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were null and void; and that the acknowledgment in the Deeds of Absolute
Remedial Law Review – Civil Procedure
I. Filing Fees
1. Ruby Shelter v. Formaran (2009)
Facts:
Petitioner obtained a loan3 in the total amount of P95,700,620.00 from
respondents Romeo Y. Tan (Tan) and Roberto L. Obiedo (Obiedo), secured
by real estate mortgages over five parcels of land issued in the name of
petitioner. When petitioner was unable to pay the loan when it became due
and demandable, respondents Tan and Obiedo agreed to an extension of the
same.
The parties entered into a Memorandum of Agreement providing the
petitioner several options for the payment of its debt. In the MOA, the
respondents Tan and Obiedo granted petitioner until 31 December 2005 to
settle its indebtedness, and condoned waived the interests, penalties, etc.
amounting P74M provided that the petitioner execute deeds of sale by way
of “dacion en pago” covering the same parcel of lands subject of the
mortgages.
Without payment having been made by petitioner on 31 December 2005,
respondents Tan and Obiedo presented the Deeds of Absolute Sale dated 3
January 2006 before the Register of Deeds of Naga City on 8 March 2006, as
a result of which, they were able to secure TCTs over the five parcels of land
in their names.
On 16 March 2006, petitioner filed before the RTC a Complaint12 against
respondents Tan, Obiedo, and Atty. Reyes, for declaration of nullity of deeds
of sales and damages.
Petitioner raised two causes of action in its Complaint.
Asserting that the Deeds of Absolute Sale over the five parcels of land were
executed merely as security for the payment of its loan to respondents Tan
and Obiedo; that the Deeds of Absolute Sale, executed in accordance with the
Memorandum of Agreement, constituted pactum commisorium and as such,
Sale were falsified, petitioner averred “that by reason of the fraudulent
actions by the [herein respondents], [herein petitioner] is prejudiced and is
now in danger of being deprived, physically and legally, of the mortgaged
properties without benefit of legal processes such as the remedy of
foreclosure and its attendant procedures, solemnities and remedies available
to a mortgagor, while [petitioner] is desirous and willing to pay its obligation
and have the mortgaged properties released.”
In support of its second cause of action, petitioner narrated in its Complaint
that on 18 January 2006, respondents Tan and Obiedo forcibly took over, with
the use of armed men, possession of the five parcels of land subject of the
falsified Deeds of Absolute Sale and fenced the said properties with barbed
wire. The actions of respondents Tan and Obiedo were to the damage and
prejudice of petitioner and its tenants/lessees.
Ultimately, petitioner’s prayer in its Complaint reads:
“WHEREFORE, premises considered, it is most respectfully prayed of this
Honorable Court that upon the filing of this complaint, a 72-hour temporary
restraining order be forthwith issued ex parte:
(d) After trial, judgment be rendered: 1. Making the injunction
permanent; 2. Declaring the provision in the Memorandum of Agreement
requiring the [petitioner] to execute deed of sales (sic) in favor of the
[respondents Tan and Obiedo] as dacion en pago in the event of non-payment
of the debt as pactum commissorium;
3. Annulling the Deed[s] of Sale for TCT Nos. 29918, 38374, 38376, 39225
and 39232, all dated January 3, 2006, the same being in contravention of law;
4. Ordering the [respondents] jointly and solidarily to pay the [petitioner]
actual damages of at least P300,000.00; attorney’s fees in the amount of
P100,000.00 plus P1,000.00 per court attendance of counsel as appearance
fee; litigation expenses in the amount of at least P10,000.00 and exemplary
damages in the amount of P300,000.00, plus the costs.
[Petitioner] further prays for such other reliefs as may be proper, just and
equitable under the premises.”14
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Upon filing its Complaint with the RTC on 16 March 2006, petitioner paid
the sum of P13,644.25 for docket and other legal fees, as assessed by the
Office of the Clerk of Court. The Clerk of Court initially considered Civil
Case No. 2006-0030 as an action incapable of pecuniary estimation and
computed the docket and other legal fees due thereon according to Section
7(b)(1), Rule 141 of the Rules of Court.
Thereafter, respondent Tan filed before the RTC an Omnibus Motion in
which he contended that Civil Case No. 2006-0030 involved real properties,
the docket fees for which should be computed in accordance with Section
7(a), not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by
A.M. No. 04-2-04-SC which took effect on 16 August 2004. Since petitioner
did not pay the appropriate docket fees for Civil Case No. 2006- 0030, the
RTC did not acquire jurisdiction over the said case. Hence, respondent Tan
asked the RTC to issue an order requiring petitioner to pay the correct and
accurate docket fees pursuant to Section 7(a), Rule 141 of the Rules of Court,
as amended; and should petitioner fail to do so, to deny and dismiss the prayer
of petitioner for the annulment of the Deeds of Absolute Sale for having been
executed in contravention of the law or of the Memorandum of Agreement as
pactum commisorium.
RTC ruled for respondent and ordered it to pay the fees within 15 days.
In a letter dated 19 April 2006, the RTC Clerk of Court computed, upon the
request of counsel for the petitioner, the additional docket fees petitioner must
pay for in Civil Case No. 2006-0030 as directed in the afore- mentioned RTC
Orders. Per the computation of the RTC Clerk of Court, after excluding the
amount petitioner previously paid on 16 March 2006, petitioner must still pay
the amount of P720,392.60 as docket fees.23
CA affirmed.
Issue:
W/N the action by petitioner is one incapable of pecuniary estimation
therefore he paid the proper filing fees corresponding to such action – No.
Held:
No.
In Manchester Development Corporation v. Court of Appeals, 149 SCRA 562
(1987), the Court explicitly pronounced that “[t]he court acquires jurisdiction
over any case only upon the payment of the prescribed docket fee.” Hence,
the payment of docket fees is not only mandatory, but also jurisdictional.
In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,29 the Court laid down
guidelines for the implementation of its previous pronouncement in
Manchester under particular circumstances, to wit:
“1. It is not simply the filing of the complaint or appropriate initiatory
pleading, but the payment of the prescribed docket fee, that vests a trial court
with jurisdiction over the subject matter or nature of the action. Where the
filing of the initiatory pleading is not accompanied by payment of the docket
fee, the court may allow payment of the fee within a reasonable time but in
no case beyond the applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and
similar pleadings, which shall not be considered filed until and unless the
filing fee prescribed therefor is paid. The court may also allow payment of
said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading, or
if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall
be the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee.”
The docket fees under Section 7(a), Rule 141, in cases involving real property
depend on the fair market value of the same: the higher the value of the real
property, the higher the docket fees due. In contrast, Section 7(b) (1), Rule
141 imposes a fixed or flat rate of docket fees on actions incapable of
pecuniary estimation.
In order to resolve the issue of whether petitioner paid the correct amount of
docket fees, it is necessary to determine the true nature of its Complaint. The
dictum adhered to in this jurisdiction is that the nature of an action is
determined by the allegations in the body of the pleading or Complaint itself,
rather than by its title or heading.32
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No matter how fastidiously petitioner attempts to conceal them, the
allegations and reliefs it sought in its Complaint in Civil Case No. 2006-0030
appears to be ultimately a real action, involving as they do the recovery by
petitioner of its title to and possession of the five parcels of land from
respondents Tan and Obiedo.
A real action is one in which the plaintiff seeks the recovery of real property;
or, as indicated in what is now Section 1, Rule 4 of the Rules of Court, a real
action is an action affecting title to or recovery of possession of real property.
Siapno v. Manalo:
“A prayer for annulment or rescission of contract does not operate to
efface the true objectives and nature of the action which is to recover real
property.
An action for the annulment or rescission of a sale of real property is a
real action. Its prime objective is to recover said real property.
While it is true that petitioner does not directly seek the recovery of title
or possession of the property in question, his action for annulment of sale
and his claim for damages are closely intertwined with the issue of
ownership of the building which, under the law, is considered immovable
property, the recovery of which is petitioner’s primary objective. The
prevalent doctrine is that an action for the annulment or rescission of a
sale of real property does not operate to efface the fundamental and
prime objective and nature of the case, which is to recover said real
property. It is a real action.”
The Court calls attention to the following statement in Spouses De Leon: “A
review of the jurisprudence of this Court indicates that in determining
whether an action is one the subject matter of which is not capable of
pecuniary estimation, this Court has adopted the criterion of first ascertaining
the nature of the principal action or remedy sought.” Necessarily, the
determination must be done on a case-to-case basis, depending on the facts
and circumstances of each. What petitioner conveniently ignores is that in
Spouses De Leon, the action therein that private respondents instituted before
the RTC was “solely for annulment or rescission” of the contract of sale over
a real property.40 There appeared to be no transfer of title or possession to
the adverse party.
A real action indisputably involves real property. The docket fees for a real
action would still be determined in accordance with the value of the real
property involved therein; the only difference is in what constitutes the
acceptable value. In computing the docket fees for cases involving real
properties, the courts, instead of relying on the assessed or estimated value,
would now be using the fair market value of the real properties (as stated in
the Tax Declaration or the Zonal Valuation of the Bureau of Internal
Revenue, whichever is higher) or, in the absence thereof, the stated value of
the same.
In sum, the Court finds that the true nature of the action instituted by
petitioner against respondents is the recovery of title to and possession of real
property. It is a real action necessarily involving real property, the docket fees
for which must be computed in accordance with Section 7(1), Rule 141 of the
Rules of Court, as amended. The Court of Appeals, therefore, did not commit
any error in affirming the RTC Orders requiring petitioner to pay additional
docket fees for its Complaint in Civil Case No. 2006-0030.
The Court does not give much credence to the allegation of petitioner that if
the judgment of the Court of Appeals is allowed to stand and not rectified, it
would result in grave injustice and irreparable injury to petitioner in view of
the prohibitive amount assessed against it. It is a sweeping assertion which
lacks evidentiary support. Undeniably, before the Court can conclude that the
amount of docket fees is indeed prohibitive for a party, it would have to look
into the financial capacity of said party. It baffles this Court that herein
petitioner, having the capacity to enter into multi-million transactions, now
stalls at paying P720,392.60 additional docket fees so it could champion
before the courts its rights over the disputed real properties. Moreover, even
though the Court exempts individuals, as indigent or pauper litigants, from
paying docket fees, it has never extended such an exemption to a corporate
entity.
Avila 4B | 2016
2. Do-All Metals v. Security Bank (2011)
Facts:
From 1996 to 1997, Dragon Lady Industries, Inc., owned by petitioner
spouses Domingo Lim and Lely Kung Lim (the Lims) took out loans from
respondent Security Bank Corporation (the Bank) that totaled
P92,454,776.45. Unable to pay the loans on time, the Lims assigned some of
their real properties to the Bank to secure the same, including a building and
the lot on which it stands (the property), located at M. de Leon St., Santolan,
Pasig City.1
In 1998 the Bank offered to lease the property to the Lims through petitioner
Do-All Metals Industries, Inc. (DMI) primarily for business although the
Lims were to use part of the property as their residence. DMI and the Bank
executed a two-year lease contract from October 1, 1998 to September 30,
2000 but the Bank retained the right to pre-terminate the lease. The contract
also provided that, should the Bank decide to sell the property, DMI shall
have the right of first refusal.
On December 3, 1999, before the lease was up, the Bank gave notice to DMI
that it was pre-terminating the lease on December 31, 1999. Wanting to
exercise its right of first refusal, DMI tried to negotiate with the Bank the
terms of its purchase. DMI offered to pay the Bank P8 million for the property
but the latter rejected the offer, suggesting P15 million instead. DMI made a
second offer of P10 million but the Bank declined the same.
While the negotiations were on going, the Lims claimed that they continued
to use the property in their business. But the Bank posted at the place private
security guards from Philippine Industrial Security Agency (PISA). The Lims
also claimed that on several occasions in 2000, the guards, on instructions of
the Bank representatives Titolaido Payon gayong and Evylene Sison,
padlocked the entrances to the place and barred the Lims as well as DMI’s
employees from entering the property. One of the guards even pointed his
gun at one employee and shots were fired. Because of this, DMI was unable
to close several projects and contracts with prospective clients. Further, the
Lims alleged that they were unable to retrieve assorted furniture, equipment,
and personal items left at the property.
The Lims eventually filed a complaint with the Regional Trial Court (RTC)
of Pasig City for damages with prayer for the issuance of a temporary
restraining order (TRO) or preliminary injunction against the Bank and its
co-defendants Payongayong, Sison, PISA, and Gil Silos.2
The Bank denied, on the other hand, that its guards harassed DMI and the
Lims. To protect its property, the Bank began posting guards at the building
even before it leased the same to DMI. Indeed, this arrangement benefited
both parties. The Bank alleged that in October of 2000, when the parties could
not come to an agreement regarding the purchase of the property, DMI
vacated the same and peacefully turned over possession to the Bank.
The Bank offered no objection to the issuance of a TRO since it claimed that
it never prevented DMI or its employees from entering or leaving the
building. For this reason, the RTC directed the Bank to allow DMI and the
Lims to enter the building and get the things they left there. The latter
claimed, however, that on entering the building, they were unable to find the
movable properties they left there. In a supplemental complaint, DMI and
the Lims alleged that the Bank surreptitiously took such properties,
resulting in additional actual damages to them of over P27 million.
RTC rendered a decision in favor of DMI and the Lims. It ordered the Bank
to pay the plaintiffsP27,974,564.00 as actual damages, P500,000.00 as moral
damages, P500,000 as exemplary damages, and P100,000.00 as attorney’s
fees. But the court absolved defendants Payongayong, Sison, Silos and PISA
of any liability.
The Bank moved for reconsideration of the decision, questioning among
other things the RTC’s authority to grant damages considering plaintiffs’
failure to pay the filing fees on their supplemental complaint. The RTC
denied the motion. On appeal to the CA, the latter found for the Bank,
reversed the RTC decision, and dismissed the complaint as well as the
counterclaims.5 DMI and the Lims filed a motion for reconsideration but the
CA denied the same, hence this petition.
Issue:
W/N the RTC had no jurisdiction over the case due to the petitioner’s failure
to pay filing fees on its supplemental complaint – No. But the RTC should
have treated the supplemental complaint as not filed.
Held:
No. But the RTC should have treated the supplemental complaint as not filed.
Avila 4B | 2016
On the issue of jurisdiction, respondent Bank argues that plaintiffs’ failure to
pay the filing fees on their supplemental complaint is fatal to their action. But
what the plaintiffs failed to pay was merely the filing fees for their
Supplemental Complaint. The RTC acquired jurisdiction over plaintiffs’
action from the moment they filed their original complaint accompanied by
the payment of the filing fees due on the same. The plaintiffs’ non-payment
of the additional filing fees due on their additional claims did not divest the
RTC of the jurisdiction it already had over the case.
As to the damages that plaintiffs claim under their supplemental complaint,
their stand is that the RTC committed no error in admitting the complaint
even if they had not paid the filing fees due on it since such fees constituted
a lien anyway on the judgment award. But this after-judgment lien, which
implies that payment depends on a successful execution of the judgment,
applies to cases where the filing fees were incorrectly assessed or paid or
where the court has discretion to fix the amount of the award. None of these
circumstances obtain in this case.
supplemental complaint. Only the Supreme Court can grant exemptions
to the payment of the fees due the courts and these exemptions are
embodied in its rules.
WHEREFORE, the Court PARTIALLY GRANTS the petition and
REINSTATES with modification the decision of the Regional Trial Court of
Pasig City in Civil Case 68184. The Court DIRECTS respondent Security
Bank Corporation to pay petitioners DMI and spouses Domingo and Lely
Kung Lim damages in the following amounts: P500,000.00 as moral
damages, P500,000.00 as exemplary damages, and P100,000.00 for
attorney’s fees. The Court DELETES the award of actual damages of
P27,974,564.00.
SO ORDERED.

Here, the supplemental complaint specified from the beginning the actual
damages that the plaintiffs sought against the Bank. Still plaintiffs paid no
filing fees on the same. And, while petitioners claim that they were willing to
pay the additional fees, they gave no reason for their omission nor offered to
pay the same. They merely said that they did not yet pay the fees because the
RTC had not assessed them for it. But a supplemental complaint is like any
complaint and the rule is that the filing fees due on a complaint need to be
paid upon its filing. The rules do not require the court to make special
assessments in cases of supplemental complaints. To aggravate plaintiffs’
omission, although the Bank brought up the question of their failure to pay
additional filing fees in its motion for reconsideration, plaintiffs made no
effort to make at least a late payment before the case could be submitted for
decision, assuming of course that the prescription of their action had not then
set it in. Clearly, plaintiffs have no excuse for their continuous failure to pay
the fees they owed the court. Consequently, the trial court should have treated
their Supplemental Complaint as not filed.

Plaintiffs of course point out that the Bank itself raised the issue of non-
payment of additional filing fees only after the RTC had rendered its decision
in the case. The implication is that the Bank should be deemed to have waived
its objection to such omission. But it is not for a party to the case or even for
the trial court to waive the payment of the additional filing fees due on the

Avila 4B | 2016
3. Phil. First Insurance v. Pyramid (2008)
Facts:
The issue, in the main, in the present case is whether respondent, Pyramid
Logistics and Trucking Corporation (Pyramid), which filed on November 7,
2001 a complaint,1 denominated as one for specific performance and
damages, against petitioners Philippine First Insurance Company, Inc.
(Philippine First) and Paramount General Insurance Corporation (Paramount)
before the Regional Trial Court (RTC) of Makati, docketed as Civil Case No.
01-1609, paid the correct docket fee; if in the negative, whether the complaint
should be dismissed or Pyramid can still be ordered to pay the fee.
Pyramid sought to recover the proceeds of two insurance policies issued to it,
Policy No. IN-002904 issued by petitioner Paramount, and Policy No. MN-
MCL-HO-00-0000007-00 issued by petitioner Philippine First. Despite
demands, petitioners allegedly failed to settle them, hence, it filed the
complaint subject of the present petition.
In its complaint, Pyramid alleged that on November 8, 2000, its delivery van
bearing license plate number PHL-545 which was loaded with goods
belonging to California Manufacturing Corporation (CMC) valued at
P907,149.07 left the CMC Bicutan Warehouse but the van, together with the
goods, failed to reach its destination and its driver and helper were nowhere
to be found, to its damage and prejudice; that it filed a criminal complaint
against the driver and the helper for qualified theft, and a claim with herein
petitioners as co-insurers of the lost goods but, in violation of petitioners’
undertaking under the insurance policies, they refused without just and valid
reasons to compensate it for the loss; and that as a direct consequence of
petitioners’ failure, despite repeated demands, to comply with their respective
undertakings under the Insurance Policies by compensating for the value of
the lost goods, it suffered damages and was constrained to engage the services
of counsel to enforce and protect its right to recover compensation under said
policies, for which services it obligated itself to pay the sum equivalent to
twenty-five (25%) of any amount recovered as and for attorney’s fees and
legal expenses.2
Pyramid thus prayed that after due proceedings, judgment be rendered,
ordering [herein petitioners] to comply with their obligation under their
respective Insurance Policies by paying to [it] jointly and severally, the
claims arising from the subject losses.
THAT, [herein petitioners] be adjudged jointly and severally to pay to [it], in
addition to the foregoing, the following:
1. The sum of PHP 50,000.00 plus PHP 1,500.00 for each Court session
attended by counsel until the instant [case] is finally terminated, as and for
attorney’ s fees;
2. The costs of suit[;]
and for other reliefs just and equitable in the premises.”
Pyramid was assessed P610 docket fee, apparently on the basis of the amount
of P50,000 specified in the prayer representing attorney’s fees, which it duly
paid.5
Pyramid later filed a 1st Amended Complaint6 containing minor changes in
its body7 but bearing the same prayer.8 Branch 148 of the Makati RTC to
which the complaint was raffled admitted the Amended Complaint.9
Petitioners filed a Motion to Dismiss on the ground of, inter alia, lack of
jurisdiction, Pyramid not having paid the docket fees in full. Petitioners claim
that in the body of the amended complaint, respondent Pyramid sought to
collect from the petitioners the amount of P907,159.07. However, the
respondent deliberately failed to specify in the prayer what these damages
are. According to petitioners, this deliberate omission by the plaintiff is
clearly intended for no other purposes than to evade the payment of the
correct filing fee if not to mislead the docket clerk, in the assessment of the
filing fee. In fact, the docket clerk in the instant case charged the plaintiff a
total of Php610.00 only as a filing fee, which she must have based on the
amount of Php50,000.00 [attorney’s fees] only.
Petitioners cited11 Manchester Development Corporation v. Court of
Appeals12 which held:
“x x x [A]ll complaints, petitions, answers and other similar pleadings should
specify the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be considered in the
assessment of the filing fees in any case. Any pleading that fails to comply
with this requirement shall not be accepted or admitted, or shall otherwise be
expunged from the record.”13 (Emphasis and italics supplied)
They cited too Sun Insurance Office, Ltd. v. Asuncion14 which held that “[i]t
is not simply the filing of the complaint or appropriate pleading, but the
Avila 4B | 2016
payment of the prescribed docket fee, that vests a trial court with jurisdiction
over the subject-matter or nature of the action.”15
To the Motion to Dismiss Pyramid filed its Opposition,17 alleging that if
there was a mistake in the assessment of the docket fees, the trial court was
not precluded from acquiring jurisdiction over the complaint as “it has the
authority to direct the mistaken party to complete the docket fees in the course
of the proceedings . . .”18 The Opposition merited a Reply19 from
petitioners.
RTC denied the MTD.
The Court of Appeals partially granted petitioners’ petition for certiorari by
setting aside the trial judge’s assailed orders and ordering Pyramid to file the
correct docket fees within a reasonable time, it holding that while the
complaint was denominated as one for specific performance, it sought to
recover from petitioners Pyramid’s “claims arising from the subject losses.”
Hence this petition by the petitioners.
Arguments:
Petitioners invoke the doctrine in Manchester Development Corporation v.
Court of Appeals38 that a pleading which does not specify in the prayer the
amount sought shall not be admitted or shall otherwise be expunged, and
that the court acquires jurisdiction only upon the payment of the prescribed
docket fee.39
Pyramid, on the other hand, insists, in its Comment on the Petition,40 on the
application of Sun Insurance Office, Ltd. (SIOL) v. Asuncion41 and
subsequent rulings relaxing the Manchester ruling by allowing payment of
the docket fee within a reasonable time, in no case beyond the applicable
prescriptive or reglementary period, where the filing of the initiatory pleading
is not accompanied by the payment of the prescribed docket fee.
Issue:
W/N respondent paid the correct filing fees, and, if no, whether its complaint
should be expunged – No and no.
Held:
No and no.
In Tacay v. Regional Trial Court of Tagum, Davao del Norte, 180 SCRA 433
(1989), the Court clarified the effect of the Sun Insurance ruling on the
Manchester ruling as follows:
“As will be noted, the requirement in Circular No. 7 [of this Court which was
issued based on the Manchester ruling] that complaints, petitions, answers,
and similar pleadings should specify the amount of damages being prayed for
not only in the body of the pleading but also in the prayer, has not been
altered. What has been revised is the rule that subsequent “amendment of the
complaint or similar pleading will not thereby vest jurisdiction in the Court,
much less the payment of the docket fee based on the amount sought in the
amended pleading,” the trial court now being authorized to allow payment
of the fee within a reasonable time but in no case beyond the applicable
prescriptive period or reglementary period. Moreover, a new rule has been
added, governing the awards of claims not specified in the pleading—i.e.,
damages arising after the filing of the complaint or similar pleading—as to
which the additional filing fee therefore shall constitute a lien on the
judgment.
Two situations may arise. One is where the complaint or similar pleading sets
out a claim purely for money and damages and there is no statement of the
amounts being claimed. In this event the rule is that the pleading will “not be
accepted nor admitted, or shall otherwise be expunged from the record.” In
other words, the complaint or pleading may be dismissed, or the claims as to
which amounts are unspecified may be expunged, although as aforestated the
Court may, on motion, permit amendment of the complaint and payment of
the fees provided the claim has not in the meantime become time-barred.
The other is where the pleading does specify the amount of every claim, but
the fees paid are insufficient; and here again, the rule now is that the court
may allow a reasonable time for the payment of the prescribed fees, or the
balance thereof, and upon such payment, the defect is cured and the court
may properly take cognizance of the action, unless in the meantime
prescription has set in and consequently barred the right of action.”
Indeed, Pyramid captioned its complaint as one for “specific performance and
damages” even if it was, as the allegations in its body showed, seeking in the
main the collection of its claims-sums of money representing losses the
amount of which it, by its own admission, “knew.”46 And, indeed, it failed
to specify in its prayer in the complaint the amount of its claims/damages.
Avila 4B | 2016
When Pyramid amended its complaint, it still did not specify, in its prayer,
the amount of claims/damages it was seeking.

Petitioner’s following justification for omitting to specify in the prayer of its

complaint the amount of its claims fails to impress:
“While respondent knew its losses and alleged them in the body of the
Complaint, it was not aware of the extent of petitioners’ respective liability
under the two insurance policies. The allegation of respondent’s losses,
albeit, without repeating them in its prayer for relief was not motivated by an
intention to mislead, cheat or defraud the Court. It just left the matter of
liability arising from two separate and distinct Insurance Policies covering
the same insurable risk for the trial court’s determination, hence, respondent
came up with an action for “specific performance.”

As the salient allegations of Pyramid’s complaint show and as priorly stated,

they constitute, in the main, an action for collection of its claims it admittedly
“knew.”

Assuming arguendo that Pyramid has other claims the amounts of which are
yet to be determined by the trial court, the rule established in Manchester
which was embodied in this Court’s Circular No. 7-88 issued on March 24,
1988, as modified by the Sun Insurance ruling, still applies.

Consider this Court’s pronouncement bearing on the matter in Ayala

Corporation v. Madayag:
“While it is true that the determination of certain damages x x x is left to the
sound discretion of the court, it is the duty of the parties claiming such
damages to specify the amount sought on the basis of which the court may
make a proper determination, and for the proper assessment of the
appropriate docket fees. The exception contemplated as to claims not
specified or to claims although specified are left for determination of the court
is limited only to any damages that may arise after the filing of the complaint
or similar pleading for then it will not be possible for the claimant to specify
nor speculate as to the amount thereof.” (Emphasis and italics supplied)

WHEREFORE, in light of the foregoing discussions, the petition is DENIED.

SO ORDERED.

Avila 4B | 2016
4. Bautista v. Unangst (2008)
Facts:
On November 15, 1996, Hamilton Salak rented a car from GAB Rent-A-Car,
a car rental shop owned by petitioner Benjamin Bautista. The lease was for
three (3) consecutive days at a rental fee of P1,000.00 per day.5 However,
Salak failed to return the car after three (3) days prompting petitioner to file
a complaint against him for estafa, violation of Batas Pambansa Blg. 22 and
carnapping.6
On February 2, 1997, Salak and his common-law wife, respondent Shirley G.
Unangst, were arrested by officers of the Criminal Investigation Service
Group (CISG) of the Philippine National Police while riding the rented car
along Quezon City. The next day, petitioner demanded from Salak at the
CISG Office the sum of P232,372.00 as payment for car rental fees, fees
incurred in locating the car, attorney’s fees, capital gains tax, transfer tax, and
other incidental expenses.7
Salak and respondent expressed willingness to pay but since they were then
short on cash, Salak proposed to sell to petitioner a house and lot titled in the
name of respondent. Petitioner welcomed the proposal after consulting his
wife, Cynthia. Cynthia, on the other hand, further agreed to pay the mortgage
loan of respondent over the subject property to a certain Jojo Lee in the
amount of P295,000.00 as the property was then set to be publicly auctioned
on February 17, 1997.8
To formalize their amicable settlement, Cynthia, Salak and respondent
executed a written agreement.9 They stipulated that respondent would sell,
subject to repurchase, her residential property in favor of Cynthia for the total
amount of P527,372.00 broken down, as follows: (1) P295,000.00 for the
amount paid by Cynthia to Lee to release the mortgage on the property; and
(2) P232,372.00, which is the amount due to GAB Rent-A-Car. Cynthia also
agreed to desist from pursuing the complaint against Salak and respondent.10
Respondent and petitioner also executed a separate deed of sale with right to
repurchase,11 specifying, among others, that:
(1) respondent, as vendor, shall pay capital gains tax, current real estate taxes
and utility bills pertaining to the property; (2) if respondent fails to repurchase
the property within 30 days from the date of the deed, she and her assigns
shall immediately vacate the premises and deliver its possession to petitioner
without need of a judicial order; and (3) respondent’s refusal to do so will
entitle petitioner to take immediate possession of the property.12
Respondent failed to repurchase the property within the stipulated period. As
a result, petitioner filed, on June 5, 1998, a complaint for specific
performance or recovery of possession, for sum of money, for consolidation
of ownership and damages against respondent and other unnamed persons
before the RTC of Olongapo City.
Petitioner prayed before the RTC that an order be issued in his favor directing
respondents to: (1) surrender the possession of the property; (2) pay
P150,000.00 for the reasonable compensation for its use from March 7, 1997
to June 7, 1998, plus P10,000.00 per month afterward; (3) pay the amount
advanced by petitioner, to wit: P71,129.05 and P11,993.72 for the payment
of capital gains tax and real estate taxes, respectively; and P70,000.00 for
attorney’s fees.15
On June 16, 1998, petitioner filed an amended complaint,16 reiterating his
previous allegations but with the added prayer for consolidation of ownership
pursuant to Article 1607 of the Civil Code.17
RTC ruled for petitioner.
Respondents failed to interpose a timely appeal. However, on September 10,
2004, respondent Unangst filed a petition for relief pursuant to Section 38 of
the 1997 Rules on Civil Procedure. She argued that she learned of the decision
of the RTC only on September 6, 2004 when she received a copy of the
motion for execution filed by petitioner.21
Petitioner, on the other hand, moved for the dismissal of respondent’s petition
on the ground that the latter paid an insufficient sum of P200.00 as docket
fees.22
It appears that respondent Unangst initially paid P200.00 as docket fees as
this was the amount assessed by the Clerk of Court of the RTC.23 Said
amount was insufficient as the proper filing fees amount to P1,715.00.
Nevertheless, the correct amount was subsequently paid by said respondent
on February 22, 2005.24
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In their comment,25 respondents countered that they should not be faulted
for paying deficient docket fees as it was due to an erroneous assessment of
the Clerk of Court.26
The RTC granted the petition for relief. Subsequently, it directed respondents
to file a notice of appeal within twenty-four (24) hours from receipt of the
order.27 Accordingly, on February 23, 2005, respondents filed their notice of
appeal.28
Before the CA, petitioner insisted, among others, that although the petition
for relief of respondents was filed on time, the proper filing fees for said
petition were paid beyond the 60-day reglementary period. He posited that
jurisdiction is acquired by the court over the action only upon full payment
of prescribed docket fees.
CA ruled for respondents.
Issue:
W/N the respondents’ failure to pay the docket fees on time warranted the
dismissal of its petition for relief – No.
Held:
No.
Arguments:
On the first issue, petitioner contends that respondents’ “Petition for Relief to
Be Able to Appeal Judgment,” which paved the way for the allowance of
respondents’ appeal of the RTC decision, was filed within the prescriptive
period but the proper docket fees for it were belatedly paid.40 He thus posits
that the RTC did not acquire jurisdiction over said petition. Having no
jurisdiction, the RTC could not have allowed respondents to appeal.
On this issue, respondent counters that the belated payment of proper docket
fees was not due to their fault but to the improper assessment by the Clerk of
Court. Respondent asserts the ruling of the CA that the court may extend the
time for the payment of the docket fees if there is a justifiable reason for the
failure to pay the correct amount. Moreover, respondent argues that petitioner
failed to contest the RTC Order dated February 21, 2004 that allowed the
payment of supplementary docket fees. Petitioner failed to file a motion for
reconsideration or a petition for certiorari to the higher court to question said
order.
We agree with respondents. Their failure to pay the correct amount of docket
fees was due to a justifiable reason.
The right to appeal is a purely statutory right. Not being a natural right or a
part of due process, the right to appeal may be exercised only in the manner
and in accordance with the rules provided therefor. For this reason, payment
of the full amount of the appellate court docket and other lawful fees within
the reglementary period is mandatory and jurisdictional.
Nevertheless, as this Court ruled in Aranas v. Endona, the strict application
of the jurisdictional nature of the above rule on payment of appellate docket
fees may be mitigated under exceptional circumstances to better serve the
interest of justice. It is always within the power of this Court to suspend its
own rules, or to except a particular case from their operation, whenever the
purposes of justice require it.
In not a few instances, the Court relaxed the rigid application of the rules of
procedure to afford the parties the opportunity to fully ventilate their cases on
the merits. This is in line with the time-honored principle that cases should
be decided only after giving all parties the chance to argue their causes and
defenses.
Technicality and procedural imperfections should thus not serve as bases of
decisions. In that way, the ends of justice would be better served. For, indeed,
the general objective of procedure is to facilitate the application of justice to
the rival claims of contending parties, bearing always in mind that procedure
is not to hinder but to promote the administration of justice.
WHEREFORE, the petition is DENIED for lack of merit. SO ORDERED.
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5. Chua v. Executive Judge (2013)
Facts:
On 13 January 2012, herein petitioner Richard Chua filed before the Office
of the City Prosecutor (OCP) of Manila, a complaint charging one Letty Sy
Gan of forty (40) counts of violation of Batas Pambansa Bilang (BP Blg.) 22
or the Bouncing Checks Law.3 After conducting preliminary investigation,
the OCP found probable cause and, on 22 March 2012, filed forty (40) counts
of violation of BP Blg. 22 before the MeTC.4
Consequently, the MeTC informed petitioner that he has to pay a total of
P540,668.00 as filing fees for all the forty (40) counts of violation of BP Blg.
22.5 Finding the said amount to be beyond his means, petitioner consulted
with the MeTC clerk of court to ask whether he could pay filing fees on a per
case basis instead of being required to pay the total filing fees for all the BP
Blg. 22 cases all at once.6 The MeTC clerk of court opined that petitioner
could not.7 Petitioner was thus unable to pay any filing fees.
Due to non-payment of the required filing fees, the MeTC designated the
forty (40) counts of violation of BP Blg. 22 as undocketed cases under UDK
Nos. 12001457 to 96. Subsequently, the OCP moved for consolidation of the
said cases.8
On 18 April 2012, petitioner filed before the Executive Judge of the MeTC a
motion entitled “Urgent Motion to Allow Private Complainant to Pay Filing
Fee on a Per Case Basis.”
In it, petitioner reiterated his request that he be allowed to pay filing fees on
a per case basis instead of being required to pay the total amount of filing fees
in its entirety.
On 26 June 2012, the Executive Judge issued an Order denying petitioner’s
Urgent Motion. In rebuffing petitioner’s Urgent Motion, the Executive Judge
1. (b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to
include the corresponding civil action. No reservation to file such civil action
separately shall be allowed.
Upon filing of the aforesaid joint criminal and civil actions, the offended party shall
pay in full the filing fees based on the amount of the check involved, which shall be
considered as the actual damages claimed. Where the complaint or information also
of the MeTC ratiocinated that granting petitioner’s plea would constitute a
deferment in the payment of filing fees that, in turn, contravenes Section 1(b)
of the Rule 111 of the Rules of Court.1
Issue:
W/N petitioner should be allowed to pay the filing fees on a per case basis –
Yes.
Held:
Yes.
Thus, We come to the focal issue of whether the Executive Judge of the
MeTC committed grave abuse of discretion, in light of the facts and
circumstances herein obtaining, in refusing petitioner’s request of paying
filing fees on a per case basis.
We answer in the affirmative. We grant the petition.
In proposing to pay filing fees on a per case basis, petitioner was not trying
to evade or deny his obligation to pay for the filing fees for all forty (40)
counts of violation of BP Blg. 22 filed before the MeTC. He, in fact,
acknowledges such obligation. He, in fact, admits that he is incapable of
fulfilling such obligation in its entirety.
Rather, what petitioner is asking is that he at least be allowed to pursue some
of the cases, the filing fees of which he is capable of financing. Petitioner
manifests that, given his current financial status, he simply cannot afford the
filing fees for all the forty (40) BP Blg. 22 cases.
We see nothing wrong or illegal in granting petitioner’s request.
First. The Executive Judge erred when she treated the entire P540,668.00 as
one indivisible obligation, when that figure was nothing but the sum of
seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the
offended party shall pay additional filing fees based on the amounts alleged therein.
If the amounts are not so alleged but any of these damages are subsequently awarded
by the court, the filing fees based on the amount awarded shall constitute a first lien
on the judgment. (Emphasis supplied)
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individual filing fees due for each count of violation of BP Blg. 22 filed
before the MeTC. Granting petitioner’s request would not constitute a
deferment in the payment of filing fees, for the latter clearly intends to pay in
full the filing fees of some, albeit not all, of the cases filed.

Filing fees, when required, are assessed and become due for each initiatory
pleading filed. In criminal actions, these pleadings refer to the information
filed in court.

In the instant case, there are a total of forty (40) counts of violation of BP
Blg. 22 that was filed before the MeTC. And each of the forty (40) was, in
fact, assessed its filing fees, individually, based on the amount of check one
covers. Under the rules of criminal procedure, the filing of the forty (40)
counts is equivalent to the filing of forty (40) different informations, as each
count represents an independent violation of BP Blg. 22. Filing fees are,
therefore, due for each count and may be paid for each count separately.

Second. In an effort to justify her refusal of petitioner’s request, the Executive

Judge further argues that since all forty (40) counts of violation of BP Blg.
22 were brought about by a single complaint filed before the OCP and are
now consolidated before the court, the payment of their filing fees should be
made for all or none at all.18

That all forty (40) counts of violation of BP Blg. 22 all emanated from a single
complaint filed in the OCP is irrelevant. The fact remains that there are still
forty (40) counts of violation of BP Blg. 22 that were filed before the MeTC
and, as a consequence, forty (40) individual filing fees to be paid.

Neither would the consolidation of all forty (40) counts make any difference.
Consolidation unifies criminal cases involving related offenses only for
purposes of trial.19 Consolidation does not transform the filing fees due for
each case consolidated into one indivisible fee.

Third. Allowing petitioner to pay for the filing fees of some of the forty (40)
counts of violation of BP Blg. 22 filed before the MeTC, will concededly
result into the absolute nonpayment of the filing fees of the rest. The fate of
the cases which filing fees were not paid, however, is already the concern of
the MeTC.

