction.
that the attempt to compromise as well as the
inability to succeed is a... condition precedent to
the filing of a suit between members of the
same family, the absence of such allegation in
the complaint being assailable at any stage of
the proceeding, even on appeal, for lack of
cause of action.
It is not therefore correct, as petitioner
contends, that private respondent may be
deemed to have waived the aforesaid defect in
failing to move to dismiss or raise the same in
the Answer. On the other hand, we cannot
sustain the proposition of private respondent
that the case... was, after all, also dismissed
pursuant to Sec. 3, Rule 17, of the Rules of
Court... for failure of petitioner to comply with
the court's order to amend his complaint.

Ruling:

the instant case presents no occasion for the

application of the above-quoted provisions. As
early as two decades ago, we already ruled in
Gayon v. Gayon... that the enumeration of
"brothers and sisters" as members of the same
family does... not comprehend "sisters-in-law."
In that case, then Chief Justice Concepcion
emphasized that "sisters-in-law" (hence, also
"brothers-in-law") are not listed under Art. 217
of the New Civil Code as members of the same
family. Since Art. 150 of the Family Code repeats
essentially... the same enumeration of
"members of the family," we find no reason to
alter existing jurisprudence on the matter.
Consequently, the court a quo erred in ruling
that petitioner Guerrero, being a brother-in-law
of private respondent Hernando, was required
to exert... earnest efforts towards a compromise
before filing the present suit.

As regards the second issue, we need only

reiterate our ruling in O'Laco v. Co Cho Chit,...

168
10. Borje vs. CFI (88 SCRA 576), GR No. L-48315,
February 27, 1979, Guerrero, J.:
FACTS:
 Borje is the counsel of the water consuming
public of Ozamis City, he allegedly received
a blank water bill, with no indication of the
meter readings, no. of cubic meters
consumed and the amount to be paid,
hence he refused to pay said bill which lead
to the disconnection of his services
 He brought an action for damages with
preliminary injunction against Misamis
Occidental Water District (MOWD) in the
respondent Court
 The court then issued an order enjoining
MOWD to disconnect the water service and
subsequently to reconnect the service
 MOWD then filed a motion to dismiss based
on two grounds:
o Lack of jurisdiction of respondent
Court
o Another action pending between
the same parties for the same
causes
 Respondent Court dismissed the case but
not based on the grounds above mentioned
but because there was no malice or bad
faith in the severance of the water
connection of petitioner and that MOWD
had already reconnected the same
 Hence, the petition for certiorari and/or
mandamus
Petitioner contentions:
 said dismissal cannot be on lack of cause of
action because the complaint alleged
sufficient facts to show that his rights have
been seriously violated by private
respondents
 argues that it cannot be a judgment on the
pleadings because the facts are
controverted.
 concludes that respondent Court has
gravely abused its discretion amounting to
lack or excess of jurisdiction when it
dismissed the case without any evidence
presented by both parties
ISSUE: WON respondent court gravely abused its
discretion in dismissing the case based on the
169
ground which is not alleged in the motion to dismiss
of Misamis Occidental Water District.
RULING: YES, respondent Court acted with grave
abuse of discretion if not in excess of its jurisdiction
in dismissing the case.
The said order of dismissal dated March 9,
1978 is not premises on lack of jurisdiction
or on the pendency of another case
between the same parties for the same
cause — the grounds alleged by private
respondents in their motion to dismiss.
o It has been hold in the case of
Malig, et al. v Bush 5 that dismissal
of actions on grounds not. alleged
in the motion to dismiss is
improper for in so doing, a court in
effect dismisses an action motu
proprio without giving the plaintiffs
a chance to argue the point and
without receiving any arguments
or evidence on the question.
"Section 1 of Rule 8 (now Section 1 of Rule
16) enumerates the grounds upon which an
action may be dismissed, and it specifically
ordains that a motion to this end be filed.
o he court had power to dismiss the
case without the requisite motion
duly presented
o The only instance in which,
according to said Rules, the court
may dismiss upon the court's own
motion on action is, when the
"plaintiff falls to appear at the time
of the trial or to the prosecute his
action for an unreasonable length
of time or to comply with the Rules
or any order of the court.
The real cause for concern, though, is not so
much the dismissal of the case for lack of
presentation of the requisite motion but
rather the dismissal thereof without
affording petitioner an opportunity to be
heard despite the presence of factual issues
that needed to be proved.
WHEREFORE, the petition for certiorari
and/or mandamus is hereby GRANTED

