1

JURISDICTION
Civil Service Commission Vs. Court Of Appeals, Dr.
Dante G. Guevarra And Atty. Augustus F. Cezar, G.R.
No. 176162, October 09, 2012 (ATIENZA)

Facts
Respondents Dante G. Guevarra (Guevarra) and Augustus
F. Cezar (Cezar) were the Officer-in-Charge/President and
the Vice President for Administration, respectively, of the
Polytechnic University of the Philippines (PUP) in 2005.

On September 27, 2005, petitioner Honesto L. Cueva
(Cueva), then PUP Chief Legal Counsel, filed an
administrative case against Guevarra and Cezar for gross
dishonesty, grave misconduct, falsification of official
documents, conduct prejudicial to the best interest of the
service, being notoriously undesirable, and for violating
Section 4 of Republic Act (R.A.) No. 6713. Cueva charged
Guevarra with falsification of a public document,
specifically the Application for Bond of Accountable
Officials and Employees of the Republic of the Philippines,
in which the latter denied the existence of his pending
criminal and administrative cases, despite the fact that
Guevarra and Cezar have 17 cases pending before th
Sandiganbayan.

On March 24, 2006, the Civil Service Commission (CSC)
formally charged Guevarra with Dishonesty and Cezar with
Conduct Prejudicial to the Best Interest of the Service.
Subsequently, the respondents filed their Motion for
Reconsideration and Motion to Declare Absence of Prima
Facie Case. This was denied and Guevarra was
subsequently placed under preventive suspension for
ninety (90) days.

Guevarra and Cezar filed a petition for certiorari and
prohibition before the CA essentially questioning the
jurisdiction of the CSC. On December 29, 2006, the CA
rendered its Decision granting the petition and nullifying
and setting aside the questioned resolutions of the CSC for
having been rendered without jurisdiction citing EO 292
(Administrative Code of 1987) which states that heads of
agencies and instrumentalities "shall have jurisdiction to
investigate and decide matters involving disciplinary action
against officers and employees under their jurisdiction"
thereby bestowing upon the Board of Regents the
jurisdiction to investigate and decide matters involving
disciplinary action against respondents Guevarra and
Cezar.

ISSUE: WON the Civil Service Commission have
jurisdiction over the case?

HELD: YES
According to the SC, the CSC have original jurisdiction
over cases filed to it. The CSC, as the central personnel
agency of the government, has the power to discipline its
officials and employees and to hear and decide
administrative cases instituted by or brought before it
directly or on appeal.

Based on the constitution, the civil service embraces all
branches, subdivisions, instrumentalities, and agencies of
the Government, including government-owned or controlled
corporations with original charters. By virtue of Presidential
Decree (P.D.) No. 1341,

PUP became a chartered state
university, thereby making it a government-owned or
controlled corporation with an original charter whose
employees are part of the Civil Service and are subject to
the provisions of E.O. No. 292

In the case of Camacho v. Gloria, the SC stated that under
E.O. No. 292, a complaint against a state university official
may be filed with either the universitys Board of Regents
or directly with the Civil Service Commission.

This is further emphasized on Sec. 4 of the Uniform Rules
on Administrative Cases stating that The Civil Service
Commission shall hear and decide administrative cases
instituted by, or brought before it, directly or on appeal.
Also, Sec. 7 of the same rules further provides that Heads
of Departments, agencies, provinces, cities, municipalities
and other instrumentalities shall have original concurrent
jurisdiction, with the Commission, over their respective
officers and employees. These rules, according to the SC,
are a reasonable interpretation of EO 292 (Administrative
Code).

This concurrent jurisdiction means that if a case is filed to
the CSC and the CSC assumes jurisdiction over the case,
then it shall be to the exclusion of other tribunals exercising
concurrent jurisdiction (The disciplinary tribunal of PUP or
its Board of regents in this particular case). Even if the
CSC delegates the investigation to other department or
agency like the disciplinary tribunal, it does not deprive the
CSC of its jurisdiction. In the same way, if the Disciplinary
tribunal of PUP or its Board of Regents takes jurisdiction
over the case, it shall be to the exclusion of the CSC.

OTHER ISSUES DISCUSSED:

On the issue that EO 292 expressly mentions A complaint
may be filed directly with the Commission by a private
citizen against a government official or employee, the SC
held that a literal interpretation is unreasonable as this
would mean that only private citizens can file directly to the
CSC and that government employees could only appeal
decisions to CSC. It is unreasonable as it would be
tantamount to disenfranchising government employees.
2
That is why the SC ruled that even government employees
can file directly to the CSC

On WON there is distinction between career and non
career: NONE. All members of the civil service are under
the jurisdiction of the CSC, unless otherwise provided by
law. Career or non-career, a civil service official or
employee is within the jurisdiction of the CSC.


Melana v. Tappa, G.R. No. 181303, September 17, 2009
(BOMBALES)

Facts:
Petitioners filed a complaint before the RTC for
Reivindicacion, Quieting of Title, and Damages

against respondents.
Petitioners alleged:
o That they are the owners of a parcel of
land they inherited from Anastacio
Danao who died intestate.
o That during the lifetime of Anastacio, he
allowed respondents (Consuelo and
her family members) to build on and
occupy the southern portion of the
subject property with the agreement
that the property will be vacated at
any time Anatacio and his heirs will
need it.
o And that respondents refused to vacate
the property despite petitioners
demand and instead claims ownership
and built their respective residences
using permanent materials.
Petitioners then referred this land dispute to the
Lupong Tagapamayapa for conciliation.
o During the conciliation proceeding:
Respondents presented
documents ostensibly
supporting their claim of
ownership.
Petitioner claims that
respondents documents
were highly dubious, falsified,
and incapable of proving the
latters claim of ownership
over the subject property.
Hence, petitioners were compelled to file a complaint
with RTC to remove such cloud from their title.
RTC dismissed the Complaint on the ground of lack of
jurisdiction by virtue of RA 7691 or other wise known
as Judiciary Reorganization Act of 1980, which vests
the RTC with jurisdiction over real actions, where the
assessed value of the property involved exceeds
P20,000.00 and since it was found that the subject
property had a value of less than P20,000.00 (The
assessed value was actually-P410 as evidenced by
Tax Dec).
o Clearly, petitioners action to recover the
same was outside the jurisdiction of the
RTC.
Petitioners filed an MR and argued that their
principal cause of action was for quieting of title
hence the complaint should not have been
dismissed, since Section 1, Rule 63 of the Rules of
Court

states that an action to quiet title falls under the
jurisdiction of the RTC.

Issue: W/N RTC committed grave abuse of discretion in
dismissing petitioners Complaint motu proprio.

Ruling: NO
The RTC in dismissing the case, made a distinction
b/w the first and 2
nd
paragraph of Section 1, Rule 63
of the Rules of Court, which provides:
Section 1. Who may file
petition. Any person interested under a
deed, will, contract or other written
instrument, or whose rights are
affected by a statute, executive order
or regulation, ordinance, or any other
governmental regulation may, before
breach or violation thereof, bring an
action in the appropriate Regional Trial
Court to determine any question of
construction or validity arising, and for
a declaration of his rights or duties,
thereunder.
An action for the reformation
of an instrument, to quiet title to real
property or remove clouds therefrom,
or to consolidate ownership under
Article 1607 of the Civil Code, may be
brought under this Rule.

The first paragraph refers to an action for declaratory relief,
which should be brought before the RTC. The second
paragraph, however, refers to a different set of remedies,
which includes an action to quiet title to real property.

The second paragraph must be read in relation to
Republic Act No. 7691, which vests the MTC with
jurisdiction over real actions, where the assessed
value of the real property involved does not
exceed P50,000.00 in Metro Manila and
P20,000.00 in all other places.

As correctly found by the RTC, the assessed
value of the subject property as stated in Tax
Declaration is only P410 therefore petitioners
complaint involving title to and possession of the
3
said property is within the exclusive original
jurisdiction of the MTC not RTC.

Hence, the RTC, in dismissing petitioners
Complaint, acted in complete accord with law
and jurisprudence, it cannot be said to have done
so with grave abuse of discretion amounting to
lack or excess of jurisdiction.


HERALD BLACK DACASIN VS. SHARON DEL MUNDO
DACASIN, G.R. No. 168785, February 05, 2010
(BUENAVENTURA)

Facts:
Petitioner Herald Dacasin, American, and respondent
Sharon Del Mundo Dacasin, Filipino, were married in
Manila in April 1994. They have one daughter, Stephanie,
born on 21 September 1995. In June 1999, respondent
sought and obtained from the Circuit Court, 19
th
Judicial
Circuit, Lake County, Illinois (Illinois court) a divorce decree
against petitioner. In its ruling, the Illinois court dissolved
the marriage of petitioner and respondent, awarded to
respondent sole custody of Stephanie and retained
jurisdiction over the case for enforcement purposes.

On 28 January 2002, petitioner and respondent
executed in Manila a contract (Agreement) for the joint
custody of Stephanie. The parties chose Philippine courts
as exclusive forum to adjudicate disputes arising from the
Agreement. Respondent undertook to obtain from the
Illinois court an order relinquishing jurisdiction to
Philippine courts.

In 2004, petitioner sued respondent in the Regional
Trial Court of Makati City, Branch 60 (trial court) to enforce
the Agreement. Petitioner alleged that in violation of the
Agreement, respondent exercised sole custody over
Stephanie.

Respondent sought the dismissal of the complaint for,
among others, lack of jurisdiction because of the Illinois
courts retention of jurisdiction to enforce the divorce
decree.

Issue:
Whether the trial court has jurisdiction to take cognizance
of petitioners suit and enforce the Agreement on the joint
custody of the parties child.

Ruling of the Court:
YES, the trial court has jurisdiction to entertain petitioners
suit but not to enforce the Agreement which is void.
However, factual and equity considerations militate against
the dismissal of petitioners suit and call for the remand of
the case to settle the question of Stephanies custody.

Regional Trial Courts Vested With Jurisdiction
to Enforce Contracts

Subject matter jurisdiction is conferred by law. At the time
petitioner filed his suit in the trial court, statutory law vests
on Regional Trial Courts exclusive original jurisdiction over
civil actions incapable of pecuniary estimation. An action
for specific performance, such as petitioners suit to
enforce the Agreement on joint child custody, belongs to
this species of actions. Thus, jurisdiction-wise, petitioner
went to the right court.

Indeed, the trial courts refusal to entertain petitioners suit
was grounded not on its lack of power to do so but on its
thinking that the Illinois courts divorce decree stripped it of
jurisdiction. This conclusion is unfounded. What the Illinois
court retained was jurisdiction x x x for the purpose of
enforcing all and sundry the various provisions of [its]
Judgment for Dissolution. Petitioners suit seeks the
enforcement not of the various provisions of the divorce
decree but of the post-divorce Agreement on joint child
custody. Thus, the action lies beyond the zone of the
Illinois courts so-called retained jurisdiction.