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6. In re: exemption of the NPC from payment of docket fees
Facts:
The National Power Corporation (NPC) seeks clarification from the Court on
whether or not it is exempt from the payment of filing fees, appeal bonds and
supersedeas bonds.
On December 6, 2005, the Court issued A.M. No. 05-10- 20-SC, In re:
Exemption of the National Power Corporation from the Payment of
Filing/Docket Fees, on the basis of Section 13, Republic Act No. 6395 (An
Act Revising the Charter of the National Power Corporation). The Court
therein declared that the NPC is still exempt from the payment of filing fees,
appeal bonds, and supersedeas bonds.
On October 27, 2009, however, the Court issued A.M. No. 05-10-20-SC
stating that:
“The Court Resolved, upon recommendation of the Committee on the
Revision of the Rules of Court, to DENY the request of the National Power
Corporation (NPC) for exemption from the payment of filing fees pursuant
to Section 10 of Republic Act No. 6395, as amended by Section 13 of
Presidential Decree No. 938. The request appears to run counter to Section
5(5), Article VIII of the Constitution, in the rule-making power of the
Supreme Court over the rules on pleading, practice and procedure in all
courts, which includes the sole power to fix the filing fees of cases in courts.”
Hence, the subject letter of NPC for clarification as to its exemption from the
payment of filing fees and court fees.
Issue:
W/N NPC is exempted from the payment of docket fees – No.
Held:
No.
Section 22 of Rule 141 reads:
“Sec. 22. Government exempt.—The Republic of the Philippines, its agencies
and instrumentalities are exempt from paying the legal fees provided in this
rule. Local government units and government-owned or controlled
corporations with or without independent charters are not exempt from
paying such fees.” (emphasis supplied)
Section 70 of Republic Act No. 9136 (Electric Power Industry Reform Act
of 2001), on privatization of NPC assets, expressly states that the NPC “shall
remain as a national government-owned and -controlled corporation.”
Thus, NPC is not exempt from payment of filing fees.
The non-exemption of NPC is further fortified by the promulgation on
February 11, 2010 of A.M. No. 08-2-01-0, In re: Petition for Recognition of
the Exemption of the Government Service Insurance System (GSIS) from
Payment of Legal Fees. In said case, the Court, citing Echegaray v. Secretary
of Justice, 301 SCRA 96 (1999) stressed that the 1987 Constitution took away
the power of Congress to repeal, alter or supplement rules concerning
pleading, practice, and procedure; and that the power to promulgate these
rules is no longer shared by the Court with Congress and the Executive.
“Since the payment of legal fees is a vital component of the rules promulgated
by this Court concerning pleading, practice and procedure, it cannot be
validly annulled, changed or modified by Congress. As one of the safeguards
of this Court’s institutional independence, the power to promulgate rules of
pleading, practice and procedure is now the Court’s exclusive domain. That
power is no longer shared by this Court with Congress, much less the
Executive.”
With the foregoing categorical pronouncement of the Court, it is clear that
NPC can no longer invoke Republic Act No. 6395 (NPC Charter), as
amended by Presidential Decree No. 938, as its basis for exemption from the
payment of legal fees.
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7. Unicapital v. Consing (2013)
Facts:
In 1997, Consing, Jr., an investment banker, and his mother, Cecilia Dela
Cruz (Dela Cruz), obtained an P18,000,000.00 loan from Unicapital. The said
loan was secured by Promissory Notes10 and a Real Estate Mortgage11 over
a 42,443 square meter-parcel of land located at Imus, Cavite, registered in the
name of Dela Cruz as per Transfer Certificate of Title (TCT) No. T- 687599
(subject property).12
Prior to these transactions, Plus Builders, Inc. (PBI), a real estate company,
was already interested to develop the subject property into a residential
subdivision.13 In this regard, PBI entered into a joint venture agreement with
Unicapital, through its real estate development arm, URI. In view of the
foregoing, the loan and mortgage over the subject property was later on
modified into an Option to Buy Real Property14 and, after further
negotiations, Dela Cruz decided to sell the same to Unicapital and PBI. For
this purpose, Dela Cruz appointed Consing, Jr. as her attorney-in-fact.15
Eventually, Unicapital, through URI, purchased one- half of the subject
property for a consideration of P21,221,500.00 (against which Dela Cruz’s
outstanding loan obligations were first offset), while PBI bought the
remaining half for the price of P21,047,000.00.16 In this relation, Dela Cruz
caused TCT No. T-687599 to be divided into three separate titles as follows:
(a) TCT No. T-851861 for URI;17 (b) TCT No. T-851862 for PBI;18 and (c)
TCT No. T-851863 which was designated as a road lot.19
However, even before URI and PBI were able to have the titles transferred to
their names, Juanito Tan Teng (Teng) and Po Willie Yu (Yu) informed
Unicapital that they are the lawful owners of the subject property as
evidenced by TCT No. T-114708;20 that they did not sell the subject
property; and that Dela Cruz’s title, i.e., TCT No. T-687599, thereto was a
mere forgery.21 Prompted by Teng and Yu’s assertions, PBI conducted
further investigations on the subject property which later revealed that Dela
Cruz’s title was actually of dubious origin. Based on this finding, PBI and
Unicapital sent separate demand letters22 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 Relief23 and later amended to Complex Action for
Injunctive Relief24 (Consing, Jr.’s complaint) before the RTC-Pasig City
against Unicapital, URI, PBI, Martirez, PBI General Manager Mariano
Martinez (Martinez), Dela Cruz and Does 1-20, docketed as SCA No. 1759.
In his complaint, Consing, Jr. claimed that the incessant demands/recovery
efforts made upon him by Unicapital and PBI to return to them the purchase
price they had paid for the subject property constituted harassment and
oppression which severely affected his personal and professional life.
Accordingly, Consing, Jr. prayed that: (a) he be declared as a mere agent of
Dela Cruz, and as such, devoid of any obligation to Unicapital, URI, and PBI
for the transactions entered into concerning the subject property; (b)
Unicapital, URI, and PBI be enjoined from harassing or coercing him, and
from speaking about him in a derogatory fashion; and (c) Unicapital, URI,
and PBI pay him actual and consequential damages in the amount of
P2,000,000.00, moral damages of at least P1,000,000.00, exemplary
damages of P1,000,000.00, all per month, reckoned from May 1, 1999
and until the controversy is resolved, and attorney’s fees and costs of
suit.32
For their part, Unicapital, URI, and Martirez (Unicapital, et al.) filed separate
Motions to Dismiss33 Consing, Jr.’s complaint (Unicapital, et al.’s motion to
dismiss) on the ground of failure to state a cause of action.
Moreover, Unicapital, et al. posited that the RTC-Pasig City did not acquire
jurisdiction over the case given that Consing, Jr. failed to pay the proper
amount of docket fees.
On September 14, 1999, the RTC-Pasig City issued a Resolution36 denying
the abovementioned motions to dismiss, holding that Consing, Jr.’s complaint
sufficiently stated a cause of action for tort and damages pursuant to Article
19 of the Civil Code. It ruled that where there is abusive behavior, a
complainant, like Consing, Jr., has the right to seek refuge from the courts.
It equally refused to dismiss the action on the ground of non-payment of
docket fees, despite Consing, Jr.’s escalated claims for damages therein, as
jurisdiction was already vested in it upon the filing of the original complaint.
CA affirmed. At the outset, it ruled that while the payment of the prescribed
docket fee is a jurisdictional requirement, its non-payment will not
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automatically cause the dismissal of the case. In this regard, it considered that constitute as a lien against the judgment as explicitly provided under Section
should there be any deficiency in the payment of such fees, the same shall 2,89 Rule 141 of the Rules.
constitute a lien on the judgment award.41

Issue:
W/N Consing’s complaint should be dismissed for failure to pay the proper
docket fees – No.

Held:
No.

Neither should Consing, Jr.’s failure to pay the required docket fees lead to
the dismissal of his complaint. It has long been settled that while the court
acquires jurisdiction over any case only upon the payment of the prescribed
docket fees, its non-payment at the time of the filing of the complaint does
not automatically cause the dismissal of the complaint provided that the fees
are paid within a reasonable period.

Consequently, Unicapital, et al.’s insistence that the stringent rule on

non-payment of docket fees enunciated in the case of Manchester
Development Corporation v. CA, 149 SCRA 562 (1987), should be applied
in this case cannot be sustained in the absence of proof that Consing, Jr.
intended to defraud the government by his failure to pay the correct amount
of filing fees.

As pronounced in the case of Heirs of Bertuldo Hinog v. Hon. Melicor:86

“Plainly, while the payment of the prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not automatically
cause the dismissal of the case, as long as the fee is paid within the applicable
prescriptive or reglementary period, more so when the party involved
demonstrates a willingness to abide by the rules prescribing such payment.
Thus, when insufficient filing fees were initially paid by the plaintiffs and
there was no intention to defraud the government, the Manchester rule does
not apply.”

Indeed, while the Court acknowledges Unicapital, et al.’s apprehension that

Consing, Jr.’s “metered” claim for damages to the tune of around
P2,000,000.00 per month88 may balloon to a rather huge amount by the time
that this case is finally disposed of, still, any amount that may by then fall due
shall be subject to assessment and any additional fees determined shall

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8. Proton Pilipinas v. Banque de Paris (2005)
Facts:
It appears that sometime in 1995, petitioner Proton Pilipinas Corporation
(Proton) availed of the credit facilities of herein respondent, Banque
Nationale de Paris (BNP). To guarantee the payment of its obligation, its co-
petitioners Automotive Corporation Philippines (Automotive), Asea One
Corporation (Asea) and Autocorp Group (Autocorp) executed a corporate
guarantee2 to the extent of US$2,000,000.00. BNP and Proton subsequently
entered into three trust receipt agreements dated June 4, 1996,3 January 14,
1997,4 and April 24, 1997.5
Under the terms of the trust receipt agreements, Proton would receive
imported passenger motor vehicles and hold them in trust for BNP. Proton
would be free to sell the vehicles subject to the condition that it would deliver
the proceeds of the sale to BNP, to be applied to its obligations to it. In case
the vehicles are not sold, Proton would return them to BNP, together with all
the accompanying documents of title.
Allegedly, Proton failed to deliver the proceeds of the sale and return the
unsold motor vehicles.
Pursuant to the corporate guarantee, BNP demanded from Automotive, Asea
and Autocorp the payment of the amount of US$1,544,984.406 representing
Proton’s total outstanding obligations.
These guarantors refused to pay, however. Hence, BNP filed on September
7, 1998 before the Makati Regional Trial Court (RTC) a complaint against
petitioners praying that they be ordered to pay (1) US$1,544,984.40 plus
accrued interest and other related charges thereon subsequent to August 15,
1998 until fully paid and (2) an amount equivalent to 5% of all sums due from
petitioners as attorney’s fees.
The Makati RTC Clerk of Court assessed the docket fees which BNP paid at
P352,116.30. In its computation of the fees, the RTC did not consider the
interest but only the principal amount owed.
To the complaint, the defendants-herein petitioners filed on October 12, 1998
a Motion to Dismiss9 on the ground that BNP failed to pay the correct docket
fees to thus prevent the trial court from acquiring jurisdiction over the case.10
As additional ground, petitioners raised prematurity of the complaint, BNP
not having priorly sent any demand letter.11
RTC denied the MTD:
“Resolving the first ground relied upon by the defendant, this court believes
and so hold that the docket fees were properly paid. It is the Office of the
Clerk of Court of this station that computes the correct docket fees, and it is
their duty to assess the docket fees correctly, which they did.
Even granting arguendo that the docket fees were not properly paid, the court
cannot just dismiss the case. The Court has not yet ordered (and it will not in
this case) to pay the correct docket fees, thus the Motion to dismiss is
premature, aside from being without any legal basis.”
CA affirmed:
“Section 7(a) of Rule 141 of the Rules of Court excludes interest accruing
from the principal amount being claimed in the pleading in the computation
of the prescribed filing fees.”
Citing Administrative Circular No. 11-94,23 petitioners argue that BNP
failed to pay the correct docket fees as the said circular provides that in the
assessment thereof, interest claimed should be included. There being an
underpayment of the docket fees, petitioners conclude, the trial court did not
acquire jurisdiction over the case.
Furthermore, petitioners submit that pursuant to Supreme Court Circular No.
7,25 the complaint should have been dismissed for failure to specify the
amount of interest in the prayer.
Additionally, petitioners point out that the clerk of court, in converting BNP’s
claims from US dollars to Philippine pesos, applied the wrong exchange rate
of US $1 = P43.00, the exchange rate on September 7, 1998 when the
complaint was filed having been pegged at US $1 = P43.21. Thus, by
petitioners’ computation, BNP’s claim as of August 15, 1998 was actually
P70,096,714.72,24 not P69,756,045.66.
Respondents, on the other hand, invoke the Tacay ruling which declared that,
where the action is purely for the recovery of money or damages, the docket
fees are assessed on the basis of the aggregate amount claimed, exclusive
only of interests and costs.2
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Issue:
W/N the interest of the amount due should be considered in the computation
of the docket fees – Yes.
Held:
Yes.
When Tacay was decided in 1989, the pertinent rule applicable was Section
5 (a) of Rule 141 which provided for the following:
“SEC. 5. Clerks of Regional Trial Courts.—(a) For filing an action or
proceeding, or a permissive counter-claim or cross-claim not arising out of
the same transaction subject of the complaint, a third-party complaint and a
complaint in intervention and for all services in the same, if the sum claimed,
exclusive of interest, of the value of the property in litigation, or the value of
the estate…”
When the complaint in this case was filed in 1998, however, as correctly
pointed out by petitioners, Rule 141 had been amended by Administrative
Circular No. 11-9429 which provides:
“(a) For filing an action or a permissive counterclaim or money claim against
an estate not based on judgment, or for filing with leave of court a third-party,
fourth-party, etc. complaint, or a complaint in intervention, and for all clerical
services in the same, if the total sum claimed, inclusive of interest, damages
of whatever kind, attorney’s fees, litigation expenses, and costs, or the stated
value of the property in litigation…”
The clerk of court should thus have assessed the filing fee by taking into
consideration “the total sum claimed, inclusive of interest, damages of
whatever kind, attorney’s fees, litigation expenses, and costs, or the stated
value of the property in litigation.” Respondent’s and the Court of Appeals’
reliance then on Tacay was not in order.
Respecting the Court of Appeals’ conclusion that the clerk of court did not
err when he applied the exchange rate of US $1 = P43.00 “[i]n the absence of
any office guide of the rate of exchange which said court functionary was
duty bound to follow,[hence,] the rate he applied is presumptively correct,”
the same does not lie. The presumption of regularity of the clerk of court’s
application of the exchange rate is not conclusive.33 It is disputable.34 As
such, the presumption may be overturned by the requisite rebutting
evidence.35 In the case at bar, petitioners have adequately proven with
documentary evidence36 that the exchange rate when the complaint was filed
on September 7, 1998 was US $1 = P43.21.
In fine, the docket fees paid by respondent were insufficient.
With respect to petitioner’s argument that the trial court did not acquire
jurisdiction over the case in light of the insufficient docket fees, the same
does not lie considering that the Sun Insurance case has already modified the
Manchester case.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate initiatory
pleading, but the payment of the prescribed docket fee, that vests a trial court
with jurisdiction over the subject-matter or nature of the action. Where the
filing of the initiatory pleading is not accompanied by payment of the docket
fee, the court may allow payment of the fee within a reasonable time but in
no case beyond the applicable prescriptive or reglementary period;
2. The same rule applies to permissive counterclaims, third-party claims and
similar pleadings, which shall not be considered filed until and unless the
filing fee prescribed therefor is paid. The court may also allow payment of
said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period;
3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading, or
if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall
be the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee.
The ruling in Sun Insurance Office was echoed in the 2005 case of Heirs of
Bertuldo Hinog v. Hon. Achilles Melicor:41
Plainly, while the payment of the prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not automatically
Avila 4B | 2016
cause the dismissal of the case, as long as the fee is paid within the applicable
prescriptive or reglementary period, more so when the party involved
demonstrates a willingness to abide by the rules prescribing such payment.
Thus, when insufficient filing fees were initially paid by the plaintiffs and
there was no intention to defraud the government, the Manchester rule
does not apply. (Emphasis and italics supplied; citations omitted)
In the case at bar, respondent merely relied on the assessment made by the
clerk of court which turned out to be incorrect. Under the circumstances, the
clerk of court has the responsibility of reassessing what respondent must pay
within the prescriptive period, failing which the complaint merits dismissal.
II.
Parenthetically, in the complaint, respondent prayed for “accrued interest . . .
subsequent to August 15, 1998 until fully paid.” The complaint having been
filed on September 7, 1998, respondent’s claim includes the interest from
August 16, 1998 until such date of filing.
this Court held that the same refers only to damages arising after the filing
of the complaint or similar pleading as to which the additional filing fee
therefor shall constitute a lien on the judgment.
WHEREFORE, the petition is GRANTED in part. The July 25, 2001
Decision and the December 18, 2001 Resolution of the Court Appeals are
hereby MODIFIED. The Clerk of Court of the Regional Trial Court of Makati
City is ordered to reassess and determine the docket fees that should be paid
by respondent, BNP, in accordance with the Decision of this Court, and direct
respondent to pay the same within fifteen (15) days, provided the applicable
prescriptive or reglementary period has not yet expired. Thereafter, the trial
court is ordered to proceed with the case with utmost dispatch.
SO ORDERED.

Respondent did not, however, pay the filing fee corresponding to its claim for
interest from August 16, 1998 until the filing of the complaint on September
7, 1998. As priorly discussed, this is required under Rule 141, as amended by
Administrative Circular No. 11-94, which was the rule applicable at the time.
Thus, as the complaint currently stands, respondent cannot claim the interest
from August 16, 1998 until September 7, 1998, unless respondent is allowed
by motion to amend its complaint within a reasonable time and specify the
precise amount of interest petitioners owe from August 16, 1998 to
September 7, 199842 and pay the corresponding docket fee therefor.

III.

With respect to the interest accruing after the filing of the complaint, the same
can only be determined after a final judgment has been handed down.
Respondent cannot thus be made to pay the corresponding docket fee
therefor. Pursuant, however, to Section 2, Rule 141, as amended by
Administrative Circular No. 11-94, respondent should be made to pay
additional fees which shall constitute a lien in the event the trial court
adjudges that it is entitled to interest accruing after the filing of the complaint.
In Ayala Corporation v. Madayag,43 in interpreting the third rule laid down
in Sun Insurance regarding awards of claims not specified in the pleading,

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9. In re Request of NCLA to exempt legal aid clients from docket fees
Facts:
On September 23, 2008 the Misamis Oriental Chapter of the Integrated Bar
of the Philippines (IBP) promulgated Resolution No. 24, series of 2008.2 The
resolution requested the IBP’s National Committee on Legal Aid3 (NCLA)
to ask for the exemption from the payment of filing, docket and other fees of
clients of the legal aid offices in the various IBP chapters.
The Court noted Resolution No. 24, series of 2008 and required the IBP,
through the NCLA, to comment thereon.5 In a comment dated December 18,
2008,6 the IBP, through the NCLA, made the following comments:
“(a) Under Section 16-D of RA7 9406, clients of the Public Attorneys’ Office
(PAO) are exempt from the payment of docket and other fees incidental to
the institution of action in court and other quasi- judicial bodies. On the other
hand, clients of legal aid offices in the various IBP chapters do not enjoy the
same exemption. IBP’s indigent clients are advised to litigate as pauper
litigants under Section 21, Rule 3 of the Rules of Court; others, it has exercised its power to “promulgate rules concerning the
(b) They are further advised to submit documentary evidence to prove
compliance with the requirements under Section 21, Rule 3 of the Rules of
Court, i.e., certifications from the barangay and the Department of Social
Welfare and Development. However, not only does the process involve some
expense which indigent clients could ill- afford, clients also lack knowledge
on how to go about the tedious process of obtaining these documents;
Section 16-D of RA 9406. In this connection, the Supreme Court previously
issued a circular exempting IBP clients from the payment of transcript of
stenographic notes.”
Issue:
W/N the legal aid clients of the IBP should be exempted from docket fees –
Yes.
Held:
Yes.
Access to justice by all, especially by the poor, is not simply an ideal in our
society. Its existence is essential in a democracy and in the rule of law. As
such, it is guaranteed by no less than the fundamental law: Sec. 11. Free
access to the courts and quasi-judicial bodies and adequate legal assistance
shall not be denied to any person by reason of poverty. (emphasis supplied)
The Court recognizes the right of access to justice as the most important pillar
of legal empowerment of the marginalized sectors of our society. Among
protection and enforcement of constitutional rights” to open the doors of
justice to the underprivileged and to allow them to step inside the courts to
be heard of their plaints. In particular, indigent litigants are permitted under

(c) Although the IBP is given an annual legal aid subsidy, the amount it
receives from the government is barely enough to cover various operating
expenses;8

(d) While each IBP local chapter is given a quarterly allocation (from the
legal aid subsidy),9 said allocation covers neither the incidental expenses
defrayed by legal aid lawyers in handling legal aid cases nor the payment of
docket and other fees collected by the courts, quasi-judicial bodies and the
prosecutor’s office, as well as mediation fees and

(e) Considering the aforementioned factors, a directive may be issued by the

Supreme Court granting IBP’s indigent clients an exemption from the
payment of docket and other fees similar to that given to PAO clients under

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Section 21, Rule 32 and Section 19, Rule 1413 of the Rules of Court to bring
suits in forma pauperis.
The “means and merit tests” of the IBP appear to be reasonable determinants
of eligibility for coverage under the legal aid program of the IBP.
Nonetheless, they may be improved to ensure that any exemption from the
payment of legal fees that may be granted to clients of the NCLA and the
legal aid offices of the various IBP chapters will really further the right of
access to justice by the poor. This will guarantee that the exemption will
neither be abused nor trivialized. Towards this end, the following shall be
observed by the NCLA and the legal aid offices in IBP chapters nationwide
in accepting clients and handling cases for the said clients: [SC laid down
new rules for determining those NCLA clients entitled to exemption from
docket fees]
Section 1. Persons qualified for exemption from payment of legal fees.—
Persons who shall enjoy the benefit of exemption from the payment of legal
fees incidental to instituting an action in court, as an original proceeding or
on appeal, granted under this Rule shall be limited only to clients of the
NCLA and the chapter legal aid offices.
The said clients shall refer to those indigents qualified to receive free legal
aid service from the NCLA and the chapter legal aid offices. Their
qualifications shall be determined based on the tests provided in this
. Section 21. Indigent party.—A party may be authorized to litigate his action, claim
or defense as an indigent if the court, upon an ex parte application and hearing, is
satisfied that the party is one who has no money or property sufficient and
available for food, shelter and basic necessities for himself and his family.
Such authority shall include an exemption from payment of docket and other lawful
fees, and of transcripts of stenographic notes which the court may order to be
furnished him. The amount of the docket and other lawful fees which the indigent
was exempted from paying shall be a lien on any judgment rendered in the case
favorable to the indigent, unless the court otherwise provides.
Any adverse party may contest the grant of such authority at any time before
judgment is rendered by the trial court. If the court should determine after hearing
that the party declared as an indigent is in fact a person with sufficient income or
property, the proper docket and other lawful fees shall be assessed and collected by
the clerk of court. If payment is not made within the time fixed by the court, execution
shall issue for the payment thereof, without prejudice to such other sanctions as the
court may impose.
Rule. Section 2. Persons not covered by the Rule.—The following shall be
disqualified from the coverage of this Rule. Nor may they be accepted as
clients by the NCLA and the chapter legal aid offices.
(a) Juridical persons; except in cases covered by developmental legal aid or
public interest causes involving juridical entities which are non-stock,
non-profit organizations, non-governmental organizations and people’s
organizations whose individual members will pass the means test provided in
this Rule;
(b) Persons who do not pass the means and merit tests;
(c) Parties already represented by a counsel de parte;
(d) Owners or lessors of residential lands or buildings with respect to the
filing of collection or unlawful detainer suits against their tenants and
(e) Persons who have been clients of the NCLA or chapter legal aid office
previously in a case where the NCLA or chapter legal aid office withdrew its
representation because of a falsity in the application or in any of the affidavits
supporting the said application.
Section 3. Cases not covered by the Rule.—The NCLA and the chapter legal
aid offices shall not handle the following:
(a) Cases where conflicting interests will be represented by the NCLA and
the chapter legal aid offices and
(b) Prosecution of criminal cases in court.
3. Section 19. Indigent-litigants exempt from payment of legal fees.— Indigent litigant
(a) whose gross income and that of their immediate family do not exceed an amount
double the monthly minimum wage of an employee and (b) who do not own real
property with a fair market value as stated in the current tax declaration of more than
Three Hundred Thousand (P300,000.00) Pesos shall be exempt from the payment of
legal fees.
The legal fees shall be a lien on any judgment rendered in the case favorable to the
indigent unless the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall execute an affidavit
that he and his immediate family do not earn a gross income abovementioned, nor
own any real property with the fair value aforementioned, supported by a an affidavit
of a disinterested person attesting to the truth of the litigant’s affidavit. The current
tax declaration, if any, shall be attached to the litigant’s affidavit.
Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause
to dismiss the complaint or action or to strike out the pleading of that party, without
prejudice to whatever criminal liability may have been incurred.
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ARTICLE IV
Tests of Indigency Section 1. Tests for determining who may be clients of
the NCLA and the legal aid offices in local IBP chapters.—The NCLA or the
chapter legal aid committee, as the case may be, shall pass upon requests for
legal aid by the combined application of the means and merit tests and the
consideration of other relevant factors provided for in the following sections.
Section 2. Means test; exception.—(a) This test shall be based on the
following criteria: (i) the applicant and that of his immediate family must
have a gross monthly income that does not exceed an amount double the
monthly minimum wage of an employee in the place where the applicant
resides and (ii) he does not own real property with a fair market value as
stated in the current tax declaration of more than Three Hundred Thousand
(P300,000.00) Pesos.
In this connection, the applicant shall execute an affidavit of indigency
(printed at the back of the application form) stating that he and his immediate
family do not earn a gross income abovementioned, nor own any real property
with the fair value aforementioned, supported by an affidavit of a
disinterested person attesting to the truth of the applicant’s affidavit. The
latest income tax return and/or current tax declaration, if any, shall be
attached to the applicant’s affidavit.
The above rule, in conjunction with Section 21, Rule 3 and Section 19, Rule
141 of the Rules of Court, the Rule on Mandatory Legal Aid Service and the
Rule of Procedure for Small Claims Cases, shall form a solid base of rules
upon which the right of access to courts by the poor shall be implemented.
With these rules, we equip the poor with the tools to effectively, efficiently
and easily enforce their rights in the judicial system.
Equity will not suffer a wrong to be without a remedy. Ubi jus ibi remedium.
Where there is a right, there must be a remedy. The remedy must not only be
effective and efficient, but also readily accessible. For a remedy that is
inaccessible is no remedy at all. The Constitution guarantees the rights of the
poor to free access to the courts and to adequate legal assistance. The legal
aid service rendered by the NCLA and legal aid offices of IBP chapters
nationwide addresses only the right to adequate legal assistance. Recipients
of the service of the NCLA and legal aid offices of IBP chapters may enjoy
free access to courts by exempting them from the payment of fees assessed
in connection with the filing of a complaint or action in court. With these twin
initiatives, the guarantee of Section 11, Article III of Constitution is advanced
and access to justice is increased by bridging a significant gap and removing
a major roadblock.

(b) The means test shall not be applicable to applicants who fall under the
developmental legal aid program such as overseas workers, fisherfolk,
farmers, laborers, indigenous cultural communities, women, children and
other disadvantaged groups.

Section 3. Merit test.—A case shall be considered meritorious if an

assessment of the law and evidence at hand discloses that the legal service
will be in aid of justice or in the furtherance thereof, taking into consideration
the interests of the party and those of society. A case fails this test if, after
consideration of the law and evidence presented by the applicant, it appears
that it is intended merely to harass or injure the opposite party or to work
oppression or wrong.

Section 4. Other relevant factors that may be considered.—The effect of legal

aid or of the failure to render the same upon the rule of law, the proper
administration of justice, the public interest involved in a given case and the
practice of law in the locality shall likewise be considered.

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10. Query of Mr. Prioreschi (2009)
Facts:
In his letter dated May 22, 2009 addressed to the Chief Justice, Mr. Roger C.
Prioreschi, administrator of the Good Shepherd Foundation, Inc., wrote:
“The Good Shepherd Foundation, Inc. is very grateful for your 1rst.
Indorsement to pay a nominal fee of Php 5,000.00 and the balance upon the
collection action of 10 million pesos, thus giving us access to the Justice
System previously denied by an up-front excessive court fee.
The Hon. Court Administrator Jose Perez pointed out to the need of
complying with OCA Circular No. 42-2005 and Rule 141 that reserves this
“privilege” to indigent persons. While judges are appointed to interpret the
law, this type of law seems to be extremely detailed with requirements that
do not leave much room for interpretations.
In addition, this law deals mainly with “individual indigent” and it does not
include Foundations or Associations that work with and for the most Indigent
persons. As seen in our Article of Incorporation, since 1985 the Good
Shepherd Foundation, Inc. reached-out to the poorest among the poor, to the
newly born and abandoned babies, to children who never saw the smile of
their mother, to old people who cannot afford a few pesos to pay for “common
prescriptions,” to broken families who returned to a normal life. In other
words, we have been working hard for the very Filipino people, that the
Government and the society cannot reach to, or have rejected or abandoned
them.
Can the Courts grant to our Foundation who works for indigent and
underprivileged people, the same option granted to indigent people?”
Issue:
W/N juridical persons that work with indigent litigants can be granted
exemption from docket fees – No.
Held:
No.
To answer the query of Mr. Prioreschi, the Courts cannot grant to foundations
like the Good Shepherd Foundation, Inc. the same exemption from payment
of legal fees granted to indigent litigants even if the foundations are working
for indigent and underprivileged people.
The basis for the exemption from legal and filing fees is the free access
clause, embodied in Sec. 11, Art. III of the 1987 Constitution, thus:
“Sec. 11. Free access to the courts and quasi judicial bodies and adequate
legal assistance shall not be denied to any person by reason of poverty.”
The importance of the right to free access to the courts and quasi judicial
bodies and to adequate legal assistance cannot be denied.
In implementation of the right of free access under the Constitution, the
Supreme Court promulgated rules, specifically, Sec. 21, Rule 3, Rules of
Court,2 and Sec. 19, Rule 141, Rules of Court,3 which respectively state thus:
“Sec. 21. Indigent party.—A party may be authorized to litigate his action,
claim or defense as an indigent if the court, upon an ex parte application and
hearing, is satisfied that the party is one who has no money or property
sufficient and available for food, shelter and basic necessities for himself
and his family.
Such authority shall include an exemption from payment of docket and other
lawful fees, and of transcripts of stenographic notes which the court may
order to be furnished him. The amount of the docket and other lawful fees
which the indigent was exempted from paying shall be a lien on any judgment
rendered in the case favorable to the indigent, unless the court otherwise
provides.
Any adverse party may contest the grant of such authority at any time before
judgment is rendered by the trial court. If the court should determine after
hearing that the party declared as an indigent is in fact a person with sufficient
income or property, the proper docket and other lawful fees shall be assessed
and collected by the clerk of court. If payment is not made within the time
fixed by the court, execution shall issue for the payment thereof, without
prejudice to such other sanctions as the court may impose. (22a)
Sec. 19. Indigent litigants exempt from payment of legal fees. —Indigent
litigants (a) whose gross income and that of their immediate family do not
exceed an amount double the monthly minimum wage of an employee and
(b) who do not own real property with a fair market value as stated in the
current tax declaration of more than three hundred thousand (P300,000.00)
pesos shall be exempt from payment of legal fees.
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The legal fees shall be a lien on any judgment rendered in the case favorable
to the indigent litigant unless the court otherwise provides.

To be entitled to the exemption herein provided, the litigant shall execute an

affidavit that he and his immediate family do not earn a gross income
abovementioned, and they do not own any real property with the fair value
aforementioned, supported by an affidavit of a disinterested person attesting
to the truth of the litigant’s affidavit. The current tax declaration, if any, shall
be attached to the litigant’s affidavit.

Any falsity in the affidavit of litigant or disinterested person shall be

sufficient cause to dismiss the complaint or action or to strike out the pleading
of that party, without prejudice to whatever criminal liability may have been
incurred.”

The clear intent and precise language of the aforequoted provisions of the
Rules of Court indicate that only a natural party litigant may be regarded as
an indigent litigant. The Good Shepherd Foundation, Inc., being a corporation
invested by the State with a juridical personality separate and distinct from
that of its members, is a juridical person. Among others, it has the power to
acquire and possess property of all kinds as well as incur obligations and
bring civil or criminal actions, in conformity with the laws and regulations of
their organization. As a juridical person, therefore, it cannot be accorded the
exemption from legal and filing fees granted to indigent litigants.

That the Good Shepherd Foundation, Inc. is working for indigent and
underprivileged people is of no moment.

Clearly, the Constitution has explicitly premised the free access clause on a
person’s poverty, a condition that only a natural person can suffer.

There are other reasons that warrant the rejection of the request for exemption
in favor of a juridical person. For one, extending the exemption to a juridical
person on the ground that it works for indigent and underprivileged people
may be prone to abuse (even with the imposition of rigid documentation
requirements), particularly by corporations and entities bent on
circumventing the rule on payment of the fees. Also, the scrutiny of
compliance with the documentation requirements may prove too
time-consuming and wasteful for the courts.

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II. Jurisdiction
1. Thorton v. Thorton (2004)
Facts:
Petitioner, an American, and respondent, a Filipino, were married on August
28, 1998 in the Catholic Evangelical Church at United Nations Avenue,
Manila. A year later, respondent gave birth to a baby girl whom they named
Sequeira Jennifer Delle Francisco Thornton.
However, after three years, respondent grew restless and bored as a plain
housewife. She wanted to return to her old job as a “guest relations officer”
in a nightclub, with the freedom to go out with her friends. In fact, whenever
petitioner was out of the country, respondent was also often out with her
friends, leaving her daughter in the care of the househelp.
Petitioner admonished respondent about her irresponsibility but she
continued her carefree ways. On December 7, 2001, respondent left the
family home with her daughter Sequiera without notifying her husband. She
told the servants that she was bringing Sequiera to Purok Marikit, Sta. Clara,
Lamitan, Basilan Province.
Petitioner filed a petition for habeas corpus in the designated Family Court in
Makati City but this was dismissed, presumably because of the allegation that
the child was in Basilan. Petitioner then went to Basilan to ascertain the
whereabouts of respondent and their daughter. However, he did not find them
there and the barangay office of Sta. Clara, Lamitan, Basilan, issued a
certification that respondent was no longer residing there.
Petitioner gave up his search when he got hold of respondent’s cellular phone
bills showing calls from different places such as Cavite, Nueva Ecija, Metro
Manila and other provinces. Petitioner then filed another petition for habeas
corpus, this time in the Court of Appeals which could issue a writ of habeas
corpus enforceable in the entire country.
However, the petition was denied by the Court of Appeals on the ground that
it did not have jurisdiction over the case. It ruled that since RA 8369 (The
Family Courts Act of 1997) gave family courts exclusive original jurisdiction
over petitions for habeas corpus, it impliedly repealed RA 7902 (An Act
Expanding the Jurisdiction of the Court of Appeals) and Batas Pambansa 129
(The Judiciary Reorganization Act of 1980)
Issue:
W/N the CA has jurisdiction to issue writs of habeas corpus involving
custody of minors in the light of the provision in RA 8369 giving family
courts exclusive original jurisdiction over such petitions – Yes.
Held:
Yes.
The Court of Appeals should take cognizance of the case since there is
nothing in RA 8369 that revoked its jurisdiction to issue writs of habeas
corpus involving the custody of minors.
The Court of Appeals opines that RA 8369 impliedly repealed RA 7902 and
BP 129 since, by giving family courts exclusive jurisdiction over habeas
corpus cases, the lawmakers intended it to be the sole court which can issue
writs of habeas corpus. To the court a quo, the word “exclusive” apparently
cannot be construed any other way.
We disagree with the CA’s reasoning because it will result in an iniquitous
situation, leaving individuals like petitioner without legal recourse in
obtaining custody of their children. Individuals who do not know the
whereabouts of minors they are looking for would be helpless since they
cannot seek redress from family courts whose writs are enforceable only in
their respective territorial jurisdictions. Thus, if a minor is being transferred
from one place to another, which seems to be the case here, the petitioner in
a habeas corpus case will be left without legal remedy. This lack of recourse
could not have been the intention of the lawmakers when they passed the
Family Courts Act of 1997.
The primordial consideration is the welfare and best interests of the child. We
rule therefore that RA 8369 did not divest the Court of Appeals and the
Supreme Court of their jurisdiction over habeas corpus cases involving the
custody of minors.
The jurisdiction of the Court of Appeals and Family Court in the case at bar
is concurrent. The Family Court can issue writs of habeas corpus enforceable
only within its territorial jurisdiction. On the other hand, in cases where the
Avila 4B | 2016
territorial jurisdiction for the enforcement of the writ cannot be determined From the foregoing, there is no doubt that the Court of Appeals and Supreme
with certainty, the Court of Appeals can issue the same writ enforceable Court have concurrent jurisdiction with family courts in habeas corpus cases
throughout the Philippines, as provided in Sec. 2, Rule 102 of the Revised where the custody of minors is involved.
Rules of Court, thus:

The Writ of Habeas Corpus may be granted by the Supreme Court, or any
member thereof, on any day and at any time, or by the Court of Appeals or
any member thereof in the instances authorized by law, and if so granted it
shall be enforceable anywhere in the Philippines, and may be made returnable
before the court or any member thereof, or before a Court of First Instance,
or any judge thereof for hearing and decision on the merits. It may also be
granted by a Court of First Instance, or a judge thereof, on any day and at any
time, and returnable before himself, enforceable only within his judicial
district.

The provisions of RA 8369 reveal no manifest intent to revoke the

jurisdiction of the Court of Appeals and Supreme Court to issue writs of
habeas corpus relating to the custody of minors. Further, it cannot be said that
the provisions of RA 8369, RA 7092 and BP 129 are absolutely incompatible
since RA 8369 does not prohibit the Court of Appeals and the Supreme Court
from issuing writs of habeas corpus in cases involving the custody of minors.
Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and
BP 129—that family courts have concurrent jurisdiction with the Court of
Appeals and the Supreme Court in petitions for habeas corpus where the
custody of minors is at issue.

In any case, whatever uncertainty there was has been settled with the adoption
of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ of Habeas
Corpus in Relation to Custody of Minors. Section 20 of the rule provides that:

“Section 20. Petition for writ of habeas corpus.—A verified petition for a writ
of habeas corpus involving custody of minors shall be filed with the Family
Court. The writ shall be enforceable within its judicial region to which the
Family Court belongs.
xxx xxx xxx
The petition may likewise be filed with the Supreme Court, Court of Appeals,
or with any of its members and, if so granted, the writ shall be enforceable
anywhere in the Philippines.”

