RULE 2 CAUSE OF ACTION

SECTION 1 ORDINARY CIVIL ACTIONS, BASIS OF

TURNER VS LORENZO SHIPPING
G.R. NO. 157479 (NOVEMBER 24, 2010)
FACTS:
The petitioners held shares of stock of the respondent. The respondent decided to amend its articles of incorporation to
remove the stockholders pre-emptive rights to newly issued shares of stock. Feeling that the corporate move would be
prejudicial to their interest as stockholders, the petitioners voted against the amendment and demanded payment of their
shares. The respondent found the fair value of the shares demanded by the petitioners was unacceptable. The
disagreement on the valuation of the shares led the parties to constitute an appraisal committee. The appraisal committee
reported its valuation, subsequently, the petitioners demanded payment based on the valuation of the appraisal
committee, plus 2%/month penalty from the date of their original demand for payment, as well as the reimbursement of
the amounts advanced as professional fees to the appraisers.
The respondent refused the petitioners demand, explaining that pursuant to the Corporation Code, the dissenting
stockholders exercising their appraisal rights could be paid only when the corporation had unrestricted retained earnings
to cover the fair value of the shares, but that it had no retained earnings at the time of the petitioners demand, as borne
out by its Financial Statements for Fiscal Year 1999.
Upon the respondents refusal to pay, the petitioners sued the respondent for collection and damages in the RTC
in Makati City upon motion for partial summary judgment.
The respondent opposed the motion for partial summary judgment, stating that the determination of the unrestricted
retained earnings should be made at the end of the fiscal year of the respondent, and that the petitioners did not have a
cause of action against the respondent.
The RTC concluded that the respondents obligation to pay had accrued by its having the unrestricted retained earnings
after the making of the demand by the petitioners. It based its conclusion on the fact that the Corporation Code did not
provide that the unrestricted retained earnings must already exist at the time of the demand.
ISSUE:
Whether or not petitioner has a cause of action.
SUPREME COURT RULING:
No, the Petitioners cause of action was premature.
A cause of action is the act or omission by which a party violates a right of another. The essential elements of a cause of
action are:
(a) the existence of a legal right in favor of the plaintiff;
(b) a correlative legal duty of the defendant to respect such right; and
(c) an act or omission by such defendant in violation of the right of the plaintiff with a resulting injury or damage to the
plaintiff for which the latter may maintain an action for the recovery of relief from the defendant.
Although the first two elements may exist, a cause of action arises only upon the occurrence of the last element, giving
the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief.
Section 1, Rule 2, of the Rules of Court requires that every ordinary civil action must be based on a cause of action.
Accordingly, Civil Case No. 01-086 was dismissible from the beginning for being without any cause of action.
The RTCs construal of the Corporation Code was unsustainable, because it did not take into account the petitioners lack
of a cause of action against the respondent. In order to give rise to any obligation to pay on the part of the respondent, the
petitioners should first make a valid demand that the respondent refused to pay despite having unrestricted retained
earnings. Otherwise, the respondent could not be said to be guilty of any actionable omission that could sustain their
action to collect.

SECTION 2 CAUSE OF ACTION, DEFINED

HEIRS OF YPON V. RICAFORTE, G.R. NO. 198680, JULY 8, 2013
Facts:
On July 29, 2010, petitioners, together with some of their cousins, 4 filed a complaint for Cancellation of Title and
Reconveyance with Damages (subject complaint) against respondent Gaudioso Ponteras Ricaforte a.k.a. Gaudioso E.
Ypon. In their complaint, they alleged that Magdaleno Ypon (Magdaleno) died intestate and childless on June 28, 1968 ,
leaving behind Lot Nos. 2-AA, 2-C, 2-F, and 2-J which were then covered by Transfer Certificates of Title (TCT) Nos. T-44
and T-77-A. Claiming to be the sole heir of Magdaleno, Gaudioso executed an Affidavit of Self-Adjudication and caused
the cancellation of the aforementioned certificates of title, leading to their subsequent transfer in his name under TCT Nos.
T-2637 and T-2638,7 to the prejudice of petitioners who are Magdalenos collateral relatives and successors-in-interest.
Gaudioso alleged that he is the lawful son of Magdaleno as evidenced by: (a) his certificate of Live Birth; (b) two (2) letters
from Polytechnic School; and (c) a certified true copy of his passport. 9 Further, by way of affirmative defense, he claimed
that: (a) petitioners have no cause of action against him; (b) the complaint fails to state a cause of action; and (c) the case
is not prosecuted by the real parties-in-interest, as there is no showing that the petitioners have been judicially declared
as Magdalenos lawful heirs.
The RTC issued the assailed July 27, 2011 Order,11 finding that the subject complaint failed to state a cause of action
against Gaudioso. It observed that while the plaintiffs therein had established their relationship with Magdaleno in a
previous special proceeding for the issuance of letters of administration, this did not mean that they could already be
considered as the decedents compulsory heirs. Quite the contrary, Gaudioso satisfactorily established the fact that he is
Magdalenos son and hence, his compulsory heir through the documentary evidence he submitted which consisted of:
(a) a marriage contract between Magdaleno and Epegenia Evangelista; (b) a Certificate of Live Birth; (c) a Letter dated
February 19, 1960; and (d) a passport.

Issue:
Whether or not the the RTCs dismissal of the case on the ground that the subject complaint failed to state a cause of
action was proper.

Ruling:
Cause of action is defined as the act or omission by which a party violates a right of another. It is well-settled that the
existence of a cause of action is determined by the allegations in the complaint. In this relation, a complaint is said to
assert a sufficient cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled
to the relief prayed for. Accordingly, if the allegations furnish sufficient basis by which the complaint can be maintained,
the same should not be dismissed, regardless of the defenses that may be averred by the defendants.
Jurisprudence dictates that the determination of who are the legal heirs of the deceased must be made in the
proper special proceedings in court, and not in an ordinary suit for recovery of ownership and possession of
property. The Court has consistently ruled that the trial court cannot make a declaration of heirship in the civil action for
the reason that such a declaration can only be made in a special proceeding. Under Section 3, Rule 1 of the 1997
Revised Rules of Court, a civil action is defined as one by which a party sues another for the enforcement or protection of
a right, or the prevention or redress of a wrong while a special proceeding is a remedy by which a party seeks to establish

a status, a right, or a particular fact. It is then decisively clear that the declaration of heirship can be made only in a special
proceeding inasmuch as the petitioners here are seeking the establishment of a status or right.
While a court usually focuses on the complaint in determining whether the same fails to state a cause of action, a court
cannot disregard decisions material to the proper appreciation of the questions before it. Since a determination of heirship
cannot be made in an ordinary action for recovery of ownership and/or possession, the dismissal of Civil Case No. T-2246
was altogether proper.

SECTION 2 CAUSE OF ACTION, DEFINED

SWAGMAN HOTEL VS CA
FACTS:
Sometime in 1996 and 1997, petitioner Swagman Hotels and Travel, Inc., through Atty. Leonor L. Infante and Rodney
David Hegerty, its president and vice-president, respectively, obtained a loan from private respondent Neal B. Christian by
three promissory notes dated 7 August 1996, 14 March 1997, and 14 July 1997. Each of the promissory notes is in the
amount of US$50,000 payable after 3 years from its date with an interest of 15% per annum payable every 3 mos. The
private respondent informed the petitioner corporation that he was terminating the loans and demanded from the latter
payment in the total amount of US$150,000 plus unpaid interests in the total amount of US$13,500
On 2 February 1999, private respondent Christian filed with the Regional Trial Court of Baguio City, Branch 59, a
complaint for a sum of money and damages against the petitioner corporation alleging that during January 1998december 1998 instead of paying 15% per annum the company paid only 6%, which violates the terms of the agreement.
Christian prayed that the trial court order them to pay him jointly and solitarily the total amount of the loans, unpaid
interests from January 1998 until December 1998.
The petitioner corporation, countered by filing an answer raising as defenses lack of cause of action and novation of the
principal obligations. Petitioner contends that Christian had no cause of action because the three promissory notes were
not yet due and demandable.(because the maturity of the PNs are on August 9, 1999, March 14, 2000 and July 14,
2000,respectively and the suit was filed on February 2, 1999).they further contend that In December 1997, since the
petitioner corporation was experiencing huge losses due to the Asian financial crisis, Christian agreed to waive the
interest of 15% per annum, and agreed to pay him in installment basis, the amount and period of which would depend on
the state of business of the petitioner corporation. Thus, the petitioner paid Christian capital repayment in the amount of
US$750 per month from January 1998 until the time the complaint was filed in February 1999.
On may 5 2000, the trial court declared the first two promissory notes dated 7 August 1996 and 14 March 1997 as already
due and demandable and that the interest on the loans had been reduced by the parties from 15% to 6% per annum. It
then ordered the petitioner corporation to pay Christian the amount of $100,000 representing the principal obligation of the
first two notes(7 August 1996, 14 March 1997), plus interest of 6% per month.
The trial court stated that:
When the instant case was filed on February 2, 1999, none of the promissory notes was due and demandable. As of this
date however, the first and the second promissory notes have already matured. Hence, payment is already due.
Under Section 5 of Rule 10 of the 1997 Rules of Civil Procedure, a complaint which states no cause of action may be
cured by evidence presented without objection. Thus, even if the plaintiff had no cause of action at the time he filed the
instant complaint, as defendants obligation are not yet due and demandable then, he may nevertheless recover on the
first two promissory notes in view of the introduction of evidence showing that the obligations covered by the two
promissory notes are now due and demandable.(since there showing that the 2 PNs have matured it cured the lack of
cause of action)
, the CA also denied petitioners appeal and affirmed in toto the decision of the trial court.
Stating that:
In the case at bench, while it is true that appellant Swagman raised in its Answer the issue of prematurity in the filing of
the complaint, appellant Swagman nonetheless failed to object to appellee Christians presentation of evidence to the
effect that the promissory notes have become due and demandable. The afore-quoted rule allows a complaint which
states no cause of action to be cured either by evidence presented without objection or, in the event of an objection
sustained by the court, by an amendment of the complaint with leave of court

ISSUE:
WON complaint that lacks a cause of action at the time it was filed be cured by the accrual of a cause of action during the
pendency of the case?
RULING:
The sc expressed that:
Cause of action, as defined in Section 2, Rule 2 of the 1997 Rules of Civil Procedure, is the act or omission by which a
party violates the right of another. Its essential elements are as follows:
1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;
2. An obligation on the part of the named defendant to respect or not to violate such right; and
3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the
obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other
appropriate relief.
It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff the right to
maintain an action in court for recovery of damages or other appropriate relief.
At the time the complaint was filed with the trial court on 2 February 1999, none of the three promissory notes was due
yet; although, two of the promissory notes with the due dates of 7 August 1999 and 14 March 2000 matured during the
pendency of the case with the trial court. Both courts also found that the petitioner had been religiously paying the private
respondent US$750 per month from January 1998 and even during the pendency of the case before the trial court and
that the private respondent had accepted all these monthly payments.
It has become glaringly obvious that when the complaint for a sum of money and damages was filed with the trial court on
2 February 1999, no cause of action has as yet existed because the petitioner had not committed any act in violation of
the terms of the three promissory notes as modified by the renegotiation in December 1997. Without a cause of action,
the private respondent had no right to maintain an action in court, and the trial court should have therefore dismissed his
complaint.
SC also ruled that the interpretation of Section 5, Rule 10 of the 1997 Rules of Civil Procedure is erroneous. The curing
effect under Section 5 is applicable only if a cause of action in fact exists at the time the complaint is filed, but the
complaint is defective for failure to allege the essential facts.It thus follows that a complaint whose cause of action has not
yet accrued cannot be cured or remedied by an amended or supplemental pleading alleging the existence or accrual of a
cause of action while the case is pending. Such an action is prematurely brought and is, therefore, a groundless suit,
which should be dismissed by the court upon proper motion seasonably filed by the defendant. The underlying reason for
this rule is that a person should not be summoned before the public tribunals to answer for complaints which are immature

SECTION 2 CAUSE OF ACTION, DEFINED

JOSEPH VS BAUTISTA (respondent judge)
FACTS:

Respondent Patrocinio Perez is the owner of a cargo truck for conveying cargoes and passengers for a
consideration from Dagupan City to Manila. On January 1973, said cargo truck driven by defendant Domingo Villa
was on its way to Valenzuela, Bulacan from Pangasinan. Petitioner, with a cargo of livestock, boarded the cargo
truck at Dagupan City after paying the sum of P 9.00 as one way fare to Valenzuela, Bulacan. While said cargo
truck was negotiating the National Highway proceeding towards Manila, defendant Domingo Villa tried to overtake
a tricycle likewise proceeding in the same direction. At about the same time, a pick-up truck, supposedly owned
by respondents Antonio Sioson and Jacinto Pagarigan, then driven by respondent Lazaro Villanueva, tried to
overtake the cargo truck which was then in the process of overtaking the tricycle, thereby forcing the cargo truck
to veer towards the shoulder of the road and to ram a mango tree. As a result, petitioner sustained a bone fracture
in one of his legs.

Petitioner filed a complaint for damages against respondent Perez, as owner of the cargo truck, based on a
breach of contract of carriage and against respondents Sioson and Villanueva, as owner and driver, respectively,
of the pick-up truck, based on quasi-delict.

Respondent Sioson filed his answer alleging that he is not and never was an owner of the pick-up truck and
neither would he acquire ownership thereof in the future.

On September 1973, petitioner filed his amended complaint impleading respondents Jacinto Pagarigan and a
certain Rosario Vargas as additional alternative defendants. Petitioner apparently could not ascertain who the real
owner of said cargo truck was,

Respondent Perez filed her amended answer with crossclaim against her co-defendants for indemnity and
subrogation in the event she is ordered to pay petitioner's claim, and therein impleaded cross-defendant Alberto
Cardeno as additional alternative defendant.

On September 1974, respondents Lazaro Villanueva, Alberto Cardeno, Antonio Sioson and Jacinto Pagarigan,
thru their insurer, Insurance Corporation of the Philippines, paid petitioner's claim for injuries sustained in the
amount of P 1,300.00. By reason thereof, petitioner executed a release of claim releasing from liability the
following parties

On December 1974, respondents Lazaro Villanueva, Alberto Cardeno and their insurer, the Insurance Corporation
of the Philippines, paid respondent Patrocinio Perez' claim for damages to her cargo truck in the amount of P
7,420.61.

Consequently, respondents Sioson, Pagarigan, Cardeno and Villanueva filed a "Motion to Exonerate and Exclude
Defs/ Cross defs. Cardeno, Villanueva, Sioson and Pagarigan on the Instant Case", alleging that respondents
Cardeno and Villanueva already paid P 7,420.61 by way of damages to respondent Perez, and alleging further
that respondents Cardeno, Villanueva, Sioson and Pagarigan paid P 1,300.00 to petitioner by way of amicable
settlement.

Thereafter, respondent Perez filed her "Opposition to Cross-defs.' motion and Counter Motion" to dismiss. The socalled counter motion to dismiss was premised on the fact that the release of claim executed by petitioner in favor
of the other respondents inured to the benefit of respondent Perez, considering that all the respondents are
solidarity liable to herein petitioner.

On July 8, 1975, respondent judge issued the questioned order dismissing the case, and a motion for the
reconsideration thereof was denied. Hence, this appeal, petitioner contending that respondent judge erred in
declaring that the release of claim executed by petitioner in favor of respondents Sioson, Villanueva and
Pagarigan inured to the benefit of respondent Perez

ISSUE:
How many causes of action in the instant case? Whats the effect then?
SC RULING:
There is only one cause of action in this case.
The argument that there are two causes of action embodied in petitioner's complaint, hence the judgment on the
compromise agreement under the cause of action based on quasi-delict is not a bar to the cause of action for breach of
contract of carriage, is untenable.
A cause of action is understood to be the delict or wrongful act or omission committed by the defendant in violation of the
primary rights of the plaintiff. It is true that a single act or omission can be violative of various rights at the same time, as
when the act constitutes juridically a violation of several separate and distinct legal obligations. However where there is

only one delict or wrong, there is but a single cause of action regardless of the number of rights that may have been
violated belonging to one person.
The singleness of a cause of action lies in the singleness of the- delict or wrong violating the rights of one person.
Nevertheless, if only one injury resulted from several wrongful acts, only one cause of action arises. In the case at bar,
there is no question that the petitioner sustained a single injury on his person. That vested in him a single cause of action,
albeit with the correlative rights of action against the different respondents through the appropriate remedies allowed by
law.
The trial court was correct in holding that there was only one cause of action involved although the bases of recovery
invoked by petitioner against the defendants therein were not necessarily Identical since the respondents were not
identically circumstanced. However, a recovery by the petitioner under one remedy necessarily bars recovery under the
other. This, in essence, is the rationale for the proscription in our law against double recovery for the same act or omission
which, obviously, stems from the fundamental rule against unjust enrichment.
There is no question that the respondents herein are solidarily liable to petitioner. We cannot accept the vacuous
contention of petitioner that said allegations are intended to apply only in the event that execution be issued in his favor.
There is nothing in law or jurisprudence which would countenance such a procedure.
The respondents having been found to be solidarity liable to petitioner, the full payment made by some of the solidary
debtors and their subsequent release from any and all liability to petitioner inevitably resulted in the extinguishment and
release from liability of the other solidary debtors, including herein respondent Patrocinio Perez.