11. Lu Ym vs. Nabua (452 SCRA 298), GR No.
161309, February 23, 2005, Tinga, J.
FACTS:
 On August 16, 2002, petitioner filed an
Omnibus Motion to Dismiss the Amended
Complaint based on following grounds:
o Plaintiff’s claims are barred by a
prior judgment or by the statute of
limitations [Rule 16, Sec. 1(f)]
o Plaintiffs had no legal capacity to
sue and / or do not have a cause of
action [Rule 16, Sec. 1(d) and/or
1(g)]
o Fraud and equity
o Dosket fees not deemed paid,
therefore, a condition precedent
for filing the claim has not been
compiled with [Rule 16, Sec. 1(j)]
 On August 29, 2002, the private
respondents filed their Opposition to the
Omnibus Motion to Dismiss Amended
Complaint alleging that:
o Plaintiff’s claims are not barred by
prior judgment nor by statute of
limitations
o Plaintiffs have the legal capacity to
sue and have valid cause of action
o Docket fees have been paid by
plaintiffs
 Lower court: Omnibus Motion to Dismiss
Amended Complaint denied. There are
justiciable questions raised in the pleadings
of the herein parties which are proper
subject of a full blown trial.
o MR denied
 Petitioner filed a petition for certiorari and
prohibition under Rule 65 contending that
the trial court committed grave abuse of
discretion in denying his motion to dismiss
 The appellate court dismissed the petition
holding that the assailed orders may only be
reviewed in the ordinary course of law by
an appeal from the judgment after trial
o the trial court complied with the
requirements set forth under Rule
16 of the 1997 Rules of Civil
Procedure (Rules) on the
resolution of motions to dismiss
 With the denial of his Motion for
Reconsideration, petitioner is now before
170
this Court seeking a review of the appellate
court’s decision and resolution claiming that
the denial of his motion to dismiss was a
disguised deferment of the resolution of the
said motion and that the trial court failed to
discuss and address each of the grounds
cited therein contrary to the express
mandate of Section 3, Rule 16 of the Rules.
o trial court committed grave abuse
of discretion in refusing to address
his grounds to dismiss and thereby
postponing their proper ventilation
until trial
o According to him, Section 2 of the
Rules provides that all available
evidence on the question of fact
involved in the motion to dismiss
may be presented including
evidence aliunde.
o thus, the grounds for dismissal
raised in his motion to dismiss
could have been resolved in a
hearing prior to a full-blown trial.
ISSUE:
WON the trial court's denial of petitioner's motion to
dismiss on the ground that "[T]here are justiciable
questions raised in the pleadings of the herein
parties which are proper subject of a full blown trial"
contravenes Sec. 3, Rule 16 of the Rules and
constitutes grave abuse of discretion on the part of
the trial court.
RULING: YES
An order denying a motion to dismiss is an
interlocutory order which neither terminates nor
finally disposes of a case, as it leaves something to
be done by the court before the case is finally
decided on the merits.
 General rule:
o the denial of a motion to dismiss
cannot be questioned in a special
civil action for certiorari which is a
remedy designed to correct errors
of jurisdiction and not errors of
judgment. Neither can a denial of a
motion to dismiss be the subject of
an appeal unless and until a final
judgment or order is rendered.
 Exception:
 o In order to justify the grant of the
extraordinary remedy of certiorari,
the denial of the motion to dismiss
must have been tainted with grave
abuse of discretion amounting to
lack or excess of jurisdiction
Sec. 3, Rule 16 of the Rules provides:
Sec. 3. Resolution of motion. 'After the hearing, the
court may dismiss the action or claim, deny the
motion or 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.
In this regard, judges should be reminded to take
pains in crafting their orders, stating therein clearly
and comprehensively the reasons for their issuance,
which are necessary for the full understanding of the
action taken.
Accordingly, considering that the order of the trial
court is a patent nullity for failure to comply with a
mandatory provision of the Rules, petitioner was
correct in directly assailing the order on certiorari
before the Court of Appeals.
However, while it was error for the appellate court
to rule that the trial court did not commit grave
abuse of discretion in denying petitioner's motion to
dismiss, it does not necessarily follow that the
motion to dismiss should have been granted.