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2. Navida v. Dizon (2011)
Facts:
Beginning 1993, a number of personal injury suits were filed in different
Texas state courts by citizens of twelve foreign countries, including the
Philippines. The thousands of plaintiffs sought damages for injuries they
allegedly sustained from their exposure to dibromochloropropane (DBCP), a
chemical used to kill nematodes (worms), while working on farms in 23
foreign countries. The cases were eventually transferred to, and consolidated
in, the Federal District Court for the Southern District of Texas, Houston
Division. The cases therein that involved plaintiffs from the Philippines were
“Jorge Colindres Carcamo, et al. v. Shell Oil Co., et al.,” which was docketed
as Civil Action No. H- 94-1359, and “Juan Ramon Valdez, et al. v. Shell Oil
Co., et al.,” which was docketed as Civil Action No. H-95-1356. The
defendants in the consolidated cases prayed for the dismissal of all the actions
under the doctrine of forum non conveniens.
In a Memorandum and Order dated July 11, 1995, the Federal District Court
conditionally granted the defendants’ motion to dismiss.
In accordance with the above Memorandum and Order, a total of 336
plaintiffs from General Santos City (the petitioners in G.R. No. 125078,
hereinafter referred to as NAVIDA, et al.) filed a Joint Complaint14 in the
RTC of General Santos City on August 10, 1995. The case was docketed as
Civil Case No. 5617. Named as defendants therein were: Shell Oil Co.
(SHELL) et al.
Navida, et al., prayed for the payment of damages in view of the illnesses and
injuries to the reproductive systems which they allegedly suffered because of
their exposure to DBCP. They claimed, among others, that they were exposed
to this chemical during the early 1970’s up to the early 1980’s when they used
the same in the banana plantations where they worked at; and/or when they
resided within the agricultural area where such chemical was used. Navida,
et al., claimed that their illnesses and injuries were due to the fault or
negligence of each of the defendant companies in that they produced, sold
and/or otherwise put into the stream of commerce DBCP- containing
products. According to NAVIDA, et al., they were allowed to be exposed to
the said products, which the defendant companies knew, or ought to have
known, were highly injurious to the former’s health and well-being.
Instead of answering the complaint, most of the defendant companies
respectively filed their Motions for Bill of Particulars.15 During the pendency
of the motions, on March 13, 1996, NAVIDA, et al., filed an Amended Joint
Complaint,16 excluding Dead Sea Bromine Co., Ltd., Ameribrom, Inc.,
Bromine Compounds, Ltd. and Amvac Chemical Corp. as party defendants.
Again, the remaining defendant companies filed their various Motions for
Bill of Particulars.17 On May 15, 1996, DOW filed an Answer with
Counterclaim.18
On May 20, 1996, without resolving the motions filed by the parties, the RTC
of General Santos City issued an Order dismissing the complaint.
First, the trial court determined that it did not have jurisdiction to hear the
case, to wit:
“The substance of the cause of action as stated in the complaint against the
defendant foreign companies cites activity on their part which took place
abroad and had occurred outside and beyond the territorial domain of the
Philippines. These acts of defendants cited in the complaint included the
manufacture of pesticides, their packaging in containers, their distribution
through sale or other disposition, resulting in their becoming part of the
stream of commerce.
Accordingly, the subject matter stated in the complaint and which is uniquely
particular to the present case, consisted of activity or course of conduct
engaged in by foreign defendants outside Philippine territory, hence, outside
and beyond the jurisdiction of Philippine Courts, including the present
Regional Trial Court.”
Second, the RTC of General Santos City declared that the tort alleged by
Navida, et al., in their complaint is a tort category that is not recognized in
Philippine laws. Said the trial court:
“The specific tort asserted against defendant foreign companies in the present
complaint is product liability tort. When the averments in the present
complaint are examined in terms of the particular categories of tort
recognized in the Philippine Civil Code, it becomes stark clear that such
averments describe and identify the category of specific tort known as
product liability tort. This is necessarily so, because it is the product
manufactured by defendant foreign companies, which is asserted to be the
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proximate cause of the damages sustained by the plaintiff workers, and the
liability of the defendant foreign companies, is premised on being the
manufacturer of the pesticides.”
Third, the RTC of General Santos City adjudged that Navida, et al., were
coerced into submitting their case to the Philippine courts.
Issue:
W/N the RTC has jurisdiction over the subject matter of the case - Yes
Held:
Yes.
The rule is settled that jurisdiction over the subject matter of a case is
conferred by law and is determined by the allegations in the complaint and
the character of the relief sought, irrespective of whether the plaintiffs are
entitled to all or some of the claims asserted therein. Once vested by law, on
a particular court or body, the jurisdiction over the subject matter or nature of
the action cannot be dislodged by anybody other than by the legislature
through the enactment of a law.
At the time of the filing of the complaints, the jurisdiction of the RTC in civil
cases under Batas Pambansa Blg. 129, as amended by Republic Act No. 7691,
was:
“SEC. 19. Jurisdiction in civil cases.—Regional Trial Courts shall exercise
exclusive original jurisdiction:
xxxx
(8) In all other cases in which the demand, exclusive of interest, damages of
whatever kind, attorney’s fees, litigation expenses, and costs or the value of
the property in controversy exceeds One hundred thousand pesos
(P100,000.00) or, in such other cases in Metro Manila, where the demand,
exclusive of the abovementioned items exceeds Two hundred thousand pesos
(P200,000.00).”60
Corollary thereto, Supreme Court Administrative Circular No. 09-94, states:
“2. The exclusion of the term “damages of whatever kind” in determining the
jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg.
129, as amended by R.A. No. 7691, applies to cases where the damages are
merely incidental to or a consequence of the main cause of action. However,
in cases where the claim for damages is the main cause of action, or one of
the causes of action, the amount of such claim shall be considered in
determining the jurisdiction of the court.”
Here, NAVIDA, et al., and ABELLA, et al., sought in their similarly-worded
Amended Joint-Complaints filed before the courts a quo, the following
prayer:
“WHEREFORE, premises considered, it is most respectfully
prayed that after hearing, judgment be rendered in favor of the plaintiffs
ordering the defendants:
a) TO PAY EACH PLAINTIFF moral damages in the amount of One Million
Five Hundred Thousand Pesos (P1,500,00.00);
b) TO PAY EACH PLAINTIFF nominal damages in the amount of Four
Hundred Thousand Pesos (P400,000.00) each;
c) TO PAY EACH PLAINTIFF exemplary damages in the amount of Six
Hundred Thousand Pesos (P600,000.00);
d) TO PAY EACH PLAINTIFF attorneys fees of Two Hundred Thousand
Pesos (P200,000.00); and
e) TO PAY THE COSTS of the suit.”61
From the foregoing, it is clear that the claim for damages is the main cause of
action and that the total amount sought in the complaints is approximately
P2.7 million for each of the plaintiff claimants. The RTCs unmistakably have
jurisdiction over the cases filed in General Santos City and Davao City, as
both claims by NAVIDA, et al., and ABELLA, et al., fall within the purview
of the definition of the jurisdiction of the RTC under Batas Pambansa Blg.
129.
Quite evidently, the allegations in the Amended Joint-Complaints of
NAVIDA, et al., and ABELLA, et al., attribute to defendant companies
certain acts and/or omissions which led to their exposure to nematocides
containing the chemical DBCP. According to NAVIDA, et al., and ABELLA,
et al., such exposure to the said chemical caused ill effects, injuries and
illnesses, specifically to their reproductive system.
Thus, these allegations in the complaints constitute the cause of action of
plaintiff claimants—a quasi-delict, which under the Civil Code is defined as
an act, or omission which causes damage to another, there being fault or
negligence. To be precise, Article 2176 of the Civil Code provides: Article
2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or
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negligence, if there is no pre-existing contractual relation between the parties,
is called a quasi-delict and is governed by the provisions of this Chapter.
As specifically enumerated in the amended complaints, NAVIDA, et al., and
ABELLA, et al., point to the acts and/or omissions of the defendant
companies in manufacturing, producing, selling, using, and/or otherwise
putting into the stream of commerce, nematocides which contain DBCP,
“without informing the users of its hazardous effects on health and/or without
instructions on its proper use and application.”63
In Citibank, N.A. v. Court of Appeals, 299 SCRA 390 (1998), this Court has
always reminded that jurisdiction of the court over the subject matter of the
action is determined by the allegations of the complaint, irrespective of
whether or not the plaintiffs are entitled to recover upon all or some of the
claims asserted therein. The jurisdiction of the court cannot be made to
depend upon the defenses set up in the answer or upon the motion to dismiss,
for otherwise, the question of jurisdiction would almost entirely depend upon
the defendants. What determines the jurisdiction of the court is the nature of
the action pleaded as appearing from the allegations in the complaint. The
averments therein and the character of the relief sought are the ones to be
consulted.
Clearly then, the acts and/or omissions attributed to the defendant companies
constitute a quasi-delict which is the basis for the claim for damages filed by
NAVIDA, et al., and ABELLA, et al., with individual claims of
approximately P2.7 million for each plaintiff claimant, which obviously falls
within the purview of the civil action jurisdiction of the RTCs.
Moreover, the injuries and illnesses, which NAVIDA, et al., and ABELLA,
et al., allegedly suffered resulted from their exposure to DBCP while they
were employed in the banana plantations located in the Philippines or while
they were residing within the agricultural areas also located in the
Philippines. The factual allegations in the Amended Joint-Complaints all
point to their cause of action, which undeniably occurred in the Philippines.
The RTC of General Santos City and the RTC of Davao City obviously have
reasonable basis to assume jurisdiction over the cases.
It is, therefore, error on the part of the courts a quo when they dismissed the
cases on the ground of lack of jurisdiction on the mistaken assumption that
the cause of action narrated by NAVIDA, et al., and ABELLA, et al., took
place abroad and had occurred outside and beyond the territorial boundaries
of the Philippines, i.e., “the manufacture of the pesticides, their packaging in
containers, their distribution through sale or other disposition, resulting in
their becoming part of the stream of commerce,”65 and, hence, outside the
jurisdiction of the RTCs.
Certainly, the cases below are not criminal cases where territoriality, or the
situs of the act complained of, would be determinative of jurisdiction and
venue for trial of cases. In personal civil actions, such as claims for payment
of damages, the Rules of Court allow the action to be commenced and tried
in the appropriate court, where any of the plaintiffs or defendants resides, or
in the case of a non-resident defendant, where he may be found, at the election
of the plaintiff.66
In a very real sense, most of the evidence required to prove the claims of
NAVIDA, et al., and ABELLA, et al., are available only in the Philippines.
First, plaintiff claimants are all residents of the Philippines, either in General
Santos City or in Davao City. Second, the specific areas where they were
allegedly exposed to the chemical DBCP are within the territorial jurisdiction
of the courts a quo wherein NAVIDA, et al., and ABELLA, et al., initially
filed their claims for damages. Third, the testimonial and documentary
evidence from important witnesses, such as doctors, co-workers, family
members and other members of the community, would be easier to gather in
the Philippines. Considering the great number of plaintiff claimants involved
in this case, it is not far-fetched to assume that voluminous records are
involved in the presentation of evidence to support the claim of plaintiff
claimants. Thus, these additional factors, coupled with the fact that the
alleged cause of action of NAVIDA, et al., and ABELLA, et al., against the
defendant companies for damages occurred in the Philippines, demonstrate
that, apart from the RTC of General Santos City and the RTC of Davao City
having jurisdiction over the subject matter in the instant civil cases, they are,
indeed, the convenient fora for trying these cases.67
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3. Pua v. Citibank (2013)
Facts:
On December 2, 2002, petitioners Jose and Benjamin Pua filed before the
RTC a Complaint6 for declaration of nullity of contract and sums of money
with damages against respondent,7 docketed as Civil Case No. 19- 1159.
In their complaint, petitioners alleged that they had been depositors of
Citibank Binondo Branch (Citibank Binondo) since 1996. Sometime in 1999,
Guada Ang, Citibank Binondo’s Branch Manager, invited Jose to a dinner
party at the Manila Hotel where he was introduced to several officers and
employees of Citibank Hongkong Branch (Citibank Hongkong).9
A few months after, Chingyee Yau (Yau), Vice-President of Citibank
Hongkong, came to the Philippines to sell securities to Jose. They averred
that Yau required Jose to open an account with Citibank Hongkong as it is
one of the conditions for the sale of the aforementioned securities.10 After
opening such account, Yau offered and sold to petitioners numerous
securities11 issued by various public limited companies established in Jersey,
Channel I sands.
The offer, sale, and signing of the subscription agreements of said securities
were all made and perfected at Citibank Binondo in the presence of its
officers and employees.12
Later on, petitioners discovered that the securities sold to them were not
registered with the Securities and Exchange Commission (SEC) and that the
terms and conditions covering the subscription were not likewise submitted
to the SEC for evaluation, approval, and registration.13
Asserting that respondent’s actions are in violation of Republic Act No.8799,
entitled the "Securities Regulation Code" (SRC), they assailed the validity of
the subscription agreements and the terms and conditions thereof for being
contrary to law and/or public policy.14
For its part, respondent filed a motion to dismiss15 alleging, inter alia, that
petitioners’ complaint should be dismissed outright for violation of the
doctrine of primary jurisdiction. It pointed out that the merits of the case
would largely depend on the issue of whether or not there was a violation of
the SRC, in particular, whether or not there was a sale of unregistered
securities. In this regard, respondent contended that the SRC conferred upon
the SEC jurisdiction to investigate compliance with its provisions and thus,
petitioners’ complaint should be first filed with the SEC and not directly
before the RTC.16
Petitioners opposed17 respondent’s motion to dismiss, maintaining that the
RTC has jurisdiction over their complaint. They asserted that Section 63of
the SRC expressly provides that the RTC has exclusive jurisdiction to hear
and decide all suits to recover damages pursuant to Sections 56 to 61 of the
same law.18
RTC denied the MTD. It noted that petitioners’ complaint is for declaration
of nullity of contract and sums of money with damages and, as such, it has
jurisdiction to hear and decide upon the case even if it involves the alleged
sale of securities. It ratiocinated that the legal questions or issues arising from
petitioners’ causes of action against respondent are more appropriate for the
judiciary than for an administrative agency to resolve.20
CA reversed RTC holding that the RTC violated the doctrine of primary
jurisdiction.
Issue:
W/N petitioners’ action falls within the primary jurisdiction of the SEC – No.
Held:
No.
At the outset, the Court observes that respondent erroneously relied on the
Baviera ruling to support its position that all complaints involving purported
violations of the SRC should be first referred to the SEC. A careful reading
of the Baviera case would reveal that the same involves a criminal
prosecution of a purported violator of the SRC, and not a civil suit such as
the case at bar. The pertinent portions of the Baviera ruling thus read:
“A criminal charge for violation of the Securities Regulation Code is a
specialized dispute. Hence, it must first be referred to an administrative
agency of special competence, i.e., the SEC. Under the doctrine of primary
jurisdiction, courts will not determine a controversy involving a question
within the jurisdiction of the administrative tribunal, where the question
demands the exercise of sound administrative discretion requiring the
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specialized knowledge and expertise of said administrative tribunal to
determine technical and intricate matters of fact. The Securities Regulation
Code is a special law. Its enforcement is particularly vested in the SEC.
Hence, all complaints for any violation of the Code and its implementing
rules and regulations should be filed with the SEC. Where the complaint is
criminal in nature, the SEC shall indorse the complaint to the DOJ for
preliminary investigation and prosecution as provided in Section 53.1 earlier
quoted.”
Records show that petitioners’ complaint constitutes a civil suit for
declaration of nullity of contract and sums of money with damages, which
stemmed from respondent’s alleged sale of unregistered securities, in
violation of the various provisions of the SRC and not a criminal case such
as that involved in Baviera.
In this light, when the Court ruled in Baviera that "all complaints for any
violation of the [SRC] x x x should be filed with the SEC,"33 it should be
construed as to apply only to criminal and not to civil suits such as petitioners’
complaint.
Moreover, it is a fundamental rule in procedural law that jurisdiction is
conferred by law;34 it cannot be inferred but must be explicitly stated therein.
Thus, when Congress confers exclusive jurisdiction to a judicial or quasi-
judicial entity over certain matters by law, this, absent any other indication to
the contrary, evinces its intent to exclude other bodies from exercising the
same.
in an amount not exceeding triple the amount of the transaction plus actual
damages.
Based on the foregoing, it is clear that cases falling under Section 57 of the
SRC, which pertain to civil liabilities arising from violations of the
requirements for offers to sell or the sale of securities, as well as other civil
suits under Sections 56, 58, 59, 60, and 61 of the SRC shall be exclusively
brought before the regional trial courts. It is a well-settled rule in statutory
construction that the term "shall" is a word of command, and one which has
always or which must be given a compulsory meaning, and it is generally
imperative or mandatory.35 Likewise, it is equally revelatory that no SRC
provision of similar import is found in its sections governing criminal suits;
quite the contrary, the SRC states that criminal cases arising from violations
of its provisions should be first referred to the SEC.
Therefore, based on these considerations, it stands to reason that civil suits
falling under the SRC are under the exclusive original jurisdiction of the
regional trial courts and hence, need not be first filed before the SEC, unlike
criminal cases wherein the latter body exercises primary jurisdiction.
All told, petitioners' filing of a civil suit against respondent for purported
violations of the SRC was properly filed directly before the RTC.

It is apparent that the SRC provisions governing criminal suits are separate
and distinct from those which pertain to civil suits. On the one hand, Section
53 of the SRC governs criminal suits involving violations of the said law. On
the other hand, Sections 56, 57, 58, 59, 60, 61, 62, and 63 of the SRC pertain
to civil suits involving violations of the same law. Among these, the
applicable provisions to this case are Sections 57.1 and 63.1 of the SRC.

SEC. 63. Amount of Damages to be Awarded. – 63.1. All suits to recover

damages pursuant to Sections 56, 57, 58, 59, 60 and 61 shall be brought
before the Regional Trial Court which shall have exclusive jurisdiction to
hear and decide such suits. The Court is hereby authorized to award damages

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4. Herrera v. Bernardo (2011)
Facts:
Respondents heirs of Crisanto S. Bernardo, represented by Emelita Bernardo,
filed a complaint before the Commission on the Settlement of Land Problems
(COSLAP) against Alfredo Herrera (Alfredo) for interference, disturbance,
unlawful claim, harassment and trespassing over a portion of a parcel of land
situated at Barangay Dalig, Cardona, Rizal, with an area of 7,993 square
meters. The complaint was docketed as COSLAP Case No. 99-221.
Respondents claimed that said parcel of land was originally owned by their
predecessor-in-interest, Crisanto Bernardo, and was later on acquired by
Crisanto S. Bernardo. The parcel of land was later on covered by Tax
Declaration No. CD-006-0828 under the name of the respondents.
Petitioner, on the other hand, alleged that the portion of the subject property
consisting of about 700 square meters was bought by Diosdado Herrera,
Alfredo’s father, from a certain Domingo Villaran. Upon the death of
Diosdado Herrera, Alfredo inherited the 700-square-meter lot.
The COSLAP, in a Resolution3 dated December 6, 1999, ruled that
respondents have a rightful claim over the subject property. Consequently, a
motion for reconsideration and/or reopening of the proceedings was filed by
Alfredo.
The COSLAP, in an Order4 dated August 21, 2002, denied the motion and
reiterated its Order dated December 6, 1999.
Aggrieved, petitioner Celia S. Vda. de Herrera, as the surviving spouse of
Alfredo, filed a petition for certiorari with the CA.5 The CA, Twelfth
Division, in its Decision dated April 28, 2005, dismissed the petition and
affirmed the resolution of the COSLAP. The CA ruled that the COSLAP has
exclusive jurisdiction over the present case and, even assuming that the
COSLAP has no jurisdiction over the land dispute of the parties herein,
petitioner is already estopped from raising the issue of jurisdiction because
Alfredo failed to raise the issue of lack of jurisdiction before the COSLAP
and he actively participated in the proceedings before the said body.
Petitioner filed a motion for reconsideration, which was denied by the CA in
a Resolution dated October 17, 2005.
Hence this petition.
Arguments:
Petitioner averred that the COSLAP has no adjudicatory powers to settle and
decide the question of ownership over the subject land. Further, the present
case cannot be classified as explosive in nature as the parties never resorted
to violence in resolving the controversy. Petitioner submits that it is the
Regional Trial Court which has jurisdiction over controversies relative to
ownership of the subject property.
Respondents, on the other hand, alleged that the COSLAP has jurisdiction
over the present case. Further, respondents argued that petitioner is estopped
from questioning the jurisdiction of the COSLAP by reason of laches due to
Alfredo’s active participation in the actual proceedings before the COSLAP.
Respondents said that Alfredo’s filing of the Motion for Reconsideration
and/or Reopening of the proceedings before the COSLAP is indicative of his
conformity with the questioned resolution of the COSLAP.
Issue:
W/N COSLAP had jurisdiction to decide the question of ownership of the
property in dispute – No.
Held:
No.
The COSLAP was created by virtue of Executive Order (E.O.) No. 561,
issued on September 21, 1979 by then President Ferdinand E. Marcos. It is
an administrative body established as a means of providing a mechanism for
the expeditious settlement of land problems among small settlers, landowners
and members of the cultural minorities to avoid social unrest.
Section 3 of E.O. No. 561 specifically enumerates the instances when the
COSLAP can exercise its adjudicatory functions:
“Section 3. Powers and Functions.—The Commission shall have the
following powers and functions:
xxxx
2. Refer and follow up for immediate action by the agency having appropriate
jurisdiction any land problem or dispute referred to the Commission:
Provided, That the Commission may, in the following cases, assume
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jurisdiction and resolve land problems or disputes which are critical and
explosive in nature considering, for instance, the large number of the
parties involved, the presence or emergence of social tension or unrest,
or other similar critical situations requiring immediate action:
(a) Between occupants/squatters and pasture lease agreement holders or
timber concessionaires;
(b) Between occupants/squatters and government reservation grantees;
(c) Between occupants/squatters and public land claimants or applicants;
(d) Petitions for classification, release and/or subdivision of lands of the
public domain; and
(e) Other similar land problems of grave urgency and magnitude.”
Administrative agencies, like the COSLAP, are tribunals of limited
jurisdiction that can only wield powers which are specifically granted to it by
its enabling statute.
Under Section 3 of E.O. No. 561, the COSLAP has two options in acting on
a land dispute or problem lodged before it, to wit:
(a) refer the matter to the agency having appropriate jurisdiction for
settlement/resolution; or
(b) assume jurisdiction if the matter is one of those enumerated in paragraph
2 (a) to (e) of the law, if such case is critical and explosive in nature, taking
into account the large number of parties involved, the presence or emergence
of social unrest, or other similar critical situations requiring immediate action.
In resolving whether to assume jurisdiction over a case or to refer the same
to the particular agency concerned, the COSLAP has to consider the nature
or classification of the land involved, the parties to the case, the nature of the
questions raised, and the need for immediate and urgent action thereon to
prevent injuries to persons and damage or destruction to property. The law
does not vest jurisdiction on the COSLAP over any land dispute or problem.
In the instant case, the COSLAP has no jurisdiction over the subject matter
of respondents’ complaint. The present case does not fall under any of the
cases enumerated under Section 3, paragraph 2 (a) to (e) of E.O. No. 561. The
dispute between the parties is not critical and explosive in nature, nor does it
involve a large number of parties, nor is there a presence or emergence of
4. In Tijam v. Sibonghanoy, 131 Phil. 556; 23 SCRA 29 (1968), the Court held that a
party may be barred by laches from invoking lack of jurisdiction at a late hour for the
social tension or unrest. It can also hardly be characterized as involving a
critical situation that requires immediate action.
It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial
officer or government agency, over the nature and subject matter of a petition
or complaint is determined by the material allegations therein and the
character of the relief prayed for, irrespective of whether the petitioner or
complainant is entitled to any or all such reliefs.10
Respondents’ cause of action before the COSLAP pertains to their claim of
ownership over the subject property, which is an action involving title to or
possession of real property, or any interest therein,11 the jurisdiction of which
is vested with the Regional Trial Courts or the Municipal Trial Courts
depending on the assessed value of the subject property.
Since the COSLAP has no jurisdiction over the action, all the proceedings
therein, including the decision rendered, are null and void. A judgment issued
by a quasi-judicial body without jurisdiction is void. It cannot be the source
of any right or create any obligation. All acts performed pursuant to it and all
claims emanating from it have no legal effect. Having no legal effect, the
situation is the same as it would be as if there was no judgment at all. It leaves
the parties in the position they were before the proceedings.
Respondents’ allegation that petitioner is estopped from questioning the
jurisdiction of the COSLAP by reason of laches does not hold water.
Petitioner is not estopped from raising the jurisdictional issue, because it may
be raised at any stage of the proceedings, even on appeal, and is not lost by
waiver or by estoppel. The fact that a person attempts to invoke unauthorized
jurisdiction of a court does not estop him from thereafter challenging its
jurisdiction over the subject matter, since such jurisdiction must arise by law
and not by mere consent of the parties.
In Regalado v. Go, 514 SCRA 616 (2007), the Court held that laches should
be clearly present for the Sibonghanoy doctrine4 to apply, thus: Laches is
defined as the “failure or neglect for an unreasonable and unexplained length
of time, to do that which, by exercising due diligence, could or should have
been done earlier, it is negligence or omission to assert a right within a
purpose of annulling everything done in the case with the active participation of said
party invoking the plea of lack of jurisdiction.
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reasonable length of time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.”

The ruling in People v. Regalario that was based on the landmark doctrine
enunciated in Tijam v. Sibonghanoy, 23 SCRA 29 (1968), on the matter of
jurisdiction by estoppel is the exception rather than the rule. Estoppel by
laches may be invoked to bar the issue of lack of jurisdiction only in cases in
which the factual milieu is analogous to that in the cited case. In such
controversies, laches should have been clearly present; that is, lack of
jurisdiction must have been raised so belatedly as to warrant the presumption
that the party entitled to assert it had abandoned or declined to assert it.

In Sibonghanoy, the defense of lack of jurisdiction was raised for the first
time in a motion to dismiss filed by the Surety almost 15 years after the
questioned ruling had been rendered. At several stages of the proceedings, in
the court a quo as well as in the Court of Appeals, the Surety invoked the
jurisdiction of the said courts to obtain affirmative relief and submitted its
case for final adjudication on the merits. It was only when the adverse
decision was rendered by the Court of Appeals that it finally woke up to raise
the question of jurisdiction.”

The factual settings attendant in Sibonghanoy are not present in the case at
bar that would justify the application of estoppel by laches against the
petitioner. Here, petitioner assailed the jurisdiction of the COSLAP when she
appealed the case to the CA and at that time, no considerable period had yet
elapsed for laches to attach. Therefore, petitioner is not estopped from
assailing the jurisdiction of the COSLAP. Additionally, no laches will even
attach because the judgment is null and void for want of jurisdiction.23

WHEREFORE, the petition is GRANTED. The Decision and the Resolution

of the Court of Appeals, dated April 28, 2005 and October 17, 2005,
respectively, in CA-G.R. SP No. 73674 are REVERSED and SET ASIDE.
The Decision and Order of the Commission on the Settlement of Land
Problems, dated December 6, 1999 and August 21, 2002, respectively, in
COSLAP Case No. 99-221, are declared NULL and VOID for having been
issued without jurisdiction.
SO ORDERED.

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5. Dacasin v. Dacasin (2010)
Facts:
Petitioner Herald Dacasin (petitioner), American, and respondent Sharon Del
Mundo Dacasin (respondent), Filipino, were married in Manila in April 1994.
They have one daughter, Stephanie, born on 21 September 1995. In June
1999, respondent sought and obtained from the Circuit Court, 19th Judicial
Circuit, Lake County, Illinois (Illinois court) a divorce decree against
petitioner.3 In its ruling, the Illinois court dissolved the marriage of petitioner
and respondent, awarded to respondent sole custody of Stephanie and
retained jurisdiction over the case for enforcement purposes.
On 28 January 2002, petitioner and respondent executed in Manila a contract
(Agreement4) for the joint custody of Stephanie. The parties chose Philippine
courts as exclusive forum to adjudicate disputes arising from the Agreement.
Respondent undertook to obtain from the Illinois court an order
“relinquishing” jurisdiction to Philippine courts.
In 2004, petitioner sued respondent in the Regional Trial Court of Makati
City, Branch 60 (trial court) to enforce the Agreement. Petitioner alleged that
in violation of the Agreement, respondent exercised sole custody over
Stephanie.
Respondent sought the dismissal of the complaint for, among others, lack of
jurisdiction because of the Illinois court’s retention of jurisdiction to enforce
the divorce decree.
RTC granted the MTD based on lack of jurisdiction holding that
(1) it is precluded from taking cognizance over the suit considering the
Illinois court’s retention of jurisdiction to enforce its divorce decree,
including its order awarding sole custody of Stephanie to respondent;
(2) the divorce decree is binding on petitioner following the “nationality rule”
prevailing in this jurisdiction;5 and
(3) the Agreement is void for contravening Article 2035, paragraph 5 of the
Civil Code6 prohibiting compromise agreements on jurisdiction.7
Petitioner sought reconsideration, raising the new argument that the divorce
decree obtained by respondent is void. Thus, the divorce decree is no bar to
the trial court’s exercise of jurisdiction over the case.
In its Order dated 23 June 2005, the trial court denied reconsideration,
holding that unlike in the case of respondent, the divorce decree is binding on
petitioner under the laws of his nationality.
Hence, this petition.
Petitioner submits the following alternative theories for the validity of the
Agreement to justify its enforcement by the trial court: (1) the Agreement
novated the valid divorce decree, modifying the terms of child custody from
sole (maternal) to joint;8 or (2) the Agreement is independent of the divorce
decree obtained by respondent.
Issue:
W/N the RTC has jurisdiction to take cognizance of petitioner’s suit and
enforce the Agreement on the joint custody of the parties’ child – The trial
court has jurisdiction to entertain petitioner’s suit but not to enforce the
Agreement which is void. However, factual and equity considerations
militate against the dismissal of petitioner’s suit and call for the remand of
the case to settle the question of Stephanie’s custody.
Held:
The trial court has jurisdiction to entertain petitioner’s suit but not to enforce
the Agreement which is void. However, factual and equity considerations
militate against the dismissal of petitioner’s suit and call for the remand of
the case to settle the question of Stephanie’s custody.
I.
Subject matter jurisdiction is conferred by law. At the time petitioner filed
his suit in the trial court, statutory law vests on Regional Trial Courts
exclusive original jurisdiction over civil actions incapable of pecuniary
estimation.9 An action for specific performance, such as petitioner’s suit to
enforce the Agreement on joint child custody, belongs to this species of
actions.10 Thus, jurisdiction-wise, petitioner went to the right court.
Indeed, the trial court’s refusal to entertain petitioner’s suit was grounded not
on its lack of power to do so but on its thinking that the Illinois court’s divorce
decree stripped it of jurisdiction. This conclusion is unfounded. What the
Illinois court retained was “jurisdiction x x x for the purpose of enforcing all
and sundry the various provisions of [its] Judgment for Dissolution.”11
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Petitioner’s suit seeks the enforcement not of the “various provisions” of the
divorce decree but of the post-divorce Agreement on joint child custody.
Thus, the action lies beyond the zone of the Illinois court’s so-called “retained
jurisdiction.”
separated because the law provides for joint parental authority when spouses
live together.21 However, upon separation of the spouses, the mother takes
sole custody under the law if the child is below seven years old and any
agreement to the contrary is void. Thus, the law suspends the joint custody
regime for (1) children under seven of (2) separated or divorced spouses.

II.
The foregoing notwithstanding, the trial court cannot enforce the Agreement
which is contrary to law.
In this jurisdiction, parties to a contract are free to stipulate the terms of
agreement subject to the minimum ban on stipulations contrary to law,
morals, good customs, public order, or public policy.12 Otherwise, the
contract is denied legal existence, deemed “inexistent and void from the
beginning.”13 For lack of relevant stipulation in the Agreement, these and
other ancillary Philippine substantive law serve as default parameters to test
the validity of the Agreement’s joint child custody stipulations.14
At the time the parties executed the Agreement on 28 January 2002, two facts
are undisputed:
(1) Stephanie was under seven years old (having been born on 21 September
1995); and
(2) petitioner and respondent were no longer married under the laws of the
United States because of the divorce decree.
III.
Instead of ordering the dismissal of petitioner’s suit, the logical end to its lack
of cause of action, we remand the case for the trial court to settle the question
of Stephanie’s custody.
Stephanie is now nearly 15 years old, thus removing the case outside of the
ambit of the mandatory maternal custody regime under Article 213 and
bringing it within coverage of the default standard on child custody
proceedings – the best interest of the child.30 As the question of custody is
already before the trial court and the child’s parents, by executing the
Agreement, initially showed inclination to share custody, it is in the interest
of swift and efficient rendition of justice to allow the parties to take advantage
of the court’s jurisdiction, submit evidence on the custodial arrangement best
serving Stephanie’s interest, and let the trial court render judgment. This
disposition is consistent with the settled doctrine that in child custody
proceedings, equity may be invoked to serve the child’s best interest.31

The relevant Philippine law on child custody for spouses separated in fact or
in law15 (under the second paragraph of Article 213 of the Family Code) is
also undisputed: “no child under seven years of age shall be separated from
the mother x x x.”16

This statutory awarding of sole parental custody17 to the mother is

mandatory,18 grounded on sound policy consideration,19 subject only to a
narrow exception not alleged to obtain here.20 Clearly then, the Agreement’s
object to establish a post-divorce joint custody regime between respondent
and petitioner over their child under seven years old contravenes Philippine
law.

The Agreement is not only void ab initio for being contrary to law, it has also
been repudiated by the mother when she refused to allow joint custody by the
father. The Agreement would be valid if the spouses have not divorced or

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6. Far East Bank v. Shemberg (2006)
Facts:
Far East Bank & Trust Company (FEBTC), petitioner, is a domestic banking
corporation organized and existing under Philippine laws. It is now managed
and operated by the Bank of the Philippine Islands with main office in Makati
City.
Shemberg Marketing Corporation, Mackie Industries Corporation, Benson
Industries Incorporated, Kamaro Enterprises Corporation, Polysaccharide
Corporation, Prime Crafts Incorporated, Cebu United Polymer Corporation,
Shemberg Natures Craft Inc., respondents herein, are all duly registered
domestic corporations based in Pakna-an, Mandaue City. The individual
respondents, all surnamed Dacay, are directors and corporate officers of the
said corporations.
Respondents are the registered owners of several realties located in Mandaue
City. Prior to 1998, respondents entered into several credit transactions with
petitioner secured by several real estate mortgages.
In their respective mortgage contracts, duly annotated on respondents’ titles,
the parties stipulated that upon failure or refusal of the mortgagor to pay the
obligations when due, the entire principal, interest, penalties and other
charges shall be immediately demandable and payable without need of notice
or demand; and the mortgagee shall have the absolute discretion to foreclose
the mortgage extrajudicially pursuant to Act No. 3135, as amended.
Pursuant to the parties’ agreements, petitioner released to respondents the
principal amounts of the loans as evidenced by various promissory notes.
However, respondents failed to pay the loans which matured on February 14,
2001. Thus, petitioner sought to foreclose the mortgages extrajudicially.
On February 28, 2001, respondents filed with the Regional Trial Court,
Branch 56, Mandaue City, a Complaint for Declaratory Relief, Injunction,
Damages, Annulment of Promissory Notes, Documents, and Contracts
against petitioner, docketed as Civil Case No. MAN-4045.
The complaint alleges that prior to 1998, respondents obtained credit
accommodations from petitioner. The latter required respondents’
representatives to sign “standard pre-printed bank forms in fine print, such as
Credit Line Agreements (CLA), Promissory Notes (PN), Real Estate
Mortgages (REM), Chattel Mortgages (CM), Trust Receipts (TR), Surety
Agreements (JSS) and other bank forms and documents.” Respondents
complied since they trusted petitioner. However, it tuned out that petitioner’s
employees filled the blanks with “false and inaccurate entries.”
Respondents deny and dispute the genuineness and due execution of the
documents and pray for the following reliefs:
“xxx
a) Declaring null and void the CLA, REMs, CMs, PNs, JSS, TRs, and other
related documents, the notices of sale, the entire foreclosure proceedings,
including the auction sale, the amount claimed by the bank to be the
outstanding account, the amount claimed by the bank to be the principal, the
interest unilaterally imposed by the bank, the penalties imposed by the bank
and the PNs made basis for default and foreclosure;
b) Declaring the CLA, REMs, CMs, PNs, JSS, TRs, and other related
documents as without consideration, invalid, inoperative, ineffective,
unenforceable, null and void and to cancel the same;
c) To make the injunction permanent;
d) To order the bank to comply with its commitments, assurances and
representations to help in the rehabilitation of the Dacay Group and the
restructuring of its obligations, if any;
e) To award to plaintiffs moral damages of P300,000.00, exemplary damages
of P200,000.00, attorney’s fees of P200,000.00 plus P1,000.00 per billable
hour, and litigation expenses of P300,000.00;
f) Declaring that the defendant cannot validly do, perform or suffer to be done
the acts complained of.”
RTC granted the TRO.
Petitioner filed its Answer with Affirmative Defenses, Counterclaim, and
Vigorous Opposition to the Order directing the issuance of a TRO and/or
preliminary mandatory injunction. Likewise, petitioner filed a Motion to
Dismiss Based On Affirmative Defenses alleging that:
(1) the venue is improperly laid;
(2) the trial court did not acquire jurisdiction over the case for non-payment
of proper docket fees;
(3) there is non-joinder of indispensable parties; and
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(4) the trial court has no jurisdiction to enjoin the foreclosure proceedings. would depend upon the amount of the claim. However, where the basic issue
is something other than the right to recover a sum of money, where the money
RTC denied the MTD holding, among others, that it has jurisdiction because claim is only incidental or a consequence of the principal relief sought, the
the annulment of a mortagage is incapable of pecuniary estimation. action is incapable of pecuniary estimation.

CA denied the R65 holding that since the RTC has jurisdiction over the case,
the extraordinary writ of certiorari cannot be utilized.
Hence this petition.
Issue:
W/N the RTC has jurisdiction - Yes
Held:
Yes.
On the first issue, petitioner contends that in real actions, the assessed value
of the property or if there is none, the estimated value thereof, must be alleged
in the complaint, and shall serve as the basis for computing the fees.
Here, the primary reliefs prayed for by respondents in Civil Case No.
MAN-4045 is the cancellation of the real estate and chattel mortgages for
want of consideration. In Bumayog v. Tumas,12 this Court ruled that where
the issue involves the validity of a mortgage, the action is one incapable of
pecuniary estimation. In the more recent case of Russell v. Vestil,13 this
Court, citing Bumayog,14 held that an action questioning the validity of a
mortgage is one incapable of pecuniary estimation. Petitioner has not shown
adequate reasons for this Court to revisit Bumayog and Russell. Hence,
petitioner’s contention can not be sustained. Since respondents paid the
docket fees, as computed by the clerk of court, consequently, the trial court
acquired jurisdiction over Civil Case No. MAN4045.

Nowhere in the complaint in Civil Case No. MAN- 4045 did respondents
allege the assessed values of their realties. Hence, there is no adequate basis
for computing the proper filing fees. It necessarily follows that the fees paid
are deficient. The trial court, therefore, did not acquire jurisdiction over the
case.

Respondents counter that a perusal of the complaint in Civil Case No.

MAN-4045 shows that the suit primarily involves cancellation of mortgages,
an action incapable of pecuniary estimation. Consequently, petitioner’s
contention that there is a deficiency in the payment of docket fees is without
merit.

A court acquires jurisdiction over a case only upon the payment of the
prescribed fees.9

In Singsong v. Isabela Sawmill,11 this Court laid the test for determining
whether the subject matter of an action is incapable of pecuniary estimation,
thus: Ascertain the nature of the principal action or remedy sought. If the
action is primarily for recovery of a sum of money, the claim is considered
capable of pecuniary estimation. Whether the trial court has jurisdiction

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7. Sabitsana v. Muertegi (2013)
Facts:
On September 2, 1981, Alberto Garcia (Garcia) executed an unnotarized
Deed of Sale5 in favor of respondent Juanito Muertegui6 (Juanito) over a
7,500-square meter parcel of unregistered land (the lot) located in Dalutan
Island, Talahid, Almeira, Biliran, Leyte del Norte covered by Tax Declaration
(TD) No. 1996 issued in 1985 in Garcia’s name.7
Juanito’s father Domingo Muertegui, Sr. (Domingo Sr.) and brother
Domingo Jr. took actual possession of the lot and planted thereon coconut
and ipil-ipil trees. They also paid the real property taxes on the lot for the
years 1980 up to 1998.
On October 17, 1991, Garcia sold the lot to the Muertegui family lawyer,
petitioner Atty. Clemencio C. Sabitsana, Jr. (Atty. Sabitsana), through a
notarized deed of absolute sale.8 The sale was registered with the Register of
Deeds on February 6, 1992.9 TD No. 1996 was cancelled and a new one, TD
No. 5327,10 was issued in Atty. Sabitsana’s name.
Although Domingo Jr. and Sr. paid the real estate taxes, Atty. Sabitsana also
paid real property taxes in 1992, 1993, and 1999. In 1996, he introduced
concrete improvements on the property, which shortly thereafter were
destroyed by a typhoon.
When Domingo Sr. passed away, his heirs applied for registration and
coverage of the lot under the Public Land Act or Commonwealth Act No.
141. Atty. Sabitsana, in a letter11 dated August 24, 1998 addressed to the
Department of Environment and Natural Resources’ CENRO/PENRO office
in Naval, Biliran, opposed the application, claiming that he was the true
owner of the lot. He asked that the application for registration be held in
abeyance until the issue of conflicting ownership has been resolved.
On April 11, 2000, Juanito, through his attorney-in-fact Domingo Jr., filed
Civil Case No. B-109712 for quieting of title and preliminary injunction,
against herein petitioners Atty. Sabitsana and his wife, Rosario, claiming that
they bought the lot in bad faith and are exercising acts of possession and
ownership over the same, which acts thus constitute a cloud over his title.
The Complaint13 prayed, among others, that the Sabitsana Deed of Sale, the
August 24, 1998 letter, and TD No. 5327 be declared null and void and of no
effect; that petitioners be ordered to respect and recognize Juanito’s title over
the lot; and that moral and exemplary damages, attorney’s fees, and litigation
expenses be awarded to him.
In their Answer with Counterclaim,14 petitioners asserted mainly that the sale
to Juanito is null and void absent the marital consent of Garcia’s wife,
Soledad Corto (Soledad); that they acquired the property in good faith and
for value; and that the Complaint is barred by prescription and laches.
They likewise insisted that the Regional Trial Court (RTC) of Naval, Biliran
did not have jurisdiction over the case, which involved title to or interest in a
parcel of land the assessed value of which is merely P1,230.00.
RTC ruled for respondent Juanito. The trial court held that petitioners are not
buyers in good faith. Petitioner Atty. Sabitsana was the Muertegui family’s
lawyer, and was informed beforehand by Carmen that her family had
purchased the lot; thus, he knew of the sale to Juanito. After conducting an
investigation, he found out that the sale was not registered. With this
information in mind, Atty. Sabitsana went on to purchase the same lot and
raced to register the sale ahead of the Muerteguis, expecting that his purchase
and prior registration would prevail over that of his clients, the Muerteguis.
Applying Article 1544 of the Civil Code,17 the trial court declared that even
though petitioners were first to register their sale, the same was not done in
good faith.
CA affirmed.
Hence this petition claiming, among others, that the RTC had no jurisdiction
over the case because the assessed value of the lot was only P1,230 and its
stated market value was only P3,450.
Arguments:
Petitioners assert that the RTC of Naval, Biliran did not have jurisdiction over
the case. They argue that since the assessed value of the lot was a mere
P1,230.00, jurisdiction over the case lies with the first level courts, pursuant
to Republic Act No. 7691, which expanded their exclusive original
jurisdiction to include "all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the
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property or interest therein does not exceed Twenty thousand pesos
(P20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorney’s fees, litigation expenses and costs."26
Petitioners thus conclude that the Decision in Civil Case No. B-1097 is null
and void for lack of jurisdiction.

Respondent, on the other hand, counters that a suit for quieting of title is one
whose subject matter is incapable of pecuniary estimation, and thus falls
within the jurisdiction of the RTC.

Issue:
W/N the RTC had jurisdiction over subject matter – Yes.

Held:
Yes.

On the question of jurisdiction, it is clear under the Rules that an action for
quieting of title may be instituted in the RTCs, regardless of the assessed
value of the real property in dispute. Under Rule 63 of the Rules of Court,29
an action to quiet title to real property or remove clouds therefrom may be
brought in the appropriate RTC.

It must be remembered that the suit for quieting of title was prompted by
petitioners’ August 24, 1998 letter-opposition to respondent’s application for
registration. Thus, in order to prevent30 a cloud from being cast upon his
application for a title, respondent filed Civil Case No. B-1097 to obtain a
declaration of his rights. In this sense, the action is one for declaratory relief,
which properly falls within the jurisdiction of the RTC pursuant to Rule 63
of the Rules.