SECTION 3 ONE SUIT FOR A SINGLE CAUSE OF ACTION

PHILIPPINE BANK OF, COMMUNICATIONS, Petitioners,
vs.
ELENA LIM, RAMON CALDERON, and TRI-ORO INTERNATIONAL TRADING & MANUFACTURING CORPORATION,
Respondents.
G.R. No. 158138. April 12, 2005
FACTS:
On September 3, 1999, the Philippine Bank of Communications filed a complaint against Elena Lim, Ramon Calderon and
Tri-Oro International Trading & Manufacturing Corporation (Tri-Oro for brevity)] with the Regional Trial Court of Manila for
the collection of a deficiency amounting to P4,014,297.23 exclusive of interest.
Petitioner alleged therein that respondents obtained a loan from it and executed a continuing surety agreement dated
November 16, 1995 in favor of petitioner.
Petitioner granted a renewal of said loan upon respondents request, the most recent being on January 21, 1998 as
evidenced by Promissory Note Renewal BD-Variable No. 8298021001 in the amount of P3,000,000.00. It was expressly
stipulated therein that the venue for any legal action that may arise out of said promissory note shall be Makati City, to the
exclusion of all other courts x x x.
Respondents allegedly failed to pay said obligation upon maturity. Thus, petitioner foreclosed the real estate mortgage
executed by respondents valued at P1,081,600.00 leaving a deficiency balance of P4,014,297.23 as of August 31, 1999.
Respondents moved to dismiss the complaint on the ground of improper venue, invoking the stipulation contained in the
last paragraph of the promissory note with respect to the restrictive/exclusive venue.
The trial court denied said motion asseverating that petitioner had separate causes of action arising from the promissory
note and the continuing surety agreement. Thus, [under] Rule 4, Section 2, of the 1997 Rules of Civil Procedure, as
amended, x x x venue was properly laid in Manila. The trial court supported its order with cases where venue was held to
be merely permissive. A motion for reconsideration of said order was likewise denied.

CA ruled that respondents alleged debt was based on the Promissory Note, which had provided an exclusionary
stipulation on venue "to the exclusion of all other courts. The parties Surety Agreement, though silent as to venue, was
an accessory contract that should have been interpreted in consonance with the Promissory Note.6
ISSUE:
Whether or not petitioner did not violate section 3 of rule 2 (One suit for a cause of action)
RULING:
Petitioner correctly argues that there are two causes of action contained in its Complaint. A cause of action is a partys act
or omission that violates the rights of the other. Only one suit may be commenced for a single cause of action. If two or
more suits are instituted on the basis of the same cause of action, only one case should remain and the others must be
dismissed.
As against Tri-Oro International Trading & Manufacturing Corporation, petitioners cause of action is the alleged failure to
pay the debt in violation of the PN; as against Elena Lim and Ramon Calderon, in violation of the SA.
Because of the variance between the causes of action, petitioner could have filed separate actions against respondents to
recover the debt, on condition that it could not recover twice from the same cause. It could have proceeded against only
one or all of them,30 as full payment by any one of them would have extinguished the obligation.31 By the same token,
respondents could have been joined as defendants in one suit, because petitioners alleged right of relief arose from the
same transaction or series of transactions that had common questions of fact.32 To avoid a multiplicity of suits, joinder of
parties is encouraged by the law.
The cause of action, however, does not affect the venue of the action. The vital issue in the present case is whether the
action against the sureties is covered by the restriction on venue stipulated in the PN. As earlier stated, the answer is in
the affirmative. Since the cases pertaining to both causes of action are restricted to Makati City as the proper venue,
petitioner cannot rely on Section 5 of Rule 2 of the Rules of Court.

SECTION 4 SPLITTING A SINGLE CAUSE OF ACTION, EFFECT OF

CHUA VS. METROBANK
G.R. No. 161135, April 8, 2005

FACTS:

Petitioner Chua is president of co-petitioner Filiden, a domestic corporation, engaged in the realty business.
[4]

Respondent Metropolitan Bank and Trust Co. (respondent Metrobank) is a domestic corporation and a duly

licensed banking institution.

Sometime in 1988, petitioners obtained from respondent Metrobank a loan of P4,000,000.00, which was secured
by a real estate mortgage (REM) on parcels of land registered in petitioner Chuas name.

Having failed to fully pay their obligations, petitioners entered into a Debt Settlement Agreement [8] with respondent
Metrobank where Amortization payments were to be made. When petitioners still failed to pay their loans,
respondent Metrobank sought to extra-judicially foreclose the REM constituted on the subject properties.
Respondent Atty. Romualdo Celestra (Atty. Celestra) issued a Notice of Sale.

Petitioner Chua, in his personal capacity and acting on behalf of petitioner Filiden, filed before Branch 257 of the
Regional Trial Court of Paraaque (RTC-Branch 257), a Complaint for Injunction with Prayer for Issuance of

Temporary Restraining Order (TRO), Preliminary Injunction and Damages,[12]against respondents Atty.
Celestra, docketed as Civil Case No. CV-01-0207. TRO was granted by RTC-Branch 257.

However, no injunction was issued by RTC-Branch 257. Hence, Atty. Celestra reset the auction sale on November
8, 2001 and a Certificate of Sale was accordingly issued to respondent Metrobank as the highest bidder of the
foreclosed properties.

Petitioners filed with RTC-Branch 257 a Motion to Admit Amended Complaint[15] in Civil Case No. CV-01-0207
impleading as additional defendant the incumbent Register of Deeds of Paraaque City on the ground that the
1.) Certificate of Sale was a falsified document; 2.) Petitioners additionally prayed in their Amended Complaint for
the award of damages given the abuse of power of respondent Metrobank in the preparation, execution, and
implementation of the Debt Settlement Agreement with petitioners; 3.) Petitioners also sought the issuance of a
TRO or a writ of preliminary injunction to enjoin respondent Atty. Celestra and all other persons from proceeding
with the foreclosure sale, on the premise that no auction sale was actually held on 8 November 2001.

However acting Judge of Branch 257 was inhibited from hearing the case. The case was then re-raffled to RTCBranch 258.
Meanwhile, petitioners filed also with Branch 195 of the Regional Trial Court of Paraaque (RTC-Branch
195) a Verified Complaint for Damages against the respondents on the ground that petitioner Chua was
prevented from realizing a profit of P70,000,000.00 from the intended sale. This is docketed as Civil Case No.
CV-05-0402.

Petitioners filed with RTC-Branch 195 a Motion to Consolidate [22] dated 27 December 2005, seeking the
consolidation of Civil Case No. CV-05-0402, the action for damages pending before said court, with Civil
Case No. CV-01-0207, the injunction case that was being heard before RTC-Branch 258. This was granted
by RTC-Branch 195 and ordered that Civil Case No. CV-05-0402 be transferred to RTC-Branch 258, which was
hearing Civil Case No. 01-0207.

This was opposed by respondents raising the ground of forum shopping.

RTC-Branch 258 declared that the facts or claims submitted by petitioners, the rights asserted, and the principal
parties in the two cases were the same. Hence, the case Civil Case No. CV-05-0402 was dismissed due to
forum shopping.

CA affirmed RTCs decision stating that the nullification of the foreclosure of the subject properties,
which petitioners sought in Civil Case No. CV-01-0207, would render proper the award for damages,
claimed by petitioners in Civil Case No. CV-05-0402. Thus, judgment in either case would result in res
judicata.

Hence, this petition.

ISSUES:
1. WON THE OUTCOME OF THE FIRST CASE WOULD AFFECT THE SECOND CASE.
2. WON the filing of Civil Case No. CV-01-0207 and Civil Case No. CV-05-0402 amounts to forum shopping.

RULING:
FORUM SHOPPING
The Court answers in the affirmative.
The proscription against forum shopping is found in Section 5, Rule 7 of the 1997 Rules of Court, which provides
that:
SEC. 5. Certification against forum shopping. The plaintiff or principal party shall certify under
oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency
and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is
such other pending action or claim, a complete statement of the present status thereof; and (c) if he
should thereafter learn that the same or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or
initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice,
unless otherwise provided, upon motion and after hearing
Forum shopping exists when a party repeatedly avails himself of several judicial remedies in different courts,
simultaneously or successively, all substantially founded on the same transactions and the same essential facts and
circumstances, and all raising substantially the same issues either pending in or already resolved adversely by some
other court.[32]

Forum shopping can be committed in three ways: (1) filing multiple cases based on the same cause of action
and with the same prayer, the previous case not having been resolved yet (where the ground for dismissal is litis
pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous case having
been finally resolved (where the ground for dismissal is res judicata); and (3) filing multiple cases based on the same
cause of action, but with different prayers (splitting of causes of action, where the ground for dismissal is also either litis
pendentia or res judicata).[34]
In the present case, there is no dispute that petitioners failed to state in the Certificate of Non-Forum Shopping,
attached to their Verified Complaint in Civil Case No. CV-05-0402 before RTC-Branch 195, the existence of Civil Case No.
CV-01-0207 pending before RTC-Branch 258. Nevertheless, petitioners insist that they are not guilty of forum shopping,
since (1) the two cases do not have the same.
Petitioners committed forum shopping by filing multiple cases based on the same cause of action,
although with different prayers.

Sections 3 and 4, Rule 2 of the Rules of Court proscribe the splitting of a single cause of action:
Section 3. A party may not institute more than one suit for a single cause of action.
Section 4. Splitting a single cause of action; effect of.If two or more suits are instituted on
the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is
available as a ground for the dismissal of the others.

Forum shopping occurs although the actions seem to be different, when it can be seen that there is a splitting of a
cause of action. Where there is only one delict or wrong, there is but a single cause of action regardless of the
number of rights that may have been violated belonging to one person. [36]
Petitioners would like to make it appear that Civil Case No. CV-01-0207 was solely concerned with the nullification
of the auction sale and certification of sale, while Civil Case No. CV-05-0402 was a totally separate claim for
damages. Yet, a review of the records reveals that petitioners also included an explicit claim for damages in their
Amended Complaint[37] in Civil Case No. CV-01-0207.

There is no question that the claims of petitioners for damages in Civil Case No. CV-01-0207 and Civil Case No.
CV-05-0402 are premised on the same cause of action, i.e., the purportedly wrongful conduct of respondents in
connection with the foreclosure sale of the subject properties.
At first glance, said claims for damages may appear different. In Civil Case No. CV-01-0207, the damages
purportedly arose from the bad faith of respondents in offering the subject properties at the auction sale at a price much
lower than the assessed fair market value of the said properties, said to be P176,117,000.00. On the other hand, the
damages in Civil Case No. CV-05-0402, allegedly resulted from the backing out of prospective buyers, who had initially
offered to buy the subject properties for not less than P175,000,000.00, because respondents made it appear that the
said properties were already sold at the auction sale. Yet, it is worthy to note that petitioners quoted closely similar
values for the subject properties in both cases, against which they measured the damages they supposedly
suffered.
OUTCOME OF THE FIRST CASE WOULD AFFECT THE SECOND CASE.
Petitioners contention that the outcome of Civil Case No. CV-01-0207 will not determine that of Civil Case No.
CV-05-0402 does not justify the filing of separate cases. Even if it were assumed that the two cases contain two separate
remedies that are both available to petitioners, these two remedies that arose from one wrongful act cannot be
pursued in two different cases. The rule against splitting a cause of action is intended to prevent repeated
litigation between the same parties in regard to the same subject of controversy, to protect the defendant from
unnecessary vexation; and to avoid the costs and expenses incident to numerous suits. It comes from the old

10

maxim nemo debet bis vexari, pro una et eadem causa (no man shall be twice vexed for one and the same cause).
[41]

If the forum shopping is not considered willful and deliberate, the subsequent case shall be dismissed without
prejudice, on the ground of either litis pendentiaor res judicata. However, if the forum shopping is willful and deliberate,
both (or all, if there are more than two) actions shall be dismissed with prejudice..[43] In this case, petitioners did not
deliberately file Civil Case No. CV-05-0402 for the purpose of seeking a favorable decision in another
forum. Otherwise, they would not have moved for the consolidation of both cases. Thus, only Civil Case No. CV05-0402 is dismissed and the hearing of Civil Case No. CV-01-0207 before RTC-Branch 258 will be continued.
IN VIEW OF THE FOREGOING, the instant Petition is DENIED.

SECTION 4 SPLITTING A SINGLE CAUSE OF ACTION, EFFECT OF

CATALINA B. CHU, THEANLYN B. CHU, THEAN CHING LEE B. CHU, THEAN LEEWN B. CHU, and MARTIN
LAWRENCE B. CHU, - versus - SPOUSES FERNANDO C. CUNANAN and TRINIDAD N. CUNANAN,BENELDA
ESTATE DEVELOPMENT CORPORATION, and SPOUSES AMADO E. CARLOS and GLORIA A. CARLOS,
FACTS:

On September 30, 1986, Spouses Manuel and Catalina Chu (Chus) executed a deed of sale with assumption of
mortgage involving their five parcels of land situated in Saguin, San Fernando City, Pampanga, registered under
Transfer Certificate of Title (TCT) No. 198470-R, TCT No. 198471-R, TCT No. 198472-R, TCT No. 198473-R, and
TCT No. 199556-R, all of the Office of the Registry of Deeds of the Province of Pampanga, in favor of Trinidad
N. Cunanan (Cunanan) for the consideration ofP5,161,090.00.
They also executed a so-called side agreement, whereby they clarified that Cunanan had paid
only P1,000,000.00 to the Chus despite the Chus, as vendors, having acknowledged
receiving P5,161,090.00; that the amount of P1,600,000.00 was to be paid directly to Benito Co and to Security
Bank and Trust Company (SBTC) in whose favor the five lots had been mortgaged; and that Cunanan would pay
the balance of P2,561.90.00 within three months, with a grace period of one month subject to 3%/month interest
on any remaining unpaid amount.
The parties further stipulated that the ownership of the lots would remain with the Chus as the vendors and would
be transferred to Cunanan only upon complete payment of the total consideration and compliance with the terms
of the deed of sale with assumption of mortgage.
Thereafter, the Chus executed a special power of attorney authorizing Cunanan to borrow P5,161,090.00 from
any banking institution and to mortgage the five lots as security, and then to deliver the proceeds to the Chus net
of the balance of the mortgage obligation and the downpayment.
Cunanan was able to transfer the title of the five lots to her name without the knowledge of the Chus, and to
borrow money with the lots as security without paying the balance of the purchase price to the Chus.
She later transferred two of the lots to Spouses Amado and Gloria Carlos (Carloses) on July 29, 1987. As a
result, on March 18, 1988, the Chus caused the annotation of an unpaid vendors lien on three of the lots.
Nonetheless, Cunanan still assigned the remaining three lots to Cool Town Realty on May 25, 1989 despite the
annotation.
In February 1988, the Chus commenced Civil Case No. G-1936 in the RTC to recover the unpaid balance from
Spouses Fernando and Trinidad Cunanan (Cunanans).
Five years later, on April 19, 1993, the Chus amended the complaint to seek the annulment of the deed of sale
with assumption of mortgage and of the TCTs issued pursuant to the deed, and to recover damages. They
impleaded Cool Town Realty and Development Corporation (Cool Town Realty), and the Office of the Registry of
Deeds of Pampanga as defendants in addition to the Cunanans.