Far East Bank v.Shemberg, G.R. NO. 163878,
December 12, 2006 (DORIA)

Petitioner: Far East Bank & Trust Company
(FEBTC), a domestic banking corporation organized
and existing under Philippine laws; now managed
and operated by the Bank of the Philippine Islands

Respondents: Shemberg Marketing Corporation,
Mackie Industries Corporation, Benson Industries
Incorporated, et. al., all duly registered domestic
corporations based in Pakna-an, Mandaue City

Individual respondents: all surnamed Dacay, are
directors and corporate officers of the said
corporations

FACTS:

Prior to 1998, respondents entered into several
credit transactions with petitioner bank, secured by several
real estate mortgages on several realties they owned in
Mandaue City. Respondents failed to pay the loans thus
petitioner sought to foreclose the mortgages.
On February 28, 2001, respondents filed with the
RTC a Complaint for Declaratory Relief, Injunction,
Damages, and Annulment of Promissory Notes,
Documents, and Contracts. Respondents prayed for reliefs
including the issuance of an ex parte TRO for 72 hours and
thereafter, upon summary hearing, a TRO for 20 days.
4
On March 9, 2001, the RTC granted
respondents prayer for the issuance of a TRO. Far East
Bank filed its Answer, Counterclaim, Vigorous Opposition
to the Order (regarding the TRO), and a Motion to Dismiss
Based On Affirmative Defenses alleging, among others,
that: the RTC did not acquire jurisdiction over the case for
non-payment of proper docket fees and that such RTC has
no jurisdiction to enjoin the foreclosure proceedings.
On March 27, 2001, the RTC denied petitioners
motion to dismiss, stating that: (1) the question of
jurisdiction has not been raised except with the cause of
action regarding the annulment of mortgages. Considering
however that an annulment of mortgage is incapable of
pecuniary estimation the court feels that its jurisdiction is
proper.
Petitioner then filed with the CA a petition for
certiorari, prohibition, and mandamus, contending that the
trial court acted with grave abuse of discretion amounting
to lack or excess of jurisdiction. The CA eventually
dismissed the petition for certiorari. It held that as the RTC
has jurisdiction over the case, its orders or decisions upon
all questions therein, cannot be corrected by the
extraordinary writ of certiorari. Petitioner filed a motion for
reconsideration which was still denied by the CA.

ISSUE: Whether or not the trial court has jurisdiction over
the case

RULING: THE RTC HAS JURISDICTION

Here, the primary reliefs prayed for by
respondents are the cancellation of the real estate and
chattel mortgages. In Bumayog v. Tumas, the SC ruled that
where the issue involves the validity of a mortgage, the
action is one incapable of pecuniary estimation. In the
more recent case of Russell v. Vestil, the SC held that an
action questioning the validity of a mortgage is one
incapable of pecuniary estimation. Since respondents paid
the docket fees, as computed by the clerk of court,
consequently, the trial court acquired jurisdiction.

A court acquires jurisdiction over a case only upon the
payment of the prescribed fees. The importance of filing
fees cannot be gainsaid for these are intended to take care
of court expenses in the handling of cases in terms of costs
of supplies, use of equipment, salaries and fringe benefits
of personnel, and others, computed as to man-hours used
in the handling of each case. Hence, the non-payment or
insufficient payment of docket fees can entail tremendous
losses to the government in general and to the judiciary in
particular.

Petitioners contention: the trial court did not
acquire jurisdiction over the case because being
a real action without a stated assessment of the
value of properties, there is no adequate basis
for computing the proper filing fees. Hence, it
necessarily follows that the fees paid are
deficient.

Respondents contention: since the suit
primarily involves cancellation of mortgages, an
action incapable of pecuniary estimation, there
is an existing basis for the computation of fees
which respondents claim they have sufficiently
complied.

NOTE: Is an action for cancellation of mortgage incapable
of pecuniary estimation?

Under Section 19 (1) of Batas Pambansa Blg.
180, as amended by Republic Act No. 7691, Regional Trial
Courts have sole, exclusive, and original jurisdiction to
hear, try, and decide "all civil actions in which the subject of
the litigation is incapable of pecuniary estimation."
In Singsong v. Isabela Sawmill, this Court laid the
test for determining whether the subject matter of an action
is incapable of pecuniary estimation, thus: Ascertain the
nature of the principal action or remedy sought. If the
action is primarily for recovery of a sum of money, the
claim is considered capable of pecuniary estimation.
Whether the trial court has jurisdiction would depend upon
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 only incidental or a consequence
of the principal relief sought, the action is incapable of
pecuniary estimation


RULE 1 GENERAL PROVISIONS

San Miguel Corporation vs. Sandiganbayan G.R. Nos.
104637-38, September 14, 2000, 340 SCRA 289
(FRANCISCO) - Facts too long because 2 cases were
discussed in the case

Doctrine:
- Any compromise agreement concerning sequestered
shares falls within the unquestionnable jurisdiction of and
has to be approved by the Sandiganbayan.
- In the exercise of its discretion, the Sandiganbayan can
require a party-litigant to deliver a sequestered property to
the PCGG.
- The present anti-graft court known as the Sandiganbayan
shall continue to function and exercise its jurisdiction as
now or hereafter may be provided by law.

Facts:
March 26, 1986 - the Coconut Industry Investment
Fund Holding Companies (CIIF) sold 33,133,266
shares of the outstanding capital stock of San Miguel
5
Corporation to Andres Soriano III of the SMC Group
payable in 4 installment
April 1, 1986 - Andres Soriano III paid the initial
P500M to the UCPB (CIIFs administrator). The sale
was transacted through the stock exchange and the
shares were registered in the name of Anscor-
Hagedorn Securities, Inc. (AHSI).
April 7, 1986 - PCGG then led by the former President
of the Senate, the Honorable Jovito R. Salonga,
sequestered the shares of stock subject of the sale.
Due to the sequestration, the SMC Group (hereinafter
referred to as the petitioners) suspended payment of
the balance of the purchase price of the subject
stocks. In retaliation, the UCPB Group rescinded the
sale.
June 2, 1986 - UCPB and CIIF Holding Companies
went to court. They filed a complaint with the RTC of
Makati SMC (petitioner) for confirmation of rescission
of sale with damages.
June 5, 1986 - SMC assailed in the SC (please check
page 99, 2
nd
paragraph in the full text if it is pertaining
to SC) the jurisdiction of the Makati RTC on the
ground that primary jurisdiction was vested with the
PCGG since the SMC shares were sequestered
shares.
August 10, 1988, SC (please check page 99, 2
nd

paragraph in the full text if it is pertaining to SC)
upheld the petitioners (SMC). SC ordered, among
others, the dismissal of the rescission case filed in the
Makati RTC without prejudice to the ventilation of the
parties' claims before the Sandiganbayan.
March 1990, they (SMC and the UCPB group) signed
a Compromise Agreement and Amicable Settlement:
"3.1. The sale of the shares covered by and
corresponding to the first installment of the
1986 Stock Purchase Agreement
consisting of Five Million SMC Shares is
hereby recognized by the parties as valid
and effective as of 1 April 1986.
Accordingly, said shares and all stock and
cash dividends declared thereon after 1
April 1986 shall pertain, and are hereby
assigned, to SMC. x x x
3.2. The First Installment Shares shall revert to
the SMC treasury for dispersal pursuant to
the SMC Stock Dispersal Plan attached as
Annex "A-1" hereof. The parties are aware
that these First Installment Shares shall be
sold to raise funds at the soonest possible
time for the expansion program of SMC. x
x x
3.3. The sale of the shares covered by and
corresponding to the second, third and
fourth installments of the 1986 Stock
Purchase Agreement is hereby rescinded
effective 1 April 1986 and deemed null and
void, and of no force and effect.
Accordingly, all stock and cash dividends
declared after 1 April 1986 corresponding
to the second, third and fourth installments
shall pertain to CIIF Holding Corporations.
xxx"[8](emphasis supplied)
They likewise agreed to pay an "arbitration fee" of
5,500,000 SMC shares composed of 3,858,831 A
shares and 1,641,169 B shares to the PCGG to be
held in trust for the Comprehensive Agrarian Reform
Program.
March 23, 1990- the SMC and the UCPB Group filed
with the Sandiganbayan a Joint Petition for Approval
of the Compromise Agreement and Amicable
Settlement. The petition was docketed as Civil case
no. 0102.
March 29, 1990, the Sandiganbayan motu proprio
directed that copies of the Joint Petition be furnished
to E. Cojuangco, Jr., M. Lobregat and others who are
defendants in Civil Case No. 0033. The same SMC
shares are the subject of Civil Case No. 0033 and
alleged as part of the alleged ill-gotten wealth of
former President Marcos and his "cronies."
April 25, 1990, the Republic of the Philippines, through
the Office of the Solicitor General (OSG), opposed the
Compromise Agreement and Amicable Settlement. It
contended that the involved coco-levy funds, whether
in the form of earnings or dividends therefrom, or in
the form of the value of liquidated corporate assets
represented by all sequestered shares (like the value
of assets sold/mortgaged to finance the P500M first
installment), or in the form of cash, or, as in the case
of subject "Settlement," in the form of "proceeds" of
sale or of "payments" of certain alleged obligations are
public funds. As public funds, the coco-levy funds, in
any form or transformation, are beyond or "outside the
commerce," and perforce not within the private
disposition of private individuals.
The reliefs prayed for by the Solicitor General
state:
"1. That the "Settlement" be stricken off the
record or at most referred back to the PCGG
for serious study and consideration.
2. That this Petition be consolidated with, or
treated as a premature motion or incident in
Civil Case No. 0033, and brought by improper
parties. To repeat, the plaintiff Republic
through PCGG is not a party to what in effect
will be a judicial compromise in Civil Case
No. 0033. Nowhere does the "Settlement"
mention that its terms are subject to the
judicial outcome of this Civil Case No. 0033.