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8. Spouses Manila v. Spouses Manzo (2011)
Facts:
On June 30, 1982, Ederlinda Gallardo leased two (2) parcels of land situated
along Real St., Manuyo, Las Piñas, Metro Manila, to Eulogia Manila for a
period of ten (10) years at a monthly rental(s) of P2,000.00 for the first two
years, and thereafter an increase of ten (10) percent every after two years.
They also agreed that the lessee shall have the option to buy the property
within two (2) years from the date of execution of the contract of lease at a
fair market value of One Hundred and Fifty Thousand Pesos (P150,000.00).
The contract of lease expired on July 1, 1992 but the lessee continued in
possession of the property despite a formal demand letter dated August 8,
1992, to vacate the same and pay the rental arrearages. In a letter reply dated
August 12, 1992, herein defendant claimed that no rental fee is due because
she allegedly became the owner of the property at the time she communicated
to the plaintiff her desire to exercise the option to buy the said property.
Respondents thus filed an action for ejectment against the petitioners with the
MTC of Las Pinas City.
MTC ruled for respondents.
RTC reversed holding that petitioners have in fact exercised their option to
buy the leased property but the respondents refused to honor the same. It
noted that respondents even informed the petitioners about foreclosure
proceedings on their property, whereupon the petitioners tried to intervene by
tendering rental payments but the respondents advised them to withhold such
payments until the appeal of respondents in the case they filed against the
Rural Bank of Bombon (Camarines Sur), Inc. (Civil Case No. 6062) is
resolved. It further noted that respondents’ intention to sell the lot to
petitioners is confirmed by the fact that the former allowed the latter to
construct a building of strong materials on the premises. RTC ordered the
petitioners to execute the corresponding deed of sale.
Respondents filed an MR which was denied.
Respondents then filed a petition for annulment of the RTC decision in the
CA. Respondents assailed the RTC for ordering them to sell their property to
petitioners arguing that said court’s appellate jurisdiction in ejectment cases
is limited to the determination of who is entitled to the physical possession of
real property and the only judgment it can render in favor of the defendant is
to recover his costs, which judgment is conclusive only on the issue of
possession and does not affect the ownership of the land.
They contended that the sale of real property by one party to another may be
ordered by the RTC only in a case for specific performance falling under its
original exclusive jurisdiction, not in the exercise of its appellate jurisdiction
in an ejectment case.
Respondents also alleged that the petition for annulment is the only remedy
available to them because the ordinary remedies of new trial, appeal, petition
for relief or other appropriate remedies are no longer available through no
fault on their part.
CA granted the petition and ruled that the RTC exceeded its jurisdiction
holding that
“what the respondent court should have done in the exercise of its appellate
jurisdiction, was to confine itself to the issue of whether or not petitioners
have a valid cause of action for ejectment against the private respondents.
Unfortunately, in the decision herein sought to be annulled, the respondent
court went further than what is required of it as an appellate court when it
ordered the petitioners to sell their properties to the private respondents. In a
very real sense, the respondent court materially changed the nature of
petitioners’ cause of action by deciding the question of ownership even as the
appealed case involves only the issue of prior physical possession which, in
every ejectment suit, is the only question to be resolved.
As it were, the respondent court converted the issue to one for specific
performance which falls under its original, not appellate jurisdiction. Sad to
say, this cannot be done by the respondent court in an appealed ejectment
case because the essential criterion of appellate jurisdiction is that it revises
and corrects the proceedings in a cause already instituted and does not create
that cause.”
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Issue:
W/N the RTC exceeded its jurisdiction when it, in its appellate jurisdiction
over an ejectment case, declared the petitioners as owners of the property –
Yes, but the petition for annulment is an erroneous remedy.
Held:
Yes, but the petition for annulment is an erroneous remedy.
Petitioners assail the CA in holding that the RTC decision is void because it
granted a relief inconsistent with the nature of an ejectment suit and not even
prayed for by the respondents in their answer. They contend that whatever
maybe questionable in the decision is a ground for assignment of errors on
appeal—or in certain cases, as ground for a special civil action for certiorari
under Rule 65—and not as ground for its annulment.
On the other hand, respondents assert that the CA, being a higher court, has
the power to adopt, reverse or modify the findings of the RTC in this case.
They point out that the CA in the exercise of its sound discretion found the
RTC’s findings unsupported by the evidence on record which also indicated
that the loss of ordinary remedies of appeal, new trial and petition for review
was not due to the fault of the respondents.
We agree with the petitioners.
Lack of jurisdiction as a ground for annulment of judgment refers to either
lack of jurisdiction over the person of the defending party or over the subject
matter of the claim. In a petition for annulment of judgment based on lack of
jurisdiction, petitioner must show not merely an abuse of jurisdictional
discretion but an absolute lack of jurisdiction. Lack of jurisdiction means
absence of or no jurisdiction, that is, the court should not have taken
cognizance of the petition because the law does not vest it with jurisdiction
over the subject matter. Jurisdiction over the nature of the action or subject
matter is conferred by law.
There is no dispute that the RTC is vested with appellate jurisdiction over
ejectment cases decided by the MeTC, MTC or MCTC. We note that
petitioners’ attack on the validity of the RTC decision pertains to a relief
erroneously granted on appeal, and beyond the scope of judgment provided
in Section 6 (now Section 17) of Rule 70. While the court in an ejectment
case may delve on the issue of ownership or possession de jure solely for the
purpose of resolving the issue of possession de facto, it has no jurisdiction to
settle with finality the issue of ownership19 and any pronouncement made by
it on the question of ownership is provisional in nature.20 A judgment in a
forcible entry or detainer case disposes of no other issue than possession and
establishes only who has the right of possession, but by no means constitutes
a bar to an action for determination of who has the right or title of
ownership.21 We have held that although it was proper for the RTC, on
appeal in the ejectment suit, to delve on the issue of ownership and receive
evidence on possession de jure, it cannot adjudicate with semblance of
finality the ownership of the property to either party by ordering the
cancellation of the TCT.
In this case, the RTC acted in excess of its jurisdiction in deciding the appeal
of respondents when, instead of simply dismissing the complaint and
awarding any counterclaim for costs due to the defendants (petitioners), it
ordered the respondents-lessors to execute a deed of absolute sale in favor of
the petitioners-lessees, on the basis of its own interpretation of the Contract
of Lease which granted petitioners the option to buy the leased premises
within a certain period (two years from date of execution) and for a fixed
price (P150,000.00).23 This cannot be done in an ejectment case where the
only issue for resolution is who between the parties is entitled to the physical
possession of the property.
Such erroneous grant of relief to the defendants on appeal, however, is but an
exercise of jurisdiction by the RTC. Jurisdiction is not the same as the
exercise of jurisdiction. As distinguished from the exercise of jurisdiction,
jurisdiction is the authority to decide a cause, and not the decision rendered
therein.24 The ground for annulment of the decision is absence of, or no,
jurisdiction; that is, the court should not have taken cognizance of the petition
because the law does not vest it with jurisdiction over the subject matter.25
Thus, while respondents assailed the content of the RTC decision, they failed
to show that the RTC did not have the authority to decide the case on appeal.
“Chiefly, Section 22 of B.P. Blg. 129, otherwise known as the Judiciary
Reorganization Act of 1980, vests upon the RTC the exercise of an ‘appellate
jurisdiction over all cases decided by the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts in their respective
territorial jurisdictions.’
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Clearly then, when the RTC took cognizance of petitioners’ appeal from the
adverse decision of the MTC in the ejectment suit, it (RTC) was
unquestionably exercising its appellate jurisdiction as mandated by law.
Perforce, its decision may not be annulled on the basis of lack of jurisdiction
as it has, beyond cavil, jurisdiction to decide the appeal.”

The CA therefore erred in annulling the November 18, 1994 RTC decision
on the ground of lack of jurisdiction as said court had jurisdiction to take
cognizance of petitioners’ appeal.

WHEREFORE, the petition for review on certiorari is GRANTED. The

Decision dated February 27, 2004 and Resolution dated May 14, 2004 of the
Court of Appeals in CA-G.R. SP No. 49998 are SET ASIDE. The petition for
annulment of judgment filed by herein respondents is DISMISSED.
No costs. SO ORDERED.

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9. Lhuillier v. British Airways (2010)
Facts:
On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint2 for
damages against respondent British Airways before the Regional Trial Court
(RTC) of Makati City.
She alleged that on February 28, 2005, she took respondent’s flight 548 from
London, United Kingdom to Rome, Italy. Once on board, she allegedly
requested Julian Halliday (Halliday), one of the respondent’s flight
attendants, to assist her in placing her hand-carried luggage in the overhead
bin. However, Halliday allegedly refused to help and assist her, and even
sarcastically remarked that “If I were to help all 300 passengers in this flight,
I would have a broken back!”
Petitioner further alleged that when the plane was about to land in Rome,
Italy, another flight attendant, Nickolas Kerrigan (Kerrigan), singled her out
from among all the passengers in the business class section to lecture on plane
safety. Allegedly, Kerrigan made her appear to the other passengers to be
ignorant, uneducated, stupid, and in need of lecturing on the safety rules and
regulations of the plane. Affronted, petitioner assured Kerrigan that she knew
the plane’s safety regulations being a frequent traveler. Thereupon, Kerrigan
allegedly thrust his face a mere few centimeters away from that of the
petitioner and menacingly told her that “We don’t like your attitude.”
Upon arrival in Rome, petitioner complained to respondent’s ground manager
and demanded an apology. However, he latter declared that the flight
stewards were “only doing their job.”
Thus, petitioner filed the complaint for damages, praying that respondent be
ordered to pay P5 million as moral damages, P2 million as nominal damages,
P1 million as exemplary damages, P300,000.00 as attorney’s fees,
P200,000.00 as litigation expenses, and cost of the suit.
On May 16, 2005, summons, together with a copy of the complaint, was
served on the respondent through Violeta Echevarria, General Manager of
Euro-Philippine Airline Services, Inc.3On May 30, 2005, respondent, by way
of special appearance through counsel, filed a Motion to Dismiss4 on
grounds of lack of jurisdiction over the case and over the person of the
respondent.
Respondent alleged that only the courts of London, United Kingdom or
Rome, Italy, have jurisdiction over the complaint for damages pursuant to the
Warsaw Convention,5 Article 28(1) of which provides:
“An action for damages must be brought at the option of the plaintiff, either
before the court of domicile of the carrier or his principal place of business,
or where he has a place of business through which the contract has been made,
or before the court of the place of destination.”
Thus, since a) respondent is domiciled in London; b) respondent’s principal
place of business is in London; c) petitioner bought her ticket in Italy (through
Jeepney Travel S.A.S, in Rome);6 and d) Rome, Italy is petitioner’s place of
destination, then it follows that the complaint should only be filed in the
proper courts of London, United Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed for lack of
jurisdiction over the person of the respondent because the summons was
erroneously served on Euro- Philippine Airline Services, Inc. which is
not its resident agent in the Philippines.
On June 3, 2005, the trial court issued an Order requiring herein petitioner to
file her Comment/Opposition on the Motion to Dismiss within 10 days from
notice thereof, and for respondent to file a Reply thereon.7
Instead of filing a Comment/Opposition, petitioner filed on June 27, 2005, an
Urgent Ex-Parte Motion to Admit Formal Amendment to the Complaint and
Issuance of Alias Summons.8 Petitioner alleged that upon verification with
the Securities and Exchange Commission, she found out that the resident
agent of respondent in the Philippines is Alonzo Q. Ancheta. Subsequently,
on September 9, 2005, petitioner filed a Motion to Resolve Pending Incident
and Opposition to Motion to Dismiss.9
RTC granted the MTD holding that it had no jurisdiction over the case based
on the Warsaw Convention. This being so, the issue of jurisdiction over the
person of the respondent airline has become moot.
Hence this petition.
Issue:
1. W/N the RTC has jurisdiction over the subject matter – No.
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2. W/N the RTC acquired jurisdiction over the respondent – No.
Held:
I. No.
The Warsaw Convention applies in this case and governs the jurisdiction over
the subject matter over the action. The WC is jurisdictional in character.
Further, it is settled that allegations of tortious conduct committed against an
airline passenger during the course of the international carriage do not bring
the case outside the ambit of the Warsaw Convention. RTC decision affirmed.
II. No.
Respondent, in seeking remedies from the trial court through special
appearance of counsel, is not deemed to have voluntarily submitted itself to
the jurisdiction of the trial court.
Petitioner argues that respondent has effectively submitted itself to the
jurisdiction of the trial court when the latter stated in its Comment/Opposition
to the Motion for Reconsideration that “Defendant [is at a loss] x x x how the
plaintiff arrived at her erroneous impression that it is/was Euro-Philippines
Airlines Services, Inc. that has been making a special appearance since x x x
British Airways x x x has been clearly specifying in all the pleadings that it
has filed with this Honorable Court that it is the one making a special
appearance.”44
In refuting the contention of petitioner, respondent cited La Naval Drug
Corporation v. Court of Appeals45 where we held that even if a party
“challenges the jurisdiction of the court over his person, as by reason of
absence or defective service of summons, and he also invokes other grounds
for the dismissal of the action under Rule 16, he is not deemed to be in
estoppel or to have waived his objection to the jurisdiction over his
person.”46
This issue has been squarely passed upon in the recent case of Garcia v.
Sandiganbayan,47 where we reiterated our ruling in La Naval Drug
Corporation v. Court of Appeals48 and elucidated thus:
“Special Appearance to Question a Court’s Jurisdiction Is Not Voluntary
Appearance
The second sentence of Sec. 20, Rule 14 of the Revised Rules of Civil
Procedure clearly provides:
Sec. 20. Voluntary appearance.—The defendant’s voluntary appearance in
the action shall be equivalent to service of summons. The inclusion in a
motion to dismiss of other grounds aside from lack of jurisdiction over the
person of the defendant shall not be deemed a voluntary appearance.
Thus, a defendant who files a motion to dismiss, assailing the jurisdiction of
the court over his person, together with other grounds raised therein, is not
deemed to have appeared voluntarily before the court. What the rule on
voluntary appearance—the first sentence of the above-quoted rule—means is
that the voluntary appearance of the defendant in court is without
qualification, in which case he is deemed to have waived his defense of lack
of jurisdiction over his person due to improper service of summons.
A special appearance before the court— challenging its jurisdiction over the
person through a motion to dismiss even if the movant invokes other
grounds—is not tantamount to estoppel or a waiver by the movant of his
objection to jurisdiction over his person; and such is not constitutive of a
voluntary submission to the jurisdiction of the court.”
In this case, the special appearance of the counsel of respondent in filing the
Motion to Dismiss and other pleadings before the trial court cannot be
deemed to be voluntary submission to the jurisdiction of the said trial court.
We hence disagree with the contention of the petitioner and rule that there
was no voluntary appearance before the trial court that could constitute
estoppel or a waiver of respondent’s objection to jurisdiction over its person.
WHEREFORE, the petition is DENIED. The October 14, 2005 Order of the
Regional Trial Court of Makati City, Branch 132, dismissing the complaint
for lack of jurisdiction, is AFFIRMED.
SO ORDERED.
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10. Heirs of Nispero v. Ducusin (2013)
Facts:
The instant case stemmed from a complaint4 filed by petitioners with the
DARAB alleging the following antecedents:
The 15,837-square-meter parcel of land subject of the instant case is part of
the 58,350-square- meter agricultural land in Pao Sur, San Fernando City, La
Union acquired by Santiago Nisperos, the predecessor of petitioners, during
his lifetime.
When Santiago and his wife Estefania died, they were survived by their nine
children, the petitioners herein, among whom was Maria and Cipriana
Nispero.
Later, the petitioner-heirs took respondent Marissa Ducusin, a daughter of
their cousin, as their ward and raised her like their own child.
On February 12, 1988, Maria and Cipriana, acting as representatives of their
other siblings, executed a Deed of Donation Mortis Causa8 in favor of
petitioners over the 58,350-square-meter property and another
46,000-square- meter property.
On April 28, 1992, a Deed of Voluntary Land Transfer (VLT) over the subject
property was executed between Maria and Cipriana as landowners, and
respondent, who was then only 17 years old, as farmer-beneficiary. The
instrument was signed by the three in the presence of witnesses Anita, Lucia
and Marcelina Gascon and Municipal Agrarian Reform Officer Susimo
Asuncion. The same was notarized by Notary Public Atty. Roberto E.
Caoayan.
On June 24, 1992, Certificate of Land Ownership Award (CLOA) No.
000212245390210 was issued to respondent by the Department of Agrarian
Reform (DAR) over the subject property. By virtue of said CLOA, OCT No.
CLOA-62311 was issued to respondent a month later, or on July 24, 1992.
Alleging fraud on the part of respondent which petitioners claim to have
discovered only in August 2001, petitioners filed a complaint on September
6, 2001 with the Municipal Agrarian Reform Office (MARO) of San
Fernando City, La Union. Unfortunately, no settlement between petitioners
and respondent was reached prompting the MARO to issue a Certificate to
File Action.12
On January 23, 2002, petitioners filed with the DARAB a complaint for
annulment of documents and damages against respondent. Petitioners
contended that the transfer of ownership over the subject land was made
without the consent of the heirs of Santiago and that respondent took
advantage of Maria’s senility and made it appear that Maria and Cipriana sold
said property by virtue of the VLT.
They further alleged that said document was falsified by respondent because
Maria could not anymore sign but could only affix her thumbmark as she did
in a 1988 Deed of Donation. To support their complaint, they attached a Joint
Affidavit of Denial13 by Anita and Lucia Gascon the supposed instrumental
witnesses to the VLT. In said affidavit, Anita and Lucia claimed that the
signatures appearing therein are not theirs as they never affixed their
signatures on said document. They further stated that they were never aware
of said document.
Petitioners likewise asseverated in their complaint that respondent committed
fraud because she was not a bona fide beneficiary as she was not engaged in
farming since she was still a minor at that time and that she could not validly
enter into a contract with Maria and Cipriana.
The DARAB Regional Adjudicator (PARAD) ruled for petitioners and
annulled the VLT and the OCT/CLOA. It was also ruled that the issuance of
the title in respondent’s name was not in accordance with agrarian laws
because she cannot be considered as a tenant but more of an heir of the
transferors.
Respondent contested the PARAD’s decision before the DARAB alleging
that the Regional Adjudicator went beyond the scope of his authority by
directing the parties to litigate the issue of ownership before the court.
The DARAB reversed the PARAD.
CA affirmed the DARAB and held that retention rights, exclusion of a
property from CARP coverage and the qualification and disqualification of
agrarian reform beneficiaries are issues not cognizable by the Regional
Adjudicator and the DARAB but by the DAR Secretary. The appellate court
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nevertheless held that petitioners failed to discharge their burden of proving
that fraud attended the execution of the VLT. It also agreed with the DARAB
that considering a certificate of title was already issued in favor of respondent,
the same became indefeasible and incontrovertible by the time petitioners
instituted the case in January 2002, and thus may no longer be judicially
reviewed.
Hence this petition claiming that the CA erred in ruling that PARAB has no
jurisdiction over the case.
Issue:
W/N the Regional Adjudicator and the DARAB have jurisdiction over the
case – No.
Held:
No.
We set aside the assailed Decision and Resolution.
The complaint should have been lodged with the Office of the DAR Secretary
and not with the DARAB.
Under the DARAB Rules of Procedure, the DARAB has primary and
exclusive original and appellate jurisdiction to determine and adjudicate all
agrarian disputes involving the implementation of the Comprehensive
Agrarian Reform Program (CARP) and other agrarian laws. Specifically,
such jurisdiction shall include cases involving the issuance, correction and
cancellation of Certificates of Land Ownership Award (CLOAs) and
Emancipation Patents (EPs) which are registered with the Land Registration
Authority.
However, it is not enough that the controversy involves the cancellation of a
CLOA registered with the Land Registration Authority for the DARAB to
have jurisdiction. What is of primordial consideration is the existence of an
agrarian dispute between the parties.
Section 3(d) of R.A. No. 6657 defines an agrarian dispute as “any controversy
relating to tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise, over lands devoted to agriculture, including disputes concerning
farmworkers’ associations or representation of persons in negotiating, fixing,
maintaining, changing, or seeking to arrange terms or conditions of such
tenurial arrangements” and includes “any controversy relating to
compensation of lands acquired under this Act and other terms and conditions
of transfer of ownership from landowners to farmworkers, tenants and other
agrarian reform beneficiaries, whether the disputants stand in the proximate
relation of farm operator and beneficiary, landowner and tenant, or lessor and
lessee.”
Thus, in Morta, Sr. v. Occidental,24 this Court held that there must be a
tenancy relationship between the parties for the DARAB to have jurisdiction
over a case. It is essential to establish all of the following indispensable
elements, to wit:
(1) that the parties are the landowner and the tenant or agricultural lessee;
(2) that the subject matter of the relationship is an agricultural land;
(3) that there is consent between the parties to the relationship;
(4) that the purpose of the relationship is to bring about agricultural
production;
(5) that there is personal cultivation on the part of the tenant or agricultural
lessee; and
(6) that the harvest is shared between the landowner and the tenant or
agricultural lessee.
In the instant case, petitioners, as supposed owners of the subject property,
did not allege in their complaint that a tenancy relationship exists between
them and respondent. In fact, in their complaint, they described respondent
as a “ward” of one of the co-owners, Maria, who is “not a bona fide
beneficiary, she being not engaged in farming because she was still a minor”
at the time the VLT was executed.
It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial
officer or government agency, over the nature and subject matter of a petition
or complaint is determined by the material allegations therein and the
character of the relief prayed for, irrespective of whether the petitioner or
complainant is entitled to any or all such reliefs.
Jurisdiction over the nature and subject matter of an action is conferred by
the Constitution and the law, and not by the consent or waiver of the parties
where the court otherwise would have no jurisdiction over the nature or
subject matter of the action. Nor can it be acquired through, or waived by,
any act or omission of the parties.
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Moreover, estoppel does not apply to confer jurisdiction to a tribunal that has
none over the cause of action. The failure of the parties to challenge the
jurisdiction of the DARAB does not prevent the court from addressing the
issue, especially where the DARAB’s lack of jurisdiction is apparent on the
face of the complaint or petition.

Considering that the allegations in the complaint negate the existence of an

agrarian dispute among the parties, the DARAB is bereft of jurisdiction to
take cognizance of the same as it is the DAR Secretary who has authority to
resolve the dispute raised by petitioners.

While it is true that PARAD and the DARAB (which was upheld by the CA)
thoroughly discussed in their respective decisions the issues pertaining to the
validity of the VLT and the OCT/CLOA issued to respondent, the fact that
they are bereft of jurisdiction to resolve the same prevents this Court from
resolving the instant petition on its merits.

The doctrine of primary jurisdiction does not allow a court to arrogate unto
itself authority to resolve a controversy, the jurisdiction over which is initially
lodged with an administrative body of special competence.29 To assume the
power is to short- circuit the administrative process, which has yet to run its
regular course. The DAR must be given a chance to correct its administrative
and procedural lapses in the issuance of the CLOA.30 Moreover, it is in a
better position to resolve the particular issue at hand, being the agency
possessing the required expertise on the matter and authority to hear the same.

WHEREFORE, the July 13, 2009 Decision and September 14, 2009
Resolution of the Court of Appeals in CA-G.R. SP No. 105898 are SET
ASIDE. The complaint is REFERRED to the Office of the Department of
Agrarian Reform Secretary for appropriate action.
No pronouncement as to costs. SO ORDERED.

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11. Dy v. Palamos (2013)
Facts:
The present controversy finds its roots in the Court’s decision in Orix Metro
Leasing and Finance Corporation v. M/V “Pilar-I” and Spouses Ernesto Dy
and Lourdes Dy2 involving the same parties. The facts, as culled from the
Court’s decision in the said case and the records, are not disputed by the
parties.
Petitioner Ernesto Dy (petitioner) and his wife, Lourdes Dy (Lourdes), were
the proprietors of Limchia Enterprises which was engaged in the shipping
business. In 1990, Limchia Enterprises, with Lourdes as co-maker, obtained
a loan from Orix Metro Leasing and Finance Corporation (respondent) to
fund its acquisition of M/V Pilar-I, a cargo vessel. As additional security for
the loan, Limchia Enterprises executed the Deed of Chattel Mortgage over
M/V Pilar-I.3
Due to financial losses suffered when M/V Pilar-I was attacked by pirates,
Spouses Dy failed to make the scheduled payments as required in their
promissory note.
After receiving several demand letters from respondent, Spouses Dy applied
for the restructuring of their loan. Meanwhile, Lourdes issued several checks
to cover the remainder of their loan but the same were dishonored by the
bank, prompting respondent to institute a criminal complaint for violation of
the Bouncing Checks Law. Lourdes appealed to respondent with a new
proposal to update their outstanding loan obligations.4
On August 18, 1992, respondent filed the Complaint and Petition for
Extrajudicial Foreclosure of Preferred Ship Mortgage under Presidential
Decree No. 1521 with Urgent Prayer for Attachment with the RTC.
Following the filing of an affidavit of merit and the posting of bond by
respondent, the RTC ordered the seizure of M/V Pilar-I and turned over its
possession to respondent. On September 28, 1994, respondent transferred all
of its rights, title to and interests, as mortgagee, in M/V Pilar-I to Colorado
Shipyard Corporation (Colorado).5
The RTC rendered a decision in favor of Spouses Dy, ruling that they had not
yet defaulted on their loan because respondent agreed to a restructured
schedule of payment. There being no default, the foreclosure of the chattel
mortgage on M/V Pilar-I was premature. The RTC ordered that the vessel be
returned to Spouses Dy.6
This was affirmed by the Court of Appeals (CA), with the modification that
Spouses Dy be ordered to reimburse the respondent for repair and drydocking
expenses while the vessel was in the latter’s possession.
On appeal, the SC affirmed the CA but deleted the order requiring the
Spouses Dy to reimburse the respondent.
Consequently, on August 17, 2010, petitioner filed a motion for execution of
judgment with the RTC. In the intervening period, Colorado filed its
Manifestation/Motion, dated July 29, 2010, informing the RTC that M/V
Pilar-I, which was in its possession, had sustained severe damage and
deterioration and had sunk in its shipyard because of its exposure to the
elements. For this reason, it sought permission from the court to cut the
sunken vessel into pieces, sell its parts and deposit the proceeds in escrow.9
In his Comment/Objection, petitioner insisted that he had the right to require
that the vessel be returned to him in the same condition that it had been at the
time it was wrongfully seized by respondent or, should it no longer be
possible, that another vessel of the same tonnage, length and beam similar to
that of M/V Pilar-I be delivered.10
Colorado, however, responded that the vessel had suffered severe damage
and deterioration that refloating or restoring it to its former condition would
be futile, impossible and very costly; and should petitioner persist in his
demand that the ship be refloated, it should be done at the expense of the
party adjudged by the court to pay the same.
The RTC issued its questioned December 13, 2010 Order granting the motion
for execution but denying petitioner’s prayer for the return of M/V Pilar-I in
the same state in which it was taken by respondent.
Hence this rule 65 petition for certiorari filed directly with the SC.
Issue:
W/N the petitioners violated the rule on hierarchy of courts in going directly
to the SC – No.
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Held:
No.
I.
Petitioner argues that his situation calls for the direct invocation of this
Court’s jurisdiction in the interest of justice. Moreover, as pointed out by the
RTC, what is involved is a judgment of the Court which the lower courts
cannot modify. Hence, petitioner deemed it proper to bring this case
immediately to the attention of this Court. Lastly, petitioner claims that the
present case involves a novel issue of law — that is, whether in an action to
recover, a defendant in wrongful possession of the subject matter in litigation
may be allowed to return the same in a deteriorated condition without any
liability.14
Respondent, on the other hand, contends that the petition should have been
filed with the CA, following the doctrine of hierarchy of courts. It pointed out
that petitioner failed to state any special or important reason or any
exceptional and compelling circumstance which would warrant a direct
recourse to this Court.15
Under the principle of hierarchy of courts, direct recourse to this Court is
improper because the Supreme Court is a court of last resort and must remain
to be so in order for it to satisfactorily perform its constitutional functions,
thereby allowing it to devote its time and attention to matters within its
exclusive jurisdiction and preventing the overcrowding of its docket.16
Nonetheless, the invocation of this Court’s original jurisdiction to issue writs
of certiorari has been allowed in certain instances on the ground of special
and important reasons clearly stated in the petition, such as,
(1) when dictated by the public welfare and the advancement of public policy;
(2) when demanded by the broader interest of justice;
(3) when the challenged orders were patent nullities; or
(4) when analogous exceptional and compelling circumstances called for and
justified the immediate and direct handling of the case.17
This case falls under one of the exceptions to the principle of hierarchy of
courts. Justice demands that this Court take cognizance of this case to put an
end to the controversy and resolve the matter which has been dragging on for
more than twenty (20) years. Moreover, in light of the fact that what is
involved is a final judgment promulgated by this Court, it is but proper for
petitioner to call upon its original jurisdiction and seek final clarification.
II. Wrong Mode of Appeal; Exception (Certiorari not proper, but exception
present in this case)
Petitioner asserts that the RTC committed grave abuse of discretion when it
failed to rule in his favor despite the fact that he had been deprived by
respondent of his property rights over M/V Pilar-I for the past eighteen (18)
years. Moreover, the change in the situation of the parties calls for a
relaxation of the rules which would make the execution of the earlier decision
of this Court inequitable or unjust. According to petitioner, for the RTC to
allow respondent to return the ship to him in its severely damaged and
deteriorated condition without any liability would be to reward bad faith.18
Conversely, respondent submits that there was no grave abuse of discretion
on the part of the RTC as the latter merely observed due process and followed
the principle that an execution order may not vary or go beyond the terms of
the judgment it seeks to enforce.19 Respondent adds that the proper remedy
should have been an ordinary appeal, where a factual review of the records
can be made to determine the condition of the ship at the time it was taken
from petitioner, and not a special civil action for certiorari.
There are considerable differences between an ordinary appeal and a petition
for certiorari which have been exhaustively discussed by this Court in
countless cases. The remedy for errors of judgment, whether based on the law
or the facts of the case or on the wisdom or legal soundness of a decision, is
an ordinary appeal.21 In contrast, a petition for certiorari under Rule 65 is an
original action designed to correct errors of jurisdiction, defined to be those
“in which the act complained of was issued by the court, officer, or
quasi-judicial body without or in excess of jurisdiction, or with grave abuse
of discretion which is tantamount to lack of in excess of jurisdiction.”22 A
court or tribunal can only be considered to have acted with grave abuse of
discretion if its exercise of judgment was so whimsical and capricious as to
be equivalent to a lack of jurisdiction. The abuse must be extremely patent
and gross that it would amount to an “evasion of a positive duty or to virtual
refusal to perform a duty enjoined by law, or to act at all in contemplation of
law, as where the power is exercised in an arbitrary and despotic manner by
reason of passion and hostility.”
Avila 4B | 2016
Therefore, a misappreciation of evidence on the part of the lower court, as
asserted by petitioner, may only be reviewed by appeal and not by certiorari
because the issue raised by the petitioner does not involve any jurisdictional
ground.24 It is a general rule of procedural law that when a party adopts an
inappropriate mode of appeal, his petition may be dismissed outright to
prevent the erring party from benefiting from his neglect and mistakes.25
There are exceptions to this otherwise ironclad rule, however. One is when
the strict application of procedural technicalities would hinder the expeditious
disposition of this case on the merits,26 such as in this case.

Avila 4B | 2016
12. Smart v. Aldecoa (2013)
Facts:
Petitioner is a domestic corporation engaged in the telecommunications
business. On March 9, 2000, petitioner entered into a contract of lease4 with
Florentino Sebastian in which the latter agreed to lease to the former a piece
of vacant lot, measuring around 300 square meters, located in Barangay Vira,
Roxas, Isabela (leased property). Petitioner, through its contractor, Allarilla
Construction, immediately constructed and installed a cellular base station on
the leased property. Inside the cellular base station is a communications
tower, rising as high as 150 feet, with antennas and transmitters; as well as a
power house open on three sides containing a 25KVA diesel power generator.
Around and close to the cellular base station are houses, hospitals, clinics,
and establishments, including the properties of respondents Arsenio Aldecoa,
Jose B. Torre, Conrado U. Pua, Gregorio V. Mansano, Jerry Corpuz, and
Estelita Acosta.
Respondents filed before the RTC on May 23, 2000 a Complaint against
petitioner for abatement of nuisance and injunction with prayer for temporary
restraining order and writ of preliminary injunction, docketed as Civil Case
No. Br. 23-632-2000. Respondents alleged in their Complaint that:
“7. With its structural design, SMART’s tower being constructed at Vira,
Roxas, Isabela, is weak, unstable, and infirm, susceptible to collapse like the
Mobiline tower which fell during a typhoon as earlier alleged, and its
structural integrity being doubtful, and not earthquake proof, this tower poses
great danger to life and limb of persons as well as their property, particularly,
the [respondents] whose houses abut, or are near or within the periphery of
the communications tower;
8. This tower is powered by a standby generator that emits noxious and
deleterious fumes, not to mention the constant noise it produces, hence, a
hazard to the health, not only of the [respondents], but the residents in the
area as well;
9. When in operation, the tower would also pose danger to the life and health
of [respondents] and residents of the barangay, especially children, because
of the ultra high frequency (UHF) radio wave emissions it radiates.
10. Worse, and in violation of law, [petitioner] constructed the tower without
the necessary public hearing, permit of the barangay, as well as that of the
municipality, the Environmental Compliance Certificate of the [Department
of Environment and Natural Resources (DENR)], construction permit, and
other requirements of the National Telecommunications Commission (NTC),
xxx.”
After filing their Answer, petitioner filed a Motion for Summary Judgment.
RTC granted the Motion for Summary Judgment and dismissed respondents’
Complaint.
CA reversed and declared the cellular base station of petitioner a nuisance
that endangered the health and safety of the residents of Barangay Vira,
Roxas, Isabela because:
(1) the locational clearance granted to petitioner was a nullity due to the
lack of approval by majority of the actual residents of the barangay and
a barangay resolution endorsing the construction of the cellular base
station; and
(2) the sound emission of the generator at the cellular base station exceeded
the Department of Environment and Natural Resources (DENR) standards.
Hence this petition claiming, among others, that the CA erred when it
encroached upon an executive function of determining the validity of a
locational clearance when it declared, contrary to the administrative findings
of the Housing Land Use and Regulatory Board (“HLURB”), that the
locational clearance of Petitioner was void.
Issue:
W/N the CA erred in taking cognizance of the issue of whether the locational
clearance for petitioner’s cell site is valid – Yes, it erred.
Held:
Yes, it erred.
The Petition is partly meritorious. While the Court agrees that the Court of
Appeals should not have taken cognizance of the issue of whether the
locational clearance for petitioner’s cellular base station is valid, the Court
will still not reinstate the RTC Order dated January 16, 2001 granting
petitioner’s Motion for Summary Judgment and entirely dismissing Civil
Case No. Br. 23-632-2000. The issues of (1) whether petitioner’s cellular
base station is a nuisance, and (2) whether the generator at petitioner’s
cellular base station is, by itself, also a nuisance, ultimately involve disputed
Avila 4B | 2016
or contested factual matters that call for the presentation of evidence at a
full-blown trial.
I.
Based on the principle of exhaustion of administrative remedies and its
corollary doctrine of primary jurisdiction, it was premature for the Court of
Appeals to take cognizance of and rule upon the issue of the validity or nullity
of petitioner’s locational clearance for its cellular base station.
The principle of exhaustion of administrative remedies and the doctrine of
primary jurisdiction were explained at length by the Court in Province of
Zamboanga del Norte v. Court of Appeals, 342 SCRA 549 (2000) as follows:
“The Court in a long line of cases has held that before a party is allowed to
seek the intervention of the courts, it is a pre-condition that he avail himself
of all administrative processes afforded him. Hence, if a remedy within the
administrative machinery can be resorted to by giving the administrative
officer every opportunity to decide on a matter that comes within his
jurisdiction, then such remedy must be exhausted first before the court’s
power of judicial review can be sought. The premature resort to the court is
fatal to one’s cause of action. Accordingly, absent any finding of waiver or
estoppel, the case may be dismissed for lack of cause of action.
The doctrine of exhaustion of administrative remedies is not without its
practical and legal reasons. Indeed, resort to administrative remedies entails
lesser expenses and provides for speedier disposition of controversies. Our
courts of justice for reason of comity and convenience will shy away from a
dispute until the system of administrative redress has been completed and
complied with so as to give the administrative agency every opportunity to
correct its error and to dispose of the case.
The doctrine of primary jurisdiction does not warrant a court to arrogate unto
itself the authority to resolve a controversy the jurisdiction over which is
initially lodged with an administrative body of special competence.
We have held that while the administration grapples with the complex and
multifarious problems caused by unbridled exploitation of our resources, the
judiciary will stand clear. A long line of cases establishes the basic rule that
the court will not interfere in matters which are addressed to the sound
discretion of government agencies entrusted with the regulation of activities
coming under the special technical knowledge and training of such agencies.
In fact, a party with an administrative remedy must not merely initiate the
prescribed administrative procedure to obtain relief, but also pursue it to its
appropriate conclusion before seeking judicial intervention. The underlying
principle of the rule on exhaustion of administrative remedies rests on the
presumption that when the administrative body, or grievance machinery, is
afforded a chance to pass upon the matter, it will decide the same correctly.”
“Corollary to the doctrine of exhaustion of administrative remedies is the
doctrine of primary jurisdiction; that is, courts cannot or will not determine a
controversy involving a question which is within the jurisdiction of the
administrative tribunal prior to the resolution of that question by the
administrative tribunal, where the question demands the exercise of sound
administrative discretion requiring the special knowledge, experience and
services of the administrative tribunal to determine technical and intricate
matters of fact.”
The Housing and Land Use Regulatory Board (HLURB) is the planning,
regulatory, and quasi-judicial instrumentality of government for land use
development. In the exercise of its mandate to ensure rational land use by
regulating land development, it issued HLURB Resolution No. R-626, series
of 1998, Approving the Locational Guidelines for Base Stations of Cellular
Mobile Telephone Service, Paging Service, Trunking Service, Wireless Loop
Service and Other Wireless Communication Services (HLURB Guidelines).
Said HLURB Guidelines aim to protect “providers and users, as well as the
public in general while ensuring efficient and responsive communication
services.”
Under the 1996 HLURB Rules of Procedure, as amended, an opposition to
an application for a locational clearance for a cellular base station or a
complaint for the revocation of a locational clearance for a cellular base
station already issued, is within the original jurisdiction of the HLURB
Executive Committee. To wit:
“SECTION 2. Opposition to Application for Permit/License/Clearance.—
When an opposition is filed to an application for a license, permit or clearance
with the Board or any of its Regional Field Office, the Regional Officer shall
make a preliminary evaluation and determination whether the case is
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impressed with significant economic, social, environmental or national policy
implications. If he/she determines that the case is so impressed with
significant economic, social, environmental or national policy implications…
the Regional Officer shall cause the records of the case to be transmitted to
the Executive Committee which shall assume original jurisdiction over the
case, otherwise, the Regional Officer shall act on and resolve the
Opposition.”
After the HLURB Executive Committee had rendered its Decision, the
aggrieved party could still avail itself of a system of administrative appeal,
also provided in the 1996 HLURB Rules of Procedure.
There is no showing that respondents availed themselves of the
aforementioned administrative remedies prior to instituting Civil Case No.
Br. 23-632-2000 before the RTC. While there are accepted exceptions to the
principle of exhaustion of administrative remedies and the doctrine of
primary jurisdiction,30 respondents never asserted nor argued any of them.
Thus, there is no cogent reason for the Court to apply the exceptions instead
of the general rule to this case.
In Republic v. Lacap (supra note 27 at pp. 97-98), the Court enumerated the
exceptions:
(a) where there is estoppel on the part of the party invoking the doctrine;
(b) where the challenged administrative act is patently illegal, amounting to
lack of jurisdiction;
(c) where there is unreasonable delay or official inaction that will
irretrievably prejudice the complainant;
(d) where the amount involved is relatively small so as to make the rule
impractical and oppressive;
(e) where the question involved is purely legal and will ultimately have to be
decided by the courts of justice;
(f) where judicial intervention is urgent;
(g) when its application may cause great and irreparable damage;
(h) where the controverted acts violate due process;
(i) when the issue of non-exhaustion of administrative remedies has been
rendered moot;
(j) when there is no other plain, speedy and adequate remedy; (k) when strong
public interest is involved; and,
(l) in quo warranto proceedings.
Ordinarily, failure to comply with the principle of exhaustion of
administrative remedies and the doctrine of primary jurisdiction will result in
the dismissal of the case for lack of cause of action. However, the Court
herein will not go to the extent of entirely dismissing Civil Case No. Br.
23-632-2000.
The Court does not lose sight of the fact that respondents’ Complaint in Civil
Case No. Br. 23-632-2000 is primarily for abatement of nuisance; and
respondents alleged the lack of HLURB requirements for the cellular base
station, not to seek nullification of petitioner’s locational clearance, but to
support their chief argument that said cellular base station is a nuisance which
needs to be abated. The issue of whether or not the locational clearance for
said cellular base station is valid is actually separate and distinct from the
issue of whether or not the cellular base station is a nuisance; one is not
necessarily determinative of the other. While the first is within the primary
jurisdiction of the HLURB and, therefore, premature for the courts to rule
upon in the present case, the latter is within the jurisdiction of the courts to
determine but only after trial proper.
The Court, in AC Enterprises, Inc. v. Frabelle Properties Corporation, 506
SCRA 625 (2006), settled that a simple suit for abatement of nuisance, being
incapable of pecuniary estimation, is within the exclusive jurisdiction of the
RTC. Although respondents also prayed for judgment for moral and
exemplary damages, attorney’s fees, and litigation expenses, such claims are
merely incidental to or as a consequence of, their principal relief.
Nonetheless, while jurisdiction over respondents’ Complaint for abatement
of nuisance lies with the courts, the respective judgments of the RTC and the
Court of Appeals cannot be upheld.
Judging by the aforequoted standards, summary judgment cannot be rendered
in this case as there are clearly factual issues disputed or contested by the
parties.
At the outset, the RTC erred in granting petitioner’s Motion for Summary
Judgment and ordering the dismissal of respondents’ Complaint in Civil Case
No. Br. 23-632- 2000.
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WHEREFORE, premises considered, the instant Petition is PARTIALLY
GRANTED. The Decision dated July 16, 2004 and Resolution dated
December 9, 2004 of the Court of Appeals in CA-G.R. CV No. 71337 are
REVERSED and SET ASIDE. Let the records of the case be REMANDED
to the Regional Trial Court, Branch 23, of Roxas, Isabela, which is
DIRECTED to reinstate Civil Case No. Br. 23-632-2000 to its docket and
proceed with the trial and adjudication thereof with appropriate dispatch in
accordance with this Decision.
SO ORDERED.