11

Considering that the Carloses had meanwhile sold the two lots to Benelda Estate Development Corporation
(Benelda Estate) in 1995, the Chus further amended the complaint in Civil Case No. G-1936 to implead Benelda
Estate as additional defendant.
On December 2, 1999, the Chus, the Cunanans, and Cool Town Realty entered into a compromise
agreement,whereby the Cunanans transferred to the Chus their 50% share in all the parcels of land situated in
Saguin, San Fernando, Pampanga registered in the name of Cool Town Realty for and in consideration of the
full settlement of their case. The RTC approved the compromise agreement in a partial decision dated January
25, 2000.
Thereafter, on April 30, 2001, the petitioners herein (i.e., Catalina Chu and her children) brought another suit, Civil
Case No. 12251, against the Carloses and Benelda Estate, seeking the cancellation of the TCTs of the two lots in
the name of Benelda Estate, and the issuance of new TCTs in their favor, plus damages.
ISSUE: Was Civil Case No. 12251 barred by res judicata although the compromise agreement did not expressly
include Benelda Estate as a party and although the compromise agreement made no reference to the lots now
registered in Benelda Estates name?
SC Ruling: Affirmative.
A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an
end to one already commenced.[19] It encompasses the objects specifically stated therein, although it may include other
objects by necessary implication,[20] and is binding on the contracting parties, being expressly acknowledged as a juridical
agreement between them.[21] It has the effect and authority of res judicata upon the parties.[22]
In the construction or interpretation of a compromise agreement, the intention of the parties is to be ascertained
from the agreement itself, and effect should be given to that intention. [23] Thus, the compromise agreement must be read
as a whole.
The following pertinent portions of the compromise agreement indicate that the parties intended to thereby
settle all their claims against each other, to wit:
1.
That the defendants SPOUSES TRINIDAD N.CUNANAN and FERNANDO C.CUNANAN for
and in consideration of the full settlement of their case in the above-entitled case, hereby
TRANSFER, DELIVER, and CONVEY unto the plaintiffs all their rights, interest, benefits, participation,
possession and ownership which consists of FIFTY (50%) percent share on all the parcels of land
situated in Saguin, San Fernando Pampanga now registered in the name of defendant, COOL TOWN
REALTY & DEVELOPMENT CORPORATION, as particularly evidenced by the corresponding Transfer
Certificates of Titles xxx
xxxx
6. That the plaintiffs and the defendant herein are waiving, abandoning, surrendering, quitclaiming,
releasing, relinquishing any and all their respective claims against each other as alleged in the
pleadings they respectively filed in connection with this case.[24] (bold emphasis supplied)

The intent of the parties to settle all their claims against each other is expressed in the phrase any and all their
respective claims against each other as alleged in the pleadings they respectively filed in connection with this case , which
was broad enough to cover whatever claims the petitioners might assert based on the deed of sale with assumption of
mortgage.
There is no question that the deed of sale with assumption of mortgage covered all the five lots, to wit:

12

WHEREAS, the VENDORS are willing to sell the above-described properties and the VENDEE is
willing to buy the same at FIFTY FIVE (P55.00) PESOS, Philippine Currency, per square meter, or a total
consideration of FIVE MILLION ONE HUNDRED SIXTY ONE THOUSAND and NINETY (P5,161,090.00)
PESOS, Philippine Currency.[25]
To limit the compromise agreement only to the three lots mentioned therein would contravene the avowed objective
of Civil Case No. G-1936 to enforce or to rescind the entiredeed of sale with assumption of mortgage. Such interpretation
is akin to saying that the Cunanans separately sold the five lots, which is not the truth. For one, Civil Case No. G-1936 did
not demand separate amounts for each of the purchased lots. Also, the compromise agreement did not state that the
value being thereby transferred to the petitioners by the Cunanans corresponded only to that of the three lots.
Apparently, the petitioners were guilty of splitting their single cause of action to enforce or rescind the deed of sale
with assumption of mortgage. Splitting a single cause of action is the act of dividing a single or indivisible cause of action
into several parts or claims and instituting two or more actions upon them. [26] A single cause of action or entire claim or
demand cannot be split up or divided in order to be made the subject of two or more different actions. [27] Thus, Section 4,
Rule 2 of the Rules of Court expressly prohibits splitting of a single cause of action.
The petitioners were not at liberty to split their demand to enforce or rescind the deed of sale with assumption of
mortgage and to prosecute piecemeal or present only a portion of the grounds upon which a special relief was sought
under the deed of sale with assumption of mortgage, and then to leave the rest to be presented in another suit; otherwise,
there would be no end to litigation. ] Their splitting violated the policy against multiplicity of suits, whose primary objective
was to avoid unduly burdening the dockets of the courts. Their contravention of the policy merited the dismissal of Civil
Case No. 12251 on the ground of bar by res judicata.
Under the doctrine of res judicata, a final judgment or decree on the merits rendered by a court of competent
jurisdiction is conclusive of the rights of the parties or their privies in all later suits and on all points and matters
determined in the previous suit.[31] The foundation principle upon which the doctrine rests is that the parties ought not
to be permitted to litigate the same issue more than once; that when a right or fact has been judicially tried and
determined by a court of competent jurisdiction, so long as it remains unreversed, should be conclusive upon the
parties and those in privity with them in law or estate.
Yet, in order that res judicata may bar the institution of a subsequent action, the following requisites must concur: (a)
the former judgment must be final; (b) it must have been rendered by a court having jurisdiction of the subject matter
and the parties; (c) it must be a judgment on the merits; and (d) there must be between the first and second actions (i)
identity of parties, (ii) identity of the subject matter, and (iii) identity of cause of action.

PANTRANCO VS. STANDARD INSURANCE

Facts:
This is a petition for review on certiorari assailing the Decision dated July 23, 1999 and Resolution dated November 4,
1999 of the Court of Appeals in CA-G.R. CV No. 38453, entitled Standard Insurance Company, Inc. and Maritima Gicale
vs. PANTRANCO North Express, Inc., and Alexander Buncan.
On October 28, 1984, respondent Crispin Gicale was driving the passenger jeepney owned by his mother Martina Gicale.
While driving north bound along the National Highway in Talavera, Nueva Ecija, a passenger bus, owned by petitioner
Pantranco North Express, Inc., driven by Alexander Buncan, also private petitioner, was trailing behind. When the two

13

vehicles were negotiating a curve along the highway, the passenger bus overtook the jeepney. In so doing, the passenger
bus hit the left rear side of the jeepney and sped away.
Crispin reported the incident to the Talavera Police Station and respondent Standard Insurance Co., Inc., insurer of the
jeepney. The total cost of the repair was P21,415.00 but Standard paid only P8,000.00. Martina Gicale shouldered the
balance of P13,415.00.
Standard and Martina demanded reimbursement from Pantranco and its driver Alexander Buncan, but they refused. This
prompted respondents to file with the RTC, Branch 94, Manila, a complaint for sum of money.
Petitioners, in their answer denied the allegations and averred that it is the Metropolitan Trial Court which has jurisdiction
over the case.
On June 5, 1992, RTC rendered a decision in favor of respondents Standard and Martina, and ordering to pay plaintiff
Standard Insurance the amount of P8,000.00 with interest due thereon from Nov. 27, 1984 until fully paid and to pay
Martina Gicale the amount of P13,415 with interest due from Oct. 22, 1984 until fully paid; to pay the attorneys fees and
the expenses of the litigation and the cost of suit.
On appeal, the Court of Appeals, affirmed the RTCs decision.
Issue/s:
a. Whether or not respondents causes of action arose out of the same transaction that by spltting would be a
ground for dismissal of the other suits.
b. Whether or not the Trial Court has jurisdiction over the subject of the action considering that respondents
respective cause of action against petitioners did not arise out of the same transaction nor are there questions of
law and facts common to both petitioners and respondents.

Held:
a. Yes, respondents causes of action arose out of the same transaction.
Rule 2 Sec. 4 of the Rules of Court provides that if two or more suits are instituted on the basis of the same cause
of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal of
the others.
In this case, there is a single transaction common to all, that is, Pantrancos bus hitting the rear side of the
jeepney. There is also a common question of fact, that is, whether petitioners are negligent. There being a single
transaction common to both respondents, consequently, they have the same cause of action against petitioners.
To determine identity of cause of action, it must be ascertained whether the same evidence which is necessary to
sustain the second cause of action would have been sufficient to authorize a recovery in the first.[7] Here, had
respondents filed separate suits against petitioners, the same evidence would have been presented to sustain the
same cause of action. Thus, the filing by both respondents of the complaint with the court below is in order. Such
joinder of parties avoids multiplicity of suit and ensures the convenient, speedy and orderly administration of
justice.
b. Yes, the Regional Trial Court has jurisdiction over the subject matter.
Sec. 5. Joinder of causes of action. A party may in one pleading assert, in the alternative or otherwise, as many
causes of action as he may have against an opposing party, subject to the following conditions:

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xxx
(d) Where the claims in all the causes of action are principally for recovery of money the aggregate amount
claimed shall be the test of jurisdiction.
The above provision presupposes that the different causes of action which are joined accrue in favor of the same
plaintiff/s and against the same defendant/s and that no misjoinder of parties is involved.[8] The issue of whether
respondents claims shall be lumped together is determined by paragraph (d) of the above provision. This
paragraph embodies the totality rule as exemplified by Section 33 (1) of B.P. Blg. 129[9] which states, among
others, that where there are several claims or causes of action between the same or different parties, embodied
in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action,
irrespective of whether the causes of action arose out of the same or different transactions.
As previously stated, respondents cause of action against petitioners arose out of the same transaction. Thus,
the amount of the demand shall be the totality of the claims.
Respondent Standards claim is P8,000.00, while that of respondent Martina Gicale is P13,415.00, or a total of
P21,415.00. Section 19 of B.P. Blg. 129 provides that the RTC has exclusive original jurisdiction over all other
cases, in which the demand, exclusive of interest and cost or the value of the property in controversy, amounts to
more than twenty thousand pesos (P20,000.00). Clearly, it is the RTC that has jurisdiction over the instant case.
It bears emphasis that when the complaint was filed, R.A. 7691 expanding the jurisdiction of the Metropolitan,
Municipal and Municipal Circuit Trial Courts had not yet taken effect. It became effective on April 15, 1994.

UMALE VS. CANOGA PARK

Facts:
The petitioner agreed to lease, for a period of two (2) years starting from January 16, 2000, an eight hundred sixty (860)square-meter prime lot located in Ortigas Center, Pasig City owned by the respondent. The respondent acquired the
subject lot from Ortigas & Co. Ltd. Partnership through a Deed of Absolute Sale, subject to the following conditions: (1)
that no shopping arcades or retail stores, restaurants, etc. shall be allowed to be established on the property, except with
the prior written consent from Ortigas & Co. Ltd. Partnership and (2) that the respondent and/or its successors-in-interest
shall become member/s of the Ortigas Center Association, Inc. (Association), and shall abide by its rules and regulations.
On October 10, 2000, before the lease contract expired, the respondent filed an unlawful detainer case against
the petitioner before the Metropolitan Trial Court (MTC)-Branch 68, Pasig City, docketed as Civil Case No. 8084. The
respondent used as a ground for ejectment the petitioners violation of stipulations in the lease contract regarding the use
of the property. Under this contract, the petitioner shall use the leased lot as a parking space for light vehicles and as a
site for a small drivers canteen, and may not utilize the subject premises for other purposes without the respondents prior
written consent. The petitioner, however, constructed restaurant buildings and other commercial establishments on the lot,
without first securing the required written consent from the respondent.
The MTC-Branch 68 decided the ejectment case in favor of the respondent. On appeal, the RTC-Branch
155, Pasig City affirmed in toto the MTC-Branch 68 decision. The case, however, was re-raffled to the RTC-Branch
267, Pasig City because the Presiding Judge of the RTC-Branch 155, upon motion, inhibited himself from resolving the
petitioners motion for reconsideration.The RTC-Branch 267 granted the petitioners motion, thereby reversing and setting
aside the MTC-Branch 68 decision. Accordingly, Civil Case No. 8084 was dismissed for being prematurely filed. Thus, the
respondent filed a petition for review with the CA on April 10, 2002.
During the pendency of the petition for review, the respondent filed on May 3, 2002 another case for unlawful
detainer against the petitioner before the MTC-Branch 71, Pasig City. The case was docketed as Civil Case No.
9210. This time, the respondent used as a ground for ejectment the expiration of the parties lease contract.

15

On December 4, 2002, the MTC-Branch 71 rendered a decision in favor of the respondent.

On appeal, the RTC-Branch 68 reversed and set aside the decision of the MTC-Branch 71, and dismissed Civil Case No.
9210 on the ground of litis pendentia. The petitioner, however, was still ordered to pay rent in the amount of seventy-one
thousand five hundred pesos (P71,500.00) per month beginning January 16, 2002, which amount is the monthly rent
stipulated in the lease contract.
Aggrieved by the reversal, the respondent filed a Petition for Review under Rule 42 of the Rules of Court with the
CA. The respondent argued that there exists no litis pendentia between Civil Case Nos. 8084 and 9210 because the two
cases involved different grounds for ejectment, i.e., the first case was filed because of violations of the lease contract,
while the second case was filed due to the expiration of the lease contract. The respondent emphasized that the second
case was filed based on an event or a cause not yet in existence at the time of the filing of the first case. The lease
contract expired on January 15, 2002, while the first case was filed on October 10, 2000.
On August 20, 2004, the CA nullified and set aside the assailed decision of the RTC-Branch 68, and ruled that
there was no litis pendentia because the two civil cases have different causes of action. The decision of the MTC- Branch
71 was ordered reinstated. Subsequently, the petitioners motion for reconsideration was denied; hence, the filing of the
present petition for review oncertiorari.
In presenting his case before this Court, the petitioner insists that litis pendentia exists between the two ejectment
cases filed against him because of their identity with one another and that any judgment on the first case will amount
to res judicata on the other. The petitioner argues that the respondent reiterated the ground of violations of the lease
contract, with the additional ground of the expiration of the lease contract in the second ejectment case. Also, the
petitioner alleges that all of the elements of litis pendentia are present in this case, thus, he prays for the reversal and
setting aside of the assailed CA decision and resolution, and for the dismissal of the complaint in Civil Case No. 9210 on
the ground of litis pendentia.
ISSUE: W/N litis pendentia exists in this case?
RULING:
As a ground for the dismissal of a civil action, litis pendentia refers to a situation where two actions are pending
between the same parties for the same cause of action, so that one of them becomes unnecessary and vexatious.
Litis pendentia exists when the following requisites are present: identity of the parties in the two actions; substantial
identity in the causes of action and in the reliefs sought by the parties; and the identity between the two actions should be
such that any judgment that may be rendered in one case, regardless of which party is successful, would amount to res
judicata in the other.
In the present case, the parties bone of contention is whether Civil Case Nos. 8084 and 9210 involve the same cause of
action. The petitioner argues that the causes of action are similar, while the respondent argues otherwise. If an identity, or
substantial identity, of the causes of action in both cases exist, then the second complaint for unlawful detainer may be
dismissed on the ground oflitis pendentia.
We rule that Civil Case Nos. 8084 and 9210 involve different causes of action.
Generally, a suit may only be instituted for a single cause of action. If two or more suits are instituted on the basis
of the same cause of action, the filing of one or a judgment on the merits in any one is ground for the dismissal of the
others.
Several tests exist to ascertain whether two suits relate to a single or common cause of action, such as whether
the same evidence would support and sustain both the first and second causes of action (also known as the same
evidence test), or whether the defenses in one case may be used to substantiate the complaint in the other. Also

16

fundamental is the test of determiningwhether the cause of action in the second case existed at the time of the filing of the
first complaint
Of the three tests cited, the third one is especially applicable to the present case, i.e., whether the cause of action in the
second case existed at the time of the filing of the first complaint and to which we answer in the negative. The facts
clearly show that the filing of the first ejectment case was grounded on the petitioners violation of stipulations in the lease
contract, while the filing of the second case was based on the expiration of the lease contract. At the time the respondent
filed the first ejectment complaint on October 10, 2000, the lease contract between the parties was still in effect. The lease
was fixed for a period of two (2) years, from January 16, 2000, and in the absence of a renewal agreed upon by the
parties, the lease remained effective until January 15, 2002. It was only at the expiration of the lease contract that the
cause of action in the second ejectment complaint accrued and made available to the respondent as a ground for ejecting
the petitioner. Thus, the cause of action in the second case was not yet in existence at the time of filing of the first
ejectment case.