Under this provision, there are three (3) courses of
action which the trial court may take in resolving a
motion to dismiss, i.e., to grant, to deny, or to allow
amendment of the pleading. Deferment of the
resolution of a motion to dismiss if the ground relied
upon is not indubitable is now disallowed in view of
the provision requiring presentation of all available
arguments and evidence. Thus, there is no longer
any need to defer action until the trial as the
evidence presented, and such additional evidence as
the trial court may require, would already enable the
trial court to rule upon the dubitability of the ground
alleged.
WHEREFORE, the petition is GRANTED in part
 The Decision of the Court of Appeals dated
August 20, 2003 sustaining the trial court's
denial of petitioner's motion to dismiss, as
well as its Resolution dated December 16,
2003 denying reconsideration, is REVERSED
and SET ASIDE.
 The case is REMANDED to the Regional Trial
Court of Cebu City for further proceedings
to resolve anew with deliberate dispatch
the motion to dismiss in accordance with
Section 3, Rule 16 of the 1997 Rules of Civil
Procedure as elucidated in this Decision.

The questioned order of the trial court denying the

motion to dismiss with a mere statement that there
are justiciable questions which require a full blown
trial falls short of the requirement of Rule 16 set
forth above.

petitioner raised several grounds in his motion to

dismiss, i.e., bar by prior judgment or by the statute
of limitations, lack of capacity to sue, lack of cause of
action, and non-payment of docket fees.

Having raised substantial grounds for dismissal, the

trial court should have, at the very least, specified
which of these grounds require a full-blown trial.
This would have enabled the defendant to
determine the errors that should be the subject of
his motion for reconsideration or Petition for
Certiorari, and given the appellate court sufficient
basis for determining the propriety of the denial of
the motion to dismiss.