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III. Cause of Action (Rule 2)
1. Mindanao Terminal v. Phoenix Assurance, G.R. No. 162467, May 8,
2009
Facts:
Del Monte Philippines, Inc. (Del Monte) contracted petitioner Mindanao
Terminal and Brokerage Service, Inc. (Mindanao Terminal), a stevedoring
company, to load and stow a shipment of 146,288 cartons of fresh green
Philippine bananas and 15,202 cartons of fresh pineapples belonging to Del
Monte Fresh Produce International, Inc. (Del Monte Produce) into the cargo
hold of the vessel M/V Mistrau.
The vessel was docked at the port of Davao City and the goods were to be
transported by it to the port of Inchon, Korea in favor of consignee Taegu
Industries, Inc. Del Monte Produce insured the shipment under an “open
cargo policy” with private respondent Phoenix Assurance Company of New
York (Phoenix), a non-life insurance company, and private respondent
McGee & Co. Inc. (McGee), the underwriting manager/agent of Phoenix.4
Mindanao Terminal loaded and stowed the cargoes aboard the M/V Mistrau.
The vessel set sail from the port of Davao City and arrived at the port of
Inchon, Korea. It was then discovered upon discharge that some of the cargo
was in bad condition. The Marine Cargo Damage Surveyor of Incok Loss and
Average Adjuster of Korea, through its representative Byeong Yong Ahn
(Byeong), surveyed the extent of the damage of the shipment. In a survey
report, it was stated that 16,069 cartons of the banana shipment and 2,185
cartons of the pineapple shipment were so damaged that they no longer had
commercial value.5
Del Monte Produce filed a claim under the open cargo policy for the damages
to its shipment. McGee’s Marine Claims Insurance Adjuster evaluated the
claim and recommended that payment in the amount of $210,266.43 be made.
A check for the recommended amount was sent to Del Monte Produce;
the latter then issued a subrogation receipt6 to Phoenix and McGee.
Rem Part
Phoenix and McGee instituted an action for damages7 against Mindanao
Terminal in the Regional Trial Court (RTC) of Davao City, Branch 12.
RTC ruled for petitioner and held that the only participation of Mindanao
Terminal was to load the cargoes on board the M/V Mistrau under the
direction and supervision of the ship’s officers, who would not have accepted
the cargoes on board the vessel and signed the foreman’s report unless they
were properly arranged and tightly secured to withstand voyage across the
open seas.
Accordingly, Mindanao Terminal cannot be held liable for whatever
happened to the cargoes after it had loaded and stowed them. Moreover, citing
the survey report, it was found by the RTC that the cargoes were damaged on
account of a typhoon which M/V Mistrau had encountered during the voyage.
It was further held that Phoenix and McGee had no cause of action
against Mindanao Terminal because the latter, whose services were
contracted by Del Monte, a distinct corporation from Del Monte
Produce, had no contract with the assured Del Monte Produce.
The RTC dismissed the complaint and awarded the counterclaim of
Mindanao Terminal in the amount of P83,945.80 as actual damages and
P100,000.00 as attorney’s fees.9 The actual damages were awarded as
reimbursement for the expenses incurred by Mindanao Terminal’s lawyer in
attending the hearings in the case wherein he had to travel all the way from
Metro Manila to Davao City.
CA reversed. It sustained Phoenix’s and McGee’s argument that the damage
in the cargoes was the result of improper stowage by Mindanao Terminal. It
imposed on Mindanao Terminal, as the stevedore of the cargo, the duty to
exercise extraordinary diligence in loading and stowing the cargoes. It further
held that even with the absence of a contractual relationship between
Mindanao Terminal and Del Monte Produce, the cause of action of Phoenix
and McGee could be based on quasi-delict under Article 2176 of the Civil
Code.
Hence this petition claiming that Phoenix and McGee had no cause of action
against it.
Issue:
W/N Phoenix and McGee have a cause of action against Mindanao Terminal
– Yes, quasi-delict.
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Held:
Yes, quasi-delict.

We agree with the Court of Appeals that the complaint filed by Phoenix and
McGee against Mindanao Terminal, from which the present case has arisen,
states a cause of action.

The present action is based on quasi-delict, arising from the negligent and
careless loading and stowing of the cargoes belonging to Del Monte Produce.
Even assuming that both Phoenix and McGee have only been subrogated in
the rights of Del Monte Produce, who is not a party to the contract of service
between Mindanao Terminal and Del Monte, still the insurance carriers may
have a cause of action in light of the Court’s consistent ruling that the act that
breaks the contract may be also a tort.17

In fine, a liability for tort may arise even under a contract, where tort is that
which breaches the contract18. In the present case, Phoenix and McGee are
not suing for damages for injuries arising from the breach of the contract of
service but from the alleged negligent manner by which Mindanao Terminal
handled the cargoes belonging to Del Monte Produce. Despite the absence of
contractual relationship between Del Monte Produce and Mindanao
Terminal, the allegation of negligence on the part of the defendant should be
sufficient to establish a cause of action arising from quasi-delict.

We adopt the findings27 of the RTC,28 which are not disputed by Phoenix
and McGee. The Court of Appeals did not make any new findings of fact
when it reversed the decision of the trial court. The only participation of
Mindanao Terminal was to load the cargoes on board M/V Mistrau.29 It was
not disputed by Phoenix and McGee that the materials, such as ropes, pallets,
and cardboards, used in lashing and rigging the cargoes were all provided by
M/V Mistrau and these materials meets industry standard.30

WHEREFORE, the petition is GRANTED. The decision of the Court of

Appeals in CA-G.R. CV No. 66121 is SET ASIDE and the decision of the
Regional Trial Court of Davao City, Branch 12 in Civil Case No. 25,311.97
is hereby REINSTATED MINUS the awards of P100,000.00 as attorney’s
fees and P83,945.80 as actual damages.
SO ORDERED.

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2. Dolores Macaslang v. Renato Zamora, G.R. No. 156375, May 30, 2011
Facts:
On March 10, 1999, the respondents filed a complaint for unlawful
detainer in the MTCC, alleging that “the [petitioner] sold to [respondents] a
residential land located in Sabang, Danao City” and that “the [petitioner]
requested to be allowed to live in the house” with a “promise to vacate as
soon as she would be able to find a new residence.” They further alleged that
despite their demand after a year, the petitioner failed or refused to vacate the
premises.
Despite the due service of the summons and copy of the complaint, the
petitioner did not file her answer. The MTCC declared her in default upon
the respondents’ motion to declare her in default, and proceeded to receive
the respondents’ oral testimony and documentary evidence.
MTC rendered judgment against the petitioner.
RTC reversed and dismissed the complaint for failure to state a cause of
action, but may be refiled in the same court alleging their cause of action if
any.
CA reversed the RTC holding that the complaint stated a cause of action.
Hence this petition.
Issue:
W/N the complaint stated a cause of action – Yes, but the respondents have
no cause of action.
Held:
Yes, but the respondents have no cause of action.
The RTC opined that the complaint failed to state a cause of action because
the evidence showed that there was no demand to vacate made upon the
petitioner.
The CA disagreed, observing in its appealed decision:
“But what is worse is that a careful reading of Plaintiffs- appellants’
Complaint would readily reveal that they have sufficiently established (sic) a
cause of action against Defendant-appellee. It is undisputed that as alleged in
the complaint and testified to by Plaintiffs-appellants, a demand to vacate was
made before the action for unlawful detainer was instituted.
A complaint for unlawful detainer is sufficient if it alleges that the
withholding of possession or the refusal is unlawful without necessarily
employing the terminology of the law.
In the case at bench, par. 4 of the Complaint alleges, thus:
‘4. After a period of one (1) year living in the aforementioned house, Plaintiff
demanded upon defendant to vacate but she failed and refused;’
From the foregoing allegation, it cannot be disputed that a demand to vacate
has not only been made but that the same was alleged in the complaint. How
the Regional Trial Court came to the questionable conclusion that
Plaintiffs-appellants had no cause of action is beyond Us.”
We concur with the CA.
A complaint sufficiently alleges a cause of action for unlawful detainer if it
states the following:
(a) Initially, the possession of the property by the defendant was by contract
with or by tolerance of the plaintiff;
(b) Eventually, such possession became illegal upon notice by the plaintiff to
the defendant about the termination of the latter’s right of possession;
(c) Thereafter, the defendant remained in possession of the property and
deprived the plaintiff of its enjoyment; and
(d) Within one year from the making of the last demand to vacate the property
on the defendant, the plaintiff instituted the complaint for ejectment.15
In resolving whether the complaint states a cause of action or not, only the
facts alleged in the complaint are considered. The test is whether the court
can render a valid judgment on the complaint based on the facts alleged
and the prayer asked for. Only ultimate facts, not legal conclusions or
evidentiary facts, are considered for purposes of applying the test.
Based on its allegations, the complaint sufficiently stated a cause of action
for unlawful detainer. Firstly, it averred that the petitioner possessed the
property by the mere tolerance of the respondents. Secondly, the respondents
demanded that the petitioner vacate the property, thereby rendering her
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possession illegal. Thirdly, she remained in possession of the property despite
the demand to vacate. And, fourthly, the respondents instituted the complaint
on March 10, 1999, which was well within a year after the demand to vacate
was made around September of 1998 or later.
Yet, even as we rule that the respondents’ complaint stated a cause of action,
we must find and hold that both the RTC and the CA erroneously appreciated
the real issue to be about the complaint’s failure to state a cause of action. It
certainly was not so, but the respondents’ lack of cause of action. Their
erroneous appreciation expectedly prevented the correct resolution of the
action.
Failure to state a cause of action and lack of cause of action are really
different from each other. On the one hand, failure to state a cause of action
refers to the insufficiency of the pleading, and is a ground for dismissal under
Rule 16 of the Rules of Court. On the other hand, lack of cause of action
refers to a situation where the evidence does not prove the cause of action
alleged in the pleading.
A complaint states a cause of action if it avers the existence of the three
essential elements of a cause of action, namely:
(a) The legal right of the plaintiff; uphold the result of the RTC decision in favor of the petitioner. This we do,
(b) The correlative obligation of the defendant; and because the respondents’ Exhibit “C” and Exhibit “E”, by demanding
(c) The act or omission of the defendant in violation of said legal right.
If the allegations of the complaint do not aver the concurrence of these
elements, the complaint becomes vulnerable to a motion to dismiss on the
ground of failure to state a cause of action. Evidently, it is not the lack or
absence of a cause of action that is a ground for the dismissal of the complaint
but the fact that the complaint states no cause of action. Failure to state a
cause of action may be raised at the earliest stages of an action through a
motion to dismiss, but lack of cause of action may be raised at any time after
the questions of fact have been resolved on the basis of the stipulations,
admissions, or evidence presented.20
Having found that neither Exhibit “C” nor Exhibit “E” was a proper demand
to vacate,21 considering that Exhibit “C” (the respondents’ letter dated
February 11, 1998) demanded the payment of P1,101,089.90, and Exhibit “E”
(their letter dated January 21, 1999) demanded the payment of P1,600,000.00,
the RTC concluded that the demand alleged in the complaint did not
constitute a demand to pay rent and to vacate the premises necessary in an
action for unlawful detainer. It was this conclusion that caused the RTC to
confuse the defect as failure of the complaint to state a cause of action for
unlawful detainer.
The RTC erred even in that regard.
To begin with, it was undeniable that Exhibit “D” (the respondents’ letter
dated April 28, 1998) constituted the demand to vacate that validly supported
their action for unlawful detainer, because of its unmistakable tenor as a
demand to vacate, which the following portion indicates:22
“This is to give notice that since the mortgage to your property has long
expired and that since the property is already in my name, I will be taking
over the occupancy of said property two (2) months from date of this letter.”
Also, the demand not being to pay rent and to vacate did not render the cause
of action deficient. Based on the complaint, the petitioner’s possession was
allegedly based on the respondents’ tolerance, not on any contract between
them. Hence, the demand to vacate sufficed.
Despite holding herein that the respondents’ demand to vacate sufficed, we
payment from the petitioner, respectively, of P1,101,089.90 and
P1,600,000.00, revealed the true nature of the transaction involving the
property in question as one of equitable mortgage, not a sale.
Verily, where the cause of action in an ejectment suit is based on ownership
of the property, the defense that the defendant retained title or ownership is a
proper subject for determination by the MTC but only for the purpose of
adjudicating the rightful possessor of the property.
WHEREFORE, we grant the petition for review on certiorari; set aside the
decision promulgated on July 3, 2002 by the Court of Appeals; and dismiss
the complaint for unlawful detainer for lack of a cause of action.
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3. Turner v. Lorenzo Shipping (2010)
Facts:
The petitioners held 1,010,000 shares of stock of the respondent, a domestic
corporation engaged primarily in cargo shipping activities. In June 1999, 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 at the rate of P2.276/share based on the book value of the shares, or a
total of P2,298,760.00.
The respondent found the fair value of the shares demanded by the petitioners
unacceptable. It insisted that the market value on the date before the action to
remove the pre-emptive right was taken should be the value, or P0.41/share
(or a total of P414,100.00), considering that its shares were listed in the
Philippine Stock Exchange, and that the payment could be made only if the
respondent had unrestricted retained earnings in its books to cover the value
of the shares, which was not the case.
The disagreement on the valuation of the shares led the parties to constitute
an appraisal committee pursuant to Section 82 of the Corporation Code.
On October 27, 2000, the appraisal committee reported its valuation of
P2.54/share, for an aggregate value of P2,565,400.00 for the petitioners.2
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.3
In its letter to the petitioners dated January 2, 2001,4 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 showing a deficit of P72,973,114.00 as of December 31,
1999.
Rem part
Upon the respondent’s refusal to pay, the petitioners sued the respondent
for collection and damages in the RTC in Makati City on January 22,
2001. The case, docketed as Civil Case No. 01-086, was initially assigned to
Branch 132.
On June 26, 2002, the petitioners filed their motion for partial summary
judgment, claiming that:
“7) xxx the defendant has an accumulated unrestricted retained earnings of
ELEVEN MILLION NINE HUNDRED SEVENTY FIVE THOUSAND
FOUR HUNDRED NINETY (P11,975,490.00) PESOS, Philippine
Currency, evidenced by its Financial Statement as of the Quarter Ending
March 31, 2002; xxx
8) xxx the fair value of the shares of the petitioners as fixed by the Appraisal
Committee is final, that the same cannot be disputed xxx
9) xxx there is no genuine issue to material fact and therefore, the plaintiffs
are entitled, as a matter of right, to a summary judgment. xxx”
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.
RTC granted the Motion for Partial Summary Judgment holding that since
the appraisal/recommendation made by the Committee is not disputed by the
parties, that since the Corporation Code provides that the appraisal is final
subject only to the further limitation that no payment shall be made unless the
corporation has unrestricted retained earnings, and since the plaintiffs have
shown in the quarterly financial statements that the corporation has retained
earnings of P11M as of March 21, 2002, therefore, the Motion for Partial
Summary Judgment should be granted.
CA reversed holding that, based on the records and the evidence, the
respondent corporation only had unrestricted retained earnings on March 21,
2002. But the complaint by petitioners were filed on January 22, 2001, at
which time there was yet no unrestricted retained earnings. Therefore, the
petitioners’ right of action arose only on March 21, 2002 when the respondent
already retained earnings worth P11M.
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Issue: of the court’s intervention renders the complaint without a cause of action
W/N the CA was correct in ruling that petitioners’ cause of action was and dismissible on such ground. In short, Civil Case No. 01-086, being a
premature – Yes, CA was correct. groundless suit, should be dismissed.

Held:
Yes.
Petitioners’ cause of action was premature That the respondent had
indisputably no unrestricted retained earnings in its books at the time the
petitioners commenced Civil Case No. 01-086 on January 22, 2001 proved
that the respondent’s legal obligation to pay the value of the petitioners’
shares did not yet arise. Thus, the CA did not err in holding that the petitioners
had no cause of action, and in ruling that the RTC did not validly render the
partial summary judgment.
Even the fact that the respondent already had unrestricted retained earnings
more than sufficient to cover the petitioners’ claims on June 26, 2002 (when
they filed their motion for partial summary judgment) did not rectify the
absence of the cause of action at the time of the commencement of Civil Case
No. 01-086. The motion for partial summary judgment, being a mere
application for relief other than by a pleading,33 was not the same as the
complaint in Civil Case No. 01-086. Thereby, the petitioners did not meet
the requirement of the Rules of Court that a cause of action must exist at the
commencement of an action, which is “commenced by the filing of the
original complaint in court.”34

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.
WHEREFORE, the petition for review on certiorari is denied for lack of
merit.
We affirm the decision promulgated on March 4, 2003 in C.A.-G.R. SP No.
74156 entitled Lorenzo Shipping Corporation v. Hon. Artemio S. Tipon, in
his capacity as Presiding Judge of Branch 46 of the Regional Trial Court of
Manila, et al.

Although the first two elements may exist, a cause of action arises only upon Costs of suit to be paid by the petitioners. SO ORDERED.
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.

Neither did the subsequent existence of unrestricted retained earnings after

the filing of the complaint cure the lack of cause of action in Civil Case No.
01-086. The petitioners’ right of action could only spring from an existing
cause of action. Thus, a complaint whose cause of action has not yet accrued
cannot be cured by an amended or supplemental pleading alleging the
existence or accrual of a cause of action during the pendency of the action.
For, only when there is an invasion of primary rights, not before, does the
adjective or remedial law become operative. Verily, a premature invocation

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4. Chua v. Metrobank, et al., G. R. No.182311, August 19, 2009
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.5
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 covered by Transfer Certificates of Title (TCTs) No.
(108020)1148, No. 93919, and No. 125185, registered in petitioner Chua’s
name (subject properties).6
Since the value of the collateral was more than the loan, petitioners were
given an open credit line for future loans. On 18 September 1995, 17 January
1996, 31 July 1996, 21 January 1997, and 12 October 1998, petitioners
obtained other loans from respondent Metrobank, and the real estate
mortgages were repeatedly amended in accordance with the increase in
petitioners’ liabilities.7
Having failed to fully pay their obligations, petitioners entered into a Debt
Settlement Agreement8 with respondent Metrobank on 13 January 2000,
whereby the loan obligations of the former were restructured. The debt
consisted of a total principal amount of P79,650,000.00, plus unpaid interest
of P7,898,309.02, and penalty charges of P552,784.96. Amortization
payments were to be made in accordance with the schedule attached to the
agreement.
In a letter9 dated 28 February 2001, the lawyers of respondent Metrobank
demanded that petitioners fully pay and settle their liabilities, including
interest and penalties, in the total amount of P103,450,391 as of 16 January
2001, as well as the stipulated attorney’s fees, within three days from receipt
of said letter.
When petitioners still failed to pay their loans, respondent Metrobank sought
to extrajudicially foreclose the REM constituted on the subject properties.
Upon a verified Petition for Foreclosure filed by respondent Metrobank on
25 April 2001, respondent Atty. Romualdo Celestra (Atty. Celestra) issued a
Notice of Sale dated 26 April 2001, wherein the mortgage debt was set at
P88,101,093.98, excluding unpaid interest and penalties (to be computed
from 14 September 1999), attorney’s fees, legal fees, and other expenses for
the foreclosure and sale. The auction sale was scheduled on 31 May 2001.10
On 4 May 2001, petitioners received a copy of the Notice of Sale.11
Case #1
On 28 May 2001, petitioner Chua, in his personal capacity and acting on
behalf of petitioner Filiden, filed before Branch 257 of the Regional Trial
Court of Parañaque (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.
RTC issued a TRO enjoining respondents from conducting the auction sale.
After the expiration of the TRO on 18 June 2001, and no injunction having
been issued by RTC-Branch 257, respondent Atty. Celestra reset the auction
sale on 8 November 2001. On 8 November 2001, the rescheduled date of the
auction sale, RTC-Branch 257 issued an Order directing that the said sale be
reset anew after 8 November 2001. The Order was served on 8 November
2001, on respondent Atty. Celestra’s daughter, Arlene Celestra, at a coffee
shop owned by the former’s other daughter, Grace Celestra Aguirre. The
auction sale, however, proceeded on 8 November 2001, and a Certificate of
Sale was accordingly issued to respondent Metrobank as the highest bidder
of the foreclosed properties.14
On 13 February 2002, petitioners filed with RTC-Branch 257 a Motion to
Admit Amended Complaint15 in Civil Case No. CV-01-0207. The Amended
Verified Complaint,16 attached to the said Motion, impleaded as additional
defendant the incumbent Register of Deeds of Parañaque City. Petitioners
alleged that the Certificate of Sale was a falsified document since there
was no actual sale that took place on 8 November 2001. And, even if an
auction sale was conducted, the Certificate of Sale would still be void
because the auction sale was done in disobedience to a lawful order of
RTC-Branch 257.
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; the bad faith of respondent Metrobank in
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offering the subject properties at a price much lower than its assessed fair
market value; and the gross violation by respondents Metrobank and Atty.
Celestra of the injunction.
Petitioners also sought, in their Amended Complaint, 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.
In an Order dated 6 March 2002, RTC-Branch 257 denied petitioners’
application for injunction on the ground that the sale of the foreclosed
properties rendered the same moot and academic. The auction sale, which
was conducted by respondents Metrobank and Atty. Celestra, after the
expiration of the TRO, and without knowledge of the Order dated 8
November 2001 of RTC-Branch 257, was considered as proper and valid.18
Petitioners went to the CA on a R65 certiorari. CA reversed the RTC and
remanded the case back to RTC. SC dismissed the appeal of respondents with
finality.
Case #2
On 28 October 2005, petitioners filed with Branch 195 of the Regional Trial
Court of Parañaque (RTC-Branch 195) a Verified Complaint for Damages
against respondents Metrobank, Atty. Celestra, and three Metrobank lawyers,
namely, Atty. Antonio Viray, Atty. Ramon Miranda and Atty. Pompeyo
Maynigo. The Complaint was docketed as Civil Case No. CV-05-0402.
Petitioners sought in their Complaint the award of actual, moral, and
exemplary damages against the respondents for making it appear that an
auction sale of the subject properties took place, as a result of which, the
prospective buyers of the said properties lost their interest and petitioner
Chua was prevented from realizing a profit of P70,000,000.00 from the
intended sale.21
Petitioners filed with RTC-Branch 195 a Motion to Consolidate22 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.
On 3 January 2006, respondents filed with RTC-Branch 195 an Opposition
to Motion to Consolidate with Prayer for Sanctions, praying for the dismissal
of the Complaint for Damages in Civil Case No. CV-05-0402, on the ground
of forum shopping.23
RTC-Branch 258 dismissed Civil Case No. CV-05-0402 on 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.
CA affirmed.
Issue:
W/N petitioners are guilty of forum shopping – Yes.
Held:
Yes.
I.
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.
Ultimately, what is truly important in determining whether forum shopping
exists or not is the vexation caused the courts and party-litigant by a party
who asks different courts to rule on the same or related causes and/or to grant
the same or substantially the same reliefs, in the process creating the
possibility of conflicting decisions being rendered by the different fora upon
the same issue.
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).
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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 ultimate objective—Civil Case No.
CV-01-0207 seeks the annulment of the 8 November 2001 public auction and
certificate of sale issued therein, while Civil Case No. CV- 05-0402 prays for
the award of actual and compensatory damages for respondents’ tortuous act
of making it appear that an auction sale actually took place on 8 November
2001; and
(2) the judgment in Civil Case No. CV-01-0207, on the annulment of the
foreclosure sale, would not affect the outcome of Civil Case No.
CV-05-0402, on the entitlement of petitioners to damages. The Court,
however, finds these arguments refuted by the allegations made by petitioners
themselves in their Complaints in both cases.
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. 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 violate 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.
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 Complaint37 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.
Evidently, this is due to the fact that petitioners actually based the said values
on the single appraisal report of the Philippine Appraisal Company on the
subject properties.
II.
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
maxim nemo debet bis vexari, pro una et eadem causa (no man shall be twice
vexed for one and the same cause).
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Moreover, petitioners admitted in their Motion to Consolidate42 dated 27
December 2005 before RTC-Branch 195 that both cases shared the same
parties, the same central issue, and the same subject property.

If the forum shopping is not considered willful and deliberate, the subsequent
case shall be dismissed without prejudice, on the ground of either litis
pendentia or 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. 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. CV-05-0402 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. The

Decision dated 31 January 2008 and Resolution dated 28 March 2008 of the
Court of Appeals in CA-G.R. CV No. 88087, affirming the Order dated 3 July
2006 of Branch 258 of the Regional Trial Court of Parañaque City, dismissing
Civil Case No. CV-05-0402, is AFFIRMED, without prejudice to the
proceedings in Civil Case No. CV-01-0207. Costs against petitioners.
SO ORDERED.

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5. Catalina Chu, et al. v. Spouses Fernando and Trinidad Cunanan, G.R.
No. 156185, September 12, 2011
Facts:
On September 30, 1986, Spouses Manuel and Catalina Chu (Chus) executed
a deed of sale with assumption of mortgage3 involving their five parcels of
land in favor of Trinidad N. Cunanan (Cunanan) for the consideration of
P5,161,090.00.
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 P2,561.090.00 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.4
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.5
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 vendor’s 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.6
Case#1
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.7
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. In due course, Benelda Estate filed its answer with a
motion to dismiss, claiming, among others, that the amended complaint stated
no cause of action because it had acted in good faith in buying the affected
lots, exerting all efforts to verify the authenticity of the titles, and had found
no defect in them.
After the RTC denied its motion to dismiss, Benelda Estate assailed the denial
on certiorari in the CA, which annulled the RTC’s denial for being tainted
with grave abuse of discretion and dismissed Civil Case No. G-1936 as
against Benelda Estate. On March 1, 2001, the Supreme Court upheld the
dismissal of Civil Case No. G-1936 in G.R. No. 142313 entitled Chu, Sr. v.
Benelda Estate Development Corporation.8
Compromise
On December 2, 1999, the Chus, the Cunanans, and Cool Town Realty
entered into a compromise agreement,9 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, 2000.10
Case#2
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,11 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.
The petitioners amended their complaint in Civil Case No. 12251 on February
4, 2002 to implead the Cunanans as additional defendants.12
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The Cunanans moved to dismiss the amended complaint based on two
grounds, namely: (a) bar by prior judgment, and (b) the claim or demand had
been paid, waived, and abandoned. Benelda Estate likewise moved to dismiss
the amended complaint, citing as grounds: (a) forum shopping; (b) bar by
prior judgment, and (c) failure to state a cause of action. On their part, the
Carloses raised affirmative defenses in their answer, namely: (a) the failure
to state a cause of action; (b) res judicata or bar by prior judgment; and (c)
bar by statute of limitations.
RTC denied both motions to dismiss,13 holding that the amended complaint
stated a cause of action against all the defendants; that the action was not
barred by res judicata because there was no identity of parties and
subject matter between Civil Case No. 12251 and Civil Case No. G-1936
CA reversed holding the compromise agreement had ended the legal
controversy between the parties with respect to the cause of action
arising from the deed of sale with assumption of mortgage covering all
the five parcels of land; that Civil Case No. G-1936 and Civil Case
No.12251 involved the violation by the Cunanans of the same legal right
under the deed of sale with assumption of mortgage; and that the filing of
Civil Case No.12251 contravened the rule against splitting of a cause of
action, and rendered Civil Case No.12251 subject of a motion to dismiss
based on bar by res judicata.
Issue:
W/N the second case was 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 Estate’s name – Yes.
Held:
Yes.
The petitioners contend that the compromise agreement did not apply or
extend to the Carloses and Benelda Estate; hence, their Civil Case No. 12251
was not barred by res judicata.
We disagree.
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
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. 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.
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.28 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.
Res judicata means a matter adjudged, a thing judicially acted upon or
decided; a thing or matter settled by judgment. The doctrine of res judicata is
an old axiom of law, dictated by wisdom and sanctified by age, and founded
on the broad principle that it is to the interest of the public that there should
be an end to litigation by the same parties over a subject once fully and fairly
adjudicated.
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. 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
Avila 4B | 2016
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.
The first requisite was attendant. Civil Case No. G-1936 was already
terminated under the compromise agreement, for the judgment, being upon a
compromise, was immediately final and unappealable.
As to the second requisite, the RTC had jurisdiction over the cause of action
in Civil Case No. G-1936 for the enforcement or rescission of the deed of sale
with assumption of mortgage, which was an action whose subject matter was
not capable of pecuniary estimation.
But was there an identity of parties, of subject matter, and of causes of action
between Civil Case No.G-1936 and Civil Case No. 12251?
There is identity of parties when the parties in both actions are the same, or
there is privity between them, or they are successors-in-interest by title
subsequent to the commencement of the action litigating for the same thing
and under the same title and in the same capacity.
The requirement of the identity of parties was fully met, because the Chus,
on the one hand, and the Cunanans, on the other hand, were the parties in both
cases along with their respective privies. The fact that the Carloses and
Benelda Estate, defendants in Civil Case No. 12251, were not parties in the
compromise agreement was inconsequential, for they were also the privies of
the Cunanans as transferees and successors-in-interest. It is settled that the
absolute identity of parties was not a condition sine qua non for res
judicata to apply, because a shared identity of interest sufficed. Mere
substantial identity of parties, or even community of interests between parties
in the prior and subsequent cases, even if the latter were not impleaded in the
first case, was sufficient.
As to identity of the subject matter, both actions dealt with the properties
involved in the deed of sale with assumption of mortgage. Identity of the
causes of action was also met, because Case No. G-1936 and Civil Case No.
12251 were rooted in one and the same cause of action—the failure of
Cunanan to pay in full the purchase price of the five lots subject of the deed
of sale with assumption of mortgage. In other words, Civil Case No. 12251
reprised Civil Case No. G-1936, the only difference between them being that
the petitioners alleged in the former that Benelda Estate was “not also a
purchaser for value and in good faith.”38
In fine, the rights and obligations of the parties vis-à-vis the five lots were all
defined and governed by the deed of sale with assumption of mortgage, the
only contract between them. That contract was single and indivisible, as far
as they were concerned. Consequently, the Chus could not properly proceed
against the respondents in Civil Case No. 12251, despite the silence of the
compromise agreement as to the Carloses and Benelda Estate, because there
can only be one action where the contract is entire, and the breach total, and
the petitioners must therein recover all their claims and damages.39 The Chus
could not be permitted to split up a single cause of action and make that single
cause of action the basis of several suits.
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6. NM Rothschild & Sons (AUSTRALIA) Limited, v. Lepanto
Consolidated Mining Company, G.R. No. 175799, November 28, 2011
Facts:
On August 30, 2005, respondent Lepanto Consolidated Mining Company
filed with the Regional Trial Court (RTC) of Makati City a Complaint3
against petitioner NM Rothschild & Sons (Australia) Limited praying for a
judgment declaring the loan and hedging contracts between the parties
void for being contrary to Article 2018 of the Civil Code of the
Philippines and for damages.
The Complaint was docketed as Civil Case No. 05-782, and was raffled to
Branch 150. Upon respondent’s (plaintiff’s) motion, the trial court authorized
respondent’s counsel to personally bring the summons and Complaint to the
Philippine Consulate General in Sydney, Australia for the latter office to
effect service of summons on petitioner (defendant).
On October 20, 2005, petitioner filed a Special Appearance With Motion to
Dismiss5 praying for the dismissal of the Complaint on the following
grounds: (b) the Complaint failed to state a cause of action and respondent
does not have any against petitioner.
RTC denied the MTD holding, among others, that the Complaint sufficiently
stated a cause of action.
CA affirmed.
Hence this petition.
Issue:
W/N the RTC erred in denying the petitioner’s MTD alleging that
respondent’s complaint failed to state a cause of action and has no cause of
action – it stated a cause of action; as to the existence of a cause of action, it
can only be determined after presentation of evidence and its absence should
not be raised in a mere MTD.
Held:
It stated a cause of action; as to the existence of a cause of action, it can only
be determined after presentation of evidence and its absence should not be
raised in a mere MTD.
As regards the allegation of failure to state a cause of action, while the same
is usually available as a ground in a Motion to Dismiss, said ground cannot
be ruled upon in the present Petition without going into the very merits of the
main case.
It is basic that “[a] cause of action is the act or omission by which a party
violates a right of another.” Its elements are the following: (1) a right existing
in favor of the plaintiff, (2) a duty on the part of the defendant to respect the
plaintiff’s right, and (3) an act or omission of the defendant in violation of
such right.
We have held that to sustain a Motion to Dismiss for lack of cause of action,
the complaint must show that the claim for relief does not exist and not only
that the claim was defectively stated or is ambiguous, indefinite or uncertain.
The trial court held that the Complaint in the case at bar contains all the three
elements of a cause of action, i.e., it alleges that:
(1) plaintiff has the right to ask for the declaration of nullity of the Hedging
Contracts for being null and void and contrary to Article 2018 of the Civil
Code of the Philippines;
(2) defendant has the corresponding obligation not to enforce the Hedging
Contracts because they are in the nature of wagering or gambling agreements
and therefore the transactions implementing those contracts are null and void
under Philippine laws; and
(3) defendant ignored the advice and intends to enforce the Hedging
Contracts by demanding financial payments due therefrom.21
The determination of whether or not the Complaint stated a cause of action
would therefore involve an inquiry into whether or not the assailed contracts
are void under Philippine laws.
This is, precisely, the very issue to be determined in Civil Case No. 05-782.
Indeed, petitioner’s defense against the charge of nullity of the Hedging
Contracts is the purported intent of the parties that actual deliveries of gold
be made pursuant thereto. Such a defense requires the presentation of
evidence on the merits of the case. An issue that “requires the contravention
of the allegations of the complaint, as well as the full ventilation, in effect, of
the main merits of the case, should not be within the province of a mere
Motion to Dismiss.”26 The trial court, therefore, correctly denied the Motion
to Dismiss on this ground.
Avila 4B | 2016
7. Pua v. Citibank, N.A., 2013 (SEC jurisdiction)
Facts:
On December 2, 2002, petitioners Jose and Benjamin Pua filed before the
RTC a Complaint6 for declaration of nullity of contract and sums of
money with damages against respondent,7 docketed as Civil Case No. 19-
1159.
In their complaint, petitioners alleged that they had been depositors of
Citibank Binondo Branch (Citibank Binondo) since 1996. Sometime in 1999,
Guada Ang, Citibank Binondo’s Branch Manager, invited Jose to a dinner
party at the Manila Hotel where he was introduced to several officers and
employees of Citibank Hongkong Branch (Citibank Hongkong).9
A few months after, Chingyee Yau (Yau), Vice-President of Citibank
Hongkong, came to the Philippines to sell securities to Jose. They averred
that Yau required Jose to open an account with Citibank Hongkong as it is
one of the conditions for the sale of the aforementioned securities.10 After
opening such account, Yau offered and sold to petitioners numerous
securities11 issued by various public limited companies established in Jersey,
Channel I sands.
The offer, sale, and signing of the subscription agreements of said securities
were all made and perfected at Citibank Binondo in the presence of its
officers and employees.12
Later on, petitioners discovered that the securities sold to them were not
registered with the Securities and Exchange Commission (SEC)and that the
terms and conditions covering the subscription were not likewise submitted
to the SEC for evaluation, approval, and registration.13
Asserting that respondent’s actions are in violation of Republic Act No.8799,
entitled the "Securities Regulation Code" (SRC), they assailed the validity of
the subscription agreements and the terms and conditions thereof for being
contrary to law and/or public policy.14
For its part, respondent filed a motion to dismiss15 alleging, inter alia, that
petitioners’ complaint should be dismissed outright for violation of the
doctrine of primary jurisdiction. It pointed out that the merits of the case
would largely depend on the issue of whether or not there was a violation of
the SRC, in particular, whether or not there was a sale of unregistered
securities. In this regard, respondent contended that the SRC conferred upon
the SEC jurisdiction to investigate compliance with its provisions and thus,
petitioners’ complaint should be first filed with the SEC and not directly
before the RTC.16
Petitioners opposed17 respondent’s motion to dismiss, maintaining that the
RTC has jurisdiction over their complaint. They asserted that Section 63of
the SRC expressly provides that the RTC has exclusive jurisdiction to hear
and decide all suits to recover damages pursuant to Sections 56 to 61 of the
same law.18
RTC denied the MTD. It noted that petitioners’ complaint is for declaration
of nullity of contract and sums of money with damages and, as such, it has
jurisdiction to hear and decide upon the case even if it involves the alleged
sale of securities. It ratiocinated that the legal questions or issues arising from
petitioners’ causes of action against respondent are more appropriate for the
judiciary than for an administrative agency to resolve.20
CA reversed RTC holding that the RTC violated the doctrine of primary
jurisdiction.
Issue:
W/N petitioners’ action falls within the primary jurisdiction of the SEC – No.
Held:
No.
At the outset, the Court observes that respondent erroneously relied on the
Baviera ruling to support its position that all complaints involving purported
violations of the SRC should be first referred to the SEC. A careful reading
of the Baviera case would reveal that the same involves a criminal
prosecution of a purported violator of the SRC, and not a civil suit such as
the case at bar. The pertinent portions of the Baviera ruling thus read:
“A criminal charge for violation of the Securities Regulation Code is a
specialized dispute. Hence, it must first be referred to an administrative
agency of special competence, i.e., the SEC. Under the doctrine of primary
jurisdiction, courts will not determine a controversy involving a question
within the jurisdiction of the administrative tribunal, where the question
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demands the exercise of sound administrative discretion requiring the
specialized knowledge and expertise of said administrative tribunal to
determine technical and intricate matters of fact. The Securities Regulation
Code is a special law. Its enforcement is particularly vested in the SEC.
Hence, all complaints for any violation of the Code and its implementing
rules and regulations should be filed with the SEC. Where the complaint is
criminal in nature, the SEC shall indorse the complaint to the DOJ for
preliminary investigation and prosecution as provided in Section 53.1 earlier
quoted.”
Records show that petitioners’ complaint constitutes a civil suit for
declaration of nullity of contract and sums of money with damages, which
stemmed from respondent’s alleged sale of unregistered securities, in
violation of the various provisions of the SRC and not a criminal case such
as that involved in Baviera.
In this light, when the Court ruled in Baviera that "all complaints for any
violation of the [SRC] x x x should be filed with the SEC,"33 it should be
construed as to apply only to criminal and not to civil suits such as petitioners’
complaint.
Moreover, it is a fundamental rule in procedural law that jurisdiction is
conferred by law;34 it cannot be inferred but must be explicitly stated therein.
Thus, when Congress confers exclusive jurisdiction to a judicial or quasi-
judicial entity over certain matters by law, this, absent any other indication to
the contrary, evinces its intent to exclude other bodies from exercising the
same.
in an amount not exceeding triple the amount of the transaction plus actual
damages.
Based on the foregoing, it is clear that cases falling under Section 57 of the
SRC, which pertain to civil liabilities arising from violations of the
requirements for offers to sell or the sale of securities, as well as other civil
suits under Sections 56, 58, 59, 60, and 61 of the SRC shall be exclusively
brought before the regional trial courts. It is a well-settled rule in statutory
construction that the term "shall" is a word of command, and one which has
always or which must be given a compulsory meaning, and it is generally
imperative or mandatory.35 Likewise, it is equally revelatory that no SRC
provision of similar import is found in its sections governing criminal suits;
quite the contrary, the SRC states that criminal cases arising from violations
of its provisions should be first referred to the SEC.
Therefore, based on these considerations, it stands to reason that civil suits
falling under the SRC are under the exclusive original jurisdiction of the
regional trial courts and hence, need not be first filed before the SEC, unlike
criminal cases wherein the latter body exercises primary jurisdiction.
All told, petitioners' filing of a civil suit against respondent for purported
violations of the SRC was properly filed directly before the RTC.

It is apparent that the SRC provisions governing criminal suits are separate
and distinct from those which pertain to civil suits. On the one hand, Section
53 of the SRC governs criminal suits involving violations of the said law. On
the other hand, Sections 56, 57, 58, 59, 60, 61, 62, and 63 of the SRC pertain
to civil suits involving violations of the same law. Among these, the
applicable provisions to this case are Sections 57.1 and 63.1 of the SRC.