SPOUSES SILVESTRE O. PLAZA AND ELENA Y. PLAZA, Petitioners,

vs.
GUILLERMO LUSTIVA, ELEODORA VDA. DE MARTINEZ AND VICKY SAYSON GOLOSENO, Respondents.
G.R. No. 172909, March 5, 2014

FACTS:
On August 28, 1997, the CA ruled that among the Plaza siblings, namely: Aureliano, Emiliana, Vidal, Marciano, and
Barbara, Barbara was the owner of the subject agricultural land. Her successors, respondents Guillermo Lustiva,
Eleodora Vda. de Martinez and Vicky Sayson Goloseno, have continued occupying the property.
On September 14, 1999, Vidals son and daughter-in-law, herein petitioners, filed a Complaint for Injunction, Damages,
Attorneys Fees with Prayer for the Issuance of the Writ of Preliminary Injunction and/or Temporary Restraining Order
against the respondents and the City Government of Butuan. They prayed that the respondents be enjoined from
unlawfully and illegally threatening to take possession of the subject property. They averred that they acquired the land
from a certain Virginia Tuazon in 1997. Tuazon was the sole bidder and winner in a tax delinquency sale conducted by
the City of Butuan on December 27, 1996.
In their answer, the respondents pointed out that they were never delinquent in paying the land taxes and were in fact not
aware that their property had been offered for public auction. Moreover, Tuazon, being a government employee, was
disqualified to bid in the public auction, as stated in Section 89 of the Local Government Code of 1991. As Tuazons
participation in the sale was void, she could have not transferred ownership to the petitioners. Equally important, the
petitioners merely falsified the property tax declaration by inserting the name of the petitioners father, making him appear
as a co-owner of the auctioned land. Armed with the falsified tax declaration, the petitioners, as heirs of their father,
fraudulently redeemed the land from Tuazon. Nonetheless, there was nothing to redeem as the land was not sold. For
these irregularities, the petitioners had no right to the Writ of Preliminary Injunction and/or Temporary Restraining Order
prayed for against them.
The Regional Trial Court (RTC) of Butuan City, Branch 5, denied the prayer for a Writ of Preliminary Injunction, and
ordered that the possession and occupation of the land be returned to the respondents.
The petitioners challenged the RTCs order before the CA through a petition for review on certiorari under Rule 65,

17

While the petition for review on certiorari was pending before the CA, the petitioners filed an action for specific
performance against the City Government of Butuan. According to the petitioners, they acquired possession and
ownership over the auctioned property when they redeemed it from Tuazon. The City Government of Butuan
must therefore issue them a certificate of sale.
The CA affirmed the RTCs ruling, found the petitioners guilty of forum shopping, dismissed the case, and referred the
case to the Court and to the Integrated Bar of the Philippines for investigation and institution of the appropriate
administrative action.
On April 6, 2006, the CA rejected the petitioners motion for reconsideration.
THE PARTIES ARGUMENTS
The petitioners filed the present petition for review on certiorari with this Court to challenge the CA rulings. The petitioners
maintain that they did not falsify the tax declaration in acquiring the auctioned property. Moreover, assuming that Tuazon,
the sole bidder, was indeed disqualified from participating in the public auction, Section 181of the Local Government Code
of 1991 finds application. Applying the law, it is as if there was no bidder, for which the City Government of Butuan was to
be considered the purchaser of the land in auction. Therefore, when the petitioners bought the land, they bought it directly
from the purchaser - City Government of Butuan - and not from Tuazon, as redeemers.
Also, the respondents may not question the validity of the public auction for failing to deposit with the court the amount
required by Section 2671 of the Local Government Code of 1991.
Finally, the petitioners argue that they did not commit forum shopping, as the reliefs prayed for in the present case and in
the specific performance case are not the same. In the present case, they merely impleaded the City Government of
Butuan as a nominal party to pay for the value of the land only if possession of the land was awarded to the respondents.
On the other hand, the complaint for specific performance prayed that the City Government of Butuan execute the
necessary certificate of sale and other relevant documents pertaining to the auction.
The respondents, for their part, reiterate the lower courts findings that there could have been no legal redemption in favor
of the petitioners as the highest bidder was disqualified from bidding. Moreover, the CA correctly applied the law in finding
the petitioners guilty of forum shopping. Most importantly, the grant of preliminary injunction lies in the sound discretion of
the court and the petitioners failed to show proof that they are entitled to it.

ISSUE:
Whether or not petitioners are guilty of forum shopping by splitting a single cause of action?
HELD : The petitioners are guilty of forum shopping
We agree with the CA that the petitioners committed forum shopping when they filed the specific performance case
despite the pendency of the present case before the CA. In the recent case of Heirs of Marcelo Sotto, etc., et al. v. Matilde
S. Palicte,the Court laid down the three ways forum shopping may be committed: 1) through litis pendentia filing
multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved
yet; 2) through res judicata filing multiple cases based on the same cause of action and the same prayer, the previous
case having been finally resolved; and 3) splitting of causes of action filing multiple cases based on the same cause of
action but with different prayers the ground to dismiss being either litis pendentia or res judicata. "The requisites of litis
pendentia are: (a) the identity of parties, or at least such as representing the same interests in both actions; (b) the identity
of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two cases
such that judgment in one, regardless of which party is successful, would amount to res judicata in the other."
Noticeable among these three types of forum shopping is the identity of the cause of action in the different cases filed.
Cause of action is "the act or omission by which a party violates the right of another."

18

The cause of action in the present case (and the main case) is the petitioners claim of ownership of the land when they
bought it, either from the City Government of Butuan or from Tuazon. This ownership is the petitioners basis in enjoining
the respondents from dispossessing them of the property. On the other hand, the specific performance case prayed that
the City Government of Butuan be ordered to issue the petitioners the certificate of sale grounded on the petitioners
ownership of the land when they had bought it, either from the City Government of Butuan or from Tuazon. While it may
appear that the main relief prayed for in the present injunction case is different from what was prayed for in the specific
performance case, the cause of action which serves as the basis for the reliefs remains the same the petitioners
alleged ownership of the property after its purchase in a public auction.
Thus, the petitioners' subsequent filing of the specific performance action is forum shopping of the third kind-splitting
causes of action or filing multiple cases based on the same cause of action, but with different prayers. As the Court has
held in the past, "there is still forum shopping even if the reliefs prayed for in the two cases are different, so long as both
cases raise substantially the same issues."
Similarly, the CA correctly found that the petitioners and their counsel were guilty of forum shopping based on litis
pendentia. Not only were the parties in both cases the same insofar as the City Government of Butuan is concerned, there
was also identity of rights asserted and identity of facts alleged. The cause of action in the specific performance case had
already been ruled upon in the present case, although it was still pending appeal before the CA. Likewise, the prayer
sought in the specific performance case-for the City Government ofButuan to execute a deed of sale in favor of the
petitioners - had been indirectly ruled upon in the present case when the R TC declared that no certificate of sale could be
issued because there had been no valid sale.

BAYANG VS. CA
G.R. NO. 53564
FEBRUARY 27, 1987
Facts:
Petitioner Juan Bayang filed a complaint for quieting of title with damages against Benigno Biong in the Court of First
Instance of Surigao del Norte, Branch 1, docketed as Civil Case No. 1892. While the case was pending, Biong succeeded
in dispossessing the plaintiff of the land in question and remained there until January 25, 1978. On February 21, 1972,
the case was decided in favor of Biong, but the Court of Appeals, reversed the trial court. This decision became final.

On February 6, 1978, Bayang filed a second case, docketed as Civil Case No. 2589, with the CFI of Surigao del Norte,
Branch II, seeking to recover from Biong the incomes earned from the same land from 1970 up to the quarterly incomes
from 1978 until the said land was delivered to the plaintiff. On August 16, 1978, Biong filed a motion for summary
judgment, reiterating the affirmative defense of res judicata raised in his answer insofar as it related to the incidents
concerning the case prior to January 25, 1978. An opposition to this motion was duly filed by Bayang.
The trial court, after considering the arguments of the parties, granted the motion and rendered a summary
judgment on October 30, 1978. The said decision was sustained by the Court of Appeals.
Issue:
Whether or not the judgment on the 1st case (civil case no. 1892) constitutes res judicata as to bar civil case 2589.
Rulings:
Yes.

19

A long line of decisions has consistently held that for res judicata to apply: a) the former judgment must be final; b) it must
have been rendered by a court having jurisdiction over the subject matter and the parties; c) it must be a judgment on the
merits; and d) there must be between the first case and the second case identity of parties, identity of subject matter and
Identity of cause of action.
The decision in Civil Case No. 1892 became final and executory on February 2, 1978. There is no dispute that the trial
court which rendered that decision had jurisdiction over the subjectmatter and the parties to the proceeding. The case was
tried on the merits. The parties to Civil Case No. 1892 and the subsequent Civil Case No. 2589 are the same petitioner
and private respondent now before us.
The petitioner would draw a distinction between the land in dispute in Civil Case No. 1892 and the income from
that land being claimed in Civil Case No. 2589. But that is in our view splitting hairs to split a cause of action. The
subjectmatter is essentially the same in both cases as the income is only a consequence or accessory of the
disputed property. We cannot agree that there are involved here two causes of action calling for two separate
cases. The claim for the income from the land was incidental to, and should have been raised by Bayang in his
earlier claim for, ownership of the land.
We are not unmindful of the argument that affirmance of the challenged decision of the respondent court will result in the
unjust enrichment of Biong at the expense of Bayang. This assumes, of course, that the petitioner could have proved his
right to the income he now claims belatedly. The point is that he did not make the proper claim at the proper time
and in the proper proceedings, and he cannot do it now. Whatever right he might have had is now deemed
waived because of his neglect.

JOSEFINA RUBIO DE LARENA vs.HERMENEGILDO VILLANUEVA

G.R. No. L-29155 November 5, 1928
RULES IN DETERMINING THE SINGLENESS OF A CAUSE OF ACTION IN CONTRACTS WITH SEVERAL
STIPULATION:

General Rule: A contract embraces only one cause of action because it may be violated only once, even if it contains
several stipulations.
Exception: A contract which provides for several stipulations to be performed at different times gives rise to as
many causes of action as there are violations. (Larena vs. Villanueva, 53 Phil. 923)

FACTS:
The case at bar is a sequel to case G. R. No. 21706, Josefina Rubio de Larena v. Hermenegildo Villanueva, decided on
March 26, 1924. In that case we affirmed a decision of the Court of First Instance ordering the rescission of a lease of the
Tacgajan Sugar Plantation and the payment by the defendant-lessee of the unpaid balance of the rent for the agricultural
year 1920-1922 in the sum of P5,949.28 with interest from August 26, 1922, and for P8,000 in rent for the agricultural year
1921-1923. The decision also provided that the possession of the leased land be delivered to the plaintiff.
Shortly after the record was returned to the court below, a writ of execution was issued, but before levy was made the
parties came to an agreement, under which the money judgment was to be satisfied by the payment of P10,500 in cash
and the transfer to the plaintiff of a dwelling house situated in the municipality of Bais. The agreement was carried out in
accordance with its terms.

20

The present action was brought on April 13, 1925, but the last amended complaint, setting forth three causes of action,
was not filed until June 17, 1927. As her first cause of action the plaintiff, after a preliminary statement of the origin of the
controversy, alleges that while case G. R. No. 21706 was on appeal to the Supreme Court, the defendant knew positively
that the aforesaid lease was declared rescinded by the Court of First Instance.
For a second cause of action the plaintiff alleges that under the contract of lease of the Tacgajan Hacienda, one of the
obligations assumed by the defendant was that he would use the care of a good father of the family in conserving the
tools, agricultural implements, draft animals, and other effects enumerated in an inventory made at the time the defendant
entered in possession under the lease.
As a third cause of action the plaintiff alleges that the harvest of sugar cane illegally made by the defendant in 1924 left
ratoon sugar cane in the fields of the hacienda, which sugar cane was the property of the plaintiff, and that during the year
1925, the defendant illegally harvested said ratoon cane together with some recently planted cane, which harvest after
deducting the share of the sugar central, produced 1,613.25 piculs of sugar, which the defendant sold for his own benefit
at the price of P13 per picul, the total amount received by him being P20,962.25 for which the plaintiff demands judgment.
In his answer to the first and third causes of action, the defendant alleges that according to the pleadings in case G. R.
No. 21706, the two causes of action were included in that case and, therefore, must be considered res adjudicata. In
regard to the second cause of action the defendant pleads the general issue and sets up as a special defense that
assuming that the property referred to in said cause of action was missing, its loss was due to its total extinction by
ordinary use, for which the defendant could not be held responsible.
Upon trial the Court of First Instance sustained the defendants special defense and absolved him from the complaint.
Hence this case.
ISSUE: Whether or not the rule on res adjudicata applies in the instant case and therefore CFI erred in absolving the
defendant from liability upon the second cause of action.
RULING:
NO. We do not think that the court below erred in absolving the defendant from liability upon the second cause of action. It
is not without significance that in her original complaint the plaintiff claimed only 5 plows, 6 carts, 3 carabaos and 4
vacunos, the total value of which was alleged to be P1,360; in the first amended complaint filed over two years later, the
same claim was made, but in the last amended complaint a number of other articles were included, thus increasing the
claim to P3,596.
As to the first cause of action the defendant argues that it was included in the prayer of an amended complaint filed in
case G. R. No. 21706 and that, although no express determination thereof was made in the decision of the case, it must,
nevertheless, be regarded as res adjudicata. That such is not the case is very clear. The Code of Civil Procedure says:
"That only is deemed to have been adjudged in a former judgment which appears upon its face to have been so
adjudged, or which was actually and necessarily included therein or necessary thereto." (Sec. 307, Code of Civ.
Proc.)
But the defendant maintains that the plaintiff having had an opportunity to ventilate the matter in the former case, she
cannot now enforce the same cause of action in the present case. Properly speaking, this argument does not involve
the doctrine of res adjudicata but rests on the well-known and, in American law, firmly established principle that a
party will not be permitted to split up a single cause of action and make it the basis for several suits. But that is
not this case. The rule is well established that when a lease provides for the payment of the rent in separate
installments, each installment is an independent cause of action, though it has been held, and is good law, that in an
action upon such a lease for the recovery of rent, the installments due at the time the action is brought must be included in

21

the complaint and that failure to do so will constitute a bar to a subsequent action for the payment of that rent. The
aforesaid action, G. R. No. 21706, was brought on August 23, 1922, the plaintiff demanding payment of the then due rent
in addition to the rescission of the lease.
The lease did not provide for payment of rent in advance or at any definite time, and it appears plainly from the record that
the rent for an agricultural year was not considered due until the end of the corresponding year. It follows that the rent for
the agricultural year 1922-1924 had not become due at the time of the trial of the case and that consequently the trial
court could not render judgment therefor. The action referred to is, therefore, no bar to the first cause of action in the
present litigation.
The action for terminating the lease was brought under article 1124 of the Civil Code, and it may, perhaps, be said that
property speaking, the subject matter of the action was a resolution of the contract and not a rescission. That may be true,
but it is a distinction without a difference; in either case a judicial declaration would be necessary for the cancellation of
the contract in the absence of a special agreement.
Very little need be said in regard to the third cause of action. It relates to a period subsequent to the complete termination
of the lease by final judicial order. The defendant had then no right whatever to the possession of the land or to the fruits
thereof, and in removing the fruits, he acted in bad faith. This being the case, he must pay for the fruits received by him,
less the necessary expenses of production. (Arts. 455 and 453 of the Civil Code.) As his bad faith commenced long before
the fruits in question were produced, he is not entitled to any part of the net proceeds of the crop. The evidence shows
that the net ratoon crop for the year 1924-1925 was 1,613.25 piculs of sugar, and according to the defendants own
statement, the market value of the sugar was in the neighborhood of P11 per picul and the cost of production about P4.50.
The net result is that under the third cause of action, the defendant must pay to the plaintiff the sum of P10,486.13 with
interest.
Judgment of the court is affirmed in regard to the second cause of action. It is reversed as to the first and third causes of
action.

BLOSSOM AND COMPANY, INC.,

vs.
MANILA GAS CORPORATION,
G.R. No. L-32958 ,November 8, 1930
Facts:
On September 10, 1918, Blossom & Company (plaintiff) and Manila Gas Corp (defendant) entered into a contract in
which the plaintiff promised and undertook to purchase and receive from the defendant and the defendant agreed to sell
and deliver to the plaintiff, for a period of four years tons of water gas tar. On about the last part of July, 1920, the
defendant "willfully and deliberately breached its said contract," and that it "flatly refused to make any deliveries under
said contract, and finally on November 23, 1923," it was forced to commence action in the Court of First Instance against
the defendant known as case No. 25352, to recover the damages which it had then sustained by reason of such flagrant
violation of said contract on the part of the defendant, in which judgment was rendered in favor of the plaintiff and against
the defendant for P26,1119.08, as damages suffered by this plaintiff by the defendant's breach of said contract from July
1920, up to and including September, 1923.
That on March 26, 1926 the said defendant offered to resume delivery to the plaintiff from that date of the minimum
monthly quantities of tars stated in its contract, and the plaintiff believing that the said defendant was at least going to try
to act in good faith in the further performance of its said contract, commenced to accept deliveries of said tars from it, and
at once ascertained that the said defendant was deliberately charging it prices much higher than the contract price.
Thus, plaintiff in this action seeks to recover damages growing out of, and arising from, other and different breaches of
that same contract after November, 1923, for the remainder of the ten-year period.