April 18, 1990 Mr. Eduardo M. Cojuangco, Jr. moved
to intervene alleging legal interest in the approval or
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disapproval of the Compromise Agreement and
Amicable Settlement.
May 24, 1990 - COCOFED, et al. filed an "Omnibus
Class Action Motion for Leave to Intervene and to
Admit: (1) Opposition-in-Intervention, and (2)
Compulsory Counter-Petition and Counterclaim for
Damages." They alleged that they are the ultimate
beneficial owners of the SMC shares subject of the
Compromise Agreement.
June 18, 1990 - the PCGG filed its Manifestation
attaching a copy of the Resolution of the Commission
en banc dated June 15, 1990. PCGG joined the
Solicitor General in praying that the Joint Petition for
Approval of Compromise Agreement should be
treated as an incident of Case No. 0033. PCGG,
however, interposed no objection to the
implementation of the Compromise Agreement subject
to the incorporation
SMC and the UCPB Group filed their Joint
Manifestation accepting the conditions imposed by
PCGG. They also opposed the intervention of
COCOFED, et al.
October 12, 1990, SMC moved for early resolution of
the Joint Petition for Approval of the Compromise
Agreement and Amicable Settlement together with its
pending incidents.
October 16, 1990, the Sandiganbayan issued an
Order integrating Case No. 0102 as an incident of
Civil Case No. 0033, thus:
"Considering the interest expressed by
the different parties in Civil Case No.
0033, and considering further that the
subject matter of the amicable
settlement which is presented before
this Court for approval, the Court has
deemed it best that Civil Case No.
0102 be integrated with, and be made
an incident to, Civil Case No. 0033.
xxx"
SMC did not challenge the Order.
November 23, 1990, Sandiganbayan deferred
consideration of the Compromise Agreement "until the
parties thereto take the initiative to restore the same in
the Court's calendar."
February 5, 1991, it also deferred resolution of
Cojuangco's Motion to Intervene.
February 21, 1991 - the UCPB Group filed a Motion to
set the Joint Petition for hearing. In its Order dated
February 27, 1991, the Sandiganbayan required the
parties to comment on the propriety of the said court's
continuing to entertain the Compromise Agreement. In
compliance with the said Order, SMC filed its
Manifestation dated March 15, 1991 expressly
recognizing the jurisdiction of the Sandiganbayan to
rule on the petition for the approval of the compromise
agreement.
June 3, 1991, the Sandiganbayan issued the following
Resolution
"It appearing that the sequestered
character of the shares of stock subject
of the instant petition for the approval
of the compromise agreement, which
are shares of stock in the San Miguel
Corporation in the name of the CIIF
Corporations, is independent of the
transaction involving the contracting
parties in the Compromise Agreement
between what may be labeled as the
"SMC Group" and the "UCPB Group,"
and it appearing further that the said
sequestered SMC shares of stock have
not been physically seized nor taken
over by the PCGG, so much so that the
reversions contemplated in said
Compromise Agreement are without
prejudice to the perpetuation of the
sequestration thereon, until such time
as a judgment might be rendered on
said sequestration (which issue is not
before this Court as (sic) this time), and
it appearing finally that the PCGG has
not interposed any objection to the
contractual resolution of the problems
confronting the "SMC Group" and the
"UCPB Group" to the extent that the
sequestered character of the shares in
question is not affected, this Court will
await the pleasure of the Presidential
Commission on Good Government
before consideration of the
Compromise Agreement is reinstated
in the Court's calendar.
While this is, in effect, a denial
of the "UCPB Group's" Motion to set
consideration of the Compromise
Agreement herein, this denial is without
prejudice to a reiteration of the motion or
any other action by the parties should
developments hereafter justify the
same."
July 8, 1991 - Sandiganbayan issued two (2) Orders.
The first was to hear the defendants in Civil Case No.
0033 on the matter of the Compromise Agreement
whether under Civil Case No. 0102 or as an incident
to Civil Case No. 0033.37 The second required the
petitioners and the UCPB Group as well as PCGG to
formally state in writing the different holders of the
SMC shares subject of the compromise agreement.
The Sandiganbayan further ordered PCGG to indicate
on the face of the subject shares their sequestered
character.
7
July 23, 1991, the Sandiganbayan noted the
Manifestations of the PCGG, the petitioners and the
UCPB group that the certificates of stock for the
subject SMC shares which are intended to form part of
the corporation's treasury shares have been marked
"sequestered" by SMC and are in the custody of the
PCGG.
August 5, 1991, the Sandiganbayan issued an order
requiring SMC to deliver the certificates of stock
representing the subject matter of the Compromise
Agreement to the PCGG in view of the oral
manifestations of Commissioner Maceren seeking
clarification of portions of Sandiganbayan's July 23,
1991 Resolution.
August 9, 1991, the UCPB Group filed a Motion to
Allow it to Utilize Dividends on SMC shares for the
payment of the loans of CIIF Companies to UCPB.42
The motion was granted on September 2, 1991.
August 15, 1991, COCOFED, et al. filed their Urgent
Motion to Compel Surrender of the Cash Dividends
pertaining to (a) the 4.5 million SMC shares allegedly
delivered to PCGG in trust for the Comprehensive
Agrarian Reform Program and (b) the SMC shares
allegedly delivered to SMC as treasury shares.
August 22, 1991, SMC filed a Manifestation and
Motion stating that the SMC shares have reverted to
the SMC treasury as treasury shares and are not
entitled to dividends
October 1, 1991, the Sandiganbayan issued a
Resolution allowing COCOFED, et al. to intervene.46
On March 30, 1992, it denied the separate motions for
reconsideration filed by the petitioners and the UCPB
Group.
October 25, 1991, the Sandiganbayan issued another
Resolution requiring SMC to deliver the 25.45 million
SMC treasury shares to the PCGG.48 On March 18,
1992, it denied petitioners' Motion for Reconsideration
and further ordered SMC to pay dividends on the said
treasury shares and to deliver them to the PCGG.
April 13, 1992, petitioners filed a Motion to Dismiss
Intervention and/or Motion for Clarification with Ad
Cautelam Motion to Suspend Time. The motion was
denied in the Sandiganbayan's Resolution dated
March 17, 1993.

Before this Court now are two (2) consolidated petitions for
certiorari under Rule 65 of the Rules of Court filed by
petitioners San Miguel Corporation, Neptunia
Corporation Limited, Andres Soriano III and Anscor-
Hagedorn Securities, Inc. They seek to annul the
following resolutions of the Sandiganbayan:

In G.R. No. 104637-38:
1. The Resolution dated October 25, 1991 reiterating that
all Certificates of Stock representing sequestered shares in
the SMC be physically deposited with the PCGG and
requiring SMC to pay the cash dividends due or actually
earned by the said shares and deliver them to PCGG

2. The Resolution dated March 18, 199254 requiring SMC
to deliver to the PCGG the 25.45 million shares as well as
the cash and/or stock dividends which have accrued
thereto from March 26, 1986 to date and which might have
further accrued thereto had not said shares of stock been
declared treasury shares.55

In G.R. No. 109797:
1. The Resolution dated September 30, 1991 allowing
COCOFED and other private respondents to intervene in
Case No. 0102 and admitting their Counter-Petition;
2. The Resolution dated March 27, 1992 denying the
motions of petitioners and the UCPB Group for
reconsideration of the Resolution dated September 30,
1991; and57
3. The Resolution dated March 17, 1993 denying
petitioners' motion to dismiss the Counter-Petition filed by
COCOFED, et al.

Issue/s:
In GR 104637-38
1. Whether or not Sandiganbayan over-reached its
jurisdiction and with grave abuse of discretion amounting to
lack of jurisdiction in the case.

In GR 109797
2. Whether or not Sandiganbayan acted without or in
excess of jurisdiction or with grave abuse of discretion in
the case.

Held:
1. NO. SC found no grave abuse of discretion on the part
of Sandiganbayan when it ordered the petitioners to deliver
the treasury shares to PCGG and pay their corresponding
dividends for the following reasons:

First. The cases at bar do not merely involve a
compromise agreement dealing with private interest.
The Compromise Agreement here involves
sequestered shares of stock now worth more than
nine (9) billions of pesos, per estimate given by
COCOFED. Their ownership is still under litigation. It
is not yet known whether the shares are part of the
alleged ill-gotten wealth of former President Marcos
and his "cronies." Any Compromise Agreement
concerning these sequestered shares falls within the
unquestionable jurisdiction of and has to be
approved by the Sandiganbayan. The parties
themselves recognized this jurisdiction. In the
Compromise Agreement itself, the petitioners and
the UCPB Group expressly acknowledged the need
to obtain the approval by the Sandiganbayan of its
terms and conditions, thus:
8

The petitioners voluntarily submitted to the
jurisdiction of the Sandiganbayan by asking for the
approval of the said Compromise Agreement. They
stated in their Manifestation dated March 15, 1991.

Second. Given its undisputed jurisdiction, the
Sandiganbayan ordered that the treasury shares
should be delivered to PCGG and that their
dividends should be paid pending determination of
their real ownership which is the key to the question
whether they are part of the alleged ill-gotten wealth
of former President Marcos and his "cronies."

SC cannot condemn and annul this order as
capricious. In the exercise of its discretion, the
Sandiganbayan can require a party-litigant to deliver
a sequestered property to the PCGG. We held in
Baseco vs. PCGG that "the power of the PCGG to
sequester property claimed to be 'ill-gotten' means to
place or cause to be placed under its possession or
control said property, or any building or office
wherein any such property and any records
pertaining thereto may be found, including 'business
enterprises and entities,' - - - for the purpose of
preventing the destruction, concealment or
dissipation of, and otherwise conserving and
preserving the same - - - until it can be determined,
through appropriate judicial proceedings, whether the
property was in truth 'ill-gotten,' i.e. acquired through
or as a result of improper or illegal use or the
conversion of funds belonging to the government or
any of its branches, instrumentalities, enterprises,
banks or financial institutions, or by taking undue
advantage of official position, authority, relationship,
connection or influence, resulting in unjust
enrichment of the ostensible owner and grave
damage and prejudice to the State."

Petitioners also argue that the Sandiganbayan
gravely abused its discretion when it treated the
contracting parties to the Compromise Agreement
differently.They argue that it should not have allowed
the dividend income of the sequestered shares in the
name of the CIIF Holding Companies to be applied to
their indebtedness to the UCPB. Again, we do not
agree for the order of the Sandiganbayan is
consistent with the need to preserve and enhance
the value of the sequestered assets.

The claim of petitioners to fairness hardly impresses.
It is planted on the assumption that their purchase of
the subject shares is above board. The assumption
begs the question for the Sandiganbayan has yet to
decide the real ownership of the subject shares, i.e.,
whether or not they are part of the alleged illegal
wealth of former President Marcos and his "cronies."
Nor have petitioners shown that they will suffer a
legal prejudice if they deliver the shares and the
dividends thereon to the PCGG. It need not be
stressed that in the event the petitioners are found to
be the lawful owners of these shares, they will be
awarded the cash and stock dividends which have
accrued thereon. We agree with the conclusion of
the Sandiganbayan in its assailed Resolution of
March 18, 1992 that "the SMC Group has not
justified its desire to retain the custody of the 25.45
million sequestered shares of stock, which it had
converted to treasury shares despite sequestration,
and to retain the dividends due thereon, on its own
merits.

2. NO. SC had the occasion to categorically draw the
distinctions between (i) the Sandiganbayan's exclusive
jurisdiction to determine the judicial question of ownership
over sequestered properties and (ii) the incidents of the
exercise by the PCGG of its purely administrative and
executive functions as conservator of sequestered
properties, as follows: (Republic vs. Sandiganbayan)
"In other words, neither in Pea nor in any other case
did this Court ever say that orders of sequestration,
seizure or take-over of the PCGG or other acts done
in the exercise of its so-called 'primary administrative
jurisdiction' are beyond judicial review, or beyond the
power of the courts to reverse or nullify. It is true, of
course, that those acts are entitled to much respect,
the findings and conclusions motivating and justifying
them should be accorded great weight, 'like the
factual findings of the trial and appellate courts,' and
such findings and conclusions of the PCGG may not
be superseded and substituted by the judgment of
the courts. But obviously the principle does not and
cannot sanction arbitrary, whimsical, capricious or
oppressive exercise of power and discretion on the
part of the PCGG, or its performance of acts without
or in excess of its authority and competence under
the law. And in accordance with applicable law,
review of those acts, and correction or invalidation
thereof, when called for, can only be undertaken by
the Sandiganbayan, which has exclusive original
jurisdiction over all cases regarding 'the funds,
moneys, assets and properties illegally acquired or
misappropriated by former President Ferdinand E.
Marcos, Mrs. Imelda Romualdez Marcos, their close
relatives, subordinates, business associates,
dummies, agents or nominees.'"
For the TWO cases involved:
A final word. The cases at bar involve shares of stock
estimated to be worth more than P9 billion now. These
shares were sequestered in 1986 and the government filed
9
Civil Case No. 0033 in 1987 to determine whether they are
part of the alleged ill-gotten wealth of former President
Marcos and his "cronies." We did not set aside the
impugned resolutions of the Sandiganbayan in the cases at
bar for they constitute cautious moves to preserve the
character of the sequestered shares pending determination
of their true owners. Be that as it may, we note that Civil
Case No. 0033 has remained unresolved by the
Sandiganbayan. The delay is no longer tolerable for it locks
in billions of pesos which could well rev-up our sputtering
economy. Worse, it constitutes another embarassing
evidence of snail-paced justice, so long lamented but
mostly by our lips alone. The Sandiganbayan must not be
the burial ground of cases of far-reaching importance to our
people. It is time for it to write finis to Civil Case No. 0033.
The petitions in G.R. Nos. 104637-38 and in G.R. No.
109797 are DISMISSED. No costs.