SEC. 63. Amount of Damages to be Awarded. – 63.1. All suits to recover

damages pursuant to Sections 56, 57, 58, 59, 60 and 61 shall be brought
before the Regional Trial Court which shall have exclusive jurisdiction to
hear and decide such suits. The Court is hereby authorized to award damages

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IV. Parties (Rule 3)
1. Go v. Distinction Properties (2012)
Facts:
Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim (petitioners) are registered
individual owners of condominium units in Phoenix Heights Condominium.
Respondent Distinction Properties Development and Construction, Inc.
(DPDCI) was incorporated as a real estate developer, engaged in the
development of condominium projects, among which was the Phoenix
Heights Condominium.
In February 1996, petitioner Pacifico Lim, one of the incorporators and the
then president of DPDCI, executed a Master Deed and Declaration of
Restrictions (MDDR)3 of Phoenix Heights Condominium, which was filed
with the Registry of Deeds. As the developer, DPDCI undertook, among
others, the marketing aspect of the project, the sale of the units and the release
of flyers and brochures.
Thereafter, Phoenix Heights Condominium Corporation (PHCC) was
formally organized and incorporated. Sometime in 2000, DPDCI turned over
to PHCC the ownership and possession of the condominium units, except for
the two saleable commercial units/spaces:
1. G/F Level BAS covered by Condominium Certificate of Title (CCT) No.
21030 utilized as the PHCC’s administration office, and
2. G/F Level 4-A covered by CCT No. PT-27396/C-136-II used as living
quarters by the building administrator.
Although used by PHCC, DPDCI was assessed association dues for these two
units.
Meanwhile, in March 1999, petitioner Pacifico Lim, as president of DPDCI,
filed an Application for Alteration of Plan4 pertaining to the construction of
22 storage units in the spaces adjunct to the parking area of the building. The
application, however, was disapproved as the proposed alteration would
obstruct light and ventilation.
In August 2004, through its Board,5 PHCC approved a settlement offer from
DPDCI for the set-off of the latter’s association dues arrears with the
assignment of title over CCT Nos. 21030 and PT- 27396/C-136-II and their
conversion into common areas. Thus, CCT Nos. PT-43400 and PT-43399
were issued by the Registrar of Deeds of Pasig City in favor of PHCC in lieu
of the old titles. The said settlement between the two corporations likewise
included the reversion of the 22 storage spaces into common areas. With the
conformity of PHCC, DPDCI’s application for alteration (conversion of
unconstructed 22 storage units and units GF4-A and BAS from saleable to
common areas) was granted by the Housing and Land Use Regulatory Board
(HLURB).
Rem Part
In August 2008, petitioners Go, Lim and Lim, as condominium unit-
owners, filed a complaint7 before the HLURB against DPDCI for
unsound business practices and violation of the Master Deed and
Declaration of Restrictions (MDDR). The case was docketed as REM-
080508-13906. They alleged that DPDCI committed misrepresentation in
their circulated flyers and brochures as to the facilities or amenities that would
be available in the condominium and failed to perform its obligation to
comply with the MDDR.
In one of its defenses, DPDCI questioned the petitioners’ personality to
sue as the action was a derivative suit.
HLURB ruled for petitioners holding, among others, that the case was not a
derivative suit but one which involved contracts of sale of the respective units
between the complainants and DPDCI, hence, within its jurisdiction pursuant
to Section 1, Presidential Decree (P.D.) No. 957 (The Subdivision and
Condominium Buyers’ Protective Decree), as amended.
On a R65, CA reversed holding that the HLURB had no jurisdiction over the
complaint filed by petitioners as the controversy did not fall within the scope
of the administrative agency’s authority under P.D. No. 957. The CA held
that jurisdiction over PHCC, an indispensable party, was neither acquired nor
waived by estoppel. Citing Carandang v. Heirs of De Guzman,12 it held that,
in any event, the action should be dismissed because the absence of PHCC,
an indispensable party, rendered all subsequent actuations of the court
void, for want of authority to act, not only as to the absent parties but
even as to those present.
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MR denied.
Hence this petition.
Issue:
W/N PHCC is an indispensable party, the non-inclusion of which rendered
the proceedings void – Yes.
Held:
Yes.
In this case, the complaint filed by petitioners alleged causes of action that
apparently are not cognizable by the HLURB considering the nature of the
action and the reliefs sought. A perusal of the complaint discloses that
petitioners are actually seeking to nullify and invalidate the duly constituted
acts of PHCC—the April 29, 2005 Agreement27 entered into by PHCC with
DPDCI and its Board Resolution28 which authorized the acceptance of the
proposed offsetting/settlement of DPDCI’s indebtedness and approval of the
conversion of certain units from saleable to common areas. All these were
approved by the HLURB.
As it is clear that the acts being assailed are those of PHHC, this case cannot
prosper for failure to implead the proper party, PHCC.
An indispensable party is defined as one who has such an interest in the
controversy or subject matter that a final adjudication cannot be made, in his
absence, without injuring or affecting that interest.
In the recent case of Nagkakaisang Lakas ng Manggagawa sa Keihin
(NLMK-OLALIA-KMU) v. Keihin Philippines Corporation, 627 SCRA 179
(2010), the Court had the occasion to state that: Under Section 7, Rule 3 of
the Rules of Court, “parties in interest without whom no final determination
can be had of an action shall be joined as plaintiffs or defendants.” If there is
a failure to implead an indispensable party, any judgment rendered would
have no effectiveness. It is “precisely ‘when an indispensable party is not
before the court (that) an action should be dismissed.’ The absence of an
indispensable party renders all subsequent actions of the court null and
void for want of authority to act, not only as to the absent parties but
even to those present.” The purpose of the rules on joinder of indispensable
parties is a complete determination of all issues not only between the parties
themselves, but also as regards other persons who may be affected by the
judgment. A decision valid on its face cannot attain real finality where there
is want of indispensable parties.
Similarly, in the case of Plasabas v. Court of Appeals,33 the Court held that
a final decree would necessarily affect the rights of indispensable parties so
that the Court could not proceed without their presence. In support thereof,
the Court in Plasabas cited the following authorities, thus:
“Parties in interest without whom no final determination can be had of an
action shall be joined either as plaintiffs or defendants. (Sec. 7, Rule 3, Rules
of Court). The burden of procuring the presence of all indispensable
parties is on the plaintiff. (39 Amjur [sic] 885). The evident purpose of the
rule is to prevent the multiplicity of suits by requiring the person arresting a
right against the defendant to include with him, either as co-plaintiffs or as
co-defendants, all persons standing in the same position, so that the whole
matter in dispute may be determined once and for all in one litigation.”
From all indications, PHCC is an indispensable party and should have been
impleaded, either as a plaintiff or as a defendant,34 in the complaint filed
before the HLURB as it would be directly and adversely affected by any
determination therein. To belabor the point, the causes of action, or the acts
complained of, were the acts of PHCC as a corporate body. Note that in the
judgment rendered by the HLURB, the dispositive portion in particular,
DPDCI was ordered (1) to pay P998,190.70, plus interests and surcharges, as
condominium dues in arrears and turnover the administration office to
PHCC; and (2) to refund to PHCC P1,277,500.00, representing the cost of
the deep well, with interests and surcharges. Also, the HLURB declared as
illegal the agreement regarding the conversion of the 22 storage units and
Units GF4-A and BAS, to which agreement PHCC was a party.
Evidently, the cause of action rightfully pertains to PHCC. Petitioners
cannot exercise the same except through a derivative suit. In the
complaint, however, there was no allegation that the action was a
derivative suit. In fact, in the petition, petitioners claim that their complaint
is not a derivative suit.
In the cited case of Chua v. Court of Appeals, 443 SCRA 259 (2004), the
Court ruled: For a derivative suit to prosper, it is required that the minority
stockholder suing for and on behalf of the corporation must allege in his
complaint that he is suing on a derivative cause of action on behalf of the
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corporation and all other stockholders similarly situated who may wish
to join him in the suit. It is a condition sine qua non that the corporation
be impleaded as a party because not only is the corporation an
indispensable party, but it is also the present rule that it must be served with
process. The judgment must be made binding upon the corporation in order
that the corporation may get the benefit of the suit and may not bring
subsequent suit against the same defendants for the same cause of action. In
other words, the corporation must be joined as party because it is its cause
of action that is being litigated and because judgment must be a res
adjudicata against it.

Without PHCC as a party, there can be no final adjudication of the HLURB’s

judgment. The CA was, thus, correct in ordering the dismissal of the case for
failure to implead an indispensable party.

Moreover, considering that petitioners, who are members of PHCC, are

ultimately challenging the agreement entered into by PHCC with DPDCI,
they are assailing, in effect, PHCC’s acts as a body corporate. This action,
therefore, partakes the nature of an “intra-corporate controversy,” the
jurisdiction over which used to belong to the Securities and Exchange
Commission (SEC), but transferred to the courts of general jurisdiction or the
appropriate Regional Trial Court (RTC), pursuant to Section 5b of P.D. No.
902- A,38 as amended by Section 5.2 of Republic Act (R.A.) No. 8799.39

In sum, inasmuch as the HLURB has no jurisdiction over petitioners’

complaint, the Court sustains the subject decision of the CA that the HLURB
decision is null and void ab initio. This disposition, however, is without
prejudice to any action that the parties may rightfully file in the proper forum.
WHEREFORE, the petition is DENIED. SO ORDERED.

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2. Macawadib v. PNP Directorate (2013)
Facts:
Petitioner was a police officer with the rank of Police Senior Superintendent.
On July 30, 2001, pursuant to the provisions of Section 39 of Republic Act
6975, otherwise known as the “Department of the Interior and Local
Government Act of 1990,” the Chief of Directorial Staff of the Philippine
National Police (PNP) issued General Order No. 1168, enumerating the
names of commissioned officers who were subject to compulsory retirement
on various dates in the month of January 2002 by virtue of their attainment
of the compulsory retirement age of 56.
Among the names included in the said Order was that of petitioner, who was
supposed to retire on January 11, 2002, as the files of the PNP Records
Management Division indicate that he was born on January 11, 1946.
On September 3, 2001, petitioner filed an application for late registration of
his birth with the Municipal Civil Registrar’s Office of Mulondo, Lanao del
Sur. In the said application, petitioner swore under oath that he was born on
January 11, 1956. The application was, subsequently, approved.
Rem Part
On October 15, 2001, petitioner filed with the RTC of Marawi City, Branch
8, a Petition for Correction of Entry in the Public Service Records
Regarding the Birth Date. (Special Proceeding)
RTC ruled for petitioner. Subsequently, the RTC issued an Entry of Final
Judgment6 indicating therein that its December 4, 2001 Decision in Spl. Proc.
No. 782-01 has become final and executory on March 13, 2002.
On January 8, 2008, herein respondent filed a Petition for Annulment of
Judgment with Prayer for the Issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction with the CA, seeking to nullify the
above-mentioned Decision of the RTC on the ground that the trial court
failed to acquire jurisdiction over the PNP, “an unimpleaded
indispensable party.”7
CA granted and nullified the RTC decision.
MR denied.
Hence this petition.
Issue:
W/N the RTC decision should be nullified due to lack of an indispensable
party – Yes.
Held:
Yes.
In his first assigned error, petitioner contends that respondent is not an
indispensable party. The Court is not persuaded.
On the contrary, the Court agrees with the ruling of the CA that it is the
integrity and correctness of the public records in the custody of the PNP,
National Police Commission (NAPOLCOM) and Civil Service Commission
(CSC) which are involved and which would be affected by any decision
rendered in the petition for correction filed by herein petitioner. The
aforementioned government agencies are, thus, required to be made parties
to the proceeding. They are indispensable parties, without whom no final
determination of the case can be had. An indispensable party is defined as
one who has such an interest in the controversy or subject matter that a final
adjudication cannot be made, in his absence, without injuring or affecting that
interest.
In the fairly recent case of Go v. Distinction Properties Development and
Construction, Inc.,13 the Court had the occasion to reiterate the principle that:
Under Section 7, Rule 3 of the Rules of Court, “parties in interest without
whom no final determination can be had of an action shall be joined as
plaintiffs or defendants.” If there is a failure to implead an indispensable
party, any judgment rendered would have no effectiveness. It is “precisely
‘when an indispensable party is not before the court (that) an action
should be dismissed.’ The absence of an indispensable party renders all
subsequent actions of the court null and void for want of authority to act,
not only as to the absent parties but even to those present.” The purpose
of the rules on joinder of indispensable parties is a complete determination of
all issues not only between the parties themselves, but also as regards other
persons who may be affected by the judgment. A decision valid on its face
cannot attain real finality where there is want of indispensable parties.14
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The burden of procuring the presence of all indispensable parties is on the attained finality. Settled is the rule that a void judgment cannot attain finality
plaintiff.16 and its execution has no basis in law.20

In the instant case, there is a necessity to implead the PNP, NAPOLCOM and WHEREFORE, the petition for review on certiorari is DENIED. The
CSC because they stand to be adversely affected by petitioner’s petition Decision dated December 17, 2008 and the Resolution dated February 25,
which involves substantial and controversial alterations in petitioner’s service 2009 of the Court of Appeals, in CA- G.R. SP No. 02120-MIN, are hereby
records. Moreover, as correctly pointed out by the Office of the Solicitor AFFIRMED.
General (OSG), if petitioner’s service is extended by ten years, the SO ORDERED.
government, through the PNP, shall be burdened by the additional salary and
benefits that would have to be given to petitioner during such extension.
Thus, aside from the OSG, all other agencies which may be affected by the
change should be notified or represented as the truth is best ascertained under
an adversary system of justice.

As the above-mentioned agencies were not impleaded in this case much less
given notice of the proceedings, the decision of the trial court granting
petitioner’s prayer for the correction of entries in his service records, is void.
As mentioned above, the absence of an indispensable party renders all
subsequent actions of the court null and void for want of authority to act, not
only as to the absent parties but even as to those present.

On the question of whether or not respondent is estopped from assailing the

decision of the RTC for failure of the OSG, as government representative, to
participate in the proceedings before the trial court or to file an opposition to
petitioner’s petition for correction of entries in his service records, this Court
rules that such an apparent oversight has no bearing on the validity of the
appeal which the petitioner filed before the CA. Neither can the State, as
represented by the government, be considered in estoppel due to the
petitioner’s seeming acquiescence to the judgment of the RTC when it
initially made corrections to some of petitioner’s records with the PNP. This
Court has reiterated time and again that the absence of opposition from
government agencies is of no controlling significance, because the State
cannot be estopped by the omission, mistake or error of its officials or
agents.18 Nor is the Republic barred from assailing the decision granting the
petition for correction of entries if, on the basis of the law and the evidence
on record, such petition has no merit.19

As to the second and last assigned errors, suffice it to say that considering
that the assailed decision of the RTC is null and void, the same could not have

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3. Hacienda Luisita v. Presidential Agrarian Reform Council (2011)
Facts:
At the core of the case is Hacienda Luisita de Tarlac (Hacienda Luisita), once
a 6,443- hectare mixed agricultural-industrial-residential expanse straddling
several municipalities of Tarlac and owned by Compaia General de Tabacos
de Filipinas (Tabacalera).
In 1957, the Spanish owners of Tabacalera offered to sell Hacienda Luisita
as well as their controlling interest in the sugar mill within the hacienda, the
Central Azucarera de Tarlac (CAT), as an indivisible transaction. The Tarlac
Development Corporation (Tadeco), then owned and/or controlled by the
Jose Cojuangco, Sr. Group, was willing to buy. As agreed upon, Tadeco
undertook to pay the purchase price for Hacienda Luisita in pesos, while that
for the controlling interest in CAT, in US dollars.[19] On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs)
To facilitate the adverted sale-and-purchase package, the Philippine
government, through the then Central Bank of the Philippines, assisted the
buyer to obtain a dollar loan from a US bank.[20] Also, the Government
Service Insurance System (GSIS) Board of Trustees extended on November
27, 1957 a PhP 5.911 million loan in favor of Tadeco to pay the peso price
component of the sale. One of the conditions contained in the approving GSIS
Resolution No. 3203, as later amended by Resolution No. 356, Series of 1958,
reads as follows:
“That the lots comprising the Hacienda Luisita shall be subdivided by the
applicant- corporation and sold at cost to the tenants, should there be any, and
whenever conditions should exist warranting such action under the provisions
of the Land Tenure Act;[21]”
As of March 31, 1958, Tadeco had fully paid the purchase price for the
acquisition of Hacienda Luisita and Tabacaleras interest in CAT.[22]
Suffice it to state that on May 7, 1980, the martial law administration filed a
suit before the Manila Regional Trial Court (RTC) against Tadeco, et al., for
them to surrender Hacienda Luisita to the then Ministry of Agrarian
Reform (MAR, now the Department of Agrarian Reform [DAR]) so that
the land can be distributed to farmers at cost. Responding, Tadeco or its
owners alleged that Hacienda Luisita does not have tenants, besides which
sugar lands of which the hacienda consisted are not covered by existing
agrarian reform legislations. As perceived then, the government commenced
the case against Tadeco as a political message to the family of the late
Benigno Aquino, Jr.[23] Eventually, the Manila RTC rendered judgment
ordering Tadeco to surrender Hacienda Luisita to the MAR.
Therefrom, Tadeco appealed to the Court of Appeals (CA).
On March 17, 1988, the Office of the Solicitor General (OSG) moved to
withdraw the governments case against Tadeco, et al. By Resolution of May
18, 1988, the CA dismissed the case the Marcos government initially
instituted and won against Tadeco, et al. The dismissal action was, however,
made subject to the obtention by Tadeco of the PARCs approval of a stock
distribution plan (SDP) that must initially be implemented after such approval
shall have been secured.
complement of Hacienda Luisita signified in a referendum their acceptance
of the proposed HLIs Stock Distribution Option Plan.
On May 11, 1989, the Stock Distribution Option Agreement (SDOA), styled
as a Memorandum of Agreement (MOA),[33] was entered into by Tadeco,
HLI, and the 5,848 qualified FWBs[34] and attested to by then DAR
Secretary Philip Juico. The SDOA embodied the basis and mechanics of the
SDP, which would eventually be submitted to the PARC for approval.
Subsequently, HLI submitted to DAR its SDP, designated as Proposal for
Stock Distribution under C.A.R.P.,[35] which was substantially based on the
SDOA.
Notably, in a follow-up referendum the DAR conducted on October 14, 1989,
5,117 FWBs, out of 5,315 who participated, opted to receive shares in
HLI.[36] One hundred thirty-two (132) chose actual land distribution.[37]
The PARC, under then Sec. Defensor-Santiago, by Resolution No. 89-
12-2[40] dated November 21, 1989, approved the SDP of
Tadeco/HLI.[41]
Rem Part
Such, in short, was the state of things when two separate petitions, both
undated, reached the DAR in the latter part of 2003. In the first,
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denominated as Petition/Protest,[57] respondents Jose Julio Suniga and
Windsor Andaya, identifying themselves as head of the Supervisory Group
of HLI (Supervisory Group), and 60 other supervisors sought to revoke the
SDOA, alleging that HLI had failed to give them their dividends and the one
percent (1%) share in gross sales, as well as the thirty-three percent (33%)
share in the proceeds of the sale of the converted 500 hectares of land. They
further claimed that their lives have not improved contrary to the promise and
rationale for the adoption of the SDOA. They also cited violations by HLI of
the SDOAs terms.
[58] They prayed for a renegotiation of the SDOA, or, in the alternative, its
revocation.
Revocation and nullification of the SDOA and the distribution of the lands in
the hacienda were the call in the second petition, styled as Petisyon
(Petition).[59] The Petisyon was ostensibly filed on December 4, 2003 by
Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA),
where the handwritten name of respondents Rene Galang as Pangulo
AMBALA and Noel Mallari as Sec-Gen. AMBALA[60] appeared. As
alleged, the petition was filed on behalf of AMBALAs members purportedly
composing about 80% of the 5,339 FWBs of Hacienda Luisita.
PARC granted the petitions and revoked the SDO plan of Tadeco and HLI.
Hence this instant recourse to the SC.
One of petitioner’s arguments is that the Supervisory Group, AMBALA and
their respective leaders are not real parties in interest in the case.
Issue:
W/N the the Supervisory Group, AMBALA and their respective leaders are
real parties-in-interest - Yes
Held:
Yes.
Supervisory Group, AMBALA and their respective leaders are real
parties-in-interest
HLI would deny real party-in-interest status to the purported leaders of the
Supervisory Group and AMBALA, i.e., Julio Suniga, Windsor Andaya, and
Rene Galang, who filed the revocatory petitions before the DAR.
As HLI would have it, Galang, the self-styled head of AMBALA, gained HLI
employment in June 1990 and, thus, could not have been a party to the SDOA
executed a year earlier.[85]
As regards the Supervisory Group, HLI alleges that supervisors are not
regular farmworkers, but the company nonetheless considered them
Farmworker-beneficiaries (FWBs) under the SDOA as a mere concession to
enable them to enjoy the same benefits given qualified regular farmworkers.
However, if the SDOA would be canceled and land distribution effected, so
HLI claims, citing Fortich v. Corona,[86] the supervisors would be excluded
from receiving lands as farmworkers other than the regular farmworkers who
are merely entitled to the fruits of the land.[87]
The SDOA no less identifies the SDP qualified beneficiaries as the
farmworkers who appear in the annual payroll, inclusive of the
permanent and seasonal employees, who are regularly or periodically
employed by [HLI].[88] Galang, per HLIs own admission, is employed
by HLI, and is, thus, a qualified beneficiary of the SDP; he comes within
the definition of a real party-in-interest under Sec. 2, Rule 3 of the Rules
of Court, meaning, one who stands to be benefited or injured by the
judgment in the suit or is the party entitled to the avails of the suit.
The same holds true with respect to the Supervisory Group whose members
were admittedly employed by HLI and whose names and signatures even
appeared in the annex of the SDOA. Being qualified beneficiaries of the SDP,
Suniga and the other 61 supervisors are certainly parties who would benefit
or be prejudiced by the judgment recalling the SDP or replacing it with some
other modality to comply with RA 6657.
Even assuming that members of the Supervisory Group are not regular
farmworkers, but are in the category of other farmworkers mentioned in Sec.
4, Article XIII of the Constitution, [89] thus only entitled to a share of the
fruits of the land, as indeed Fortich teaches, this does not detract from the
fact that they are still identified as being among the SDP qualified
beneficiaries.
Avila 4B | 2016
As such, they are, thus, entitled to bring an action upon the SDP.[90] At any
rate, the following admission made by Atty. Gener Asuncion, counsel of HLI,
during the oral arguments should put to rest any lingering doubt as to the
status of protesters Galang, Suniga, and Andaya:
Justice Bersamin: x x x I heard you a while ago that you were conceding the
qualified farmer beneficiaries of Hacienda Luisita were real parties in
interest?
Atty. Asuncion: Yes, Your Honor please, real party in interest which that
question refers to the complaints of protest initiated before the DAR and the
real party in interest there be considered as possessed by the farmer
beneficiaries who initiated the protest.[91]

Further, under Sec. 50, paragraph 4 of RA 6657, farmer-leaders are expressly

allowed to represent themselves, their fellow farmers or their organizations
in any proceedings before the DAR. Specifically:
SEC. 50. Quasi-Judicial Powers of the DAR.x x x
xxxx
Responsible farmer leaders shall be allowed to represent themselves,
their fellow farmers or their organizations in any proceedings before the
DAR: Provided, however, that when there are two or more representatives
for any individual or group, the representatives should choose only one
among themselves to represent such party or group before any DAR
proceedings. (Emphasis supplied.)
Clearly, the respective leaders of the Supervisory Group and AMBALA are
contextually real parties-in-interest allowed by law to file a petition before
the DAR or PARC.

This is not necessarily to say, however, that Galang represents AMBALA,

for as records show and as HLI aptly noted,[92] his petisyon filed with DAR
did not carry the usual authorization of the individuals in whose behalf it was
supposed to have been instituted. To date, such authorization document,
which would logically include a list of the names of the authorizing FWBs,
has yet to be submitted to be part of the records.

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4. Metrobank v. Rural Bank of Gerona (RBG) (2010)
Facts:
RBG is a rural banking corporation organized under Philippine laws and
located in Gerona, Tarlac. In the 1970s, the Central Bank and the RBG
entered into an agreement providing that RBG shall facilitate the loan
applications of farmers-borrowers under the Central Bank-International Bank
for Reconstruction and Developments (IBRDs) 4th Rural Credit Project.
The agreement required RBG to open a separate bank account where the
IBRD loan proceeds shall be deposited. The RBG accordingly opened a
special savings account with Metrobank’s Tarlac Branch.
As the depository bank of RBG, Metrobank was designated to receive the
credit advice released by the Central Bank representing the proceeds of the
IBRD loan of the farmers-borrowers; Metrobank, in turn, credited the
proceeds to RBGs special savings account for the latters release to the
farmers-borrowers.
On September 27, 1978, the Central Bank released a credit advice in
Metrobanks favor and accordingly credited Metrobanks demand deposit
account in the amount of P178,652.00, for the account of RBG. The amount,
which was credited to RBGs special savings account represented the
approved loan application of farmer-borrower Dominador de Jesus. RBG
withdrew the P178,652.00 from its account.
On the same date, the Central Bank approved the loan application of another
farmer- borrower, Basilio Panopio, for P189,052.00, and credited the
amount to Metrobanks demand deposit account. Metrobank, in turn, credited
RBGs special savings account. Metrobank claims that the RBG also withdrew
the entire credited amount from its account.
On October 3, 1978, the Central Bank approved Ponciano Lagmans loan
application for P220,000.00. As with the two other IBRD loans, the amount
was credited to Metrobanks demand deposit account, which amount
Metrobank later credited in favor of RBGs special savings account. Of the
P220,000.00, RBG only withdrew P75,375.00.
On November 3, 1978, more than a month after RBG had made the above
withdrawals from its account with Metrobank, the Central Bank issued
debit advices, reversing all the approved IBRD loans.[6] The Central Bank
implemented the reversal by debiting from Metrobanks demand deposit
account the amount corresponding to all three IBRD loans.
Upon receipt of the November 3, 1978 debit advices, Metrobank, in turn,
debited the following amounts from RBGs special savings account:
P189,052.00, P115,000.00, and P8,000.41. Metrobank, however, claimed
that these amounts were insufficient to cover all the credit advices that were
reversed by the Central Bank. It demanded payment from RBG which could
make partial payments.
Rem Part
As of October 17, 1979, Metrobank claimed that RBG had an outstanding
balance of P334,220.00. To collect this amount, it filed a complaint for
collection of sum of money against RBG before the RTC, docketed as Civil
Case No. 6028.[7]
RTC ruled for Metrobank holding that legal subrogation ensued.
CA reversed. CA noted that this was not a case of legal subrogation under
Article 1302 of the Civil Code. Nevertheless, the CA recognized that
Metrobank had a right to be reimbursed of the amount it had paid and failed
to recover, as it suffered loss in an agreement that involved only the Central
Bank and the RBG. It clarified, however, that a determination still had to be
made on who should reimburse Metrobank. Noting that no evidence exists
why the Central Bank reversed the credit advices it had previously confirmed,
the CA declared that the Central Bank should be impleaded as a
necessary party so it could shed light on the IBRD loan reversals. Thus, the
CA set aside the RTC decision, and remanded the case to the trial court for
further proceedings after the Central Bank is impleaded as a necessary party.
Hence this petition.
Issue:
W/N the Central Bank should be impleaded as a necessary party – No.
Held:
No.
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The petition is impressed with merit.
A basic first step in resolving this case is to determine who the liable parties
are on the IBRD loans that the Central Bank extended. The Terms and
Conditions of the IBRD 4th Rural Credit Project[12] (Project Terms and
Conditions) executed by the Central Bank and the RBG shows that the
farmers-borrowers to whom credits have been extended, are primarily liable
for the payment of the borrowed amounts.
The loans were extended through the RBG which also took care of the
collection and of the remittance of the collection to the Central Bank. RBG,
however, was not a mere conduit and collector. While the farmers-borrowers
were the principal debtors, RBG assumed liability under the Project Terms
and Conditions by solidarily binding itself with the principal debtors to fulfill
the obligation.
How RBG profited from the transaction is not clear from the records and is
not part of the issues before us, but if it delays in remitting the amounts due,
the Central Bank imposed a 14% per annum penalty rate on RBG until the
amount is actually remitted. The Central Bank was further authorized to
deduct the amount due from RBGs demand deposit reserve should the latter
become delinquent in payment.
On these points, paragraphs 5 and 6 of the Project Terms and Conditions read:
5. Collection received representing repayments of borrowers shall be
immediately remitted to the Central Bank, otherwise[,] the Rural Bank/SLA
shall be charged a penalty of fourteen [percent] (14%) p.a. until date of
remittance.
6. In case the rural bank becomes delinquent in the payment of
amortizations due[,] the Central Bank is authorized to deduct the
corresponding amount from the rural banks demand deposit reserve[13]
at any time to cover any delinquency. [Emphasis supplied.]
Based on these arrangements, the Central Banks immediate recourse,
therefore should have been against the farmers-borrowers and the RBG; thus,
it erred when it deducted the amounts covered by the debit advices from
Metrobanks demand deposit account. Under the Project Terms and
Conditions, Metrobank had no responsibility over the proceeds of the IBRD
loans other than serving as a conduit for their transfer from the Central Bank
to the RBG once credit advice has been issued. Thus, we agree with the CAs
conclusion that the agreement governed only the parties involved the Central
Bank and the RBG. Metrobank was simply an outsider to the agreement.
Article 1303 of the Civil Code states that subrogation transfers to the person
subrogated the credit with all the rights thereto appertaining, either against
the debtor or against third persons. As the entity against which the collection
was enforced, Metrobank was subrogated to the rights of Central Bank and
has a cause of action to recover from RBG the amounts it paid to the Central
Bank, plus 14% per annum interest.
Under this situation, impleading the Central Bank as a party is completely
unnecessary.
We note that the CA erroneously believed that the Central Banks presence is
necessary in order x x x to shed light on the matter of reversals made by it
concerning the loan applications of the end users and to have a complete
determination or settlement of the claim.[16]
In so far as Metrobank is concerned, however, the Central Banks presence
and the reasons for its reversals of the IBRD loans are immaterial after
subrogation has taken place; Metrobanks interest is simply to collect the
amounts it paid the Central Bank. Whatever cause of action RBG may have
against the Central Bank for the unexplained reversals and any undue
deductions is for RBG to ventilate as a third-party claim; if it has not done so
at this point, then the matter should be dealt with in a separate case that should
not in any way further delay the disposition of the present case that had been
pending before the courts since 1980.
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5. Constantino v. Heirs of Pedro Constantino (2013)
Facts:
This involves a controversy over a parcel of land claimed to be part of an
estate which needed to be proportionally subdivided among heirs.
Pedro Constantino, Sr., (Pedro Sr.) ancestors of the petitioners and
respondents, owned several parcels of land, one of which is an unregistered
parcel of land declared for taxation purposes under Tax Declaration 208143
consisting of 240 square meters situated at Sta. Monica, Hagonoy, Bulacan.
Pedro, Sr., upon his death, was survived by his six (6) children.
Rem Part
On 17 June 1999, respondents Asuncion Laquindanum (Asuncion) and
Josefina Cailipan (Josefina), great grandchildren of Pedro Sr., in
representation of Pedro, Jr. filed a complaint5 against petitioners Oscar
Constantino, Maxima Constantino and Casimira Maturingan, grandchildren
of Pedro Sr., for the nullification of a document denominated as
“Pagmamana sa Labas ng Hukuman” dated 10 August 1992, and other tax
declaration documents.
In the said complaint, respondents alleged that sometime in October 1998,
petitioners asserted their claim of ownership over the whole parcel of land
(240 sq m) owned by the late Pedro Sr., to the exclusion of respondents who
are occupying a portion thereof. Upon verification, respondents learned that
a Tax Declaration No. 02010- 2170-33235 in the name of petitioner Oscar
Constantino and his cousin Maxima Constantino was unlawfully issued,
which in effect canceled Tax Declaration No. 20814 in the name of their
ancestor Pedro Sr. The issuance of the new tax declaration was allegedly due
to the execution of a simulated, fabricated and fictitious document
denominated as “Pagmamana sa Labas ng Hukuman,” wherein the
petitioners misrepresented themselves as the sole and only heirs of Pedro Sr.
Further, petitioners alleged that the respondents have no cause of action
against them considering that the respondents’ lawful share over the estate of
Pedro Sr., had already been transferred to them as evidenced by the Deed of
Extrajudicial Settlement with Waiver14 dated 5 December 1968, executed by
Angelo Constantino, Maria Constantino (mother of respondent Asuncion),
Arcadio Constantino and Mercedes Constantino, all heirs of Pedro Jr. In the
said deed, respondents adjudicated unto themselves to the exclusion of other
heirs, the parcel of land with an area of 192 sq m by misrepresenting that they
were “the only legitimate heirs of Pedro Sr. Thus, petitioners claimed that in
the manner similar to the assailed “Pagmamana sa Labas ng Hukuman,” they
asserted their rights and ownership over the subject 240 sq m lot without
damage to the respondents.
In essence, petitioners position was that the Deed of Extrajudicial Settlement
with Waiver which led to the issuance of Tax Declaration No. 9534 was
acquiesced in by the other heirs of Pedro Sr., including the petitioners, on the
understanding that the respondent heirs of Pedro Jr. would no longer share
and participate in the settlement and partition of the remaining lot covered by
the “Pagmamana sa Labas ng Hukuman.” Maria Laquindanum,
respondent’s predecessor-in-interest, was one of the signatories in the
Extrajudicial Settlement with Waiver who was also allegedly in
agreement with the petitioners.
RTC ruled for petitioners and dismissed the complaint holding that the
parties are in pari delito and should be left where they stand. Thus the
documents sought to be nullified remain valid.
CA reversed holding that the Extrajudicial Settlement with Waiver dated 5
December 1968 pertains to a different property and is valid absent any
evidence to the contrary. Hence, it is erroneous for the trial court to declare
the parties in pari delicto.
Hence this petition.
Respondents argue among others that no fault can be attributed to them or
that they are free from the effects of violation of any laws arising from the
supposed unlawful agreement entered into between Maria Laquindanum,
their predecessor-in-interest, and the other heirs, including petitioners herein,
based on the fact that they are not signatories to said agreement, thus, the lack
of any binding effect to them.
Issue:
W/N the parties are in pari delicto and whether the respondent’s claim that
they are not bound by the acts of their predecessor in interest has merit – No
and no, but contracts are annulled.
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Held:
No and no, but contracts are annulled.
We do not dispute that herein parties, through the Deeds they separately
executed deprived each other of rightful shares in the two lots subject of the
separate contracts — that is, if the two (2) parcels of land subject matter
thereof, form part of the estate of the late Pedro Sr.
We find that the trial court erroneously applied the doctrine of in pari delicto.
This is not to say, however, that the CA was correct in upholding the validity
of the contract denominated as “Pagmamana sa Labas ng Hukuman.” The
CA decision being, likewise, based on pari delicto, is also incorrect.
Finding the inapplicability of the in pari delicto doctrine, We find occasion
to stress that Article 1412 of the Civil Code that breathes life to the doctrine
speaks of the rights and obligations of the parties to the contract with an
illegal cause or object which does not constitute a criminal offense. It applies
to contracts which are void for illegality of subject matter and not to contracts
rendered void for being simulated,28 or those in which the parties do not
really intend to be bound thereby. Specifically, in pari delicto situations
involve the parties in one contract who are both at fault, such that neither can
recover nor have any action against each other.
In this case, there are two Deeds of extrajudicial assignments unto the
signatories of the portions of the estate of an ancestor common to them and
another set of signatories likewise assigning unto themselves portions of the
same estate. The separate Deeds came into being out of an identical intention
of the signatories in both to exclude their co-heirs of their rightful share in
the entire estate of Pedro Sr. It was, in reality, an assignment of specific
portions of the estate of Pedro Sr., without resorting to a lawful partition of
estate as both sets of heirs intended to exclude the other heirs.
Clearly, the principle of in pari delicto cannot be applied. The inapplicability
is dictated not only by the fact that two deeds, not one contract, are involved,
but because of the more important reason that such an application would
result in the validation of both deeds instead of their nullification as
necessitated by their illegality. It must be emphasized that the underlying
agreement resulting in the execution of the deeds is nothing but a void
agreement.
That said, we cannot give credence to the contention of respondents that no
fault can be attributed to them or that they are free from the effects of
violation of any laws arising from the supposed unlawful agreement entered
into between Maria Laquindanum, their predecessor-in-interest, and the other
heirs, including petitioners herein, based on the fact that they are not
signatories to said agreement, thus, the lack of any binding effect to them.
Respondents argued and set forth as an issue during the trial that they were
not signatories to any of the contract or privies to such an arrangement. It is
not disputed, however, that respondents are successors-in-interest of Maria
Laquindanum, one of the signatories in the Extrajudicial Settlement with
Waiver who was also allegedly in agreement with the petitioners.
On this note, We agree with the trial court that respondents are “privies” to
Maria Laquindanum. By the term “privies” is meant those between whom an
action is deemed binding although they are not literally parties to the said
action.30
This Court, in Correa v. Pascual,31 had occasion to explain that “privity in
estate denotes the privity between assignor and assignee, donor and donee,
grantor and grantee, joint tenant for life and remainderman or reversioner
and their respective assignees, vendor by deed of warranty and a remote
vendee or assignee. A privy in estate is one, it has been said, who derives his
title to the property in question by purchase; one who takes by conveyance.”
In fine, respondents, as successors-in- interest, derive their right from and are
in the same position as their predecessor in whose shoes they now stand.
As such successors, respondents’ situation is analogous to that of a transferee
pendente lite illustrated in Santiago Land Development Corporation v. Court
of Appeals,32 reiterating Fetalino v. Sanz33 where this Court held:
“As such, he stands exactly in the shoes of his predecessor in interest, the
original defendant, and is bound by the proceedings had in the case before
the property was transferred to him. He is a proper, but not an indispensable,
party as he would, in any event, have been bound by the judgment against his
predecessor.34”
Thus, any condition attached to the property or any agreement precipitating
the execution of the Deed of Extrajudicial Settlement with Waiver which was
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binding upon Maria Laquindanum is applicable to respondents who merely
succeeded Maria.

In light of the foregoing, while both parties acted in violation of the law on
legitimes, the pari delicto rule, expressed in the maxims “Ex dolo malo non
oritur action” and “in pari delicto potior est condition defendentis,” which
refuses remedy to either party to an illegal agreement and leaves them where
they are, does not apply in this case.

Accordingly, in order not to put a premium to the circumvention of the laws

as contemplated by the parties in the instant case, we must declare both
contracts as void. Indeed, any circumvention of the law cannot be
countenanced.48

WHEREFORE, the 31 May 2007 Decision of the Court of Appeals in CA-

G.R. CV No. 81329 is hereby REVERSED. The Pagmamana sa Labas ng
Hukuman and Extrajudicial Settlement with Waiver are hereby declared void
without prejudice to the partition of the estate of Pedro Constantino Sr. with
the full participation of all the latter’s heirs.
SO ORDERED.

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6. Cagatao v. Almonte (2013)
Facts:
This case stemmed from an action for annulment of deeds of sale,
cancellation of title and damages filed on April 18, 1996 by petitioner
Virgilio G. Cagatao (Cagatao) against respondents Guillermo Almonte
(Almonte), Arthur Aguilar (Aguilar), Spouses Ernesto and Avelina Fernandez
(Spouses Fernandez), and Marvin John Fernandez, Marson Fernandez and
Marjun Fernandez (collectively the Fernandez Siblings).4
On February 16, 1949, a homestead patent over the property subject of this
controversy (Lot No. 5598, Pls-67) was issued in favor of Juan Gatchalian.5
Cagatao claimed that sometime in 1940, Gatchalian sold the lot to Delfin
Manzulin (Manzulin) in exchange for one carabao, as embodied in a barter
agreement which was unfortunately destroyed or lost during the Second
World War.6 In 1990, Manzulin allegedly executed a private written
document in the Ilocano dialect, transferring ownership over the property to
his son-in-law, Cagatao.7 The latter then occupied and cultivated the land
until the Fernandez Siblings attempted to take possession of the lot, thereby
prompting him to file the subject complaint before the RTC.
The respondents, on the other hand, contended that on April 3, 1993, the
Spouses Fernandez purchased the property from Almonte and Aguilar who
had in their possession a tax declaration covering the said land.9 To protect
their interest, on January 17, 1996, Spouses Fernandez once again
bought the same property for P220,000.00 from Emmaculada Carlos
(Carlos), believed to be the owner of the lot by virtue of Transfer
Certificate of Title (TCT) No. T-12159-A, a reconstituted title in her
name.10 The former, in turn, executed a deed of sale, dated January 22, 1996,
in favor of their children, the Fernandez Siblings, resulting in the issuance of
TCT No. T-249437 in their names.11
RTC ruled that Cagatao’s evidence was insufficient to prove his ownership
over the land in question because Manzulin never acquired a lawful title to
the property from his predecessor, Gatchalian. The RTC, after noting that
Cagatao had no valid title, ruled that his claim of possession could not prevail
over the claim of ownership by Spouses Fernandez as evidenced by a
certificate of title. Finally, the RTC sustained the validity of TCT No. T-
12159-A in the name of Carlos, theorizing that someone must have applied
for an original certificate of title from which the said title was derived.
CA on appeal partly granted his petition and modified the decision of the
RTC. CA ruled that the deed of sale between Carlos and Spouses Fernandez
could not be declared null and void, especially because Carlos was not
impleaded as a party in the case. It, however, stressed that Cagatao’s
possession of the subject property should be respected. Any party, including
the respondents, who would like to assert their claim of ownership or a better
right over the lot should assert their right in an appropriate action in court
against him.
Hence this petition.
Issue:
W/N the failure to implead Carlos is fatal to petitioner’s case – Yes.
Held:
Yes.
Cagatao’s entire petition revolves around the assertion that the reconstituted
TCT No. 12159-A in the name of Carlos was a fake and should have been
declared void. This claim is based on the existence of an allegedly falsified
annotation (Entry No. 7259), the speculative nature of the RTC’s declaration
that the said title appeared valid, and the fact that the respondents were not
able to present an affidavit of loss or any proof of judicial reconstitution.22
The Court cannot accommodate the petitioner.
The validity of TCT No. 12159-A cannot be attacked collaterally; Carlos is
an indispensable party
From the arguments of Cagatao, it is clear that he is assailing the validity of
the title of Carlos over the land in question. Section 48 of P.D. No. 1529
clearly states that “a certificate of title shall not be subject to collateral attack.
It cannot be altered, modified, or cancelled except in a direct proceeding in
accordance with law.” An attack on the validity of the title is considered to
be a collateral attack when, in an action to obtain a different relief and as an
incident of the said action, an attack is made against the judgment granting
the title.23
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Cagatao’s original complaint before the RTC was for the cancellation of TCT
No. T-249437 in the name of the Fernandez Siblings and the nullification of
the deeds of sale between the Fernandez Siblings and Spouses Fernandez, and
the earlier one between the latter and Almonte and Aguilar. Nowhere in his
complaint did Cagatao mention that he sought to invalidate TCT No. 12159-
A. It was only during the course of the proceedings, when Spouses Fernandez
disclosed that they had purchased the property from Carlos, that Cagatao
thought of questioning the validity of TCT No. 12159-A.