22

Issue:
Whether or not rendition of the former judgment is a bar to the right of the plaintiff to recover damages from and after
September, 1923, arising from, and growing out of, breaches of the original contract of September 10, 1918, as modified
on January 1, 1919. / Whether or not res judicata sets in.
Ruling:
Yes. plaintiff must stand or fall on its own pleadings, and tested by that rule it must be admitted that the plaintiff's original
cause of action, in which it recovered judgment for damages, was founded on the ten-year contract, and that the damages
which it then recovered were recovered for a breach of that contract.
Both actions are founded on one and the same contract. By the terms of the original contract of September 10, 1018, the
defendant was to sell and the plaintiff was to purchase three tons of water gas tar per month form September to January
1, 1919, and twenty tons of water gas tar per month after January 1, 1919, one-half ton of coal gas tar per month from
September to January 1, 1919, and six tons of coal gas tar per month after January 1, 1919. That from and after January
1, 1919, plaintiff would take at least the quantities specified in the contract of September 10, 1918, and that at its option, it
would have the right to take the total output of water gas tar of defendant's plant and 50 per cent of the gross output of its
coal gas tar, and upon giving ninety days' notice, it would have the right to the entire output of coal gas tar, except such as
the defendant might need for its own use. That is to say, the contract provided for the delivery to the plaintiff from month to
month of the specified amounts of the different tars as ordered and requested by the plaintiff. In other words, under
plaintiff's own theory, the defendant was to make deliveries from month to month of the tars during the period of ten years,
and it is alleged in both complaints that the defendant broke its contract, and in bad faith refused to make any more
deliveries.
In 34 Corpus Juris, p. 839, it is said:
As a general rule a contract to do several things at several times in its nature, so as to authorize successive
actions; and a judgment recovered for a single breach of a continuing contract or covenant is no bar to a suit for a
subsequent breach thereof. But where the covenant or contract is entire, and the breach total, there can be only
one action, and plaintiff must therein recover all his damages.
In the case of Rhoelm vs, Horst, 178 U. U., 1; 44 Law. ed., 953, that court said:
An unqualified and positive refusal to perform a contract, though the performance thereof is not yet due, may, if
the renunciation goes to the whole contract, be treated as a complete breach which will entitle the injured party to
bring his action at once.
15 Ruling Case Law, 966, 967, sec. 441 says:
Similarly if there is a breach by the vendor of a contract for the sale of goods to be delivered and paid for in
installments, and the vendee maintains an action therefor and recovers damages, he cannot maintain a
subsequent action to recover for the failure to deliver later installments.
In Pakas vs. Hollingshead, 184 N. Y., 211; 77 N. E., 40; 3 L. R. A. (N. S.), 1024, the syllabus says:
Upon refusal, by the seller, after partial performance, longer to comply with his contract to sell and deliver a
quantity of articles in installments the buyer cannot keep the contract in force and maintain actions for breaches
as they occur but must recover all his damages in one suit.

DANFOSS, INC. V. CONTINENTAL CEMENT CORP.

G.R. NO. 143788, September 9, 2005

23

NATURE OF THE CASE: The CA affirmed the decision of the RTC that the CCCs (herein respondent) complaint for
damages against Danfoss. So, the case was elevated to the Supreme Court on appeal of the said ruling of the CA and the
CAs denial for Danfoss motion for reconsideration.

FACTS:
Mechatronics Instruments and Controls, Inc. (MINCI) is an agent of Danfoss, Inc.s products here in the Philippines. On
September 1997, CCC ordered two unit 132 KW Danfoss Brand Frequency Converter/Inverter from MINCI to be used in
the Finish Mill of its Cement Plant in Bulacan. In the terms of conditions of the original purchase order, the two unit
Frequency Converter shall be delivered by Danfoss within 8 to 10 weeks from the opening of the letter of credit. The letter
of credit opened by CCC in favour of Danfoss on September 9, 1997.
On September 17, 1997, MINCI informed CCC that its order are already ready for shipment and MINCI requested to
amend the letter of credit changing the port of origin/loading from Singapore to Denmark (Singapore is the Asian Regional
Office of Danfoss, the Head Office of the company is Denmark). CCC complied and the port of origin in the letter of credit
was changed.
On November 6, 1997, MINCI relayed to CCC that Danfoss Inc. was still checking the status of their order. CCC replied
that every delay in the delivery of the order will cause loss to their company, so CCC requested for early work out and
immediate shipment to avoid further loss.
But, on November 9, 1997, Danfoss Inc. informed MINCI through fax, that the reason for the delivery problems was that
some of the supplied components for the new VLT 5000 series (this may be a part of the converter which is the subject
thing in this case or a machine to create the converter) did not meet the agreed quality standard. So, Danfoss was
canvassing for another supplier for the said VLT 5000 series. In the fax, there was no clear message as to when normal
production will resume.
Upon receiving the relayed information, CCC surmised that Danfoss would not be able to deliver their order. There was
also no definite commitment of the delivery from Danfoss and MINCI, so CCC informed MINCI that they intend to cancel
its order. The order was cancelled on November 13, 1997.
Hence the complaint for damages filed by CCC with the RTC of Quezon City against Danfoss and MINCI on November 5,
1998. In reply, Danfoss filed a motion to dismiss the complaint.
CCC: Due to the impending delay in the delivery of its order, it suffered more than P8 million and was compelled to look
for another supplier.
Danfoss: The case should be dismissed on the ground that it did not state a cause of action.
1) The letter of credit was opened on September 9, 1997, so, since the agreed delivery period
from the opening of the letter of credit, the due date is until November 19,
1997.

is 8 to 10 weeks

2) Although Danfoss was having a problem with its supplier prior to CCCs cancellation of its
surmised that Danfoss could not deliver within the due date agreed upon.

order, CCC only

3) Neither Danfoss nor CCC agreed to change the date of delivery. Only the port of origin was
changed in the
letter of credit. Danfoss has until November 19, 1997 to deliver the order, CCC cancelled the order on November 13,
1997.
4) CCC never made an extrajudicial demand for the delivery of its order on its due date as it cancelled
before the due date.

the

order

24

5) Damages sought for by CCC could not have accrued yet since the order was cancelled
actually delayed.

before the delivery was

RTC: Judgment in favor of CCC. According to the RTC:

...the issue of whether or not the defendants incur delay in the delivery of the equipment in question within the period
stipulated is a debatable question which necessitates actual trial on the merits where the parties have to adduce evidence
in support of their respective stance.
While the defendants contend that the stipulated period of delivery had not lapsed yet when the plaintiff cancelled its order
of the two equipments in question as the cancellation took place seven (7) days before the expiry date of the defendants
obligation to deliver, the plaintiffs position is that the acts of the defendants had made compliance with their obligation to
deliver within the period stipulated, impossible, hence, there was no need for a demand as the law provides that when
demand would be useless, as when the obligor has rendered it beyond his power to perform. The plaintiffs contention if
properly and strongly supported by evidence during the hearing of the merits of the case may well negates (sic) the
defendants contrary stand.
CA: Affirmed the decision of the RTC and denied the Motion for Reconsideration of Danfoss.
ISSUE: WON there was a cause of action in the complaint filed by CCC against Danfoss and WON the principle of
anticipatory breach can be applied in the case.
HELD: No, there was no cause of action in the complaint for damages filed by CCC.
In order to sustain a dismissal on the ground of lack of cause of action, the insufficiency must appear on the face of the
complaint. And the test of the sufficiency of the facts alleged in the complaint to constitute a cause of action is whether or
not, admitting the facts alleged, the court can render a valid judgment thereon in accordance with the prayer of the
complaint. For this purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the
complaint.

The RTC erred in ruling that the issue of whether or not the defendants incurred delay in the delivery of the equipment
within the period stipulated was a debatable question. How could Danfoss be liable for damages when Danfoss had not
yet breached his obligation to deliver the order of CCC, aside from the fact that the obligation was already negated when
CCC cancelled the order before the prestation became due and demandable? Thus, there was no breach and there was
no damage caused by Danfoss.
The principle of anticipatory breach cannot be applied here because the obligation was single and indivisible to deliver
two units of frequency converter by November 19, 1997. There was no showing that Danfoss refused to deliver, and on
the contrary, Danfoss made an effort to make good in its obligation by looking for other suppliers who could provide the
parts needed to make the timely delivery of the order. Thus, the case was prematurely filed.
CCCs fear that Danfoss might not be able to deliver its order on time was not the cause of action referred to by the Rules
and jurisprudence.
PETITION GRANTED. THE CAS DECISIONS ARE REVERSED AND SET ASIDE.

BANK OF AMERICA V. AMERICAN REALTY CORP.

25

FACTS:

As borne by the records, BANTSA and BAIL on several occasions granted three major multi-million United States (US)
Dollar loans to the following corporate borrowers: (1) Liberian Transport Navigation, S.A.; (2) El Challenger S.A. and (3)
Eshley Compania Naviera S.A. (hereinafter collectively referred to as "borrowers"), all of which are existing under and by
virtue of the laws of the Republic of Panama and are foreign affiliates of private respondent.
Due to the default in the payment of the loan amortizations, BANTSA and the corporate borrowers signed and entered into
restructuring agreements. As additional security for the restructured loans, private respondent ARC as third party
mortgagor executed two real estate mortgages
Eventually, the corporate borrowers defaulted in the payment of the restructured loans prompting petitioner BANTSA to file
civil actions before foreign courts for the collection of the principal loan
n the civil suits instituted before the foreign courts, private respondent ARC, being a third party mortgagor, was private not
impleaded as party-defendant.
On 16 December 1992, petitioner BANTSA filed before the Office of the Provincial Sheriff of Bulacan, Philippines an
application for extrajudicial foreclosure of real estate mortgage and the lots were subsequently sold at an auction.
On 12 February 1993, private respondent filed before the Pasig Regional Trial Court, Branch 159, an action for
damages 8 against the petitioner, for the latter's act of foreclosing extrajudicially the real estate mortgages despite the
pendency of civil suits before foreign courts for the collection of the principal loan.
On 14 December 1993, private respondent filed a motion for
suspension which the trial court granted.
After trial, the lower court rendered a decision in favor of private respondent ARC .
On appeal, the Court of Appeals affirmed the assailed decision of the lower court prompting petitioner to file a motion for
reconsideration which the appellate court denied.
Hence, the instant petition for review on certiorari
ISSUE:
Whether or not the requisites of filing the action for collection and rendition of final judgment therein should concur.
RULING:
In the instant case, petitioner's contention that the requisites of filing the action for collection and rendition of final
judgment therein should concur, is untenable.
Thus, in Cerna vs. Court of Appeals, 22 we agreed with the petitioner in said case, that the filing of a collection suit barred
the foreclosure of the mortgage:
A mortgagee who files a suit for collection abandons the remedy of foreclosure of the chattel mortgage
constituted over the personal property as security for the debt or value of the promissory note when he
seeks to recover in the said collection suit.
. . . When the mortgagee elects to file a suit for collection, not foreclosure, thereby abandoning the chattel
mortgage as basis for relief, he clearly manifests his lack of desire and interest to go after the mortgaged
property as security for the promissory note . . . .
Contrary to petitioner's arguments, we therefore reiterate the rule, for clarity and emphasis, that the mere act of filing of an
ordinary action for collection operates as a waiver of the mortgage-creditor's remedy to foreclose the mortgage. By the
mere filing of the ordinary action for collection against the principal debtors, the petitioner in the present case is deemed to
have elected a remedy, as a result of which a waiver of the other necessarily must arise. Corollarily, no final judgment in
the collection suit is required for the rule on waiver to apply.
Hence, in Caltex Philippines, Inc. vs. Intermediate-Appellate Court, 23 a case relied upon by petitioner, supposedly to
buttress its contention, this Court had occasion to rule that the mere act of filing a collection suit for the recovery of a debt

26

secured by a mortgage constitutes waiver of the other remedy of foreclosure.

In the case at bar, petitioner BANTSA only has one cause of action which is non-payment of the debt. Nevertheless,
alternative remedies are available for its enjoyment and exercise. Petitioner then may opt to exercise only one of two
remedies so as not to violate the rule against splitting a cause of action.

ALANDALE SPORTSLINE V. GOOD DEVELOPMENT CORP

FACTS:
Allandale Sportsline, Inc. (ASI) obtained a loan of P204,000.00 from The Good Development Corp. (GDC) under a Promissory Note
signed by defendants (ASI) with other co-makers. The Promissory Note provides that the loan is payable in daily equal installments
ofP2,000.00 with interest at the rate of 26.002% per annum. In case of default in the payment of any installment, the entire balance of
the obligation shall become immediately due and payable, and subject to liquidated penalty of 2% of the principal. They provide
additional security of mortgage in favor of GDC in which they acceded that should the MORTGAGORS fail to comply with any of the
terms of the promissory note and this mortgage contract, the MORTGAGEE shall automatically have the absolute right without need of
prior notice or demand to forthwith judicially or extrajudicially foreclose this mortgage. On June 24, 1991, GDC demanded the unpaid
account or surrender the mortgaged chattels within five days from notice to the defendants. When no payment was made, GDC filed with
the RTC a Complaint for Replevin with Damages and alternative reliefs against defendants but GDC did not alleged for deficiency
amount. The RTC issued a Writ of Replevin. Meanwhile, defendants filed their Answer with Counterclaim. They claimed that their
unpaid obligation was only P171,000.00. GDC presented to the RTC a Statement of Account dated August 24, 1992, which indicated
that the total outstanding balance of the loan obligation of defendants was reduced to P191,111.82 after the proceeds of the auction sale
conducted on June 19, 1992 in the amount of P78,750.00 was deducted from the earlier balance of P266,126.17. The RTC rendered a
Decision, the dispositive portion of which reads: WHEREFORE, in view of the foregoing, judgment is rendered in favor of the plaintiff
GDC against defendants ordering them to pay the plaintiff jointly and severally the amount of P269,611.82 plus legal interest thereon
effective to date until the full amount is fully paid, and 25% of the total amount due as liquidated damages. Defendants appealed to the
CA. CA affimred the decision of RTC and motion for reconsideration of defendants is denied by the CA and they filed a petition for review
in the SC.

ISSUE:
1. Whether respondent instituted the proper action for the deficiency amount at the pre-trial.
2. Whether or not petitioners are entitled to the return of their properties pursuant to Section 9, Rule 60 of the Rules of Court.

RULING:

27

One effect of respondents election of the remedy of extra-judicial foreclosure is its waiver of the remedy of collection of the
unpaid loan. Therefore, there was no more legal basis for the RTC to grant respondent the relief of collecting from petitioners the
amount ofPhp269,611.82 plus legal interest thereon effective to date until the full amount is fully paid, nor for the CA to affirm it.

Another effect of its election of the remedy of extra-judicial foreclosure is that whatever deficiency remains after applying the
proceeds of the auction sale to the total loan obligation may still be recovered by respondent. But to recover any deficiency
after foreclosure, the rule is that a mortgage creditor must institute an independent civil action.[53]
PCI Leasing & Finance, Inc. v. Dai the Court held that the claim should at least be included in the pre-trial brief. In said case, the
mortgage-creditor had foreclosed on the mortgaged properties and sold the same at public auction during the trial on the action for
damages with replevin. After judgment on the replevin case was rendered, the mortgage-creditor filed another case, this time for the
deficiency amount. The Court dismissed the second case on the ground of res judicata.
In the case at bar, the Court notes that evidence on the deficiency amount was duly presented by respondent and examined by
petitioners. Therefore, in the higher interest of justice and equity, the Court takes it upon itself to grant the claim of respondent to the
deficiency amount of P191,111.82, as stated in its August 24, 1992 Statement of Account.