171

12. Aquino vs. Aure (546 SCRA 71), GR No. 153567,
February 18, 2008, Chico-Nazario, J:
DOCTRINE:
It is true that the precise technical effect of failure to
comply with the requirement of Section 412 of the
Local Government Code on barangay conciliation
(previously contained in Section 5 of Presidential
Decree No. 1508) is much the same effect produced
by non-exhaustion of administrative remedies - - the
complaint becomes afflicted with the vice of pre-
maturity; and the controversy there alleged is not
ripe for judicial determination. The complaint
becomes vulnerable to a motion to dismiss.
Nevertheless, the conciliation process is not a
jurisdictional requirement, so that noncompliance
therewith cannot affect the jurisdiction which the
court has otherwise acquired over the subject matter
or over the person of the defendant.
FACTS:
1. Aure and E.S. Aure Lending Investors, Inc. (Aure
Lending) filed a Complaint for ejectment against
Aquino before the MeTC docketed as Civil Case No.
17450. In their Complaint, Aure and Aure Lending
alleged that they acquired the subject property from
Aquino and her husband Manuel (spouses Aquino)
by virtue of a Deed of Sale executed on 4 June 1996.
Aure claimed that after the spouses Aquino received
substantial consideration for the sale of the subject
property, they refused to vacate the same.
2. MeTC rendered a Decision in Civil Case No. 17450
in favor of Aquino and dismissed the Complaint for
ejectment of Aure for non-compliance with the
barangay conciliation process, among other grounds.
On appeal, the RTC affirmed the dismissal of the
Complaint on the lack of cause of action.
3. The Court of Appeals rendered a Decision,
reversing the MeTC and RTC. The appellate court
declared that the failure of Aure to subject the
matter to barangay conciliation is not a jurisdictional
172
flaw and it will not affect the sufficiency of Aure's
Complaint since Aquino failed to seasonably raise
such issue in her Answer.
4. The Court of Appeals denied the Motion for
Reconsideration interposed by Aquino for it was
merely a rehash of the arguments set forth in her
previous pleadings which were already considered
and passed upon by the appellate court in its
assailed Decision. Hence, the present petition.
ISSUE: Whether or not non-compliance with
barangay conciliation proceedings is a jurisdictional
defect?
RULING: NO.
1. There is no dispute herein that the present case
was never referred to the Barangay Lupon for
conciliation before Aure and Aure Lending instituted
Civil Case No. 17450. In fact, no allegation of such
barangay conciliation proceedings was made in Aure
and Aure Lending's Complaint before the MeTC. The
only issue to be resolved is whether non-recourse to
the barangay conciliation process is a jurisdictional
flaw that warrants the dismissal of the ejectment
suit filed with the MeTC.
2. Aquino posits that failure to resort to barangay
conciliation makes the action for ejectment
premature and, hence, dismissible. She likewise
avers that this objection was timely raised during the
pre-trial and even subsequently in her Position Paper
submitted to the MeTC.
3. It is true that the precise technical effect of failure
to comply with the requirement of Section 412 of
the Local Government Code on barangay conciliation
(previously contained in Section 5 of Presidential
Decree No. 1508) is much the same effect produced
by non-exhaustion of administrative remedies - - the
complaint becomes afflicted with the vice of pre-
maturity; and the controversy there alleged is not
ripe for judicial determination. The complaint
becomes vulnerable to a motion to dismiss.
Nevertheless, the conciliation process is not a
jurisdictional requirement, so that non-compliance
therewith cannot affect the jurisdiction which the
court has otherwise acquired over the subject matter
or over the person of the defendan
13. Heirs of Dr. Mariano Favis, Sr. vs. Gonzales (713
SCRA 568), GR No. 185922, January 15, 2014,
Perez, J:
FACTS:
Dr. Mariano Favis, Sr. (Dr. Favis) was married to
Capitolina Aguilar (Capitolina) with whom he had
seven children. When Capitolina died in March 1994,
Dr. Favis married Juana Gonzales (Juana), his
common-law wife with whom he sired one child,
Mariano G. Favis (Mariano), he executed an affidavit
acknowledging Mariano as one of his legitimate
children. Mariano is married to Larcelita D. Favis
(Larcelita), with whom he has four children.
Dr. Favis died intestate on July 29, 1994. On October
16, 1994, prior his death, he allegedly executed a
Deed of Donation transferring and conveying
properties in favor of his grandchildren with Juana.
Claiming the said donation prejudiced their legitime,
Dr.Favis children with Capitolina, petitioners herein,
filed an action for annulment of the Deed of
Donation, inventory, liquidation and partition of
property before the RTC against Juana, Sps. Mariano
and Larcelita and their grandchildren as
respondents.
RTC nullified the Deed of Donation. The trial court
found that Dr. Favis, at the age of 92 and plagued
with illnesses, could not have had full control of his
mental capacities to execute a valid Deed of
Donation.
The Court of Appeals ordered the dismissal of the
petitioners nullification case. The CA motu proprio