Moreover, Carlos, as the registered owner of the lot whose title Cagatao seeks
to nullify, should have been impleaded as an indispensable party.

Section 7, Rule 3 of the 1997 Rules of Civil Procedure defines indispensable

parties to be “parties in interest without whom no final determination can be
had of an action.”

It is clear in this case that Cagatao failed to include Carlos in his action for
the annulment of TCT No. 12159-A. Basic is the rule in procedural law that
no man can be affected by any proceeding to which he is a stranger and
strangers to a case cannot be bound by a judgment rendered by the court. It
would be the height of injustice to entertain an action for the annulment of
Carlos’ title without giving her the opportunity to present evidence to support
her claim of ownership through title. In addition, it is without question a
violation of the constitutional guarantee that no person shall be deprived of
property without due process of law.

Thus, should Cagatao wish to question the ownership of the subject lot of
Carlos and Spouses Fernandez, he should institute a direct action before the
proper courts for the cancellation or modification of the titles in the name of
the latter two. He cannot do so now because it is tantamount to a collateral
attack on Carlos’ title, which is expressly prohibited by law and
jurisprudence.

While the Court finds that the validity of TCT No. 12159-A cannot be
attacked collaterally and that Cagatao had not sufficiently established his
claim of ownership over the subject property, it agrees with the CA that he,
the current possessor, shall remain to be so until such time that his possession
is successfully contested by a person with a better right.

WHEREFORE, the petition is DENIED. SO ORDERED.

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7. Legaspi Towers 300 Inc v. Muer (2012)
Facts:
Pursuant to the by-laws of Legaspi Towers 300, Inc., petitioners Lilia
Marquinez Palanca, Rosanna D. Imai, Gloria Domingo and Ray Vincent, the
incumbent Board of Directors, set the annual meeting of the members of the
condominium corporation and the election of the new Board of Directors for
the years 2004-2005 on April 2, 2004 at 5:00 p.m. at the lobby of Legaspi
Towers 300, Inc.
Out of a total number of 5,723 members who were entitled to vote, 1,358
were supposed to vote through their respective proxies and their votes were
critical in determining the existence of a quorum, which was at least 2,863
(50% plus 1).
The Committee on Elections of Legaspi Towers 300, Inc., however, found
most of the proxy votes, at its face value, irregular, thus, questionable; and
for lack of time to authenticate the same, petitioners adjourned the meeting
for lack of quorum.
However, the group of respondents challenged the adjournment of the
meeting. Despite petitioners’ insistence that no quorum was obtained during
the annual meeting held on April 2, 2004, respondents pushed through with
the scheduled election and were elected as the new Board of Directors and
officers of Legaspi Towers 300, Inc. Subsequently, they submitted a General
Information Sheet to the Securities and Exchange Commission (SEC) with a
new set of officers.
Rem Part
On April 13, 2004, petitioners filed a Complaint for the Declaration of
Nullity of Elections with Prayers for the Issuance of Temporary Restraining
Orders and Writ of Preliminary Injunction and Damages against respondents
with the RTC of Manila. Later they amended their Complaint.
During the pre-trial conference held on July 21, 2004, the trial court resolved
various incidents in the case and other issues raised by the contending parties.
One of the incidents acted upon by the trial court was petitioners’ motion
to amend complaint to implead Legaspi Towers 300, Inc. as plaintiff,
which motion was denied with the issuance of two Orders both dated July
21, 2004. The RTC held that the said motion could not be admitted for being
improper.
MR of the two Orders were denied.
CA on R65 affirmed. The Court of Appeals stated that petitioners’ complaint
sought to nullify the election of the Board of Directors held on April 2, 2004,
and to protect and enforce their individual right to vote. The appellate court
held that as the right to vote is a personal right of a stockholder of a
corporation, such right can only be enforced through a direct action; hence,
Legaspi Towers 300, Inc. cannot be impleaded as plaintiff in this case.
MR denied. Hence this R45.
Arguments:
Petitioners clarified that the inclusion of Legaspi Towers 300, Inc. as a party-
plaintiff in the Second Amended Complaint was, first and foremost, intended
as a direct action by the corporation acting through them (petitioners) as the
reconstituted Board of Directors of Legaspi Towers 300, Inc. Petitioners
allege that their act of including the corporation as party-plaintiff is consistent
with their position that the election conducted by respondents was invalid;
hence, petitioners, under their by-laws, could reconstitute themselves as the
Board of Directors of Legaspi Towers 300, Inc. in a hold-over capacity for
the succeeding term. By so doing, petitioners had the right as the rightful
Board of Directors to bring the action in representation of Legaspi Towers
300, Inc. Thus, the Second Amended Complaint was intended by the
petitioners as a direct suit by the corporation joined in by the petitioners to
protect and enforce their common rights.
Petitioners contend that Legaspi Towers 300, Inc. is a real party- in- interest
as it stands to be affected the most by the controversy, because it involves the
determination of whether or not the corporation’s by-laws was properly
carried out in the meeting held on April 2, 2004, when despite the
adjournment of the meeting for lack of quorum, the elections were still
conducted. Although petitioners admit that the action involves their right to
vote, they argue that it also involves the right of the condominium corporation
to be managed and run by the duly-elected Board of Directors, and to seek
redress against those who wrongfully occupy positions of the corporation and
who may mismanage the corporation.
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Issue:
W/N RTC erred in denying the motion to implead the corporation Legaspi
Towers as party-plaintiff – No, RTC did not err.
Held:
No, RTC did not err.
Petitioners’ argument is unmeritorious.
The Court notes that in the Amended Complaint, petitioners as plaintiffs
stated that they are the incumbent reconstituted Board of Directors of Legaspi
Towers 300, Inc., and that defendants, herein respondents, are the newly-
elected members of the Board of Directors; while in the Second Amended
Complaint, the plaintiff is Legaspi Towers 300, Inc., represented by
petitioners as the allegedly incumbent reconstituted Board of Directors of
Legaspi Towers 300, Inc.
The Second Amended Complaint states who the plaintiffs are, thus:
That the plaintiffs are: LEGASPI TOWERS 300, INC., non-stock
corporation xxx duly represented by the incumbent reconstituted Board
of Directors of Legaspi Towers 300, Inc.,
The Court agrees with the Court of Appeals that the Second Amended
Complaint is meant to be a derivative suit filed by petitioners in behalf of the
corporation. The Court of Appeals stated in its Decision that petitioners
justified the inclusion of Legaspi Towers 300, Inc. as plaintiff in Civil Case
No. 0410655 by invoking the doctrine of derivative suit.
Is a derivative suit proper in this case? No.
Cua v. Tan:
“A derivative suit must be differentiated from individual and representative
or class suits, thus:
Suits by stockholders or members of a corporation based on wrongful or
fraudulent acts of directors or other persons may be classified into:
(1) individual suits,
(2) class suits, and
(3) derivative suits.
Where a stockholder or member is denied the right of inspection, his suit
would be individual because the wrong is done to him personally and not
to the other stockholders or the corporation.
Where the wrong is done to a group of stockholders, as where preferred
stockholders’ rights are violated, a class or representative suit will be
proper for the protection of all stockholders belonging to the same group.
But where the acts complained of constitute a wrong to the corporation
itself, the cause of action belongs to the corporation and not to the
individual stockholder or member.
Thus, an individual stockholder is permitted to institute a derivative suit on
behalf of the corporation wherein he holds stock in order to protect or
vindicate corporate rights, whenever officials of the corporation refuse to
sue or are the ones to be sued or hold the control of the corporation. In such
actions, the suing stockholder is regarded as the nominal party, with the
corporation as the party-in- interest.”
Since it is the corporation that is the real party-in-interest in a derivative suit,
then the reliefs prayed for must be for the benefit or interest of the
corporation. When the reliefs prayed for do not pertain to the corporation,
then it is an improper derivative suit.
The requisites for a derivative suit are as follows:
a) the party bringing suit should be a shareholder as of the time of the act or
transaction complained of, the number of his shares not being material;
b) he has tried to exhaust intra-corporate remedies, i.e., has made a demand
on the board of directors for the appropriate relief but the latter has failed or
refused to heed his plea; and
c) the cause of action actually devolves on the corporation, the wrongdoing
or harm having been, or being caused to the corporation and not to the
particular stockholder bringing the suit.
In this case, petitioners, as members of the Board of Directors of the
condominium corporation before the election in question, filed a complaint
against the newly-elected members of the Board of Directors for the years
2004-2005, questioning the validity of the election held on April 2, 2004, as
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it was allegedly marred by lack of quorum, and praying for the nullification
of the said election.

As stated by the Court of Appeals, petitioners’ complaint seek to nullify the

said election, and to protect and enforce their individual right to vote.
Petitioners seek the nullification of the election of the Board of Directors for
the years 2004-2005, composed of herein respondents, who pushed through
with the election even if petitioners had adjourned the meeting allegedly due
to lack of quorum. Petitioners are the injured party, whose rights to vote and
to be voted upon were directly affected by the election of the new set of board
of directors. The party-in-interest are the petitioners as stockholders, who
wield such right to vote. The cause of action devolves on petitioners, not the
condominium corporation, which did not have the right to vote. Hence, the
complaint for nullification of the election is a direct action by petitioners,
who were the members of the Board of Directors of the corporation before
the election, against respondents, who are the newly-elected Board of
Directors.

Under the circumstances, the derivative suit filed by petitioners in behalf of

the condominium corporation in the Second Amended Complaint is
improper.

The stockholder’s right to file a derivative suit is not based on any express
provision of The Corporation Code, but is impliedly recognized when the law
makes corporate directors or officers liable for damages suffered by the
corporation and its stockholders for violation of their fiduciary duties, which
is not the issue in this case.

WHEREFORE, the petition is DENIED. The Decision of the Court of

Appeals in CA-G.R. CV No. 87684, dated July 22, 2005, and its Resolution
dated November 24, 2005 are AFFIRMED.
Costs against petitioners. SO ORDERED.

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8. Republic v. Agunoy (2005)
Facts:
Respondent Gregorio Anuoy, Sr. filed his application for Free Patent No.5-
1414 covering two parcels of land. On January 18, 1967, he was issued Free
Patent No. 314450 by the Director of Lands.
On February 6, 1967, the Register of Deeds of Nueva Ecija registered Free
Patent No. 314450 and issued the corresponding Original Certificate of Title
(OCT) No. P-4522 in the name of Gregorio Agunoy, Sr.
On March 10, 1967, the heirs of Eusebio Perez, represented by Francisca
Perez, caused the annotation on the said OCT of an adverse claim in their
favor over a portion of 15.1593 hectares of the property.
The said heirs filed a formal protest with the Bureau of Lands that Lot 1341
of the Sta. Rosa Cadastre, Nueva Ecija, covered by Original Certificate of
Title No-P4522 is identical to Lots 1 and 2 of Plan Psu-47200 which had been
adjudicated as private property of said protestant pursuant to a decision
promulgated on October 24, 1960 by the Court of First Instance of Nueva
Ecija in Land Registration Case No. 430, LRC Records No. 14876.
On May 3, 1976, the chief of the Legal Division, Bureau of Lands, conducted
a formal investigation and ocular inspection of the premises and it was
ascertained that Free Patent No. 314450 and its corresponding OCT No. P-
4522 were improperly and fraudulently issued (Records, p.78)
On July 31, 1979, upon the death of the wife of Gregorio Agunoy, Sr., the
heirs, namely Gregorio Sr., Tomas, Lilian, Angelito and Gregorio, Jr.,
executed a Deed of Extrajudicial Partition with Sale in favor of Joaquin
Sangabol for and in consideration of the sum of Twenty Thousand Pesos
(P20,000.00).
The Original Certificate of Title No. P-4522 was cancelled by the Register of
Deeds of Nueva Ecija and Transfer Certificate of Title (TCT) No. 166270
was issued in favor of the aforenamed heirs. Said TCT No. 166270 was again
cancelled by reason of the concurrent sale to Joaquin Sangabol in whose favor
TCT No. NT-166271 was issued. to defendant Gregorio Agunoy, Sr. are null and void and should be cancelled.
On May 12, 1980, the adverse claim of Francisca Perez, et al. annotated at
the back of the OCT was cancelled by the Register of Deeds of Nueva Ecija
(Exhibit “G”).
On January 16, 1981, Joaquin Sangabol subdivided the property described as
Lot 1341 in TCT No. NT-166271 into three lots. Thereafter, the lands were
transferred to different persons at different points in time…
On May 10, 1988, the Chief of the Legal Division recommended to the
Director of Lands that court action be instituted for the cancellation of
Free Patent No. 314450 and its corresponding Original Certificate of Title
No. P- 4522 in the name Gregorio Agunoy, Sr., as well as other subsequent
transfer certificates of title issued therefrom based on the foregoing findings
Rem Part
It was against the foregoing backdrop of events when, on May 24, 1990, in
the Regional Trial Court at Gapan, Nueva Ecija petitioner Republic of the
Philippines, thru the Office of the Solicitor General, filed the complaint in
this case against several defendants, among whom are the herein respondents
Gregorio Agunoy, Sr., his children, the spouses Eduardo Dee and Arcelita
Marquez-Dee and the Rural Bank of Gapan, Nueva Ecija.
In its complaint, docketed as Civil Case No. 831-AF, petitioner Republic
alleged, inter alia:
1. Free Patent No. 314450 and its corresponding Original Certificate of Title
No. P-4522 were procured by defendant Gregorio Agunoy, Sr., through fraud,
deceit and misrepresentation since the property in question (Lots 1341 and
1342) at the time the patent and the title were issued was already
adjudicated as private property of the heirs of Eusebio Perez and Valeriano
Espiritu, respectively. Consequently, the then Bureau of Lands, now Lands
Management Bureau, no longer had any jurisdiction and control over the
same.
2. The fraudulent acts and misrepresentation of defendant Gregorio Agunoy,
Sr. had misled the then Bureau of Lands in issuing said patent. Since the
property in question was no longer a disposable public land, Free Patent No.
314450 and its corresponding Original Certificate of Title No. P-4522 issued
The OSG prayed for a judgment:
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1. Declaring Free Patent No. 314450 and the corresponding Original
Certificate of Title No. P-4522 in the name of Gregorio Agunoy, as well as
all other subsequent transfer certificates of title emanating therefrom,
including all liens and encumbrances annotated thereon, null and void;
RTC ruled for petitioner and declared as null and void Free Patent No. 314450
and the corresponding Original Certificate of Title No. P-4522 in the name
of Gregorio Agunoy, as well as all other subsequent transfer certificates of
titles emanating therefrom.
CA reversed holding that respondent Agunoy validly acquired the patent and
the OCT, and that the respondent Spouses Dee’s TCT (which sprung from
Agunoy’s title) is valid because the spouses acquired it in good faith and for
value.
The CA declared, among others, that petitioner Republic is not the real party
in interest in this case.
Hence this petition.
Issue:
W/N the Republic is a real party in interest – No.
Held:
No.
We DENY. To begin with, we agree with the Court of Appeals that
petitioner Republic is not the real party-in-interest in this case. other than the heirs of Eusebio Perez and Valeriano Espiritu, but certainly not
Basic it is in the law of procedure that every action must be prosecuted or
defended in the name of the real party-in-interest, meaning “the party who
stands to be benefited or injured by the judgment in the suit, or the party
entitled to the avails of the suit,” a procedural rule reechoed in a long line of
cases decided by this Court.
For sure, not too long ago, in Shipside, Inc. vs. Court of Appeals, citing earlier
cases, we wrote:
“x x x. Consequently, the Republic is not a real party in interest and it may
not institute the instant action. Nor may it raise the defense of
imprescriptibility, the same being applicable only in cases where the
government is a party in interest. Under Section 2 of Rule 3 of the 1997 Rules
of Civil Procedure, “every action must be prosecuted or defended in the name
of the real party in interest.” To qualify a person to be a real party in interest
in whose name an action must be prosecuted, he must appear to be the present
real owner of the right sought to enforced (Pioneer Insurance v. CA, 175
SCRA 668 [1989]). A real party in interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled to the
avails of the suit. And by real interest is meant a present substantial interest,
as distinguished from a mere expectancy, or a future, contingent, subordinate
or consequential interest.”
The very complaint in this case, supra, filed by petitioner Republic before the
trial court unmistakably alleges that at the time Free Patent No. 31445 and its
corresponding Original Certificate of Title No. P-45222 were issued to
Gregorio Agunoy, Sr., “the property in question (Lots 1341 and 1342) was
already adjudicated as private property of the heirs of Eusebio Perez and
Valeriano Espiritu,” and that at that time, “the property in question was no
longer a disposable public land.”
With the very admissions by the petitioner itself in its basic pleading that Lots
No. 1341 and 1342 are already private properties of the heirs of Eusebio
Perez and Valeriano Espiritu, and are, therefore, “no longer disposable
public land” over which the then Bureau of Lands, now Lands Management
Bureau, “no longer had any jurisdiction and control,” we are simply at a
loss to understand how petitioner Republic can still profess to be the real
party-in- interest in this case, and insists that the disputed properties are still
part of the public domain. If ever, the real party-in-interest could be none
the petitioner.
Then, too, it is striking to note that even as the complaint is basically one for
reversion of private property to the mass of public domain, petitioner did not
implead either the heirs of Eusebio Perez or that of Valeriano Espiritu.
Without doubt, if our decision hereon were to be in favor of petitioner, the
real beneficiary thereof is not the State. And because, as no less admitted by
the petitioner, the lands subject of this case are no longer part of the public
domain, the nullification of Agunoy’s Free Patent P-314450 and OCT No. P-
4522 would not result in the reversion of the lands subject thereof to the mass
of public land. And the government, not being the real party-in-interest, is
without personality to institute reversion proceedings.
Avila 4B | 2016
9. Juana Complex v. Fil-Estate (2012)
Facts:
On January 20, 1999, Juana Complex I Homeowners Association, Inc.
(JCHA), together with individual residents of Juana Complex I and other
neighboring subdivisions (collectively referred as JCHA, et al.), instituted a
complaint5 for damages, in its own behalf and as a class suit representing
the regular commuters and motorists of Juana Complex I and
neighboring subdivisions who were deprived of the use of La Paz Road,
against Fil-Estate Land, Inc. (Fil-Estate), Fil-estate Ecocentrum Corporation
(FEEC), La Paz Housing & Development Corporation (La Paz), and Warbird
Security Agency and their respective officers (collectively referred as Fil-
Estate, et al.).
The complaint alleged that JCHA, et al. were regular commuters and
motorists who constantly travelled towards the direction of Manila and
Calamba; that they used the entry and exit toll gates of South Luzon
Expressway (SLEX) by passing through right-of-way public road known as
La Paz Road; that they had been using La Paz Road for more than ten (10)
years; that in August 1998, Fil-estate excavated, broke and deliberately
ruined La Paz Road that led to SLEX so JCHA, et al. would not be able to
pass through the said road; that La Paz Road was restored by the residents to
make it passable but Fil-estate excavated the road again; that JCHA reported
the matter to the Municipal Government and the Office of the Municipal
Engineer but the latter failed to repair the road to make it passable and safe
to motorists and pedestrians; that the act of Fil- estate in excavating La Paz
Road caused damage, prejudice, inconvenience, annoyance, and loss of
precious hours to them, to the commuters and motorists because traffic was
re-routed to narrow streets that caused terrible traffic congestion and hazard;
and that its permanent closure would not only prejudice their right to free and
unhampered use of the property but would also cause great damage and
irreparable injury.
On February 26, 1999, Fil-Estate, et al. filed a motion to dismiss7 arguing
that the complaint failed to state a cause of action and that it was improperly
filed as a class suit. On March 5, 1999, JCHA, et al. filed their comment8 on
the motion to dismiss to which respondents filed a reply.9
RTC denied the MTD.
On a R65, CA partially affirmed, sustaining the RTC ruling that the complaint
was properly filed as a class suit as it was shown that the case was of common
interest and that the individuals sought to be represented were so numerous
that it was impractical to include all of them as parties.
Hence this petition.
Issue:
W/N the complaint was properly filed as a class suit – Yes.
Held:
Yes.
With respect to the issue that the case was improperly instituted as a class
suit, the Court finds the opposition without merit. Section 12, Rule 3 of the
Rules of Court defines a class suit, as follows:
“Sec. 12. Class suit.— When the subject matter of the controversy is one of
common or general interest to many persons so numerous that it is
impracticable to join all as parties, a number of them which the court finds to
be sufficiently numerous and representative as to fully protect the interests of
all concerned may sue or defend for the benefit of all. Any party in interest
shall have the right to intervene to protect his individual interest.”
The necessary elements for the maintenance of a class suit are:
1) the subject matter of controversy is one of common or general interest to
many persons;
2) the parties affected are so numerous that it is impracticable to bring them
all to court; and
3) the parties bringing the class suit are sufficiently numerous or
representative of the class and can fully protect the interests of all concerned.
In this case, the suit is clearly one that benefits all commuters and motorists
who use La Paz Road. As succinctly stated by the CA:
“The subject matter of the instant case, i.e., the closure and excavation of the
La Paz Road, is initially shown to be of common or general interest to many
persons. The records reveal that numerous individuals have filed
manifestations with the lower court, conveying their intention to join private
respondents in the suit and claiming that they are similarly situated with
private respondents for they were also prejudiced by the acts of petitioners in
closing and excavating the La Paz Road. Moreover, the individuals sought to
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be represented by private respondents in the suit are so numerous that it is
impracticable to join them all as parties and be named individually as
plaintiffs in the complaint. These individuals claim to be residents of various
barangays in Biñan, Laguna and other barangays in San Pedro, Laguna.”

WHEREFORE, the petitions are DENIED. Accordingly, the July 31, 2001
Decision and February 21, 2002 Resolution of the Court of Appeals in CA-
G.R. SP No. 60543 are AFFIRMED.
SO ORDERED.

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10. Banda v. Ermita (2010)
Facts:
The National Printing Office (NPO) was formed on July 25, 1987, during the
term of former President Corazon C. Aquino (President Aquino), by virtue of
Executive Order No. 2851 which provided, among others, the creation of the
NPO from the merger of the Government Printing Office and the relevant
printing units of the Philippine Information Agency (PIA).
Under Section 6, the NPO shall have exclusive printing jurisdiction over
Printing, binding and distribution of all standard and accountable forms of
national, provincial, city and municipal governments, including government
corporations, among others.
On October 25, 2004, President Arroyo issued the herein assailed Executive
Order No. 378, amending Section 6 of Executive Order No. 285 by, inter alia,
removing the exclusive jurisdiction of the NPO over the printing services
requirements of government agencies and instrumentalities.
The pertinent portions of Executive Order No. 378, in turn, provide:
“SECTION 1. The NPO shall continue to provide printing services to
government agencies and instrumentalities as mandated by law.
However, it shall no longer enjoy exclusive jurisdiction over the printing
services requirements of the government over standard and accountable
forms. It shall have to compete with the private sector, except in the
printing of election paraphernalia…”
Pursuant to Executive Order No. 378, government agencies and
instrumentalities are allowed to source their printing services from the private
sector through competitive bidding, subject to the condition that the services
offered by the private supplier be of superior quality and lower in cost
compared to what was offered by the NPO. Executive Order No. 378 also
limited NPO’s appropriation in the General Appropriations Act to its income.
Perceiving Executive Order No. 378 as a threat to their security of tenure as
employees of the NPO, petitioners now challenge its constitutionality,
contending that: (1) it is beyond the executive powers of President Arroyo to
amend or repeal Executive Order No. 285 issued by former President Aquino
when the latter still exercised legislative powers; and (2) Executive Order No.
378 violates petitioners’ security of tenure, because it paves the way for the
gradual abolition of the NPO.
Petitioners characterize their action as a class suit filed on their own
behalf and on behalf of all their co-employees at the National Printing
Office (NPO).
Issue:
W/N the petition qualifies as a class suit – No.
Held:
No.
Before proceeding to resolve the substantive issues, the Court must first delve
into a procedural matter.
Since petitioners instituted this case as a class suit, the Court, thus, must first
determine if the petition indeed qualifies as one. In Board of Optometry v.
Colet, 260 SCRA 88 (1996), we held that “[c]ourts must exercise utmost
caution before allowing a class suit, which is the exception to the requirement
of joinder of all indispensable parties. For while no difficulty may arise if the
decision secured is favorable to the plaintiffs, a quandary would result if the
decision were otherwise as those who were deemed impleaded by their self-
appointed representatives would certainly claim denial of due process.”
Section 12, Rule 3 of the Rules of Court defines a class suit, as follows: “Sec.
12. Class suit.—When the subject matter of the controversy is one of
common or general interest to many persons so numerous that it is
impracticable to join all as parties, a number of them which the court finds to
be sufficiently numerous and representative as to fully protect the interests of
all concerned may sue or defend for the benefit of all. Any party in interest
shall have the right to intervene to protect his individual interest.”
From the foregoing definition, the requisites of a class suit are:
1) the subject matter of controversy is one of common or general interest to
many persons;
2) the parties affected are so numerous that it is impracticable to bring them
all to court; and
3) the parties bringing the class suit are sufficiently numerous or
representative of the class and can fully protect the interests of all concerned.
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In Mathay v. The Consolidated Bank and Trust Company, 58 SCRA 559
(1974), the Court held that: An action does not become a class suit merely
because it is designated as such in the pleadings. Whether the suit is or is not
a class suit depends upon the attending facts, and the complaint, or other
pleading initiating the class action should allege the existence of the
necessary facts, to wit:
1. the existence of a subject matter of common interest, and
2. the existence of a class and
3. the number of persons in the alleged class, in order that the court
might be enabled to determine whether the members of the class are so
numerous as to make it impracticable to bring them all before the court,
to contrast the number appearing on the record with the number in the
class and to determine whether claimants on record adequately
represent the class and the subject matter of general or common
interest.”
Here, the petition failed to state the number of NPO employees who would
be affected by the assailed Executive Order and who were allegedly
represented by petitioners. It was the Solicitor General, as counsel for
respondents, who pointed out that there were about 549 employees in the
NPO.4
The 67 petitioners undeniably comprised a small fraction of the NPO
employees whom they claimed to represent. Subsequently, 32 of the original
petitioners executed an Affidavit of Desistance, while one signed a letter
denying ever signing the petition,5 ostensibly reducing the number of
petitioners to 34.
We note that counsel for the petitioners challenged the validity of the
desistance or withdrawal of some of the petitioners and insinuated that such
desistance was due to pressure from people “close to the seat of power.” Still,
even if we were to disregard the affidavit of desistance filed by some of the
petitioners, it is highly doubtful that a sufficient, representative number of
NPO employees have instituted this purported class suit. A perusal of the
petition itself would show that of the 67 petitioners who signed the
Verification/Certification of Non-Forum Shopping, only 20 petitioners were
in fact mentioned in the jurat as having duly subscribed the petition before
the notary public. In other words, only 20 petitioners effectively instituted the
present case.
Indeed, in MVRS Publications, Inc. v. Islamic Da’wah Council of the
Philippines, Inc., 396 SCRA 210 (2003), we observed that an element of a
class suit or representative suit is the adequacy of representation. In
determining the question of fair and adequate representation of members of a
class, the court must consider
(a) whether the interest of the named party is coextensive with the interest of
the other members of the class;
(b) the proportion of those made a party, as it so bears, to the total
membership of the class; and
(c) any other factor bearing on the ability of the named party to speak for the
rest of the class.
Previously, we held in Ibañes v. Roman Catholic Church, that where the
interests of the plaintiffs and the other members of the class they seek to
represent are diametrically opposed, the class suit will not prosper.
It is worth mentioning that a Manifestation of Desistance,9 to which the
previously mentioned Affidavit of Desistance10 was attached, was filed by
the President of the National Printing Office Workers Association
(NAPOWA). The said manifestation expressed NAPOWA’s opposition to
the filing of the instant petition in any court.
Even if we take into account the contention of petitioners’ counsel that the
NAPOWA President had no legal standing to file such manifestation, the said
pleading is a clear indication that there is a divergence of opinions and views
among the members of the class sought to be represented, and not all are in
favor of filing the present suit. There is here an apparent conflict between
petitioners’ interests and those of the persons whom they claim to represent.
Since it cannot be said that petitioners sufficiently represent the interests of
the entire class, the instant case cannot be properly treated as a class suit.
WHEREFORE, the petition is hereby DISMISSED and the prayer for a
Temporary Restraining Order and/or a Writ of Preliminary Injunction is
hereby DENIED. No costs.
SO ORDERED.
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11. Napere v. Barbarona (2008)
Facts:
Respondent Amando Barbarona is the registered owner of Lot No. 3177,
situated in Barangay San Sotero (formerly Tambis), Javier, Leyte and
covered by Original Certificate of Title (OCT) No. P-7350.
Lot No. 3176, covered by OCT No. 1110 in the name of Anacleto Napere,
adjoins said lot on the northeastern side. After Anacleto died, his son, Juan
Napere, and the latter’s wife, herein petitioner, planted coconut trees on
certain portions of the property with the consent of his coheirs.
In their complaint for recovery of possession, quieting of title and
damages, respondents alleged that in April 1980, the spouses Napere, their
relatives and hired laborers, by means of stealth and strategy, encroached
upon and occupied the northeastern portion of Lot No. 3177; that the Naperes
harvested the coconut fruits thereon, appropriated the proceeds thereof, and,
despite demands, refused to turn over possession of the area; that in April
1992, a relocation survey was conducted which confirmed that the
respondents’ property was encroached upon by the Naperes; that on the basis
of the relocation survey, the respondents took possession of this encroached
portion of the lot and harvested the fruits thereon from April 1993 to
December 1993; but that in January 1994, the Naperes repeated their acts by
encroaching again on the respondents’ property, harvesting the coconuts and
appropriating the proceeds thereof, and refusing to vacate the property on
demand.
On November 10, 1995, while the case was pending, Juan Napere died.
Their counsel informed the court of Juan Napere’s death, and submitted
the names and addresses of Napere’s heirs.
At the pre-trial, the RTC noted that the Naperes were not contesting the
respondents’ right of possession over the disputed portion of the property but
were demanding the rights of a planter in good faith under Articles 445 and
455 of the Civil Code.
RTC ruled against the estate of Juan Napere.
Petitioner appealed the case to the Court of Appeals (CA), arguing, inter alia,
that the judgment of the trial court was void for lack of jurisdiction over the
heirs who were not ordered substituted as party- defendants for the deceased.
CA affirmed RTC. The appellate court held that failure to substitute the heirs
for the deceased defendant will not invalidate the proceedings and the
judgment in a case which survives the death of such party.
Hence this petition.
Petitioner alleges that the trial court did not acquire jurisdiction over the
persons of the heirs because of its failure to order their substitution pursuant
to Section 17, Rule 3 of the Rule of Court; hence, the proceedings conducted
and the decision rendered by the trial court are null and void.
Issue:
W/N the proceedings before the RTC are void for lack of jurisdiction over
the heirs of Napere for failure to order the substitution of the petitioner heirs
– No.
Held:
No.
The petition must fail.
When a party to a pending case dies and the claim is not extinguished by such
death, the Rules require the substitution of the deceased party by his legal
representative or heirs. In such case, counsel is obliged to inform the court of
the death of his client and give the name and address of the latter’s legal
representative.
The complaint for recovery of possession, quieting of title and damages is an
action that survives the death of the defendant. Notably, the counsel of Juan
Napere complied with his duty to inform the court of his client’s death and
the names and addresses of the heirs. The trial court, however, failed to order
the substitution of the heirs. Nonetheless, despite this oversight, we hold that
the proceedings conducted and the judgment rendered by the trial court are
valid.
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The Court has repeatedly declared that failure of the counsel to comply with The alleged denial of due process as would nullify the proceedings and the
his duty to inform the court of the death of his client, such that no substitution judgment thereon can be invoked only by the heirs whose rights have been
is effected, will not invalidate the proceedings and the judgment rendered violated. Violation of due process is a personal defense that can only be
thereon if the action survives the death of such party. asserted by the persons whose rights have been allegedly violated. Petitioner,
who had every opportunity and who took advantage of such opportunity,
The trial court’s jurisdiction over the case subsists despite the death of the through counsel, to participate in the trial court proceedings, cannot claim
party. Mere failure to substitute a deceased party is not sufficient ground to denial of due process.
nullify a trial court’s decision. The party alleging nullity must prove that
there was an undeniable violation of due process. WHEREFORE, premises considered, the petition is DENIED DUE
COURSE. The Decision of the Court of Appeals, dated October 9, 2003, in
Strictly speaking, the rule on substitution by heirs is not a matter of CA-G.R. CV No. 56457, is AFFIRMED.
jurisdiction, but a requirement of due process. The rule on substitution was SO ORDERED.
crafted to protect every party’s right to due process. It was designed to ensure
that the deceased party would continue to be properly represented in the suit
through his heirs or the duly appointed legal representative of his estate.
Moreover, non-compliance with the Rules results in the denial of the right to
due process for the heirs who, though not duly notified of the proceedings,
would be substantially affected by the decision rendered therein. Thus, it is
only when there is a denial of due process, as when the deceased is not
represented by any legal representative or heir, that the court nullifies
the trial proceedings and the resulting judgment therein.

Formal substitution by heirs is not necessary when they themselves

voluntarily appear, participate in the case, and present evidence in defense of
the deceased. In such case, there is really no violation of the right to due
process. The essence of due process is the reasonable opportunity to be heard
and to submit any evidence available in support of one’s defense. When due
process is not violated, as when the right of the representative or heir is
recognized and protected, noncompliance or belated formal compliance with
the Rules cannot affect the validity of a promulgated decision.

In light of these pronouncements, we cannot nullify the proceedings before

the trial court and the judgment rendered therein because the petitioner, who
was, in fact, a codefendant of the deceased, actively participated in the case.

The records show that the counsel of Juan Napere and petitioner continued to
represent them even after Juan’s death. Hence, through counsel, petitioner
was able to adequately defend herself and the deceased in the proceedings
below. Due process simply demands an opportunity to be heard and this
opportunity was not denied petitioner.