Gochan vs. GochanG.R. No. 146089, December 13,
2001, 372 SCRA 256 (GATCHALIAN)

FACTS:
Respondents were stockholders of the Felix Gochan
and Sons Realty Corporation and the Mactan Realty
Development Corporation. Respondents offered to sell
their shares in the two corporations to the individual
petitioners in consideration of the sum of
P200,000,000:00. Petitioners accepted and paid the
said amount to respondents. (Receipts were issued
and given to the petitioners as proof)
Respondents, through Crispo Gochan, Jr., required
individual petitioners to execute a "promissory note.
The former drafted the promissory note in his own
handwriting and had the same signed by the
petitioners. Unbeknown to petitioners, Crispo Gochan,
Jr. inserted in the "promissory note" a phrase that
says, "Said amount is in partial consideration of the
sale."
Respondents filed a complaint against petitioners for
specific performance and damages alleging that the
petitioners that offered to buy their shares of stock,in
consideration of P200M and multiple properties.
Accordingly, respondents claimed that they are
entitled to the conveyance of the properties, in
addition to the amount of P200,000,000.00, which
they acknowledge to have received from petitioners
plus damages.
Petitioners filed their answer, raising the following
affirmative defenses one of which is the lack of
jurisdiction by the trial court for non-payment of the
correct docket fees;
Trial court ruled in favor of the defendants. It cited that
respondents paid the necessary filing and docket fees
of at least P165K.
MR denied. Petition for certiorari with CA dismissed.
MR denied. Hence this petition.

ISSUE:
1. Did the respondent file and pay the necessary
docket fees to warrant courts jurisdiction?
2. What is the real nature of the case?
3. What should be the basis for the assessment of
the correct docket fees?

HELD:
1. NO
2. Real action not specific performance
3. Assessed value of the property, or the estimated
value

The rule is well-settled that the court acquires jurisdiction
over any case only upon the payment of the prescribed
docket fees. In the case of Sun Insurance Office, Ltd.
(SIOL) v. Asuncion,
12
this Court held that 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.

Petitioners, that the complaint is in the nature of a real
action which affects title to real properties; hence,
respondents should have alleged therein the value of the
real properties which shall be the basis for the assessment
of the correct docket fees.

It is necessary to determine the true nature of the
complaint in order to resolve the issue of whether or not
respondents paid the correct amount of docket fees
therefor. In this jurisdiction, the dictum adhered to is that
the nature of an action is determined by the allegations in
the body of the pleading or complaint itself, rather than by
its title or heading. The caption of the complaint below was
denominated as one for "specific performance and
damages." The relief sought, however, is the conveyance
or transfer of real property, or ultimately, the execution of
deeds of conveyance in their favor of the real properties
enumerated in the provisional memorandum of agreement.
Under these circumstances, the case below was actually a
real action, affecting as it does title to or possession of real
property.

Real action is one where the plaintiff seeks the recovery of
real property or, as indicated in section 2(a) of Rule 4 (now
Section 1, Rule 4 of the 1997 Rules of Civil Procedure), a
real action is an action affecting title to or recovery of
possession of real property.

In the case at bar, therefore, the complaint filed with the
trial court was in the nature of a real action, although
ostensibly denominated as one for specific performance.
10
Consequently, the basis for determining the correct docket
fees shall be the assessed value of the property, or the
estimated value thereof as alleged by the claimant

We are not unmindful of our pronouncement in the case of
Sun Insurance, to the effect that in case 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 period. However, the liberal interpretation of
the rules relating to the payment of docket fees as applied
in the case of Sun Insurance cannot apply to the instant
case as respondents have never demonstrated any
willingness to abide by the rules and to pay the correct
docket fees. Instead, respondents have stubbornly insisted
that the case they filed was one for specific performance
and damages and that they actually paid the correct docket
fees therefor at the time of the filing of the complaint.

NOTE: The parties in the Sun Insurance case expressed
willingness to pay the correct docket fees


De Leon vs. Court of Appeals G.R. No. 104796, March
6, 1998, (GAUDIEL)

FACTS:
A complaint for annulment or rescission of a
contract of sale of 2 parcels of land was filed by private
respondents in the Regional Trial Court of Quezon City
against petitioners, praying for the following reliefs: (1)
ordering nullification or rescission of the Contract of
Conditional Sale for having violated the rights of plaintiff
(private respondent) guaranteed to them under Article 886
of the Civil Code and/or violation of the terms and
conditions of the said contract, and (2) ordering defendants
(petitioners) to pay plaintiffs (private respondents)
attorneys fees in the amount of P100,000.

Upon the filing of the complaint, the clerk of court
required private respondents to pay docket and legal fees
in the total amount of P610.00, broken down as follows:

P450.00 Docket fee for the Judicial
Development Fund under Official
Receipt No. 1877773

150.00 Docket fee for the General
Fund under Official Receipt No.
6834215

10.00 for the Legal Research Fund
under Official Receipt No. 6834450.

Petitioners moved for the dismissal of the
complaint on the ground that the trial court did not acquire
jurisdiction over the case by reason of private respondents
nonpayment of the correct amount of docket fees.
Petitioners contended that in addition to the fees already
paid based on the claim for P100,000.00 for attorneys
fees, private respondents should have paid docket fees in
the amount of P21,640.00, based on the alleged value of
the two (2) parcels of land subject matter of the contract of
sale sought to be annulled.

Private respondents filed opposition to the motion
to dismiss, arguing that outright dismissal of their complaint
was not warranted on the basis of the alleged nonpayment
of the correct amount of docket fees, considering that the
amount paid by them was that assessed by the clerk of
court. Petitioners filed a reply to which private respondents
filed, a rejoinder.

Trial court denied petitioners motion to dismiss
but required private respondents to pay the amount of
docket fees based on the estimated value of the parcels of
land in litigation as stated in the complaint.

Private respondents filed a motion for
reconsideration but their motion was denied by the trial
court. They therefore, brought the matter to the Court of
Appeals which rendering a decision annulling the orders of
the trial court. The appellate court held that an action for
rescission or annulment of contract is not susceptible of
pecuniary estimation and, therefore, the docket fees should
not be based on the value of the real property, subject
matter of the contract sought to be annulled or rescinded.

Petitioners moved for reconsideration, but their
motion was denied in a resolution. Hence, a petition for
review on certiorari was filed.

ISSUE:

Whether not the basis for the docket fees to be
paid for the filing of an action for annulment or rescission of
a contract of sale should be assessed as the value of the
real property, subject matter of the contract, or whether the
action should be considered as one which is not capable of
pecuniary estimation and therefore the fee charged should
be a flat rate of P400.00 as provided in Rule 141, 7(b)(1)
of the Rules of Court.

RULING:

The Court holds that Judge Dalisay did not err in
considering Civil Case No. V-144 (Bautista v. Lim case) as
basically one for rescission or annulment of contract which
is not susceptible of pecuniary estimation. It agrees with
the cases discussion of actions where the value of the
case cannot be estimated, where the court held that an
action for rescission of contract is one which cannot be
11
estimated and therefore the docket fee for its filing should
be the flat amount of P200.00 as then fixed in the former
Rule 141, 5(10). Consequently, the fee for docketing it is
P200, an amount already paid by plaintiff, now respondent
Matilda Lim. (She should pay also the two pesos legal
research fund fee, if she has not paid it, as required in
Section 4 of Republic Act No. 3870, the charter of the U.P.
Law Center).

Thus, although eventually the result may be the
recovery of land, it is the nature of the action as one for
rescission of contract that is controlling. The Court of
Appeals correctly applied the case to the present one.

The applicable basis of the amount of docket fee
to be paid is P400 as based on

Rule 141 of the Rules of Court which provides:

SEC. 7. Clerks of Regional Trial Courts.

xxx

(b) For filing:

1. Actions where the value of the subject
matter cannot be estimated .............
P400.00


RULE 2 CAUSE OF ACTION

Sta. Clara Homeowners Association vs. Gaston G.R.
No. 141961, January 23, 2002, 374 SCRA 396 (LESAVA)

Doctrine: A complaint states a cause of action when it
contains these three essential elements: (1) the legal right
of the plaintiff, (2) the correlative obligation of the
defendant, and (3) the act or omission of the defendant in
violation of the said legal right.

Facts:
Sps. Gaston (respondents) filed a case against Sta. Clara
Homeowners Assoc. (SCHA), petitioner, thru its Board of
Directors, security guard, John Doe and Sta. Clara estate,
Inc.

The complaint alleges that when the Sps. bought their lot in
the subdivision, there was no mention or requirement of
membership in any homeowners association. From that
time on, they have remained non-members of SCHA. For a
time, non-membership was not an issue in the issuance of
a ticket. This arrangement remained undisturbed until
sometime in the middle of March, 1998, when SCHA
disseminated a board resolution which decreed that only its
members in good standing were to be issued stickers for
use in their vehicles. Thereafter, on three separate
incidents,

Victor M. Gaston, the son of the Sps. who lives with them
was required by the guards on duty employed by SCHA to
show his drivers license as a prerequisite to his entrance
to the subdivision and to his residence therein despite their
knowing him personally and the exact location of his
residence.

On another incident, The husband was himself prevented
from entering the subdivision and proceeding to his
residential abode when petitioner herein security guards
Roger Capillo and a John Doe lowered the steel bar of the
KAMETAL gate of the subdivision and demanded from him
his drivers license for identification. The complaint further
alleged that these acts of the petitioners herein done in the
presence of other subdivision owners had caused private
respondents to suffer moral damage.

In the hearing for a TRO filed by the respondents, the
counsel for the petitioners informed the court that he would
be filing a motion to dismiss the case. In his motion to
dismiss the case, petitioner's lawyer stated the ff. grounds:
the trial court ha[d] no jurisdiction over the case as it
involve[d] an intra-corporate dispute between SCHA and its
members. That private respondents, having become lot
owners of Sta. Clara Subdivision after the approval by the
SEC of SCHAs articles of incorporation and by-laws,
became members automatically. Moreover, the private
respondents allegedly enjoyed the privileges and benefits
of membership in and abided by the rules of the
association, and even attended the general special
meeting of the association members. Their non-payment of
the association yearly dues [did] not make them non-
members of SCHA continued the petitioners. And even
granting that the private respondents [were] not members
of the association, the petitioners opined that the HIGC still
ha[d] jurisdiction over the case pursuant to Section 1 (a),
Rule II of the Rules of Procedure of the HIGC.

RTC ruled: deny motion to dismiss. finding that there
existed no intra-corporate controversy since the private
respondents alleged that they ha[d] never joined the
association; and, thus, the HIGC had no jurisdiction to hear
the case.

After this, petitioners filed a motion to resolve defendants
motion to dismiss on ground of lack of cause of action.

RTC issued an order denying the motion.

CA: dismissed the Petition and ruled that the RTC had
jurisdiction over the dispute. It debunked petitioners
contention that an intra-corporate controversy existed
12
between the SCHA and respondents. The CA held that the
Complaint had stated a cause of action. It likewise opined
that jurisdiction and cause of action were determined by
the allegations in the complaint and not by the defenses
and theories set up in the answer or the motion to dismiss

Petitioners are now raising that CA erred with the argument
that there was no allegation therein that private
respondents were actually prevented from entering the
subdivision and gaining access to their residential abode.

Issue:
WON CA erred in not ruling for a dismissal due to lack of
action

Held:
NO. In the instant case, the records sufficiently establish a
cause of action. First, the Complaint alleged that, under the
Constitution, respondents had a right of free access to and
from their residential abode. Second, under the law,
petitioners have the obligation to respect this right. Third,
such right was impaired by petitioners when private
respondents were refused access through the Sta. Clara
Subdivision, unless they showed their drivers license for
identification.

RTC thus has original and exclusive jurisdiction.