On the other hand, Section 9, Rule 60 of the Rules of Court is not applicable in this case. Section 9. Judgment. After trial of the
issues, the court shall determine who has the right of possession to and the value of the property and shall render judgment in the
alternative for the delivery thereof to the party entitled to the same, or for its value in case delivery can not be made and also for such
damages as either party may prove, with costs.
As already discussed, the properties of petitioners which were seized by virtue of the Writs of Replevin were extra-judicially foreclosed
and sold at public auction by respondent in the exercise of its absolute right under the contract entered into by the parties.
WHEREFORE, the Court PARTLY GRANTS the petition and MODIFIES the May 15, 2003 Decision and June 12, 2004 Resolution of
the Court of Appeals (CA) in CA-G.R. CV No. 59475, as follows:

Enriquez v. Ramos, G.R. No. L-16797, February 27, 1963

Facts:
Rodrigo Enriquez and the spouses Urbano Dizon and Aurea Soriano de Dizon sold to Socorro A. Ramos, by a notarial
deed eleven (11) parcels of land. The vendee paid P5,000.00 down, P2,500.00 in cash, and P2,500.00 by a check drawn
against the Philippine National Bank, and agreed to satisfy the balance of P96,000.00 within ninety (90) days. To secure
the said balance, the vendee Socorro A. Ramos, in the same deed of sale, mortgaged the eleven parcels in favor of the
vendors. By way of additional security, Socorro A. Ramos, executed another mortgage on Lot No. 409 of the Malinta
Estate.

28

Because of the vendee-mortgagor's failure to comply with some conditions of the mortgage, this action for foreclosure of
the mortgage was filed. Defendant Socorro Ramos moved to dismiss, alleging that the plaintiffs previously had filed action
against her for the recovery of P2,500.00 paid by check as part of the down payment on the price of the mortgaged lands
that at the time this first suit was filed, the mortgage debt was already accrued and demandable; that plaintiffs were,
therefore, guilty of splitting a single cause of action, and under section 4 of Rule 2 of the Rules of Court, the filing of the
first action for P2,500.00 was a defense that could be pleaded in abatement of the second suit.
The Court of First Instance of Quezon City rendered judgment against defendant Ramos.
Ramos appealed directly to the Supreme Court, and insists that the action should be dismissed on account of the alleged
splitting of appellee's cause of action.
Issue:
WON there was a splitting of appellees cause of action.
Ruling:
An examination of the first complaint filed against appellant in the Court of First Instance of Manila shows that it was
based on appellants' having unlawfully stopped payment of the check for P2,500.00 she had issued in favor of appellees;
while the complaint in the present action was for non-payment of the balance of P96,000.00 guaranteed by the mortgage.
The claim for P2,500.00 was, therefore, a distinct debt not covered by the security; and since the mortgage was
constituted on lands situated in Quezon City, the appellees could not ask for its foreclosure in the Manila courts. The two
causes of action being different, section 4 of Rule 2 does not apply.

RAMON A. TARNATE, petitioner-appellant,

vs.
LUCILO U. GARCIA and The Hon. VICTORIANO H. ENDAYA as presiding Judge of the Municipal Court of
Batangas, respondents-appellees.
G.R. No. L-26266 December 29, 1972

SECTION 5 JOINDER OF CAUSES OF ACTION

LILIA B. ADA, LUZ B. ADANZA, FLORA C. BAYLON, REMO BAYLON, JOSE BAYLON, ERIC BAYLON,
FLORENTINO BAYLON, AND MA. RUBY BAYLON, PETITIONERS,
-versus
FLORANTE BAYLON, Respondent.

29

Facts:
This case involves the estate of the late spouses Florentino Baylon and Maximina Elnas Baylon.
At the time of their death, Spouses Baylon were survived by their legitimate children, namely, Rita Baylon (Rita), Victoria
Baylon (Victoria), Dolores Baylon (Dolores), Panfila Gomez (Panfila), Ramon Baylon (Ramon) and herein petitioner Lilia
B. Ada (Lilia).
On July 3, 1996, the petitioners filed with the RTC a Complaint for partition, accounting and damages against Florante,
Rita and Panfila. They alleged therein that after the death of Spouses Baylon, Rita took possession of the (inheritance)
estates and appropriated for herself the income from the same. Using the income produced by the said estate (parcels of
land), Rita allegedly purchased two parcels of land, Lot No. 47096 and half of Lot No. 4706. The petitioners averred that
Rita refused to effect a partition of the said parcels of land.
During the pendency of the case, Rita, through a Deed of Donation dated July 6, 1997, conveyed Lot No. 4709 and half of
Lot No. 4706 to Florante. On July 16, 2000, Rita died intestate and without any issue.
Thereafter, learning of the said donation inter vivos in favor of Florante, the petitioners filed a Supplemental Pleading
dated February 6, 2002, praying that the said donation in favor of the respondent be rescinded.
On October 20, 2005, the RTC rendered a Decision, in favor of the petitioners and rescinded the donation inter vivos of
Lot No. 4709 and half of Lot No. 4706 in favor of Florante.

On appeal, the CA rendered a decision reversing and setting aside the decision of the RTC.
The CA held that
(1) before the petitioners may file an action for rescission, they must first obtain a favorable judicial ruling that Lot No.
4709 and half of Lot No. 4706 actually belonged to the estate of Spouses Baylon and not to Rita. Until then, the
CA asserted, an action for rescission is premature.
(2) that the petitioners action for rescission cannot be joined with their action for partition, accounting and damages
through a mere supplemental pleading. Hence, this petition. (in effect, the CA dismissed a case on the ground of
misjoinder of causes of action)
Issue: WON petitioners action for rescission cannot be joined with their action for partition, accounting and damages
through a mere supplemental pleading.
(Corollary: WON the court can dismiss action for rescission for being a misjoinder on action for partition, accounting and
damages).

Ruling:
(here, the court observe the filling of two distinct action in one complaint a joinder, nay, a misjoinder) The complaint filed
by the petitioners with the RTC involves two separate, distinct and independent actions partition and rescission. First,
the petitioners raised the refusal of their co-heirs, Florante, Rita and Panfila, to partition the properties which they inherited
from Spouses Baylon. Second, in their supplemental pleading, the petitioners assailed the donation inter vivos of Lot No.
4709 and half of Lot No. 4706 made by Rita in favor of Florante pendente lite. The actions of partition and rescission
cannot be joined in a single action.

30

By a joinder of causes of action is meant the uniting of two or more demands or rights of action in one action, the
statement of more than one cause of action in a declaration. It is the union of two or more civil causes of action, each of
which could be made the basis of a separate suit, in the same complaint, declaration or petition.
(wisdom behind rule on joinder) The objectives of the rule or provision are to avoid a multiplicity of suits where the same
parties and subject matter are to be dealt with by effecting in one action a complete determination of all matters in
controversy and litigation between the parties involving one subject matter, and to expedite the disposition of litigation at
minimum cost. The provision should be construed so as to avoid such multiplicity, where possible, without prejudice to the
rights of the litigants.
(here, the court opined a limitation of a joinder i.e. not include special action)Nevertheless, while parties to an action
may assert in one pleading, in the alternative or otherwise, as many causes of action as they may have against an
opposing party, such joinder of causes of action is subject to the condition, inter alia, that the joinder shall not include
special civil actions governed by special rules.
(here, the court applied the above limitation) Here, there was a misjoinder of causes of action. The action for partition filed
by the petitioners could not be joined with the action for the rescission of the said donation inter vivos in favor of Florante.
Lest it be overlooked, an action for partition is a special civil action governed by Rule 69 of the Rules of Court while an
action for rescission is an ordinary civil action governed by the ordinary rules of civil procedure. The variance in the
procedure in the special civil action of partition and in the ordinary civil action of rescission precludes their joinder in one
complaint or their being tried in a single proceeding to avoid confusion in determining what rules shall govern the conduct
of the proceedings as well as in the determination of the presence of requisite elements of each particular cause of action.
(what is the effect of a misjoined cause of action, if not severed upon motion of a party or by the court moto proprio, as in
this case) isip2!
A misjoined cause of action, if not severed upon motion of a party or by the court sua sponte, may be
adjudicated by the court together with the other causes of action.

Nevertheless, misjoinder of causes of action is not a ground for dismissal. Indeed, the courts have the power, acting upon
the motion of a party to the case or sua sponte, to order the severance of the misjoined cause of action to be proceeded
with separately. However, if there is no objection to the improper joinder or the court did not motu proprio direct a
severance, then there exists no bar in the simultaneous adjudication of all the erroneously joined causes of action.
Here, Florante posed no objection, and neither did the RTC direct the severance of the petitioners action for rescission
from their action for partition. While this may be a patent omission on the part of the RTC, this does not constitute a
ground to assail the validity and correctness of its decision. The RTC validly adjudicated the issues raised in the actions
for partition and rescission filed by the petitioners.

Supporting cases: (application of the res judicata principle)never mind!

Republic of the Philippines v. Herbieto
Misjoinder of causes of action and parties do not involve a question of jurisdiction of the court to hear and proceed with
the case. They are not even accepted grounds for dismissal thereof. Instead, under the Rules of Court, the misjoinder of
causes of action and parties involve an implied admission of the courts jurisdiction. It acknowledges the power of the
court, acting upon the motion of a party to the case or on its own initiative, to order the severance of the misjoined cause
of action, to be proceeded with separately.

31

PANTRANCO NORTH EXPRESS, INC. and ALEXANDER BUNCAN vs. STANDARD INSURANCE COMPANY, INC.
and MARTINA GICALE
FACTS:
In the afternoon of October 28, 1984, Crispin Gicale (Crispin) was driving the passenger jeepney owned by his
mother Martina Gicale (Martina). It was then raining. While driving north bound along the National Highway in Talavera,
Nueva Ecija, a passenger bus, owned by Pantranco North Express, Inc., driven by Alexander Buncan (Buncan), was
trailing behind. When the two vehicles were negotiating a curve along the highway, the passenger bus overtook the
jeepney. The passenger bus hit the left rear side of the jeepney and sped away.
Crispin reported the incident to the Talavera Police Station and Standard Insurance Co., Inc. (Standard), insurer of
the jeepney. Standard did not pay the total cost and so Martina paid the rest.
Standard and Martina, demanded reimbursement from petitioners Pantranco and its driver Buncan, but they
refused. This prompted respondents to file with the RTC Manila, a complaint for sum of money. Both petitioners
specifically denied the allegations in the complaint and averred that it is the MTC, not the RTC, which has jurisdiction over
the case. The trial court rendered a Decision in favor of respondents Standard and Martina.
On appeal, the CA affirmed the trial courts ruling. Petitioners filed a motion for reconsideration but was denied.
Hence, this petition for review on certiorari .
ISSUE:
1. Whether or not respondents respective cause of action against petitioners arose out of the same transaction or
are there questions of law and facts common to both petitioners and respondents.
RULING:
YES. Section 6, Rule 3 of the Revised Rules of Court, provides:
"Sec. 6. Permissive joinder of parties. All persons in whom or against whom any right to relief in respect to or
arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the
alternative, may, except as otherwise provided in these Rules, join as plaintiffs or be joined as defendants in one
complaint, where any question of law or fact common to all such plaintiffs or to all such defendants may arise in
the action; but the court may make such orders as may be just to prevent any plaintiff or defendant from being
embarrassed or put to expense in connection with any proceedings in which he may have no interest."
Permissive joinder of parties requires that: (a) the right to relief arises out of the same transaction or series of
transactions; (b) there is a question of law or fact common to all the plaintiffs or defendants; and (c) such joinder is not
otherwise proscribed by the provisions of the Rules on jurisdiction and venue.
In this case, there is a single transaction common to all, that is, Pantrancos bus hitting the rear side of the
jeepney. There is also a common question of fact, that is, whether petitioners are negligent. There being a single
transaction common to both respondents, consequently, they have the same cause of action against petitioners.
To determine identity of cause of action, it must be ascertained whether the same evidence which is necessary to
sustain the second cause of action would have been sufficient to authorize a recovery in the first. Here, had respondents
filed separate suits against petitioners, the same evidence would have been presented to sustain the same cause of
action. Thus, the filing by both respondents of the complaint with the court below is in order. Such joinder of parties avoids
multiplicity of suit and ensures the convenient, speedy and orderly administration of justice.
Corollarily, Section 5(d), Rule 2 of the same Rules provides:
"Sec. 5. Joinder of causes of action. A party may in one pleading assert, in the alternative or otherwise, as
many causes of action as he may have against an opposing party, subject to the following conditions:
xxx
(d) Where the claims in all the causes of action are principally for recovery of money the aggregate amount
claimed shall be the test of jurisdiction."
The above provision presupposes that the different causes of action which are joined accrue in favor of the same
plaintiff/s and against the same defendant/s and that no misjoinder of parties is involved. The issue of whether
respondents claims shall be lumped together is determined by paragraph (d) of the above provision. This paragraph
embodies the "totality rule" as exemplified by Section 33 (1) of B.P. Blg. 129 which states, among others, that "where there
are several claims or causes of action between the same or different parties, embodied in the same complaint, the amount
of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action
arose out of the same or different transactions."

32

As previously stated, respondents cause of action against petitioners arose out of the same transaction. Thus, the
amount of the demand shall be the totality of the claims.

UNION GLASS & CONTAINER CORPORATION and CARLOS PALANCA, JR., in his capacity as President of Union
Glass & Container Corporation, petitioners,
vs.
THE SECURITIES AND EXCHANGE COMMISSION and CAROLINA HOFILEA, respondents.
G.R. No. L-64013 November 28, 1983

TITLE: FLORES VS. JUDGE MALLARE PHILLIPS

CITATION: L-66620, September 24, 1986
PENNED BY: FERIA, J.

FACTS:
1. On the petitioners complaint states two (2) causes of action, one against Binongcal for refusing to pay P11,643
representing cost of truck tires which the latter purchased from the petitioner on credit; and the second cause of
action was against respondent Callon for allegedly refusing to pay the amount of P10,212 representing the cost of
truck tires he purchased on credit.
2. The counsel for Binongcal and Callon filed for a motion to dismiss on the ground of lack of jurisdiction since the
amount of the demand against said respondent was P11,643 and P10,212 for Binongcal and Callon, respectively.
That under Sec 19(8) of BP 129, the regional trial court shall have jurisdiction if the demand is more than P20,000
3. It was further averred in the said motion that Callon is indebted for P10,212 and that such is a separate and
distinct to that of Binongcal.
4. The court dismissed the petitioner for lack of jurisdiction.
5. Petitioner however posits that lower court has jurisdiction over the case by applying novel totality rule introduced
in Section 33(I) of BP 129
The pertinent portion of Section 33(l) of BP129 reads as follows:
... Provided, That where there are several claims or causes of action between the same or different
parties, embodied in the same complaint, the amount of the demand shall be the totality of the
claims in all the causes of action, irrespective of whether the causes of action arose out of the
same or different transactions. ...
Section 11 of the Interim Rules provides thus:
Application of the totality rule.-In actions where the jurisdiction of the court is dependent on the amount
involved, the test of jurisdiction shall be the aggregate sum of all the money demands, exclusive only of
interest and costs, irrespective of whether or not the separate claims are owned by or due to

33

different parties. If any demand is for damages in a civil action, the amount thereof must be specifically
alleged.
6. Petitioner compares the above-quoted provisions with the pertinent portion of the former rule under Section 88 of
the Judiciary Act of 1948 as amended which reads as follows:
... Where there are several claims or causes of action between the same parties embodied in the same
complaint, the amount of the demand shall be the totality of the demand in all the causes of action,
irrespective of whether the causes of action arose out of the same or different transactions; but where
the claims or causes of action joined in a single complaint are separately owed by or due to
different parties, each separate claim shall furnish the jurisdictional test. ...
and argues that with the deletion of the proviso in the former rule, the totality rule was reduced to clarity and
brevity and the jurisdictional test is the totality of the claims in all, not in each, of the causes of action, irrespective
of whether the causes of action arose out of the same or different transactions.
ISSUE:
Whether or not the petitioner is correct in arguing that the jurisdiction is based on the totality of the amount
demanded, irrespective of whether the causes of action arose out of same or different transactions.