ordered the dismissal of the complaint for failure of
petitioners to make an averment that earnest efforts
toward a compromise have been made, as
mandated by Article 151 of the Family Court.
ISSUE:
Whether or not the appellate court may dismiss the
order of dismissal of the complaint for failure to
173
allege therein that earnest efforts towards a
compromise have been made.
RULING: YES. CA committed egregious error in
dismissing the complaint.
The appellate court correlated this provision with
Section 1, par. (j), Rule 16 of the 1997 Rules of Civil
Procedure, which provides:
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:
(j) That a condition precedent for filing the claim has
not been complied with.
The appellate court’s reliance on this provision is
misplaced. Rule 16 treats of the grounds for a
motion to dismiss the complaint. It must be
distinguished from the grounds provided under
Section 1, Rule 9 which specifically deals with
dismissal of the claim by the court motu proprio
Section 1, Rule 9 provides for only four instances
when the court may motu proprio dismiss the claim,
namely: (a) lack of jurisdiction over the subject
matter; (b) litis pendentia; (c) res judicata; and (d)
prescription of action.
The error of the Court of Appeals is evident even if
the consideration of the issue is kept within the
confines of the language of Section 1(j) of Rule 16
and Section 1 of Rule 9. That a condition precedent
for filing the claim has not been complied with, a
ground for a motion to dismiss emanating from the
law that no suit between members from the same
family shall prosper unless it should appear from the
verified complaint that earnest efforts toward a
compromise have been made but had failed, is, as
the Rule so words, a ground for a motion to dismiss
Significantly, the Rule requires that such a motion
should be filed “within the time for but before filing
the answer to the complaint or pleading asserting a
claim.”
A failure to allege earnest but failed efforts at a
compromise in a complaint among members of the
same family, is not a jurisdictional defect but merely
a defect in the statement of a cause of action.
In the case at hand, the proceedings before the trial
court ran the full course. The complaint of
petitioners was answered by respondents without a
prior motion to dismiss having been filed. The
decision in favor of the petitioners was appealed by
respondents on the basis of the alleged error in the
ruling on the merits, no mention having been made
about any defect in the statement of a cause of
action. In other words, no motion to dismiss the
complaint based on the failure to comply with a
condition precedent was filed in the trial court;
neither was such failure assigned as error in the
appeal that respondent brought before the Court of
Appeals.
Therefore, the rule on deemed waiver of the non–
jurisdictional defense or objection is wholly
applicable to respondent. If the respondents as
parties–defendants could not, and did not, after
filing their answer to petitioner’s complaint, invoke
the objection of absence of the required allegation
on earnest efforts at a compromise, the appellate
court unquestionably did not have any authority or
basis to motu propio order the dismissal of
petitioner’s complaint.
The Court of Appeals ignored the facts of the case
that clearly demonstrated the refusal by the
respondents to compromise. Instead it ordered the
dismissal of petitioner’s complaint on the ground
that it did not allege what in fact was shown during
the trial. The error of the Court of Appeals is patent.
Unfortunately for respondents, they relied
completely on the erroneous ruling of the Court of
Appeals even when petitioners came to us for review
not just on the basis of such defective motu propio
action but also on the proposition that the trial court
correctly found that the donation in question is
flawed because of vitiated consent. Respondents did
not answer this argument.
The correctness of the finding was not touched by
the Court of Appeals. The respondents opted to rely
only on what the appellate court considered,
erroneously though, was a procedural infirmity. The
trial court’s factual finding, therefore, stands
unreversed; and respondents did not provide us with
any argument to have it reversed.
WHEREFORE, the Decision of the Court of Appeals is
REVERSED and SET ASIDE and the Judgment of the
Regional Trial Court of Vigan, Ilocos Sur, Branch 20 is
AFFIRMED.

The facts of the case show that compromise was

never an option insofar as the respondents were
concerned. The impossibility of compromise instead
of litigation was shown not alone by the absence of a
motion to dismiss but on the respondents’ insistence
on the validity of the donation in their favor of the
subject properties. Nor could it have been otherwise
because the Pre–trial Order specifically limited the
issues to the validity of the deed and whether or not
respondent Juana and Mariano are compulsory heirs
of Dr. Favis. Respondents not only confined their
arguments within the pre–trial order; after losing
their case, their appeal was based on the proposition
that it was error for the trial court to have relied on
the ground of vitiated consent on the part of Dr.
Favis.

174
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