In rendering this Decision, this Court is not prejudging the
main issue of whether, in truth and in fact, private
respondents are entitled to a favorable decision by the
RTC. That will be made only after the proper proceedings
therein. Later on, if it is proven during the trial that they are
indeed members of the SCHA, then the case may be
dismissed on the ground of lack of jurisdiction. We are
merely holding that, on the basis of the allegations in the
Complaint, (1) the RTC has jurisdiction over the
controversy and (2) the Complaint sufficiently alleges a
cause of action. Therefore, it is not subject to attack by a
motion to dismiss on these grounds.


Cipriano Centeno vs. Ignacio Centeno G.R. No. 140825,
October 13, 2000, 343 SCRA 153 (LIM)

FACTS:
Cipriano Centeno is the owner of two parcels of rice
land in Malolos, Bulacan.
The parcels of land were the subject of an earlier
case filed before the DAR by Ignacia Centeno for the
cancellation of Certificates of Land Transfer (CLT)
It was established that Cipriano et al had obtained
the CLTs for the parcels of land through fraud and
misrepresentation.
Consequently, the Secretary of Agrarian Reform
orders the cancellation of the CLTs in favor of
Cipriano et al and ordered the issuance of a CLT in
favor of Ignacia.
Ignacia files a complaint with the Department of
Agrarian Reform Adjudication Board (DARAB)
praying for preliminary injunction, ejectment, and
damages against Cipriano, et al.
Ignacia alleges that despite the decision of the DAR
recognizing her ownership over the properties as
affirmed by the Office of the President, Cipriano,
Leonila Calonzo and Ramona Adriano have
interfered with and prevented respondent from
exercising acts of possession over the properties and
kept on harassing, molesting and disturbing her
peaceful possession as well as the enjoyment of the
fruits thereof, to her great damage and prejudice
Cipriano et al insisted that they are better entitled to
the possession of the lots in dispute, having been
allegedly in long possession thereof, with their
houses thereon. On the other hand, the award of
said lots to respondent is unauthorized, not only
because she has no possession thereof but also
because she has other landholdings in the locality.
They averred that the complaint should be dismissed
for lack of cause of action and for lack of jurisdiction
on the part of the DARAB over the case.
The DARAB decides in favor of Ignacia.
Cipriano et al file a petition for review with the Court of
Appeals asserting, (amongst other issues such as
jurisdiction) that the complaint states no cause of
action. They contend that respondent cannot claim
maintenance of peaceful possession when she does
not in fact have actual possession of the subject
property. They claim that it is they who are in actual
possession of said land. Furthermore, they claim that
respondent did not even make a demand for them to
vacate the land; nor did she present evidence to
show that their acts of possession resulted in loss or
damage to her.

ISSUE: W/N there is a valid cause of action.

HELD:
Anent petitioners' contention that the complaint states no
cause of action, we find this to be, likewise, without merit. A
cause of action is an act or omission of one party in
violation of the legal right or rights of another. The
elements of a cause of action are: (1) a right in favor of the
plaintiff by whatever means and under whatever law it
arises or is created; (2) an obligation on the part of the
named defendant to respect or not to violate such right;
and (3) an act or omission on the part of such defendant in
violation of the right of the plaintiff or constituting a breach
of the obligations of the defendant to the plaintiff for which
the latter may maintain an action for recovery of damages.

13
In the instant case, the complaint for maintenance of
peaceful possession contains the following allegations, to
wit:

FIRST CAUSE OF ACTION

8. Defendants are persistently interfering in and preventing
plaintiff's possession and cultivation of farmlot no. 122, and
continue to commit acts tending to eject, oust and remove
the plaintiff therefrom, to her great damage and injury;

9. Similarly, defendants are harassing, molesting and
disturbing plaintiff's peaceful possession of Home Lot No.
111;

SECOND CAUSE OF ACTION

10. Without the knowledge and consent of herein plaintiffs,
defendants constructed two (2) houses on two portions of
Home Lot No. 111, one house belonging to defendant
Cipriano Centeno, and the other to defendant Leonila
Centeno Calonzo, but occupied by defendant Ramona
Adriano;

11. The construction of said houses is patently illegal and
deprives plaintiff of the possession and enjoyment thereof,
to her great damage and injury.[9]

Clearly, the above allegations regarding petitioners' actions
with regard to the subject land, if true, violate respondent's
rights as adjudicated by the DARAB; hence, these
constitute causes of action which entitle the respondent to
the relief sought.


City Trust Corporation vs. Villanueva G.R. No. 142011,
July 19, 2001, 361 SCRA 446 (MAGSUMBOL)

FACTS: Isagani C. Villanueva opened a savings account
and current account with Citytrust Banking Corporation
(BANK). On May 1986, Villanueva deposited some money
in his savings account with the Bank's Legaspi Village
Branch in Makati. Realizing that he hadrun out of blan
checks, Villanueva requested a new checkbook from one
of the Bank's customer service respresentatives. He then
filled up a checkbook requisition slip with the obligatory
particulars, except for his current account number which he
could not remember. He told his predicament to a customer
service representative of the Bank, who in turn assured him
that she could supply the information from the Bank's
account records. After signing the requisition slip, he gave
it to the representative.

Rempillo, another customer service representative of the
Bank, saw Villanueva's checkbook requisition slip. SHe
took it and checked the Bank's checkbook register which
contained all the names and account numbers of the
Bank's clients who were issued checkbooks. Upon seeing
the name "Isagani Villanueva" with Account No. 33-00446-
3 in the checkbook register, Rempillo copied the aforesaid
account number on the space intended for it in Villanueva's
requisition slip.

A month after, Villanueva received his requested
checkbook. He immediately signed a check bearing the the
amount of P50k payable to the order of Kingly
Commodities. Villanueva delivered the check to Helen Chu,
his investment consultant at Kingly Commodities, with his
express instruction to use said check in placing a trading
order at Kingly Commodities' future trading business as
soon as a favorable opportunity presented itself. Two days
later, he was informed that a trading order has been placed
in his behalf and the check has been delivered to Kingly
Commodities. He then deposited cash to his savings
account to cover the full amount of the check he issued.

However, his check was dishonored due to insufficiency of
funds and disparity in the signature. Villanueva called
Kingly Commodities and explained that there was a
mistake in the dishonor and told them to redeposit the
check. He called the Bank's Legaspi Village Branch
Operations and inquired about the dishonor of his well-
funded check. The manager assured Villanueva that the
check would be honored after the sufficiency of the funds
was ascertained. But 3 days later, he was informed that the
check was again dishonored due to insufficiency of funds
and a stop-payment order he allegedly issued.

Dismayed, Villanueva called up the Bank and inquired from
the Manager the reason for the dishonor of his well-funded
check and the alleged stop-payment order he never issued.
The Manager promised to investigate the matter. In the
meantime, he was advised to re-deposit the check.

Villanueva then requested Lawrence Chin of Kingly
Commodities to give him until 5:30pm that same day to
make good his P50k check. He then proceed to the Bank's
Legaspi Village Branch Office to personally inqure. There
he complained that his trading order was rejected because
of the dishonor of the check and that Kingly Commodities
threatened to close his trading account unless his check
payment would be made good before 5:30pm that day.
Upon investigation, it appears that the reason for the
dishonor of the check was that the account number
assigned to his new checkbook was the account number of
another depositor also named "Isagani Villanueva" but with
a different middle initial.

To resolve the matter, Genuino promised to send to Kingly
Commodities a manager's check for P50k before 5:30pm,
the deadline given to Villanueva. She personally called
14
Kingly Commodities and explained the reason for the
dishonor of the check.

On June 30, 1986, Villanueva sent a letter to the Bank
addressing the President, demanding indemnification for
alleged losses and damages suffered by him as a result of
the dishonor of his well-funded check. He demanded the
amount of P70k as indemnification for actual damages in
the form of lost profits and P2M for moral and other
damages.

The Bank' s Senior VP answered his letter and apologized
for the unfortunate oversight, but reminded VIllanueva that
hte dishonor of his check was due to his failure to state his
current account number in his requisition slip. He stated
furhter that as soon as the mistake was discovered, the
Bank promptly sent a manager's check to Kingly
COmmodities before the deadline to avoid any damage the
dishonor of the check might have caused.

Failing to obtain a facorable action from the Bank,
Villanueva filed a complaint for damages based on breach
of contract and/or quasi-delict before the RTC of Makati.

ISSUE: W/N Villanueva has sufficient cause of action
against the Bank

HELD: No.

It is clear from the records that the Bank was able to
remedy the caveat of Kingly Commodities to Villanueva
that his trading account would be closed at 5:30pm on
June 26 1986. The Bank was able to issue a manager's
check in favor of Kingly Commodities before the deadline
and was able to likewise explaint to Kingly Commodities
the circumstances surrounding the unfortunate situation.
Verily, the alleged embarrasment or inconveniece caused
to Villanueva as a result of the incident was timely and
adequately contained, corrected, mitigated, if not entirely
eradicated. Villanueva, thus, failed to support his claim for
moral damages.

As for compensatory damages, the SC said that while
Villanueva might have suffered some form of
inconvenience and discomfort as a result of the dishonor of
his check, the same could not have been so grave or
intolerable as he attempts to portray it.

The SC also said that the award of attorney's fees should
also be deleted. As a general rule, attorney's fees cannot
be recovered as part of damages because of the policy that
no premium should be place on the right to litigate. They
are not to be awarded every time a party wins a suit. This
award demands factual, legal and equitable justification.

In view of the foregoing discussion, the SC concluded that
Villanueva did not sustain any compensable injury. If any
damage had been suffered at all, it could be equivalent to
damnum absque injuria, i.e., damage wwithout injury or
damage or injury inflicted without injustice, or loss or
damage without violation of a legal right, or a wrong done
to a man for which the law provides no remedy.


Macaslang v. Zamora, May 30, 2011, G.R. No. 156375
(MORA)
GR 156375; May 30, 2011

FACTS:
The respondents (Renato and Melba Zamora) filed a
complaint for unlawful detainer in the MTCC, alleging that
the petitioner (Dolores Macaslang) sold to the Zamoras a
residential land located in Sabang, DanaoCity and that
the Macaslang requested to be allowed to live in the
house with a promise to vacate as soon as she would be
able to find a new residence. They further alleged that
despite their demand after a year, the petitioner failed or
refused to vacate the premises.

Despite the due service of the summons and copy of the
complaint, the petitioner did not file her answer. The MTCC
declared her in default upon the respondents motion to
declare her in default, and proceeded to receive the
respondents oral testimony and documentary evidence.
Thereafter, the MTCC rendered judgment ordering that
Macaslang to vacate the properties in question and to pay
Attorneys Fees and the monthly rental from December
1997 until the time Macaslang shall have vacated the
properties in question.

The petitioner appealed to the RTC, averring the following
as reversible errors, namely:

1. Extrinsic Fraud was practiced upon defendant-
appellant which ordinary prudence could not have guarded
against and by reason of which she has been impaired of
her rights.

2. Defendant-Appellant has a meritorious defense in
that there was no actual sale considering that the absolute
deed of sale relied upon by the plaintiff-appell[ees] is a
patent-nullity as her signature therein was procured
through fraud and trickery.

and praying through her appeal memorandum, that a
judgment be rendered in her favor and this case be
remanded to the Court of Origin , Municipal Trial Court of
Danao City, further proceedings to allow the defendant to
present her evidence, and thereafter, to render a judgment
anew.

15
The RTC dismissed the complaint for failure to state a
cause of action and rendered the petitioners Motion for
Execution of Judgment of the lower court, moot.

The respondents appealed to the CA, assailing the RTCs
decision for disregarding the allegations in the complaint
in determining the existence or non-existence of a cause of
action.