HELD:
This argument is partly correct. There is no difference between the former and present rules in cases where a
plaintiff sues a defendant on two or more separate causes of action. In such cases, the amount of the demand shall be the
totality of the claims in all the causes of action irrespective of whether the causes of action arose out of the same or
different transactions. If the total demand exceeds twenty thousand pesos, then the regional trial court has jurisdiction.
Needless to state, if the causes of action are separate and independent, their joinder in one complaint is permissive and
not mandatory, and any cause of action where the amount of the demand is twenty thousand pesos or less may be the
subject of a separate complaint filed with a metropolitan or municipal trial court.
On the other hand, there is a difference between the former and present rules in cases where two or more
plaintiffs having separate causes of action against a defendant join in a single complaint. Under the former rule, "where
the claims or causes of action joined in a single complaint are separately owed by or due to different parties, each
separate claim shall furnish the jurisdictional test. However, it was also applicable to cases of permissive joinder of
parties defendant.
Under the present law, the totality rule is applied also to cases where two or more plaintiffs having separate
causes of action against a defendant join in a single complaint, as well as to cases where a plaintiff has separate causes
of action against two or more defendants joined in a single complaint. However, the causes of action in favor of the
two or more plaintiffs or against the two or more defendants should arise out of the same transaction or series of
transactions and there should be a common question of law or fact, as provided in Section 6 of Rule 3.
The difference between the former and present rules in cases of permissive joinder of parties may be illustrated by the two
cases which were cited in the case of Vda. de Rosario vs. Justice of the Peace (supra) as exceptions to the totality
rule.
In the case of Soriano y Cia vs. Jose (86 Phil. 523), where twenty-nine dismissed employees joined in a complaint against
the defendant to collect their respective claims, each of which was within the jurisdiction of the municipal court although
the total exceeded the jurisdictional amount, this Court held that under the law then the municipal court had jurisdiction. In
said case, although the plaintiffs' demands were separate, distinct and independent of one another, their joint suit was
authorized under Section 6 of Rule 3 and each separate claim furnished the jurisdictional test. In the case of International
Colleges, Inc. vs. Argonza (90 Phil. 470), where twenty-five dismissed teachers jointly sued the defendant for unpaid
salaries, this Court also held that the municipal court had jurisdiction because the amount of each claim was within,

34

although the total exceeded, its jurisdiction and it was a case of permissive joinder of parties plaintiff under Section 6 of
Rule 3.
Under the present law, the two cases above cited (assuming they do not fall under the Labor Code) would be under the
jurisdiction of the regional trial court. Similarly, in the abovecited cases of Brillo vs. Buklatan and Gacula vs.
Martinez (supra), if the separate claims against the several defendants arose out of the same transaction or series of
transactions and there is a common question of law or fact, they would now be under the jurisdiction of the regional trial
court.
In other words, in cases of permissive joinder of parties, whether as plaintiffs or as defendants, under Section 6
of Rule 3, the total of all the claims shall now furnish the jurisdictional test. Needless to state also, if instead of
joining or being joined in one complaint separate actions are filed by or against the parties, the amount
demanded in each complaint shall furnish the jurisdictional test.
In the case at bar, the lower court correctly held that the jurisdictional test is subject to the rules on joinder of
parties pursuant to Section 5 of Rule 2 and Section 6 of Rule 3 of the Rules of Court and that, after a careful scrutiny of
the complaint, it appears that there is a misjoinder of parties for the reason that the claims against respondents
Binongcal and Calion are separate and distinct and neither of which falls within its jurisdiction.

GENESIS INVESTMENT, INC., ET AL., VS. HEIRS OF CEFERINO EBARASABAL, ET AL.,

G.R. NO. 181622, 20 NOVEMBER 2013
FACTS: Respondents filed before the RTC OF BARILI CEBU A a complaint against herein petitioners for Declaration of
Nullity of Documents, Recovery of Shares, Partition, Damages and Attorney's Fees.
Petitioner filed a Motion to Dismiss contending, that RTC has no jurisdiction to try the case on the ground that, as the case
involves title to or possession of real property or any interest therein and since the assessed value of the subject property
does not exceed P20,000.00 (the same being only P11,990.00), the action falls within the jurisdiction of the Municipal Trial
Court (MTC). The RTC granted petitioners' Motion to Dismiss. Respondents filed a Motion for Partial Reconsideration,
arguing that their complaint consists of several causes of action, including one for annulment of documents, which is
incapable of pecuniary estimation and, as such, falls within the jurisdiction of the RTC. Petitioners filed a Motion for
Reconsideration, but the RTC denied.
RTC issued an Order granting respondents' Motion for Partial Reconsideration and reversing its earlier Order.
petitioners filed a petition for certiorari with the CA.
However, the CA dismissed the petition holding that the subject matter of respondents' complaint is incapable of pecuniary
estimation and, therefore, within the jurisdiction of the RTC, considering that the main purpose in filing the action is to
declare null and void the documents assailed therein.
Issue: Does the RTC have jurisdiction over the case?
Held:
Yes. On the issue of want of jurisdiction, this court likewise finds to be with merit the contention of the movants as indeed
the main case or the primary relief prayed for by the movants is for the declaration of nullity or annulment of documents
which unquestionably is incapable of pecuniary estimation and thus within the exclusive original jurisdiction of this court to
try although in the process of resolving the controversy, claims of title or possession of the property in question is involved
which together with all the other remaining reliefs prayed for are but purely incidental to or as a consequence of the
foregoing principal relief sought. It is true that one of the causes of action of respondents pertains to the title, possession
and interest of each of the contending parties over the contested property, the assessed value of which falls within the
jurisdiction of the MTC. However, a complete reading of the complaint would readily show that, based on the nature of the
suit, the allegations therein, and the reliefs prayed for, the action is within the jurisdiction of the RTC.

35

Clearly, this is a case of joinder of causes of action which comprehends more than the issue of partition of or recovery of
shares or interest over the real property in question but includes an action for declaration of nullity of contracts and
documents which is incapable of pecuniary estimation.
Section 5 (c), Rule 2 of the Rules of Court that where the causes of action are between the same parties but pertain to
different venues or jurisdictions, the joinder may be allowed in the RTC provided one of the causes of action falls within
the jurisdiction of said court and the venue lies therein. Thus, as shown above, respondents complaint clearly falls within
the jurisdiction of the RTC.

UNIWIDE HOLDINGS, INC., petitioner,

vs.
ALEXANDER M. CRUZ, respondent.
G.R. No. 171456
August 9, 2007
FACTS:

Petitioner, Uniwide Holdings, Inc. (UHI), whose principal office is located in Paraaque City, entered into a
Franchise Agreement granting respondent, Alexander M. Cruz , a five-year franchise to adopt and use the
"Uniwide Family Store System" for the establishment and operation of a "Uniwide Family Store" along Marcos
Highway, Sta. Cruz, Cogeo, Marikina City.

Article 10.2 of the agreement called for Cruz as franchisee to pay UHI a monthly service fee of P50,000 or three
percent of gross monthly purchases, whichever is higher, payable within five days after the end of each month
without need of formal billing or demand from UHI. In case of any delay in the payment of the monthly service fee,
Cruz would, under Article 10.3 of the agreement, be liable to pay an interest charge of three percent per month.

In August 2002, FPC and USWCI executed Deeds of Assignment in favor of UHI assigning all their rights and
interests over Cruzs accounts payable to them.

As of August 13, 2002, Cruz had outstanding obligations with UHI, FPC, and USWCI in the total amount
ofP1,358,531.89, drawing UHI to send him a letter of even date for the settlement t in five days but Cruzs
accounts remained unsettled.

Thus UHI filed a complaint for collection of sum of money before the Regional Trial Court (RTC) of Paraaque against
Cruz on the following causes of action:
1.

Being entitled to the payment of monthly service fee pursuant to the FA, which defendant failed to pay
despite demand, plaintiff suffered actual damages in the amount P1,327,669.83, computed as of 05 April
2004, for which defendant should be held liable together with legal interest thereon from the date of filing of this
Complaint, until fully paid.
2. Being the assignee of the receivable of FPC, which receivable defendant failed to pay despite demand,
plaintiff suffered actual damages in the amount of P64,165.96 for which defendant should be held liable
together with the legal interest thereon computed from date of receipt of plaintiffs demand letter, or on August 16,
2002 to be exact, until fully paid.
3. Being the assignee of the receivable of USWCI, which receivable defendant failed to pay despite demand,
plaintiff suffered actual damages in the total amount of P1,579,061.36, computed as of 05 April 2004, inclusive
of the two and a half percent (2.5%) monthly interest, as and by way of penalty, and the three (3%) annual interest
on the unpaid amount, for which defendant should be held liable, with legal interest thereon from the date of filing
of this Complaint, until fully paid.
4. By reason of defendants obstinate refusal or failure to pay his indebtedness, plaintiff was constrained to file this
Complaint and in the process incur expenses by way of attorneys fees, which could be reasonably estimated to
reach at least P250,000.00 and for which defendant should be held answerable for.

36

Cruz filed a motion to dismiss on the ground of improper venue by invoking Article 27.5 of the agreement which
reads:
27.5 Venue Stipulation The Franchisee consents to the exclusive jurisdiction of the courts of
Quezon City, the Franchisee waiving any other venue.

Branch 258 of the Paraaque RTC, by Order of December 12, 2005, granted Cruzs motion to dismiss.

ISSUE:
WHETHER A CASE BASED ON SEVERAL CAUSES OF ACTION IS DISMISSIBLE ON THE GROUND OF
IMPROPER VENUE WHERE ONLY ONE OF THE CAUSES OF ACTION ARISES FROM A CONTRACT WITH
EXCLUSIVE VENUE STIPULATION.
SC RULING:
The petition is impressed with merit.
The general rule on venue of personal actions, as in petitioners complaint for collection of sum of money, is embodied in
Section 2, Rule 4 of the Rules of Court and is qualified by Section 4 of the same rule which allows parties, before the filing
of the action, to validly agree in writing on an exclusive venue.
The forging of a written agreement on an exclusive venue of an action does not, however, preclude parties from bringing a
case to other venues.
Where there is a joinder of causes of action between the same parties one of which does not arise out of the
contract where the exclusive venue was stipulated upon, the complaint, as in the one at bar, may be brought
before other venues provided that such other cause of action falls within the jurisdiction of the court and the
venue lies therein.
Based on the allegations in petitioners complaint, the second and third causes of action are based on the deeds of
assignment executed in its favor by FPC and USWCI. The deeds bear no exclusive venue stipulation with respect to the
causes of action thereunder. Hence, the general rule on venue applies that the complaint may be filed in the place
where the plaintiff or defendant resides.
It bears emphasis that the causes of action on the assigned accounts are not based on a breach of the agreement
between UHI and Cruz. They are based on separate, distinct and independent contracts-deeds of assignment in which
UHI is the assignee of Cruzs obligations to the assignors FPC and USWCI. Thus, any action arising from the deeds of
assignment cannot be subjected to the exclusive venue stipulation embodied in the agreement. So San Miguel
Corporation v. Monasterio enlightens:
Exclusive venue stipulation embodied in a contract restricts or confines parties thereto when the suit relates to
breach of said contract. But where the exclusivity clause does not make it necessarily encompassing, such
that even those not related to the enforcement of the contract should be subject to the exclusive venue,
the stipulation designating exclusive venues should be strictly confined to the specific undertaking or
agreement. Otherwise, the basic principles of freedom to contract might work to the great disadvantage of a weak
party-suitor who ought to be allowed free access to courts of justice.
In fine, since the other causes of action in petitioners complaint do not relate to a breach of the agreement it forged with
Cruz embodying the exclusive venue stipulation, they should not be subjected thereto. As San Miguel further enlightens:
Restrictive stipulations are in derogation of the general policy of making it more convenient for the parties to
institute actions arising from or in relation to their agreements. Thus, the restriction should be strictly construed as
relating solely to the agreement for which the exclusive venue stipulation is embodied. Expanding the scope of

37

such limitation on a contracting party will create unwarranted restrictions which the parties might find unintended
or worse, arbitrary and oppressive. (Underscoring supplied)

UNICAPITAL VS. CONSING JR.

FACTS:
In 1997, Consing, Jr. and his mother, Cecilia Dela Cruz obtained anP18,000,000.00 loan from Unicapital, secured
by Promissory Notes and a Real Estate Mortgage over a parcel of land registered in the name of Dela Cruz. Prior to
these, Plus Builders Inc. (PBI), a real estate company, entered into a joint venture agreement with Unicapital. The loan
and mortgage over the subject property was later on modified into an Option to Buy Real Property and, after further
negotiations, Dela Cruz decided to sell the same to Unicapital and PBI. Unicapital purchased one-half of the property
for P21,221,500.00 against which the outstanding loan obligations were first offset , while PBI bought the remaining half
for the price of P21,047,000.00. However, even before URI and PBI were able to have the titles transferred to their
names, Juanito Tan Teng and Po Willie Yu informed Unicapital that they are the lawful owners of the subject property and
that Dela Cruzs title was a mere forgery. After conducting further investigations, PBI and Unicapital sent separate demand
letters to Dela Cruz and Consing, Jr., seeking the return of the purchase price they had paid for the subject property.
On May 3, 1999, Consing, Jr. filed a complaint, denominated as a Complex Action for Declaratory Relief and later
amended to Complex Action for Injunctive Relief before the RTC-Pasig City against Unicapital et al. He claimed that the
incessant demands/recovery efforts made upon him constituted harassment and oppression which severely affected his
personal and professional life. He also averred that he was coerced to commit a violation of Batas Pambansa Blg. 22 as
he was forced to issue a post-dated check,notwithstanding their knowledge that he had no funds. He further alleged that
he was required him to sign blank deeds of sale and transfers without cancelling the old ones and that their
representatives were speaking of him in a manner that was inappropriate and libelous. He ask for the payment of actual,
moral and exemplary damages, attorney's fees and costs of suit. For their part, Unicapital et al filed separate Motions to
Dismiss complaint on the ground of failure to state a cause of action and lack of jurisdiction for failure to pay the proper
amount of docket fees. RTC-Pasig City issued a Resolution denying the motions to dismiss, holding that the complaint
sufficiently stated a cause of action for tort and damages pursuant to Article 19 of the Civil Code. Unicapital et al. moved
for reconsideration therefrom which was, however, denied by the RTC for lack of merit. Aggrieved, they elevated the
denial of their motions to dismiss before the CA via a petition for certiorari and prohibition. The CA held that no grave
abuse of discretion was committed by the RTC-Pasig City in refusing to dismiss Consing, Jr.'s complaint. Dissatisfied,
Unicapital sought reconsideration therefrom but the same was denied. Hence, the petitions for review on certiorari (G.R.
Nos.175277 and 175285)
On the other hand, on August 4, 1999, Unicapital filed a complaint for sum of money with damages against
Consing, Jr. and Dela Cruz before the RTC-Makati City. PBI also filed a complaint for damages and attachment against
Consing, Jr. and Dela Cruz before the RTC of Manila, Branch 12 also predicated on the same set of facts. PBI's Civil
Case was subsequently consolidated with that of Consing's pending before the RTC-Pasig City. For his part, Consing, Jr.
filed a Motion to Dismiss Civil Case filed by Unicapital which was, however, denied by the RTC-Makati City. Thereafter, he
filed a Motion for Consolidation with his own initiated pending before the RTC-Pasig City. The RTC-Makati City dismissed
Consing, Jr.s motion for consolidation. Consing, Jr.'s motion for reconsideration therefrom was denied. Hence, he filed a
petition for certiorari before the CA ascribing grave abuse of discretion on the part of the RTC-Makati City in refusing to
consolidate the cases. The CA rendered a Decision sustaining the Orders of the RTC-Makati City which denied Consing,
Jr.s motion for consolidation. Undaunted, Consing, Jr. filed a motion for reconsideration therefrom but was denied by the
CA. Hence, the present petition for review on certiorari (G.R. No. 192073).
Issue:
1) Whether or not Consing's complaint properly states a cause of action.
2) Whether or not there was a misjoinder of cause of action.
Ruling:
1) Yes.