The CA reversed and set aside the RTCs decision and
reinstated the MTCCs decision in favor of the respondents,
disposing:

WHEREFORE,foregoing premises considered, the Petition
is hereby GIVEN DUE COURSE. Resultantly, the
impugned decision of the Regional Trial Court is hereby
REVERSED and SET ASIDE for having no basis in fact
and in law, and the Decision of the Municipal Trial Court in
Cities REINSTATED and AFFIRMED.

ISSUES:
1. Whether or not the CA correctly found that the RTC
committed reversible error in ruling on issues not raised by
the petitioner in her appeal;

Ruling:
As an appellate court, the RTC may rule upon an issue not
raised on appeal.

In its decision, the CA ruled that the RTC could not resolve
issues that were not assigned by the petitioner in her
appeal memorandum, and yet the Trial Court, in its
decision, ruled on issues not raised such as lack of cause
of action and no prior demand to vacate having been
made.

Only errors assigned and properly argued on the brief and
those necessarily related thereto, may be considered by
the appellate court in resolving an appeal in a civil case.
Based on said clear jurisprudence, the court a quo
committed grave abuse of discretion amounting to lack of
jurisdiction when it resolved Defendant-appellees appeal
based on grounds or issues not raised before it, much less
assigned by Defendant-appellee as an error.

Not only that. It is settled that an issue which was not
raised during the Trial in the court below would not be
raised for the first time on appeal as to do so would be
offensive to the basic rules of fair play, justice and due
process

The petitioner disagrees with the CA and contends that the
RTC as an appellate court could rule on the failure of the
complaint to state a cause of action and the lack of
demand to vacate even if not assigned in the appeal.

The Court concurs with the petitioner. The CA might have
been correct had the appeal been a first appeal from the
RTC to the CA or another proper superior court, in which
instance Section 8 of Rule 51, which applies to appeals
from the RTC to the CA, imposes the express limitation of
the review to only those specified in the assignment of
errors or closely related to or dependent on an assigned
error and properly argued in the appellants brief

But the petitioners appeal herein, being taken from the
decision of the MTCC to the RTC, was governed by a
different rule, specifically Section 18 of Rule 70 of the
Rules of Court, to wit:

Section 18. xxxxxx
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. (7a)

As such, the RTC, in exercising appellate jurisdiction, was
not limited to the errors assigned in the petitioners appeal
memorandum, but could decide on the basis of the entire
record of the proceedings had in the trial court and such
memoranda and/or briefs as may be submitted by the
parties or required by the RTC.

The difference between the procedures for deciding on
review is traceable to Section 22 of Batas Pambansa Blg.
12, which provides:

Section 22. Appellate Jurisdiction. Regional Trial
Courts shall exercise appellate jurisdiction over all cases
decided by Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts in their
respective territorial jurisdictions. Such cases shall be
decided 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 Courts. The
decision of the Regional Trial Courts in such cases shall be
appealable by petition for review to the Court of Appeals
which may give it due course only when the petition shows
prima facie that the lower court has committed an error of
fact or law that will warrant a reversal or modification of the
decision or judgment sought to be reviewed.

As its compliance with the requirement of Section 36 of
Batas Pambansa Blg. 129 to adopt special rules or
procedures applicable to such cases in order to achieve an
expeditious and inexpensive determination thereof without
regard to technical rules, the Court promulgated the 1991
16
Revised Rules on Summary Procedure, whereby it
institutionalized the summary procedure for all the first level
courts. Section 21 of the 1991 Revised Rules on Summary
Procedures pecifically stated:

Section 21. Appeal. The judgment or final order
shall be appealable to the appropriate Regional Trial Court
which shall decide the same in accordance with Section 22
of Batas Pambansa Blg. 129. The decision of the Regional
Trial Court in civil cases governed by this Rule, including
forcible entry and unlawful detainer shall be immediately
executory, without prejudice to a further appeal that may be
taken there from. Section 10 of Rule 70 shall be deemed
repealed.

Later on, the Court promulgated the 1997 Rules of Civil
Procedure, effective on July 1, 1997, and incorporated in
Section 7 of Rule 40 thereof the directive to the RTC to
decide appealed cases on the basis of the entire record of
the proceedings had in the court of origin and such
memoranda as are filed, viz:

Section 7. Procedure in the Regional Trial Court.

(a) Upon receipt of the complete record or the
record on appeal, the clerk of court of the Regional Trial
Court shall notify the parties of such fact.

(b) Within fifteen (15) days from such notice, it shall
be the duty of the appellant to submit a memorandum
which shall briefly discuss the errors imputed to the lower
court, a copy of which shall be furnished by him to the
adverse party. Within fifteen (15) days from receipt of the
appellants memorandum, the appellee may file his
memorandum. Failure of the appellant to file a
memorandum shall be a ground for dismissal of the appeal.

(c) Upon the filing of the memorandum of the
appellee, or the expiration of the period to do so, the case
shall be considered submitted for decision. The Regional
Trial Court shall decide the case on the basis of the entire
record of the proceedings had in the court of origin and
such memoranda as are filed. (n)

As a result, the RTC presently decides all appeals from the
MTC based on the entire record of the proceedings had in
the court of origin and such memoranda or briefs as are
filed in the RTC.

Yet, even without the differentiation in the procedures of
deciding appeals, the limitation of the review to only the
errors assigned and properly argued in the appeal brief or
memorandum and the errors necessarily related to such
assigned error sought not to have obstructed the CA from
resolving the unassigned issues by virtue of their coming
under one or several of the following recognized
exceptions to the limitation, namely:

(a) When the question affects jurisdiction over
the subject matter;

(b) Matters that are evidently plain or clerical
errors within contemplation of law;

(c) Matters whose consideration is necessary in
arriving at a just decision and complete
resolution of the case or in serving the
interests of justice or avoiding dispensing
piecemeal justice;

(d) Matters raised in the trial court and are of
record having some bearing on the issue
submitted that the parties failed to raise or
that the lower court ignored;

(e) Matters closely related to an error assigned;
and

(f) Matters upon which the determination of a
question properly assigned is dependent.

Consequently, the CA improperly disallowed the
consideration and resolution of the two errors despite their
being: (a) necessary in arriving at a just decision and
acomplete resolution of the case; and (b) matters of record
having some bearing on the issues submitted that the
lower court ignored.

2. Whether or not the CA correctly found that the
complaint stated a valid cause of action;

Ruling: CA correctly delved into and determined whether
or not complaint stated a cause of action.

The RTC opined that the complaint failed to state a cause
of action because the evidence showed that there was no
demand to vacate made upon the petitioner.

The CA disagreed, observing in its appealed decision:

But what is worse is that a careful reading of
Plaintiffs-appellants Complaint would readily reveal that
they have sufficiently established (sic) a cause of action
against Defendant-appellee. It is undisputed that as alleged
in the complaint and testified to by Plaintiffs-appellants, a
demand to vacate was made before the action for unlawful
detainer was instituted.

A complaint for unlawful detainer is sufficient if it
alleges that the withholding of possession or the refusal is
unlawful without necessarily employing the terminology of
17
the law (Jimenez vs. Patricia, Inc., 340 SCRA 525). In the
case at bench, par. 4 of the Complaint alleges, thus:

4. After a period of one (1) year
living in the aforementioned house,
Plaintiff demanded upon defendant
to vacate but she failed and refused;

From the foregoing allegation, it cannot be disputed
that a demand to vacate has not only been made but that
the same was alleged in the complaint. How the Regional
Trial Court came to the questionable conclusion that
Plaintiffs-appellants had no cause of action is beyond Us.

The Supreme Court agrees with the CA. A complaint
sufficiently alleges a cause of action for unlawful detainer if
it states the following:

(a)Initially, the possession of the property by the
defendant was by contract with or by
tolerance of the plaintiff;

(b)Eventually, such possession became illegal
upon notice by the plaintiff to the
defendant about the termination of the
latters right of possession;

(c)Thereafter, the defendant remained in
possession of the property and deprived
the plaintiff of its enjoyment; and

(d)Within one year from the making of the last
demand to vacate the property on the
defendant, the plaintiff instituted the
complaint for ejectment.

In resolving whether the complaint states a cause of action
or not, only the facts alleged in the complaint are
considered. The test is whether the court can render a
valid judgment on the complaint based on the facts alleged
and the prayer asked for. Only ultimate facts, not legal
conclusions or evidentiary facts, are considered for
purposes of applying the test.

Based on its allegations, the complaint sufficiently stated a
cause of action for unlawful detainer. Firstly, it averred that
the petitioner possessed the property by the mere
tolerance of the respondents. Secondly, the respondents
demanded that the petitioner vacate the property, thereby
rendering her possession illegal. Thirdly, she remained in
possession of the property despite the demand to vacate.
And, fourthly, the respondents instituted the complaint on
March 10, 1999, which was well within a year after the
demand to vacate was made around September of 1998 or
later.

Yet, even as the Court rule that the respondents complaint
stated a cause of action, we must find and hold that both
the RTC and the CA erroneously appreciated the real issue
to be about the complaints failure to state a cause of
action. It certainly was not so, but the respondents lack of
cause of action. Their erroneous appreciation expectedly
prevented the correct resolution of the action.

Failure to state a cause of action and lack of cause of
action are really different from each other. On the one
hand, failure to state a cause of action refers to the
insufficiency of the pleading, and is a ground for dismissal
under Rule 16 of the Rules of Court. On the other hand,
lack of cause action refers to a situation where the
evidence does not prove the cause of action alleged in the
pleading. Justice Regalado, a recognized commentator on
remedial law, has explained the distinction:

xxx What is contemplated, therefore, is a failure to
state a cause of action which is provided in Sec. 1(g) of
Rule 16. This is a matter of insufficiency of the pleading.
Sec. 5 of Rule 10, which was also included as the last
mode for raising the issue to the court, refers to the
situation where the evidence does not prove a cause of
action. This is, therefore, a matter of insufficiency of
evidence. Failure to state a cause of action is different from
failure to prove a cause of action. The remedy in the first is
to move for dismissal of the pleading, while the remedy in
the second is to demur to the evidence, hence reference to
Sec. 5 of Rule 10 has been eliminated in this section. The
procedure would consequently be to require the pleading to
state a cause of action, by timely objection to its deficiency;
or, at the trial, to file a demurrer to evidence, if such motion
is warranted.

A complaint states a cause of action if it avers the
existence of the three essential elements of a cause of
action, namely:

(a) The legal right of the plaintiff;

(b) The correlative obligation of the defendant; and

(c) The act or omission of the defendant in
violation of said legal right.

If the allegations of the complaint do not aver the
concurrence of these elements, the complaint becomes
vulnerable to a motion to dismiss on the ground of failure to
state a cause of action. Evidently, it is not the lack or
absence of a cause of action that is a ground for the
dismissal of the complaint but the fact that the complaint
states no cause of action. Failure to state a cause of action
may be raised at the earliest stages of an action through a
motion to dismiss, but lack of cause of action may be
raised at any time after the questions of fact have been
18
resolved on the basis of the stipulations, admissions, or
evidence presented.

Having found that neither Exhibit C nor Exhibit E was a
proper demand to vacate, considering that Exhibit C (the
respondents letter dated February 11, 1998) demanded
the payment ofP1,101,089.90, and Exhibit E (their letter
dated January 21, 1999) demanded the payment
ofP1,600,000.00, the RTC concluded that the demand
alleged in the complaint did not constitute a demand to pay
rent and to vacate the premises necessary in an action for
unlawful detainer. It was this conclusion that caused the
RTC to confuse the defect as failure of the complaint to
state a cause of action for unlawful detainer.

The Court held that the RTC erred even in that regard.

To begin with, it was undeniable that Exhibit D (the
respondents letter dated April 28, 1998) constituted the
demand to vacate that validly supported their action for
unlawful detainer, because of its unmistakable tenor as a
demand to vacate, which the following portion indicates:

This is to give notice that since the mortgage to
your property has long expired and that since the property
is already in my name, I will be taking over the occupancy
of said property two (2) months from date of this letter.


Exhibit D, despite not explicitly using the word vacate,
relayed to the petitioner the respondents desire to take
over the possession of the property by giving her no
alternative except to vacate. The word vacate, according to
Golden Gate Realty Corporation v. Intermediate Appellate
Court, is not a talismanic word that must be employed in all
notices to vacate.


RULE 3 PARTIES TO CIVIL ACTION

Korea Exchange Bank vs. Filkor Business Integrated,
Inc. G.R. No. 138292, April 10, 2002, 380 SCRA 381
(PEREZ)


FACTS:
On January 9, 1997, Filkor borrowed US$140,000
from petitioner Korea Exchange Bank, payable on July
9, 1997. Of this amount, only US$40,000 was paid by
Filkor
In addition, Filkor executed nine trust receipts in favor
of petitioner. However, Filkor failed to turn over to
petitioner the proceeds from the sale of the goods, or
the goods themselves as required by the trust receipts
in case Filkor could not sell them.
Filkor also negotiated to petitioner the proceeds of
seventeen letters of credit. When petitioner tried to
collect the proceeds of the letters of credit by
presenting the bills of exchange drawn to collect the
proceeds, they were dishonored because of
discrepancies
Prior to all the above, in order to secure payment of all
its obligations, Filkor executed a Real Estate
Mortgage on February 9, 1996. It mortgaged to
petitioner the improvements belonging to it
constructed on the lot it was leasing at the Cavite
Export Processing Zone Authority
As respondents failed to fulfill their obligations,
petitioner filed Civil Case No. N-6689 in the Regional
Trial Court of Cavite City, docketed as Korea
Exchange Bank vs. Filkor Business Integrated, Inc.
In its complaint, petitioner prayed that (a) it be paid
by respondents under its twenty-seven causes of
action; (b) the property mortgaged be foreclosed and
sold at public auction in case respondents failed to
pay petitioner within ninety days from entry of
judgment; and (c) other reliefs just and equitable be
granted.
The defendants denied the allegations based on the
fact that the provided documents were mere
photocopies
Moreover, although the RTC granted letter (a) of the
petition, it ruled that petitioner had already abandoned
its claim under letter (b) because it only filed a simple
collection case

ISSUES:
1) Is the petitioner entitled to summary proceedings? Yes
2) Is petitioners complaint before the trial court an action
for foreclosure of a real estate mortgage, or an action
for collection of a sum of money? REM
3) Is the appeal correctly lodged before SC rather than with
the Court of Appeals? SC

HELD:
1) Yes. A summary of judgment is one granted by the
court upon motion by a party for an expeditious
settlement of the case, there appearing from the
pleadings, depositions, admissions and affidavits that
there are no important questions or issues of fact
involved (except as to the amount of damages) and
that, therefore, the moving party is entitled to a
judgment as a matter of law (Sections 1, 2, 3, Rule 35,
1997 Rules of Civil Procedure). In the case at bar,
there is clearly no substantial triable issue, since it
appears that Defendants denied all material
allegations of the complaint only because the
documents attached were mere photocopies. Hence,
the motion for summary judgment filed by plaintiff is
proper.

19
2) The plaintiffs allegation satisfies in part the
requirements of Section 1, Rule 68 of the 1997 Rules
of Civil Procedure on foreclosure of real estate
mortgage, which provides:
SECTION 1. Complaint in action for foreclosure. In an
action for the foreclosure of a mortgage or other
encumbrance upon real estate, the complaint shall set
forth the date and due execution of the mortgage; its
assignments, if any; the names and residences of the
mortgagor and the mortgagee; a description of the
mortgaged property; a statement of the date of the
note or other documentary evidence of the obligation
secured by the mortgage, the amount claimed to be
unpaid thereon; and the names and residences of all
persons having or claiming an interest in the property
subordinate in right to that of the holder of the
mortgage, all of whom shall be made defendants in
the action.

In Paragraph 183 of the plaintiffs allegation, the date
and due execution of the real estate mortgage are
alleged. The properties mortgaged are stated and
described therein as well. In addition, the names and
residences of respondent Filkor, as mortgagor, and of
petitioner, as mortgagee, are alleged in paragraphs 1
and 2 of the complaint.[13] The dates of the
obligations secured by the mortgage and the amounts
unpaid thereon are alleged in petitioners first to
twenty-seventh causes of action.[14]
Moreover, the very prayer of the complaint before the
trial court states that judgment be rendered to
foreclose the said property, and have it sold at public
auction in case defendants fail to pay plaintiff within
ninety (90) days from entry of judgment.
o Section 2 of Rule 68 of the 1997 Rules of
Civil Procedure, provides that payment
shall be rendered 90 120 days from
date of judgment. Otherwise such
default would lead to the foreclosure of
defendants property

3) Appeal was appropriately filed with the SC because it
involves a question of law. This is pursuant to Section
1 of Rule 45 of the 1997 Rules of Civil Procedure
What the petitioner impugns is the
determination by the trial court of the
nature of action filed by petitioner,
based on the allegations in the
complaint. Such a determination as to
the correctness of the conclusions
drawn from the pleadings undoubtedly
involves a question of law.




Relucio vs. Mejia Lopez G.R. No. 138497, January 16,
2002, 373 SCRA 578 (SUPAPO)

Subject guide: Real Party in Interest; Necessary Party

Facts:
Angelina Mejia Lopez (legal wife) filed a petition for
APPOINTMENT AS SIX OF CONJUGAL PARTNERSHIP
OF PROPERTIES, FORFEITURE, ETC., Alberto Lopez
(husband) and Imelda Relucio, in the RTC of Makati.

In the petition, Angelina alleged that Alberto, abandoned
the latter and their four legitimate children; that he
arrogated unto himself full and exclusive control and
administration of the conjugal properties, spending and
using the same for his sole gain and benefit to the total
exclusion of the private respondent and their four children.
It was further alleged that Alberto and Relucio, during their
period of cohabitation since 1976, have amassed a fortune.
And, that Alberto placed substantial portions of these
conjugal properties in the name of Relucio.

A Motion to Dismiss the Petition was filed by Relucio on the
ground that Angelina has no cause of action against her.
Respondent Judge denied the Motion to Dismiss on the
ground that she is impleaded as a necessary or
indispensable party because some of the subject
properties are registered in her name and defendant
Lopez, or solely in her name. The Motion for
reconsideration was also denied. CA denied her Petition for
Certiorari.

Issue:

Whether Relucios inclusion as party defendant is essential
in the proceedings for a complete adjudication of the
controversy. (Whether Relucio is a real party in
interest/necessary party/indispensable party)

Held: No.

Nowhere in the allegations does it appear that relief is
sought against petitioner. Respondents causes of action
were all against her husband.
The first cause of action is for judicial appointment of
respondent as administratrix of the conjugal partnership or
absolute community property arising from her marriage to
Alberto J. Lopez. Petitioner is a complete stranger to this
cause of action. The administration of the property of the
marriage is entirely between them, to the exclusion of all
other persons. Respondent alleges that Alberto J. Lopez is
her husband. Therefore, her first cause of action is against
Alberto J. Lopez. There is no right-duty relation between
petitioner and respondent that can possibly support a
20
cause of action. In fact, none of the three elements of a
cause of action exists.
The second cause of action is for an accounting by
respondent husband. The accounting of conjugal
partnership arises from or is an incident of marriage.
Petitioner has nothing to do with the marriage between
respondent Alberto J. Lopez. Hence, no cause of action
can exist against petitioner on this ground.
The third cause of action is essentially for forfeiture of
Alberto J. Lopez share in property co-owned by him and
petitioner. It does not involve the issue of validity of the co-
ownership between Alberto J. Lopez and petitioner. The
issue is whether there is basis in law to forfeit Alberto J.
Lopez share, if any there be, in property co-owned by him
with petitioner.
Respondents asserted right to forfeit extends to Alberto J.
Lopez share alone. Failure of Alberto J. Lopez to
surrender such share, assuming the trial court finds in
respondents favor, results in a breach of an obligation to
respondent and gives rise to a cause of action. Such cause
of action, however, pertains to Alberto J. Lopez, not
petitioner.
The respondent also sought support. Support cannot be
compelled from a stranger.
The action in Special Proceedings is, to use respondent
Angelina M. Lopez own words, one by an aggrieved wife
against her husband. References to petitioner in the
common and specific allegations of fact in the complaint
are merely incidental, to set forth facts and circumstances
that prove the causes of action alleged against Alberto J.
Lopez.

Finally, as to the moral damages, respondents claim for
moral damages is against Alberto J. Lopez, not petitioner.

A real party in interest is one who stands to be benefited
or injured by the judgment of the suit. In this case,
petitioner would not be affected by any judgment in Special
Proceedings.

If petitioner is not a real party in interest, she cannot be an
indispensable party. An indispensable party is one without
whom there can be no final determination of an action.
Petitioners participation in Special Proceedings M-3630 is
not indispensable. Certainly, the trial court can issue a
judgment ordering Alberto J. Lopez to make an accounting
of his conjugal partnership with respondent, and give
support to respondent and their children, and dissolve
Alberto J. Lopez conjugal partnership with respondent, and
forfeit Alberto J. Lopez share in property co-owned by him
and petitioner. Such judgment would be perfectly valid and
enforceable against Alberto J. Lopez.
Nor can petitioner be a necessary party in Special
Proceedings. A necessary party as one who is not
indispensable but who ought to be joined as party if
complete relief is to be accorded those already parties, or
for a complete determination or settlement of the claim
subject of the action. In the context of her petition in the
lower court, respondent would be accorded complete relief
if Alberto J. Lopez were ordered to account for his alleged
conjugal partnership property with respondent, give support
to respondent and her children, turn over his share in the
co-ownership with petitioner and dissolve his conjugal
partnership or absolute community property with
respondent.
Judgment: the Court GRANTS the petition and
REVERSES the decision of the Court of Appeals. The
Court DISMISSES Special Proceedings M-3630 of the
RTC, Makati, Branch 141 as against petitioner.