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A cause of action is defined as the act or omission by which a party violates a right of another. It is well-settled
that the existence of a cause of action is determined by the allegations in the complaint. In this relation, a complaint is
said to sufficiently assert a cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be
entitled to the relief prayed for. Thus, if the allegations furnish adequate basis by which the complaint can be maintained,
then the same should not be dismissed, regardless of the defenses that may be averred by the defendants.
The elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would
justify the relief demanded. Stated otherwise, may the court render a valid judgment upon the facts alleged therein? The
inquiry is into the sufficiency, not the veracity of the material allegations. If the allegations in the complaint furnish
sufficient basis on which it can be maintained, it should not be dismissed regardless of the defense that may be presented
by the defendants. (Pioneer Concrete Philippines, Inc. v. Todaro, citing Hongkong and Shanghai Banking Corporation,
Limited. v. Catalan). Stated otherwise, the resolution on this matter should stem from an analysis on whether or not the
complaint is able to convey a cause of action; and not that the complainant has no cause of action. Lest it be
misunderstood, failure to state a cause of action is properly a ground for a motion to dismiss under Section 1(g), Rule
16 of the Rules of Court(Rules), while the latter is not a ground for dismissal under the same rule.
In this case, the Court finds that Consing, Jr.s complaint in SCA No.1759 properly states a cause of action since
the allegations there insufficiently bear out a case for damages under Articles 19 and 26 of the Civil Code.
Records disclose that Consing, Jr.s complaint contains allegations which aim to demonstrate the abusive manner in
which Unicapital and PBI, et al. enforced their demands against him. Among others, the complaint states that Consing, Jr.
"has constantly been harassed and bothered by Unicapital and PBI, et al.; x x x besieged by phone calls from them; x x x
has had constant meetings with them variously, and on a continuing basis, such that he is unable to attend to his work as
an investment banker." In the same pleading, he also alleged that Unicapital and PBI, et al.s act of "demanding a
postdated check knowing fully well that he does not have the necessary funds to cover the same, nor is he expecting to
have them is equivalent to asking him to commit a crime under unlawful coercive force." Accordingly, these specific
allegations, if hypothetically admitted, may result into the recovery of damages pursuant to Article 19 of the Civil Code
which states that "every person must, in the exercise of his rights and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good faith." As explained in the HSBC case:
When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results
in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. But a right,
though by itself legal because it is recognized or granted by law as such, may nevertheless become the source of some
illegality. A person should be protected only when he acts in the legitimate exercise of his right, that is, when he acts with
prudence and in good faith; but not when he acts with negligence or abuse. There is an abuse of right when it is exercised
for the only purpose of prejudicing or injuring another. The exercise of a right must be in accordance with the purpose for
which it was established, and must not be excessive or unduly harsh; there must be no intention to injure another.
Likewise, Consing, Jr.s complaint states a cause of action for damages under Article 26 of the Civil Code which provides
that:
Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and
other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a
cause of action for damages, prevention and other relief:
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical
defect, or other personal condition.
The rationale therefor was explained in the case of Manaloto v. Veloso III, citing Concepcion v. CA, to wit:
The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The Code Commission
stressed in no uncertain terms that the human personality must be exalted. The sacredness of human personality is a
concomitant consideration of every plan for human amelioration. The touchstone of every system of law, of the culture and
civilization of every country, is how far it dignifies man. If the statutes insufficiently protect a person from being unjustly
humiliated, in short, if human personality is not exalted - then the laws are indeed defective. Thus, under this article, the
rights of persons are amply protected, and damages are provided for violations of a person's dignity, personality, privacy
and peace of mind.
To add, a violation of Article 26 of the Civil Code may also lead to the payment of moral damages under Article
2219(10) of the Civil Code.
Records reveal that Consing, Jr., in his complaint, alleged that "he has come to discover that Unicapital and PBI,
et al. are speaking of him in a manner that is inappropriate and libelous; and that they have spread their virulent version of
events in the business and financial community such that he has suffered and continues to suffer injury upon his good
name and reputation which, after all, is the most sacred and valuable wealth he possesses - especially considering that

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he is an investment banker." In similar regard, the hypothetical admission of these allegations may result into the recovery
of damages pursuant to Article 26, and even Article2219(10), of the Civil Code.
2) No.
The rule is that a partys failure to observe the following conditions under Section 5, Rule 2 of the Rules results in
a misjoinder of causes of action:
SEC. 5. Joinder of causes of action . - A party may in one pleading assert, in the alternative or otherwise, as many causes
of action as he may have against an opposing party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) The joinder shall not include special civil actions governed by special rules;
(c) Where the causes of action are between the same parties but pertain to different venues or jurisdictions, the
joinder may be allowed in the Regional Trial Court provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein; and
(d) Where the claims in all the causes of action are principally for recovery of money the aggregate amount claimed shall
be the test of jurisdiction.
A careful perusal of his complaint discloses that Consing, Jr. did not seek to hold Unicapital and PBI, et al. liable
for any specific violation of the Corporation Code or the Revised Securities Act. Rather, he merely sought damages for
Unicapital and PBI, et al.s alleged acts of making him sign numerous documents and their use of the same against him.
In this respect, Consing, Jr. actually advances an injunction and damages case which properly falls under the jurisdiction
of the RTC-Pasig City. Therefore, there was no violation of Section 5, Rule 2 of the Rules, particularly, paragraph (c)
thereof. Besides, even on the assumption that there was a misjoinder of causes of action, still, such defect should not
result in the dismissal of Consing, Jr.s complaint. Section 6, Rule 2 of the Rules explicitly states that a "misjoinder of
causes of action is not a ground for dismissal of an action" and that "a misjoined cause of action may, on motion of a party
or on the initiative of the court, be severed and proceeded with separately."

INIEGO vs. HON. PURGANAN

-petition for certiorari is DENIED
FACTS:
Private respondent Fokker Santos filed a complaint for quasi-delict and damages against Jimmy Pinion, the driver of a
truck involved in a traffic accident, and against petitioner Artemio Iniego, as owner of the said truck and employer of
Pinion. The complaint stemmed from a vehicular accident that happened when a freight truck allegedly being driven by
Pinion hit private respondents jitney which private respondent was driving at the time of the accident.
On August 24, 2002, private respondent filed a Motion to Declare defendant in Default allegedly for failure of the latter to
file his answer within the final extended period. Petitioner filed a Motion to Admit and a Motion to Dismiss the complaint on
the ground, among other things, that the RTC has no jurisdiction over the cause of action of the case.
On Oct. 21, 2002, public respondent Judge Guillermo Purganan, acting as presiding judge of the RTC of Manila issued
the assailed Omnibus Order denying the Motion to Dismiss of the petitioner and the Motion to Declare Defendant in
Default of the private respondent. Also, based on the RTCs Decision the main cause of action is not the claim for
damages in the total amount of P490,000.00. Damages are being claimed only as a result of the alleged fault or
negligence of both defendants under Article 2176 of the Civil Code in the case of defendant Pinion and under Article 2180
also of the Civil Code in the case of defendant Iniego. But since fault or negligence (quasi-delict) could not be the subject
of pecuniary estimation, the court has exclusive jurisdiction.
Motion for Reconsideration filed by the petitioner was denied by the RTC. According to the court, What this court referred
to in its Order sought to be reconsidered as not capable of pecuniary estimation is the CAUSE OF ACTION, which is
quasidelict and NOT the amount of damage prayed for.
A petition for certiorari under Rule 65 of the Rules of Court was filed with the CA, but the CA denied the motion and
dismissed it for lack of merit. MR was likewise denied. Hence this petition.

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ISSUE:
Whether actions for damages based on quasi delict are actions that are capable of pecuniary estimation and
therefore fall under the jurisdiction of the municipal courts if the claim does not exceed the jurisdictional amount
of P400,000.00

Whether moral and exemplary damages claimed by private respondent should be excluded from the computation
of the above-mentioned jurisdictional amount because they arose from a cause of action other than the negligent
act of the defendant.

RULING:
1. Yes. Actions for damages based on quasi-delicts are primarily and effectively actions for the recovery of a
sum of money for the damages suffered because of the defendant's alleged tortious acts, and are
therefore capable of pecuniary estimation.
The respondent Judges observation as to his assailed order as not capable of pecuniary estimation is the cause of action,
which is quasi- delict, and not the amount of damage prayed for is erroneous.
CAUSE OF ACTION and SUBJECT MATTER defined
It is crystal clear from BP 129, as amended, that what must be determined to be capable or incapable of pecuniary
estimation is not the cause of action, but the subject matter of the action.
A cause of action is the delict or the wrongful act or omission committed by the defendant in violation of the
primary rights of the plaintiff.

subject matter of the action is the physical facts, the thing real or personal, the money, lands, chattels, and
the like, in relation to which the suit is prosecuted, and not the delict or wrong committed by the defendant.
The case of Lapitan v. Scandia, Inc., et al ., has guided this Court time and again in determining whether the
subject matter of the action is capable of pecuniary estimation. In Lapitan , the Court spoke through the eminent
Mr. Justice Jose B.L. Reyes:
In determining whether an action is one the subject matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of firs ascertaining the nature of the principal action or
remedy sought. If it I primarily for the recovery of a sum of money, the claim is considered capable
of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of
first instance [now Regional Trial Courts] would depend on the amount of the claim . However,
where the basic issue is something other than the right to recover a sum of money, where the money
claim is purely incidental to, or a consequence of, the principal relief sought like suits to have the
defendant perform his part of the contract (specific performance) and in actions for support, or for
annulment of a judgment or to foreclose a mortgage, this court has considered such actions as cases
where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively
by courts of first instance [now Regional Trial Courts].
. . . . (Emphasis supplied.)

2. No. The amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all kinds
of damages that is the basis of determining the jurisdiction of courts, whether the claims for damages
arise from the same or from different causes of action.
The distinction made by petitioner between damages arising directly from injuries in a quasi-delict and those arising from
a refusal to admit liability for a quasi-delict is more apparent than real, as the damages sought by respondent originate
from the same cause of action: the quasidelict. The fault or negligence of the employee and the juris tantum
presumption of negligence of his employer in his selection and supervision are the seeds of the damages claimed, without
distinction.

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Even assuming, for the sake of argument, that the claims for moral and exemplary damages arose from a cause of action
other than the quasi-delict, their inclusion in the computation of damages for jurisdictional purposes is still proper. All
claims for damages should be considered in determining the jurisdiction of the court regardless of whether they arose
from a single cause of action or several causes of action. Rule 2, Section 5, of the Rules of Court allows a party to
assert as many causes of action as he may have against the opposing party. Subsection (d) of said section provides that
where the claims in all such joined causes of action are principally for recovery of money, the aggregate amount claimed
shall be the test of jurisdiction
Hence, whether or not the different claims for damages are based on a single cause of action or different causes of action,
it is the total amount thereof which shall govern. Jurisdiction in the case at bar remains with the RTC, considering that the
total amount claimed, inclusive of the moral and exemplary damages claimed, is P490,000.00.
In sum, actions for damages based on quasi-delicts are actions that are capable of pecuniary estimation. As such, they
fall within the jurisdiction of either the RTC or the municipal courts, depending on the amount of damages claimed. In this
case, the amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all kinds of damages
that is the basis of determining the jurisdiction of courts, whether the claims for damages arise from the same or from
different causes of action

SECTION 6 MISJOINDER OF CAUSE OF ACTION

LILIA B. ADA, LUZ B. ADANZA, FLORA C. BAYLON, REMO BAYLON, JOSE BAYLON, ERIC BAYLON,
FLORENTINO BAYLON, and MA. RUBY BAYLON, Petitioners,
-versus
FLORANTE BAYLON, Respondent.

Facts:
This case involves the estate of the late spouses Florentino Baylon and Maximina Elnas Baylon.
At the time of their death, Spouses Baylon were survived by their legitimate children, namely, Rita Baylon (Rita), Victoria
Baylon (Victoria), Dolores Baylon (Dolores), Panfila Gomez (Panfila), Ramon Baylon (Ramon) and herein petitioner Lilia
B. Ada (Lilia).
On July 3, 1996, the petitioners filed with the RTC a Complaint for partition, accounting and damages against Florante,
Rita and Panfila. They alleged therein that after the death of Spouses Baylon, Rita took possession of the (inheritance)
estates and appropriated for herself the income from the same. Using the income produced by the said estate (parcels of
land), Rita allegedly purchased two parcels of land, Lot No. 47096 and half of Lot No. 4706. The petitioners averred that
Rita refused to effect a partition of the said parcels of land.
During the pendency of the case, Rita, through a Deed of Donation dated July 6, 1997, conveyed Lot No. 4709 and half of
Lot No. 4706 to Florante. On July 16, 2000, Rita died intestate and without any issue.
Thereafter, learning of the said donation inter vivos in favor of Florante, the petitioners filed a Supplemental Pleading
dated February 6, 2002, praying that the said donation in favor of the respondent be rescinded.
On October 20, 2005, the RTC rendered a Decision, in favor of the petitioners and rescinded the donation inter vivos of
Lot No. 4709 and half of Lot No. 4706 in favor of Florante.

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On appeal, the CA rendered a decision reversing and setting aside the decision of the RTC.
The CA held that
(1) before the petitioners may file an action for rescission, they must first obtain a favorable judicial ruling that Lot No.
4709 and half of Lot No. 4706 actually belonged to the estate of Spouses Baylon and not to Rita. Until then, the
CA asserted, an action for rescission is premature.
(2) that the petitioners action for rescission cannot be joined with their action for partition, accounting and damages
through a mere supplemental pleading. Hence, this petition. (in effect, the CA dismissed a case on the ground of
misjoinder of causes of action)
Issue: WON petitioners action for rescission cannot be joined with their action for partition, accounting and damages
through a mere supplemental pleading.
(Corollary: WON the court can dismiss action for rescission for being a misjoinder on action for partition, accounting and
damages).

Ruling:
(here, the court observe the filling of two distinct action in one complaint a joinder, nay, a misjoinder) The complaint filed
by the petitioners with the RTC involves two separate, distinct and independent actions partition and rescission. First,
the petitioners raised the refusal of their co-heirs, Florante, Rita and Panfila, to partition the properties which they inherited
from Spouses Baylon. Second, in their supplemental pleading, the petitioners assailed the donation inter vivos of Lot No.
4709 and half of Lot No. 4706 made by Rita in favor of Florante pendente lite. The actions of partition and rescission
cannot be joined in a single action.
By a joinder of causes of action is meant the uniting of two or more demands or rights of action in one action, the
statement of more than one cause of action in a declaration. It is the union of two or more civil causes of action, each of
which could be made the basis of a separate suit, in the same complaint, declaration or petition.
(wisdom behind rule on joinder) The objectives of the rule or provision are to avoid a multiplicity of suits where the same
parties and subject matter are to be dealt with by effecting in one action a complete determination of all matters in
controversy and litigation between the parties involving one subject matter, and to expedite the disposition of litigation at
minimum cost. The provision should be construed so as to avoid such multiplicity, where possible, without prejudice to the
rights of the litigants.
(here, the court opined a limitation of a joinder i.e. not include special action)Nevertheless, while parties to an action
may assert in one pleading, in the alternative or otherwise, as many causes of action as they may have against an
opposing party, such joinder of causes of action is subject to the condition, inter alia, that the joinder shall not include
special civil actions governed by special rules.
(here, the court applied the above limitation) Here, there was a misjoinder of causes of action. The action for partition filed
by the petitioners could not be joined with the action for the rescission of the said donation inter vivos in favor of Florante.
Lest it be overlooked, an action for partition is a special civil action governed by Rule 69 of the Rules of Court while an
action for rescission is an ordinary civil action governed by the ordinary rules of civil procedure. The variance in the
procedure in the special civil action of partition and in the ordinary civil action of rescission precludes their joinder in one
complaint or their being tried in a single proceeding to avoid confusion in determining what rules shall govern the conduct
of the proceedings as well as in the determination of the presence of requisite elements of each particular cause of action.

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(what is the effect of a misjoined cause of action, if not severed upon motion of a party or by the court moto proprio, as in
this case) isip2!
A misjoined cause of action, if not severed upon motion of a party or by the court sua sponte, may be
adjudicated by the court together with the other causes of action.

Nevertheless, misjoinder of causes of action is not a ground for dismissal. Indeed, the courts have the power, acting upon
the motion of a party to the case or sua sponte, to order the severance of the misjoined cause of action to be proceeded
with separately. However, if there is no objection to the improper joinder or the court did not motu proprio direct a
severance, then there exists no bar in the simultaneous adjudication of all the erroneously joined causes of action.
Here, Florante posed no objection, and neither did the RTC direct the severance of the petitioners action for rescission
from their action for partition. While this may be a patent omission on the part of the RTC, this does not constitute a
ground to assail the validity and correctness of its decision. The RTC validly adjudicated the issues raised in the actions
for partition and rescission filed by the petitioners.

Supporting cases: (application of the res judicata principle)never mind!

Republic of the Philippines v. Herbieto
Misjoinder of causes of action and parties do not involve a question of jurisdiction of the court to hear and proceed with
the case. They are not even accepted grounds for dismissal thereof. Instead, under the Rules of Court, the misjoinder of
causes of action and parties involve an implied admission of the courts jurisdiction. It acknowledges the power of the
court, acting upon the motion of a party to the case or on its own initiative, to order the severance of the misjoined cause
of action, to be proceeded with separately.

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