William Uy and Rodel Roxas vs. Court of Appeals G.R.
No. 120465, September 9, 1999, 314 SCRA 69
(VELASCO)

FACTS:
Petitioners William Uy and Rodel Roxas are agents
authorized to sell eight parcels of land by the owners
thereof. They offered to sell these lots to National Housing
Authority (NHA) to be utilized and developed as a housing
project.
Of the eight parcels of land, only five were paid for
by the NHA because of the report it received from the Land
Geosciences Bureau of the Department of Environment
and Natural Resources (DENR) that the remaining area is
located at an active landslide area and therefore, not
suitable for development into a housing project. NHA
therefore cancelled the sale over the three parcels of land.
Petitioners filed a Complaint for Damages against
NHA. After trial, the RTC rendered a decision declaring the
cancellation of the contract to be justified. However, they
awarded damages to petitioners in the amount as agreed
upon in their contract of sale. Upon appeal, the CA
reversed the decision of the trial court. It held that since
there was sufficient justifiable basis in cancelling the sale,
it saw no reason for the award of damages. The CA also
noted that petitioners were mere attorneys-in-fact and,
therefore, not the real parties-in-interest in the action
before the trial court.
The CA explained that in the complaint, they
alleged themselves to be the sellers agents for the 8
parcels of land. This obviously shows that they acted as
attorneys-in-fact of the lot owners who are the real parties
in interest but who were omitted to be pleaded as party-
plaintiffs in the case. The case should be properly
dismissed as the rule is that: every action must be
21
prosecuted in the name of the real parties-in-interest
(Section 2, Rule 3, Rules of Court).
ISSUE: WON Uy and Roxas are real parties-in-interest.
HELD: No.
Petitioners in this case brought the action for
damages in their own name and in their own behalf,
claiming damages for unearned income and advances.
This contention is unmeritorious.
Section 2, Rule 3 of the Rules of Court requires that
every action must be prosecuted and defended in the
name of the real party-in-interest. The real party-in-interest
is the party who stands to be benefited or injured by the
judgment or the party entitled to the avails of the suit.
Petitioners in this case do not have this right. Article
1311 of the Civil Code states:
Contracts take effect only between the parties, their
assigns, and heirs, except in case where the rights
and obligations arising from the contract are not
transmissible by their nature, or by stipulation, or by
provision of law. x x x.
If a contract should contain some stipulation in
favor of a third person, he may demand its
fulfillment provided he communicated his
acceptance to the obligor before its revocation. A
mere incidental benefit or interest of a person is not
sufficient. The contracting parties must have
clearly and deliberately conferred a favor upon a
third person.
PARTIES
Petitioners are not parties to the contract of sale
between their principals and NHA. They are mere agents
of the owners of the land subject of the sale. Since a
contract may be violated only by the parties thereto as
against each other, the real parties-in-interest, either as
plaintiff or defendant, in an action upon that contract must,
generally, either be parties to said contract.
HEIRS
Neither has there been any allegation, much less
proof, that petitioners are the heirs of their principals.
ASSIGNS
An agent, in his own behalf, may bring an action
founded on a contract made for his principal, as an
assignee of such contract under the law on agency. In its
Comment, it further expounded that the customs of
business or the course of conduct between the principal
and the agent may indicate that an agent who ordinarily
has merely a security interest is a transferee of the
principals rights under the contract and as such is
permitted to bring suit. If the agent has settled with his
principal with the understanding that he is to collect the
claim against the obligor by way of reimbursing himself for
his advances and commissions, the agent is in the position
of an assignee who is the beneficial owner of the chose in
action. He has an irrevocable power to sue in his
principals name.
Petitioners, however, have not shown that they are
assignees of their principals to the subject contracts. While
they alleged that they made advances and that they
suffered loss of commissions, they have not established
any agreement granting them the right to receive payment
and out of the proceeds to reimburse for advances and
commissions before turning the balance over to the
principal[s].
THIRD PARTIES
In this case, it does not appear that petitioners are
beneficiaries of a stipulation pour autrui under the second
paragraph of Article 1311 of the Civil Code. Indeed, there
is no stipulation in any of the Deeds of Absolute Sale
clearly and deliberately conferring a favor to any third
person.
Section 372 (2) of the Restatement of the Law on
Agency (Second) states:
(2) An agent does not have such an interest in a
contract as to entitle him to maintain an action at
law upon it in his own name merely because he is
entitled to a portion of the proceeds as
compensation for making it or because he is liable
for its breach.
The Comment on the above subsection also says
that the fact that an agent who makes a contract for his
principal will gain or suffer loss by the performance or
nonperformance of the contract by the principal or by the
other party thereto does not entitle him to maintain an
action on his own behalf against the other party for its
breach. An agent entitled to receive a commission from his
principal upon the performance of a contract which he has
made on his principals account does not, from this fact
alone, have any claim against the other party for breach of
the contract, either in an action on the contract or
otherwise. An agent who is not a promisee cannot
maintain an action at law against a purchaser merely
because he is entitled to have his compensation or
advances paid out of the purchase price before payment to
the principal.
22
As petitioners are not parties, heirs, assignees, or
beneficiaries of a stipulation pour autrui under the contracts
of sale, they do not, under substantive law, possess the
right they seek to enforce. Therefore, they are not the real
parties-in-interest in this case.

Clara Espiritu Borlongan v. Consuelo Madrideo G.R.
No. 120267, January 25, 2000, 323 SCRA 248
(VILLAFUERTE)

Facts:
Petitioners Clara Borlongan,et. al and private respondent
Consuelo Madrideo occupied Dalisay Tongko-Camachos
lot. Private respondent filed an unlawful detainer case
against petitioners claiming that she is the sole lessee and
that petitioners possession was by her mere tolerance.
Camacho, the owner of the lot, testified that both
petitioners and defendant were rightful lessees.

Issues: 1. Who has the burden of proof?
2. Whether private respondent is the real party-in-
interest

Held:
1. Private respondent has the burden of proof. In civil
cases the burden of proof to be established by
preponderance of evidence is on the plaintiff who is the
party asserting the affirmative of an issue. He has the
burden of presenting evidence required to obtain a
favorable judgment, and he, having the burden of proof, will
be defeated if no evidence were given on either side.

Private respondent as plaintiff in the unlawful detainer
action had the burden to prove her allegations inasmuch as
she claims that she has a better right as lessee against
petitioners. However, she failed miserably to meet the
burden of proof.

Private respondent basically relied on the receipts of her
rental payments. At best, those receipts by themselves
alone simply confirm that she is a lessee, and not that she
is the only lessee of the property. Moreover, the owner of
the property, Ma. Dalisay Tongko-Camacho, has been
unwavering in her declaration that petitioners are also
lessees of her property. When faced with Camachos
undeviating acknowledgment, private respondents claim
turns nil. Private respondent never rebutted Camachos
recognition of the legitimate status of petitioners as
lessees. This omission creates an adverse inference that
such uncontroverted evidence speaks of the truth.
Accordingly, as against the undisputed sworn declaration
by the owner of the property who is more knowledgeable of
the subsisting contract concerning her land, private
respondents claim lacks buoyancy.

2. No. Private respondent is not the real party-in-interest.
One who has no right or interest to protect cannot invoke
the jurisdiction of the court as party-plaintiff in action for it is
jurisprudentially ordained that every action must be
prosecuted or defended in the name of the real party in
interest. A "real party in interest" is one who stands to be
benefited or injured by the judgment in the suit, or the party
entitled to the avails of the suit. In the instant case, private
respondent is not a real party in interest inasmuch as she
failed to establish her claim of being the sole lessee of the
disputed property or the sublessor of petitioners. Thus,
dismissal of the case for lack of cause of action was
properly ordered by the Metropolitan Trial Court, as
affirmed by the Regional Trial Court on appeal.


International Express Travel vs. Court of Appeals G.R.
No. 119020, October 19, 2000, 343 SCRA 674 (CHING)

Facts:
International Express Travel & Tour Services, Inc. (IETTI)
offered its travel services as a travel agency to the
Philippine Football Federation (PFF) through its president,
Henri Kahn. PFF accepted the offer.

IETTI secured airline tickets for the trips to the SEA Games
in Kuala Lumpur and other trips and in turn, PFF made two
partial payments. Since payment is not yet complete, IETTI
wrote a demand letter to Kahn and received two payments
but no other payment was made afterwards despite
repeated demands.

IETTI filed a civil case before RTC against Henri Kahn in
his personal capacity as President of PFF and impleaded
PFF as an alternative defendant for the unpaid balance.
Kahn filed his answer with counterclaim, while PFF failed to
file its answer and was declared in default by the trial court.
Afterwards, the trial court rendered judgment and ruled in
favor of IETTI and declared Henri Kahn personally liable for
the unpaid obligation for failure to prove the corporate
existence of PFF. The complaint of IETTI against PFF and
the counterclaims of Henri Kahn were dismissed, with
costs against Kahn. Only Henri Kahn elevated the decision
to the Court of Appeals.

CA rendered a decision reversing the trial court. The Court
of Appeals took judicial notice of the existence of PFF as a
national sports association; as such, PFF is empowered to
enter into contracts through its agents and should be liable
for the contract entered into by its agent.

IETTI filed a motion for reconsideration and as an
alternative prayer pleaded that PFF be held liable for the
unpaid obligation but was denied by CA so IETTI filed the
petition with the Supreme Court.

23
According to Kahn, IETTI has no cause of action against
him either in his personal capacity or in his official capacity
as president of PFF because he did not guarantee
payment but merely acted as an agent of PFF which has a
separate and distinct juridical personality.

Issue: Whether Kahn should be made personally liable for
the unpaid obligations of the Philippine Football Federation.

Held:
Yes.

PFF is not automatically considered a national sports
association. It must first be recognized and accredited by
the Philippine Amateur Athletic Federation and the
Department of Youth and Sports Development. In this
case, this was never substantiated by Kahn; thus, PFF is
not a national sports association within the purview of the
aforementioned laws and does not have corporate
existence of its own.

It follows that Kahn should be held liable for the unpaid
obligations of PFF. Under the law, any person acting or
purporting to act on behalf of a corporation which has no
valid existence assumes such privileges and becomes
personally liable for contract entered into or for other acts
performed as such agent. Thus, Kahn is therefore
personally liable for the contract entered into by PFF with
IETTI. As president of the PFF, Kahn is presumed to have
known about the corporate existence or non-existence of
PFF.

A voluntary unincorporated association, like PFF has no
power to enter into, or to ratify, a contract. The contract
entered into by its officers or agents on behalf of such
association is not binding on, or enforceable against it. The
officers or agents are themselves personally liable.


RULE 4 VENUE OF ACTIONS

AUCTION IN MALINTA, INC., VS. WARREN EMBES
LUYABEN, G.R. NO. 173979, February 12, 2007
(PABALAN)

Doctrine:
Mere stipulation on the venue of an action is not enough to
preclude parties from bringing a case in other venues. It
must be shown that such stipulation is exclusive.

Facts:
Warren Embes Luyaben won in the auction of
petitioner. Respondent paid for the equipment but
petitioner was not able to produce the same.
Luyaben then filed a complaint for damages against
Auction in Malinta, Inc. (AIMI) in RTC-Kalinga where
Luyaben resides.
AIMI moved to dismiss the complaint on the ground of
improper venue by invoking the following stipulation in
the Bidders Application and Registration Bidding
Agreement which states that: ALL COURT
LITIGATION PROCEDURES SHALL BE
CONDUCTED IN THE APPROPRIATE COURTS OF
VALENZUELA CITY, METRO MANILA.

Issue:
WON stipulation in the Agreement effectively limits the
venue of the case exclusively to the proper court of
Valenzuela City? -- NO.

Held:
The SC held that mere stipulation on the venue of an
action is not enough to preclude parties from bringing a
case in other venues. It must be shown that such
stipulation is exclusive. In the absence of qualifying or
restrictive words, such as exclusively and waiving for this
purpose any other venue, shall only preceding the
designation of venue, to the exclusion of the other courts,
or words of similar import, the stipulation should be
deemed as merely an agreement on an additional forum,
not as limiting venue to the specified place.

In the instant case, the stipulation in the parties
agreement, i.e., all Court litigation procedures shall be
conducted in the appropriate Courts of Valenzuela City,
Metro Manila, evidently lacks the restrictive and qualifying
words that will limit venue exclusively to the RTC of
Valenzuela City. Hence, the Valenzuela courts should only
be considered as an additional choice of venue to those
mentioned under Section 2, Rule 4.
Being that Kalinga is where the aggrieved party resides,
RTC-Kalinga is a proper venue for the case at bar,
following Rule 4 Section 2 of the Rules of Civil Procedure,
which states that:
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
nonresident defendant, where he may be found, at the
election of the plaintiff.