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12. Sumaljag v. Spouses Literato (2008)
Facts:
On November 16, 1993, Josefa D. Maglasang (“Josefa”) filed with the
Regional Trial Court (“RTC”), Branch 14, Baybay, Leyte a complaint3
(docketed as Civil Case No. B-1239) for the nullity of the deed of sale of
real property purportedly executed between her as vendor and the spouses
Diosdidit and Menendez Literato (the “respondent spouses”) as vendees.
The complaint alleged that this deed of sale dated October 15, 1971 of Lot
1220-D is spurious. Josefa was the sister of Menendez Maglasang Literato
(“Menendez”). They were two (2) of the six (6) heirs who inherited equal
parts of a 6.3906-hectare property (Lot 1220) passed on to them by their
parents Cristito and Inecita Diano Maglasang.4 Lot 1220-D was partitioned
to Josefa, while Lot 1220-E was given to Menendez.
The respondent spouses’ response to the complaint was an amended answer
with counterclaim5 denying that the deed of sale was falsified. They
impleaded the petitioner with Josefa as counterclaim defendant on the
allegation that the petitioner, at the instance of Josefa, occupied Lot 1220-D
and Lot 1220-E without their (the respondent spouses’) authority; Lot 1220-
E is theirs by inheritance while 1220-D had been sold to them by Josefa. They
also alleged that the petitioner acted in bad faith in acquiring the two (2) lots
because he prepared and notarized on September 26, 1986 the contract of
lease over the whole of Lot 1220 between all the Maglasang heirs (but
excluding Josefa) and Vicente Tolo, with the lease running from 1986 to
1991; thus, the petitioner then knew that Josefa no longer owned Lot 1220-
D.
Civil Case No. 12816 is a complaint that Menendez filed on April 4, 1996
with the RTC for the declaration of the inexistence of lease contract,
recovery of possession of land, and damages against the petitioner and
Josefa after the RTC dismissed the respondent spouses’ counterclaim in Civil
Case No. 1239.
The complaint alleged that Josefa, who had previously sold Lot 1220-D to
Menendez, leased it, together with Lot 1220-E, to the petitioner. Menendez
further averred that the petitioner and Josefa were in bad faith in entering their
contract of lease as they both knew that Josefa did not own the leased lots.
Menendez prayed, among others, that this lease contract between Josefa and
the petitioner be declared null and void.
Josefa died on May 3, 1999 during the pendency of Civil Case Nos. B-
1239 and B-1281.
On August 13, 1999, Atty. Zenen A. Puray (“Atty. Puray”)—the petitioner’s
and Josefa’s common counsel—asked the RTC in Civil Case No. 1239 that
he be given an extended period or up to September 10, 1999 within which to
file a formal notice of death and substitution of party.
The RTC granted the motion in an order dated August 13, 1999.7 On August
26, 1999, Atty. Puray filed with the RTC a notice of death and
substitution of party,8 praying that Josefa—in his capacity as plaintiff
and third party counterclaim defendant—be substituted by the
petitioner Judge Sumaljag. The submission alleged that prior to Josefa’s
death, she executed a Quitclaim Deed9 over Lot 1220-D in favor of
Remismundo D. Maglasang10 who in turn sold this property to the petitioner.
Menendez, through counsel, objected to the proposed substitution, alleging
that Atty. Puray filed the notice of death and substitution of party beyond the
thirty-day period provided under Section 16, Rule 3 of the 1997 Rules of Civil
Procedure, as amended. She recommended instead that Josefa be substituted
by the latter’ s full-blood sister, Michaeles Rodrigo (“Michaeles”).
RTC denied the motion for substitution. MR denied.
CA on R65 affirmed. MR denied.
Hence this petition claiming, among others, that petitioner should be
substituted because he is a transferee pendente lite under R3, §20.
Issue:
W/N the lower courts erred in denying the substitution of petitioner – No,
they did not err.
Held:
No, they did not err.
Avila 4B | 2016
The rule on substitution in case of death of a party is governed by Section 16,
Rule 3 of the 1997 Rules of Civil Procedure, as amended, which provides:
“Section 16. Death of a party; duty of counsel.—Whenever a party to a
pending action dies, and the claim is not thereby extinguished, it shall be the
duty of his counsel to inform the court within thirty (30) days after such death
of the fact thereof, and to give the name and address of his legal representative
or representatives. Failure of counsel to comply with this duty shall be a
ground for disciplinary action. The heirs of the deceased may be allowed
to be substituted for the deceased, without requiring the appointment of
an executor or administrator and the court may appoint a guardian ad litem
for the minor heirs.”
The purpose behind this rule is the protection of the right to due process of
every party to the litigation who may be affected by the intervening death.
The deceased litigant is herself or himself protected as he/she continues to be
properly represented in the suit through the duly appointed legal
representative of his estate.
Application of the Governing Rule.
a. Survival of the pending action
A question preliminary to the application of the above provision is whether
Civil Case Nos. B-1239 and B-1281 are actions that survive the death of
Josefa.
We said in Gonzalez v. Pagcor, 429 SCRA 533 (2004): “The criteria for
determining whether an action survives the death of a plaintiff or petitioner
was elucidated upon in Bonilla v. Barcena, 71 SCRA 491 (1976), as follows:
. . . The question as to whether an action survives or not depends on the nature
of the action and the damage sued for. In the causes of action which survive,
the wrong complained [of] affects primarily and principally property
and property rights, the injuries to the person being merely incidental,
while in the causes of action which do not survive, the injury complained
of is to the person, the property and rights of property affected being
incidental. . . .”
Since the questions involved in these cases relate to property and property
rights, then we are dealing with actions that survive so that Section 16, Rule
3 must necessarily apply.
b. Duty of Counsel under the Rule.
The duty of counsel under the aforecited provision is to inform the court
within thirty (30) days after the death of his client of the fact of death, and to
give the name and address of the deceased’s legal representative or
representatives. Incidentally, this is the only representation that counsel can
undertake after the death of a client as the fact of death terminated any further
lawyer-client relationship.17
In the present case, it is undisputed that the counsel for Josefa did in fact
notify the lower court, although belatedly, of the fact of her death.18
However, he did as well inform the lower court that before she died she
executed a QUITCLAIM DEED in favor of REMISMUNDO D.
MAGLASANG over the land in question who in turn sold it in favor of
JUDGE ANTONIO SUMALJAG, evidenced by a DEED OF ABSOLUTE
SALE. Further, counsel asked that “the deceased Josefa Maglasang in her
capacity as plaintiff and as Third Party Counterclaim Defendant be
substituted in the case at bar by JUDGE ANTONIO SUMALJAG whose
address is 38 Osmeña Street, Ormoc City pursuant to Section 16, Rule 3 of
the Rules of Court.”
This notification, although filed late, effectively informed the lower court of
the death of litigant Josefa Maglasang so as to free her counsel of any liability
for failure to make a report of death under Section 16, Rule 3 of the Rules of
Court. In our view, counsel satisfactorily explained to the lower court the
circumstances of the late reporting, and the latter in fact granted counsel an
extended period. The timeliness of the report is therefore a non-issue.
The reporting issue that goes into the core of this case is whether counsel
properly gave the court the name and address of the legal representative of
the deceased that Section 16, Rule 3 specifies.
We rule that he did not.
The “legal representatives” that the provision speaks of, refer to those
authorized by law—the administrator, executor or guardian who, under the
rule on settlement of estate of deceased persons, is constituted to take over
the estate of the deceased.
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Section 16, Rule 3 likewise expressly provides that “the heirs of the deceased
may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator . . . .”
Significantly, the person—now the present petitioner—that counsel gave as
substitute was not one of those mentioned under Section 16, Rule 3. Rather,
he is a counterclaim co-defendant of the deceased whose proferred
justification for the requested substitution is the transfer to him of the interests
of the deceased in the litigation prior to her death.
Under the circumstances, both the lower court and the CA were legally
correct in not giving effect to counsel’s suggested substitute.
First, the petitioner is not one of those allowed by the Rules to be a substitute.
Section 16, Rule 3 speaks for itself in this respect.
Second, as already mentioned above, the reason for the Rule is to protect all
concerned who may be affected by the intervening death, particularly the
deceased and her estate. We note in this respect that the Notice that counsel
filed in fact reflects a claim against the interest of the deceased though the
transfer of her remaining interest in the litigation to another party.
Third, counsel has every authority to manifest to the court changes in interest
that transpire in the course of litigation. Thus, counsel could have validly
manifested to the court the transfer of Josefa’s interests in the subject matter
of litigation pursuant to Section 19, Rule 3.5 But this can happen only while
the client- transferor was alive and while the manifesting counsel was still
the effective and authorized counsel for the client-transferor, not after the
death of the client when the lawyer-client relationship has terminated.
The fact that the alleged transfer may have actually taken place is immaterial
to this conclusion, if only for the reason that it is not for counsel, after the
death of his client, to make such manifestation because he then has lost the
authority to speak for and bind his client. Thus, at most, the petitioner can be
said to be a transferee pendente lite whose status is pending with the lower
court.
5. Section 19. Transfer of interest.—In case of any transfer of interest, the action may
be continued by or against the original party, unless the court upon motion directs the
person to whom the interest is transferred to be substituted in the action or joined with
the original party.
c. The Heirs as Legal Representatives.
The CA correctly harked back to the plain terms of Section 16, Rule 3 in
determining who the appropriate legal representative/s should be in the
absence of an executor or administrator. The second paragraph of the Section
16, Rule 3 of the 1997 Rules of Court, as amended, is clear—the heirs of the
deceased may be allowed to be substituted for the deceased, without requiring
the appointment of an executor or administrator.
We likewise said in Gochan v. Young, 354 SCRA 207 (2001): For the
protection of the interests of the decedent, this Court has in previous instances
recognized the heirs as proper representatives of the decedent, even when
there is already an administrator appointed by the court. When no
administrator has been appointed, as in this case, there is all the more reason
to recognize the heirs as the proper representatives of the deceased.
Josefa’s death certificate shows that she was single at the time of her death.
The records do not show that she left a will. Therefore, as correctly held by
the CA, in applying Section 16, Rule 3, her heirs are her surviving sisters
(Michaelis, Maria, Zosima, and Consolacion) and the children of her
deceased sister, Lourdes (Manuel, Cesar, Huros and Regulo) who should be
her legal representatives. Menendez, although also a sister, should be
excluded for being one of the adverse parties in the cases before the RTC.
WHEREFORE, premises considered, we DENY the petition for lack of merit.
We AFFIRM the Court of Appeals decision that the surviving heirs of the
deceased Josefa—namely Michaelis M. Rodrigo; Maria M. Cecilio; Zosima
D. Maglasang; Consolacion M. Bag-aw; and the children of Lourdes M.
Lumapas, namely Manuel Lumapas, Cesar Lumapas, Huros Lumapas and
Regulo Maquilan— should be her substitutes and are hereby so ordered to be
substituted for her in Civil Case Nos. B-1239 and B-1281.
Costs against the petitioner. SO ORDERED.
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13. Memoracion Cruz v. Oswaldo Z. Cruz, G.R. No. 173292, September
01, 2010
Facts:
Memoracion Z. Cruz filed with the Regional Trial Court in Manila a
Complaint against her son, defendant-appellee Oswaldo Z. Cruz, for
“Annulment of Sale, Reconveyance and Damages.”
Memoracion claimed that during her union with her common-law husband
(deceased) Architect Guido M. Cruz, she acquired a parcel of land located at
Tabora corner Limay Streets, Bo. Obrero, Tondo Manila; that the said lot was
registered in her name under TCT No. 63467 at the Register of Deeds of
Manila; that sometime in July 1992, she discovered that the title to the said
property was transferred by appellee and the latter’s wife in their names in
August 1991 under TCT No. 0-199377 by virtue of a Deed of Sale dated
February 12, 1973; that the said deed was executed through fraud, forgery,
misrepresentation and simulation, hence, null and void…
After Memoracion x x x finished presenting her evidence in chief, she died
on October 30, 1996. Through a Manifestation, Memoracion’s counsel, Atty.
Roberto T. Neri, notified the trial court on January 13, 1997 of the fact of
such death, evidenced by a certificate thereof.
For his part, appellee filed a Motion to Dismiss on the grounds that (1) the
plaintiff’s reconveyance action is a personal action which does not
survive a party’s death, pursuant to Section 21, Rule 3 of the Revised Rules
of Court, and (2) to allow the case to continue would result in legal absurdity
whereby one heir is representing the defendant [and is a] co- plaintiff in this
case.
RTC granted the MTD and dismissed the case without prejudice.
On October 17, 1997, Memoracion’s son-heir, Edgardo Z. Cruz, manifested
to the trial court that he is retaining the services of Atty. Neri for the plaintiff.
MR with RTC denied.
On appeal, CA affirmed. MR denied.
Hence this appeal.
Issue:
W/N the lower courts erred in holding that the action was personal action that
did not survive a party’s death – Yes, they erred.
Held:
Yes, they erred.
The criterion for determining whether an action survives the death of a
petitioner was elucidated in Bonilla v. Barcena, 71 SCRA 491 (1976), to wit:
“The question as to whether an action survives or not depends on the nature
of the action and the damage sued for. In the causes of action which survive,
the wrong complained [of] affects primarily and principally property and
property rights, the injuries to the person being merely incidental, while in
the causes of action which do not survive, the injury complained of is to the
person, the property and rights of property affected being incidental.”
If the case affects primarily and principally property and property rights, then
it survives the death of the plaintiff or petitioner. In Sumaljag v. Literato, 555
SCRA 53 (2008), we held that a Petition for Declaration of Nullity of Deed
of Sale of Real Property is one relating to property and property rights, and
therefore, survives the death of the petitioner. Accordingly, the instant case
for annulment of sale of real property merits survival despite the death of
petitioner Memoracion Z. Cruz.
The CA erred in affirming RTC’s dismissal of the Petition for Annulment
of Deed of Sale, Reconveyance and Damages
When a party dies during the pendency of a case, Section 16, Rule 3 of the
1997 Revised Rules of Civil Procedure necessarily applies, viz.:
“Sec. 16. Death of party; duty of counsel.—Whenever a party to a pending
action dies, and the claim is not thereby extinguished, it shall be the duty of
his counsel to inform the court within thirty (30) days after such death of the
fact thereof, and to give the name and address of his legal representative or
representatives. Failure of counsel to comply with this duty shall be a ground
for disciplinary action.
The heirs of the deceased may be allowed to be substituted for the deceased,
without requiring the appointment of an executor or administrator and the
court may appoint a guardian ad litem for the minor heirs.
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The court shall forthwith order said legal representative or representatives to
appear and be substituted within a period of thirty (30) days from notice.
If no legal representative is named by the counsel for the deceased party, or
if the one so named shall fail to appear within the specified period, the court
may order the opposing party, within a specified time, to procure the
appointment of an executor or administrator for the estate of the deceased and
the latter shall immediately appear for and on behalf of the deceased. The
court charges in procuring such appointment, if defrayed by the opposing
party, may be recovered as costs.”
If the action survives despite death of a party, it is the duty of the deceased’s
counsel to inform the court of such death, and to give the names and addresses
of the deceased’s legal representatives. The deceased may be substituted by
his heirs in the pending action.
What the RTC could have done was to require Edgardo Cruz to appear in
court and substitute Memoracion as party to the pending case, pursuant to
Section 16, Rule 3 of the 1997 Revised Rules of Civil Procedure, and
established jurisprudence.
We note that on 17 October 1997, Edgardo Cruz filed with the RTC a
Manifestation, stating that he is retaining the services of Atty. Roberto T.
Neri.
Consistent with our ruling in Heirs of Haberer v. Court of Appeals,15 we
consider such Manifestation, signed by Memoracion’s heir, Edgardo Cruz,
and retaining Atty. Neri’s services as counsel, a formal substitution of
deceased Memoracion by her heir, Edgardo Cruz. It also needs mention that
Oswaldo Cruz, although also an heir of Memoracion, should be excluded as
a legal representative in the case for being an adverse party therein.16

If no legal representative is named by the counsel of the deceased, or the legal WHEREFORE, we GRANT the petition.
representative fails to appear within a specified period, it is the duty of the
court where the case is pending to order the opposing party to procure the
appointment of an executor or administrator for the estate of the deceased.
The reason for this rule is to protect all concerned who may be affected by
the intervening death, particularly the deceased and his estate.11

In the instant case, petitioner (plaintiff) Memoracion Z. Cruz died on 30

October 1996. Her counsel, Atty. Roberto T. Neri, notified the trial court of
such death on 13 January 1997, through a Manifestation, and stated that “The
legal representative of the deceased plaintiff is her son EDGARDO CRUZ
whose address is at No. 3231-E Tabora St., Bo. Obrero, Tondo, Manila.”

On 24 January 1997, respondent (defendant) Oswaldo Z. Cruz moved to

dismiss the case alleging that it did not survive Memoracion’s death. The
RTC granted the motion to dismiss in the assailed Order dated 2 June 1997.

We rule that it was error for the RTC to dismiss the case. As mentioned
earlier, the petition for annulment of deed of sale involves property and
property rights, and hence, survives the death of petitioner Memoracion.
The RTC was informed, albeit belatedly,13 of the death of Memoracion, and
was supplied with the name and address of her legal representative, Edgardo
Cruz.

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14. Heritage Park Management v. CIAC, G.R. No. 148133, October 8,
2008
Facts:
The antecedent facts of the case are set forth in the Court’s decision in Public
Estates Authority v. Uy.3 In that case, the petitioner, Public Estates Authority
(PEA), was designated by the Bases Conversion Development Authority to
develop the first class memorial park known as the Heritage Park, located in
Fort Bonifacio, Taguig, Metro Manila.
Relative thereto, PEA engaged the services of herein private respondent
Elpidio S. Uy, doing business under the name and style of EDC, under a
Landscaping and Construction Agreement dated November 20, 1996
(Agreement). In the Agreement, EDC undertook to perform all landscaping
works on the 105-hectare Heritage Park, to be completed within 450 days,
commencing within 14 days from EDC’s receipt from PEA of a written notice
to proceed. Due to delays, the contract period was extended to 693 days.
Among the causes of delay was PEA’s inability to deliver to EDC 45 hectares
of the property landscaping due to the existence of squatters and a public
cemetery.
Thus, EDC instituted a Complaint dated January 12, 2000 with the CIAC
(CIAC case), docketed as CIAC Case No. 02-2000, seeking to collect from
PEA damages arising from its delay in the delivery of the entire property
for landscaping.
EDC alleged that it incurred additional rental costs for equipment which were
kept on standby and labor costs for idle manpower. Likewise, the delay
incurred by PEA caused the topsoil of the original supplier to be depleted,
thereby incurring added costs. EDC also claimed incurring additional costs
to mobilize water trucks for the plants and trees which had already been
delivered at the site. Finally, EDC claimed that it was necessary to construct
a nursery shade to protect and preserve the young plants and trees prior to
actual transplanting at the landscaped area.
Sometime in March 2000, PEA executed a Deed of Assignment in favor of
herein petitioner Heritage Park Management Corporation (Heritage),
whereby PEA assigned all its interests in the contracts with EDC to Heritage.
Thereafter, on April 5, 2000, Heritage filed a petition dated April 4, 20004
with the CA (CA case) for prohibition/injunction with prayer for
preliminary injunction and temporary restraining order (TRO) against
the CIAC and EDC.
Heritage alleged in the petition that the CIAC has no jurisdiction over the
subject funds against which any award against PEA, a party-defendant in the
CIAC case, would be enforced. Allegedly, Heritage has complete control,
custody, and authority over the Heritage Park Project funds and has never
submitted itself and the funds to the CIAC’s arbitral jurisdiction.
CA granted the TRO to enjoin the CIAC from further proceedings.
Previously, however, the CIAC already finished the hearing of the case and
the same was already submitted for decision as of April 4, 2000 or one day
before the filing of the petition in CA-G.R. SP No. 58124 with the CA.
Thereafter, CIAC ruled on the main case for EDC.
CA affirmed CIAC on appeal. On appeal of the main case docketed as PEA
v. Uy, the SC affirmed CA.
Meanwhile, private respondent filed a comment before the CA in the CA
case.
CA issued a Certification, upon the request of private respondent, stating that
no Writ of Preliminary Injunction had been issued by the Court as of June 7,
2000 and that the TRO issued in a Resolution dated April 7, 2000 had already
lapsed.
Private respondent filed with the CIAC a Motion Ex Parte to Promulgate
Decision, arguing that the 60-day period of effectivity of the TRO had already
lapsed.
CIAC issued a Notice of Award.
It is against the foregoing factual backdrop that the CA issued the assailed
decision dated November 29, 2000, denying and accordingly dismissing the
petition. The CA reasoned that considering the petition prayed that the CIAC
be prohibited from further acting on the case and that the CIAC had rendered
Avila 4B | 2016
a Decision thereon, the petition had become moot and academic, there being
nothing more to prohibit or enjoin.
Hence this petition claiming, among others, that petitioner Heritage is an
indispensable party to the proceedings before the CIAC as the assignee of
PEA. Thus, its non-inclusion in the proceedings before the CIAC deprived
the latter of jurisdiction over the case.
Issue:
W/N Heritage is an indispensable party to the CIAC case – No. (issue of
violation of TRO omitted)
Held:
No.
Such contention is bereft of merit.
It must be remembered that when the case was originally filed by EDC before
the CIAC on January 12, 2000, PEA had not yet transferred its rights and
obligations over the Project to Heritage, as evidenced by the Deed of
Assignment dated March 2000. Thus, by impleading PEA as respondent, the
CIAC had jurisdiction over the case at that time.
Heritage, however, claims that when PEA transferred its rights and
obligations over the Project to Heritage, the CIAC lost its jurisdiction. In
other words, Heritage alleges that a court may lose jurisdiction over a case
based on the subsequent actions of the parties.
This is unacceptable. The settled rule is that jurisdiction once acquired is not
lost upon the instance of the parties but continues until the case is terminated.
Certainly, it would be the height of injustice to allow parties that disagree
with the decision of a judicial tribunal to annul the same through the
expedient of transferring their interests or rights involved in the case.
Moreover, Heritage is mistaken when it claims that it is an indispensable
party to the case and that it was not included in the case before the CIAC.
Being a transferee of the interests of PEA over the Project during the
pendency of the case before the CIAC, it is bound by the proceedings in like
manner as PEA.
In Jocson v. Court of Appeals, this Court held the Bank of the Philippine
Islands is bound by the decision of the trial court being the transferee
pendente lite of the original defendant therein, despite the fact that it had not
been substituted for the original defendant and had not been notified of the
proceedings against it. We ruled that:
“We hold that the respondent court erred when it declared that the
decision of the trial court was not binding on BPI because it had not been
substituted for the original defendant and had not been notified of the
proceedings against them.
This Court has declared in a number of decisions that a transferee pendente
lite stands in exactly the same position as its predecessor-in-interest, the
original defendant, and is bound by the proceedings had in the case before
the property was transferred to it.
It is a proper but not an indispensable party as it would in any event be
bound by the judgment against his predecessor. This would follow even
if it is not formally included as a defendant through an amendment of
the complaint.”
Verily, the non-inclusion of Heritage in the proceedings before the CIAC is
of no moment as the Rules of Court specifically allows the proceedings to
proceed with the original parties while binding the transferee.
WHEREFORE, the instant petition is hereby DENIED on the ground that it
has become moot.
Costs against petitioner. SO ORDERED.
Avila 4B | 2016
15. William Genato v. Benjamin Bayhon, G.R. No. 171035, August 24,
2009
Facts:
Civil Case No. Q-90-7012
On October 18, 1990, respondents Benjamin M. Bayhon, Melanie Bayhon,
Benjamin Bayhon Jr., Brenda Bayhon, Alina Bayhon-Campos, Irene
Bayhon-Tolosa and the minor Gino Bayhon, as represented by his mother
Jesusita M. Bayhon, filed an action before the RTC, Quezon City, Branch
76, docketed as Civil Case No. Q-90-7012. In their Complaint, respondents
sought the declaration of nullity of a dacion en pago allegedly executed by
respondent Benjamin Bayhon in favor of petitioner William Ong Genato.2
Respondent Benjamin Bayhon alleged that on July 3, 1989, he obtained from
the petitioner a loan amounting to PhP 1,000,000.00;3 that to cover the loan,
he executed a Deed of Real Estate Mortgage over the property covered by
Transfer Certificate of Title (TCT) No. 38052; that, however, the execution
of the Deed of Real Estate Mortgage was conditioned upon the personal
assurance of the petitioner that the said instrument is only a private
memorandum of indebtedness and that it would neither be notarized nor
enforced according to its tenor.4
Civil Case No. Q-90-7551
On December 20, 1990, petitioner William Ong Genato filed Civil Case No.
Q-90-7551, an action for specific performance, before the RTC, Quezon
City, Branch 79. In his Complaint, petitioner alleged that respondent obtained
a loan from him in the amount of PhP 1,000,000.00. Petitioner alleged further
that respondent failed to pay the loan and executed on October 21, 1989 a
dacion en pago in favor of the petitioner. The dacion en pago was inscribed
and recorded with the Registry of Deeds of Quezon City.11
Decision
RTC consolidated the two cases and ruled for petitioner and ordered
respondent Benjamin Bayhon to pay petitioner.
While the appeal was pending with the CA, respondent Benjamin
Bayhon died.
CA reversed the RTC. The Court of Appeals held among others that while
the principal obligation is valid, the death of respondent Benjamin Bayhon
extinguished it. 21 The heirs could not be ordered to pay the debts left by the
deceased.22 Based on the foregoing, the Court of Appeals dismissed
petitioner’ s appeal.
Issue:
W/N the death of respondent extinguished his obligation – No.
Held:
No.
We now go to the ruling of the appellate court extinguishing the obligation
of respondent. As a general rule, obligations derived from a contract are
transmissible. Article 1311, par.1 of the Civil Code provides:
“Contracts take effect only between the parties, their assigns and heirs, except
in case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law. The
heir is not liable beyond the value of the property he received from the
decedent.”
The Court proceeded further to state the general rule:
“Under our law, therefore, the general rule is that a party’s contractual
rights and obligations are transmissible to the successors. The rule is a
consequence of the progressive “depersonalization” of patrimonial rights and
duties that, as observed by Victorio Polacco, has characterized the history of
these institutions. From the Roman concept of a relation from person to
person, the obligation has evolved into a relation from patrimony to
patrimony, with the persons occupying only a representative position, barring
those rare cases where the obligation is strictly personal, i.e., is contracted
intuitu personae, in consideration of its performance by a specific person and
by no other. The transition is marked by the disappearance of the
imprisonment for debt.”
The loan in this case was contracted by respondent. He died while the case
was pending before the Court of Appeals. While he may no longer be
compelled to pay the loan, the debt subsists against his estate. No property or
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portion of the inheritance may be transmitted to his heirs unless the debt has
first been satisfied. Notably, throughout the appellate stage of this case, the
estate has been amply represented by the heirs of the deceased, who are also
his co-parties in Civil Case No. Q-90-7012.

The procedure in vindicating monetary claims involving a defendant who

dies before final judgment is governed by Rule 3, Section 20 of the Rules of
Civil Procedure, to wit:
“When the action is for recovery of money arising from contract, express or
implied, and the defendant dies before entry of final judgment in the court in
which the action was pending at the time of such death, it shall not be
dismissed but shall instead be allowed to continue until entry of final
judgment. A favorable judgment obtained by the plaintiff therein shall be
enforced in the manner especially provided in these Rules for prosecuting
claims against the estate of a deceased person.”

Pursuant to this provision, petitioner’s remedy lies in filing a claim against

the estate of the deceased respondent.

IN VIEW WHEREOF, the decision of the Court of Appeals dated September

16, 2005 is AFFIRMED with the MODIFICATION that the obligation to pay
the principal loan and interest contracted by the deceased Benjamin Bayhon
subsists against his estate and is computed at PhP 3,050,682.00.
No costs. SO ORDERED.

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16. Algura v. LGU of the City of Naga, G.R. No. 15013;5, October 30,
2006
Facts:
On September 1, 1999, spouses Antonio F. Algura and Lorencita S.J. Algura
filed a Verified Complaint dated August 30, 1999 for damages against the
Naga City Government and its officers, arising from the alleged illegal
demolition of their residence and boarding house and for payment of lost
income derived from fees paid by their boarders amounting to PhP 7,000.00
monthly.
Simultaneously, petitioners filed an Ex Parte Motion to Litigate as
Indigent Litigants, to which petitioner Antonio Algura’s Pay Slip No.
2457360 (Annex “A” of motion) was appended, showing a gross monthly
income of Ten Thousand Four Hundred Seventy Four Pesos (PhP 10,474.00)
and a net pay of Three Thousand Six Hundred Sixteen Pesos and Ninety Nine
Centavos (PhP 3,616.99) for [the month of] July 1999. Also attached as
Annex “B” to the motion was a July 14, 1999 Certification issued by the
Office of the City Assessor of Naga City, which stated that petitioners had no
property declared in their name for taxation purposes.
Finding that petitioners’ motion to litigate as indigent litigants was
meritorious, Executive Judge Jose T. Atienza of the Naga City RTC, in the
September 1, 1999 Order, granted petitioners’ plea for exemption from
filing fees.
Meanwhile, as a result of respondent Naga City Government’s demolition of
a portion of petitioners’ house, the Alguras allegedly lost a monthly income
of PhP 7,000.00 from their boarders’ rentals. With the loss of the rentals, the
meager income from Lorencita Algura’s sari-sari store and Antonio Algura’s
small take home pay became insufficient for the expenses of the Algura
spouses and their six (6) children for their basic needs including food, bills,
clothes, and schooling, among others.
On March 13, 2000, respondents filed a Motion to Disqualify the Plaintiffs
for Non-Payment of Filing Fees dated March 10, 2000. They asserted that
in addition to the more than PhP 3,000.00 net income of petitioner Antonio
Algura, who is a member of the Philippine National Police, spouse Lorencita
Algura also had a mini- store and a computer shop on the ground floor of their
residence along Bayawas St., Sta. Cruz, Naga City. Also, respondents
claimed that petitioners’ second floor was used as their residence and as a
boarding house, from which they earned more than PhP 3,000.00 a month. In
addition, it was claimed that petitioners derived additional income from their
computer shop patronized by students and from several boarders who paid
rentals to them. Hence, respondents concluded that petitioners were not
indigent litigants.
RTC issued an Order disqualifying petitioners as indigent litigants on the
ground that they failed to substantiate their claim for exemption from
payment of legal fees and to comply with the third paragraph of Rule 141,
Section 18 of the Revised Rules of Court—directing them to pay the requisite
filing fees.
Petitioners filed an MR.
On May 5, 2000, the trial court issued an Order giving petitioners the
opportunity to comply with the requisites laid down in Section 18, Rule 141,
for them to qualify as indigent litigants.
On May 13, 2000, petitioners submitted their Compliance attaching the
affidavits of petitioner Lorencita Algura and Erlinda Bangate, to comply with
the requirements of then Rule 141, Section 18 of the Rules of Court and in
support of their claim to be declared as indigent litigants.
RTC denied the MR. Judge Barsaga ratiocinated that the pay slip of Antonio
F. Algura showed that the “GROSS INCOME or TOTAL EARNINGS of
plaintiff Algura [was] P10,474.00 which amount [was] over and above the
amount mentioned in the first paragraph of Rule 141, Section 18 for pauper
litigants residing outside Metro Manila.” Said rule provides that the gross
income of the litigant should not exceed PhP 3,000.00 a month and shall not
own real estate with an assessed value of PhP 50,000.00. The trial court found
that, in Lorencita S.J. Algura’s May 13, 2000 Affidavit, nowhere was it stated
that she and her immediate family did not earn a gross income of PhP
3,000.00.
Hence this R41 in rel. to R45 petition directly with the SC raising a pure
question of law.
Avila 4B | 2016
Issue:
W/N petitioners should be considered as pauper litigants – Remanded to
determine whether they qualify as indigents under Rule 3, §21.
Held:
Remanded to determine whether they qualify as indigents under Rule 3, §21.
The petition is meritorious.
I.
[History of provision on indigent litigants in R141 omitted]
It can be readily seen that the rule on pauper litigants was inserted in Rule
141 without revoking or amending Section 21 of Rule 3, which provides for
the exemption of pauper litigants from payment of filing fees. Thus, on March
1, 2000, there were two existing rules on pauper litigants; namely, Rule 3,
Section 21 and Rule 141, Section 18.
It is undisputed that the Complaint (Civil Case No. 99-4403) was filed on
September 1, 1999. However, the Naga City RTC, in its April 14, 2000 and
July 17, 2000 Orders, incorrectly applied Rule 141, Section 18 on Legal Fees
when the applicable rules at that time were Rule 3, Section 21 on Indigent
Party which took effect on July 1, 1997 and Rule 141, Section 16 on Pauper
Litigants which became effective on July 19, 1984 up to February 28, 2000.
The old Section 16, Rule 141 requires applicants to file an ex parte motion to
litigate as a pauper litigant by submitting an affidavit that they do not have a
gross income of PhP 2,000.00 a month or PhP 24,000.00 a year for those
residing in Metro Manila and PhP 1,500.00 a month or PhP 18,000.00 a year
for those residing outside Metro Manila or those who do not own real
property with an assessed value of not more than PhP 24,000.00 or not more
than PhP 18,000.00 as the case may be. Thus, there are two requirements:
a) income requirement—the applicants should not have a gross monthly
income of more than PhP 1,500.00, and
b) property requirement——they should not own property with an assessed
value of not more than PhP 18,000.00.
In the case at bar, petitioners Alguras submitted the Affidavits of petitioner
Lorencita Algura and neighbor Erlinda Bangate, the pay slip of petitioner
Antonio F. Algura showing a gross monthly income of PhP 10,474.00, and a
Certification of the Naga City assessor stating that petitioners do not have
property declared in their names for taxation.
Undoubtedly, petitioners do not own real property as shown by the
Certification of the Naga City assessor and so the property requirement is
met. However with respect to the income requirement, it is clear that the gross
monthly income of PhP 10,474.00 of petitioner Antonio F. Algura and the
PhP 3,000.00 income of Lorencita Algura when combined, were above the
PhP 1,500.00 monthly income threshold prescribed by then Rule 141, Section
16 and therefore, the income requirement was not satisfied.
The trial court was therefore correct in disqualifying petitioners Alguras as
indigent litigants although the court should have applied Rule 141, Section
16 which was in effect at the time of the filing of the application on September
1, 1999. Even if Rule 141, Section 18 (which superseded Rule 141, Section
16 on March 1, 2000) were applied, still the application could not have been
granted as the combined PhP 13,474.00 income of petitioners was beyond the
PhP 3,000.00 monthly income threshold.
Unrelenting, petitioners however argue in their Motion for Reconsideration
of the April 14, 2000 Order disqualifying them as indigent litigants that the
rules have been relaxed by relying on Rule 3, Section 21 of the 1997 Rules
of Civil procedure which authorizes parties to litigate their action as indigents
if the court is satisfied that the party is “one who has no money or property
sufficient and available for food, shelter and basic necessities for himself and
his family.” The trial court did not give credence to this view of petitioners
and simply applied Rule 141 but ignored Rule 3, Section 21 on Indigent Party.
II.
The position of petitioners on the need to use Rule 3, Section 21 on their
application to litigate as indigent litigants brings to the fore the issue on
whether a trial court has to apply both Rule 141, Section 16 and Rule 3,
Section 21 on such applications or should the court apply only Rule 141,
Section 16 and discard Rule 3, Section 21 as having been superseded by Rule
141, Section 16 on Legal Fees.
The Court rules that Rule 3, Section 21 and Rule 141, Section 16 (later
amended as Rule 141, Section 18 on March 1, 2000 and subsequently
amended by Rule 141, Section 19 on August 16, 2003, which is now the
present rule) are still valid and enforceable rules on indigent litigants.
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The history of the two seemingly conflicting rules readily reveals that it was
not the intent of the Court to consider the old Section 22 of Rule 3, which
took effect on January 1, 1994 to have been amended and superseded by Rule
141, Section 16, which took effect on July 19, 1984 through A.M. No. 83-6-
389-0.
The fact that Section 22 which became Rule 3, Section 21 on indigent litigant
was retained in the rules of procedure, even elaborating on the meaning of an
indigent party, and was also strengthened by the addition of a third paragraph
on the right to contest the grant of authority to litigate only goes to show that
there was no intent at all to consider said rule as expunged from the 1997
Rules of Civil Procedure.
Furthermore, Rule 141 on indigent litigants was amended twice: first on
March 1, 2000 and the second on August 16, 2004; and yet, despite these two
amendments, there was no attempt to delete Section 21 from said Rule 3. This
clearly evinces the desire of the Court to maintain the two (2) rules on
indigent litigants to cover applications to litigate as an indigent litigant.
It may be argued that Rule 3, Section 21 has been impliedly repealed by the
recent 2000 and 2004 amendments to Rule 141 on legal fees. This position is
bereft of merit. Implied repeals are frowned upon unless the intent of the
framers of the rules is unequivocal.
Instead of declaring that Rule 3, Section 21 has been superseded and
impliedly amended by Section 18 and later Section 19 of Rule 141, the Court
finds that the two rules can and should be harmonized. The Court opts to
reconcile Rule 3, Section 21 and Rule 141, Section 19 because it is a settled
principle that when conflicts are seen between two provisions, all efforts must
be made to harmonize them. Hence, “every statute [or rule] must be so
construed and harmonized with other statutes [or rules] as to form a uniform
system of jurisprudence.”
Procedure to be followed
In light of the foregoing considerations, therefore, the two (2) rules can stand
together and are compatible with each other.
When an application to litigate as an indigent litigant is filed, the court shall
scrutinize the affidavits and supporting documents submitted by the applicant
to determine if the applicant complies with the income and property standards
prescribed in the present Section 19 of Rule 141—that is, the applicant’s
gross income and that of the applicant’s immediate family do not exceed an
amount double the monthly minimum wage of an employee; and the applicant
does not own real property with a fair market value of more than Three
Hundred Thousand Pesos (PhP 300,000.00).
If the trial court finds that the applicant meets the income and property
requirements, the authority to litigate as indigent litigant is automatically
granted and the grant is a matter of right.
However, if the trial court finds that one or both requirements have not been
met, then it would set a hearing to enable the applicant to prove that the
applicant has “no money or property sufficient and available for food, shelter
and basic necessities for himself and his family.”
In that hearing, the adverse party may adduce countervailing evidence to
disprove the evidence presented by the applicant; after which the trial court
will rule on the application depending on the evidence adduced.
In addition, Section 21 of Rule 3 also provides that the adverse party may
later still contest the grant of such authority at any time before judgment is
rendered by the trial court, possibly based on newly discovered evidence not
obtained at the time the application was heard.
If the court determines after hearing, that the party declared as an indigent is
in fact a person with sufficient income or property, the proper docket and
other lawful fees shall be assessed and collected by the clerk of court.
If payment is not made within the time fixed by the court, execution shall
issue or the payment of prescribed fees shall be made, without prejudice to
such other sanctions as the court may impose.
The Court concedes that Rule 141, Section 19 provides specific standards
while Rule 3, Section 21 does not clearly draw the limits of the entitlement
to the exemption. Knowing that the litigants may abuse the grant of authority,
the trial court must use sound discretion and scrutinize evidence strictly in
granting exemptions, aware that the applicant has not hurdled the precise
standards under Rule 141. The trial court must also guard against abuse and
misuse of the privilege to litigate as an indigent litigant to prevent the filing
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of exorbitant claims which would otherwise be regulated by a legal fee
requirement.

Instead of disqualifying the Alguras as indigent litigants, the trial court should
have called a hearing as required by Rule 3, Section 21 to enable the
petitioners to adduce evidence to show that they didn’t have property and
money sufficient and available for food, shelter, and basic necessities for
them and their family. In that hearing, the respondents would have had the
right to also present evidence to refute the allegations and evidence in support
of the application of the petitioners to litigate as indigent litigants. Since this
Court is not a trier of facts, it will have to remand the case to the trial court to
determine whether petitioners can be considered as indigent litigants using
the standards set in Rule 3, Section 21.

Recapitulating the rules on indigent litigants, therefore, if the applicant for

exemption meets the salary and property requirements under Section 19 of
Rule 141, then the grant of the application is mandatory. On the other hand,
when the application does not satisfy one or both requirements, then the
application should not be denied outright; instead, the court should apply the
“indigency test” under Section 21 of Rule 3 and use its sound discretion in
determining the merits of the prayer for exemption.

WHEREFORE, the petition is GRANTED and the April 14, 2000 Order
granting the disqualification of petitioners, the July 17, 2000 Order denying
petitioners’ Motion for Reconsideration, and the September 11, 2001 Order
dismissing the case in Civil Case No. RTC-99-4403 before the Naga City
RTC, Branch 27 are ANNULLED and SET ASIDE. Furthermore, the Naga
City RTC is ordered to set the “Ex Parte Motion to Litigate as Indigent
Litigants” for hearing and apply Rule 3, Section 21 of the 1997 Rules of Civil
Procedure to determine whether petitioners can qualify as indigent litigants.
No costs. SO ORDERED.

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V. Venue (Rule 4)
1. Briones v. CA, G.R. 204444, January 14, 2015
Facts:
Petitioner Virgilio Briones filed a complaint before the RTC of Manila for
Nullity of Mortgage Contract, Promissory Note, Loan Agreement,
Foreclosure of Mortgage, Cancellation of Transfer Certificate of Title (TCT)
No. 290846, and Damages against Cash Asia.
He alleged, that he is the owner of a property covered by TCT No. 160689
(subject property), and that, on July 15, 2010, his sister informed him that his
property had been foreclosed and a writ of possession had already been issued
in favor of Cash Asia.8
Upon investigation, Briones discovered that:
(a) on December 6, 2007, he purportedly executed a promissory note,9 loan
agreement,10 and deed of real estate mortgage11 covering the subject
property (subject contracts) in favor of Cash Asia in order to obtain a loan in
the amount of P3,500,000.00 from the latter;12 and
(b) since the said loan was left unpaid, Cash Asia proceeded to foreclose his
property.13
In this relation, Briones claimed that he never contracted any loans from Cash
Asia as he has been living and working in Vietnam since October 31, 2007.
He further claimed that he only went back to the Philippines on December
28, 2007 until January 3, 2008 to spend the holidays with his family, and that
during his brief stay in the Philippines, nobody informed him of any loan
agreement entered into with Cash Asia. Essentially, Briones assailed the
validity of the foregoing contracts claiming his signature to be forged.14
Respondent Cash Asia filed a MTD on the ground of improper venue.
Respondent pointed out the venue stipulation in the subject contracts stating
that “all legal actions arising out of this notice in connection with the Real
Estate Mortgage subject hereof shall only be brought in or submitted to
the jurisdiction of the proper court of Makati City.”17
In view thereof, it contended that all actions arising out of the subject
contracts may only be exclusively brought in the courts of Makati City, and
as such, Briones’ complaint should be dismissed for having been filed in the
City of Manila.18
In response, Briones filed an opposition,19 asserting, inter alia, that he should
not be covered by the venue stipulation in the subject contracts as he was
never a party therein. He also reiterated that his signatures on the said
contracts were forgeries.
RTC denied MTD holding that the parties must be afforded the right to be
heard in view of the substance of Briones’ cause of action against Cash Asia
as stated in the complaint.22
CA reversed holding that the subject contracts clearly provide that actions
arising therefrom should be exclusively filed before the courts of Makati City
only.28 As such, the CA concluded that Briones’ complaint should have been
dismissed outright on the ground of improper venue,29 this, notwithstanding
Briones’ claim of forgery.
Hence this R65.
Issue:
Where is the proper venue of the action? General rules on venue, therefore,
the case should not have been dismissed.
Held:
General rules on venue, therefore, the case should not have been dismissed.
The petition is meritorious.
Based on the Rules of Court, the general rule is that the venue of real actions
is the court which has jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated; while the venue of personal actions
is the court which has jurisdiction where the plaintiff or the defendant resides,
at the election of the plaintiff. As an exception, jurisprudence in Legaspi v.
Rep. of the Phils., 559 SCRA 410 (2008), instructs that the parties, thru a
written instrument, may either introduce another venue where actions arising
from such instrument may be filed, or restrict the filing of said actions in a
certain exclusive venue, viz.:
“The parties, however, are not precluded from agreeing in writing on an
exclusive venue, as qualified by Section 4 of the same rule. Written
stipulations as to venue may be restrictive in the sense that the suit may
be filed only in the place agreed upon, or merely permissive in that the
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parties may file their suit not only in the place agreed upon but also in
the places fixed by law. As in any other agreement, what is essential is the
ascertainment of the intention of the parties respecting the matter.

As regards restrictive stipulations on venue, jurisprudence instructs that

it must be shown that such stipulation is exclusive. In the absence of
qualifying or restrictive words, such as “exclusively,” “waiving for this
purpose any other venue,” “shall only” preceding the designation of venue,
“to the exclusion of the other courts,” or words of similar import, the
stipulation should be deemed as merely an agreement on an additional
forum, not as limiting venue to the specified place.”

In this relation, case law likewise provides that in cases where the complaint
assails only the terms, conditions, and/or coverage of a written instrument
and not its validity, the exclusive venue stipulation contained therein shall
still be binding on the parties, and thus, the complaint may be properly
dismissed on the ground of improper venue.35

Conversely, therefore, a complaint directly assailing the validity of the

written instrument itself should not be bound by the exclusive venue
stipulation contained therein and should be filed in accordance with the
general rules on venue. To be sure, it would be inherently consistent for a
complaint of this nature to recognize the exclusive venue stipulation when it,
in fact, precisely assails the validity of the instrument in which such
stipulation is contained.

In this case, the venue stipulation found in the subject contracts is indeed
restrictive in nature, considering that it effectively limits the venue of the
actions arising therefrom to the courts of Makati City. However, it must be
emphasized that Briones’ complaint directly assails the validity of the subject
contracts, claiming forgery in their execution. Given this circumstance,
Briones cannot be expected to comply with the aforesaid venue stipulation,
as his compliance therewith would mean an implicit recognition of their
validity. Hence, pursuant to the general rules on venue, Briones properly filed
his complaint before a court in the City of Manila where the subject property
is located.

In conclusion, the CA patently erred and hence committed grave abuse of

discretion in dismissing Briones’ complaint on the ground of improper venue.

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2. San Miguel Corporation v. Monasterio, G.R. No. 151037, June 23,
2005
Facts:
On August 1, 1993, petitioner SMC entered into an Exclusive Warehouse
Agreement (hereafter EWA for brevity) with SMB Warehousing Services
(SMB), represented by its manager, respondent Troy Francis L. Monasterio.
SMB undertook to provide land, physical structures, equipment and
personnel for storage, warehousing and related services such as, but not
limited to, segregation of empty bottles, stock handling, and receiving SMC
products for its route operations at Sorsogon, Sorsogon and Daet, Camarines
Norte.
The agreement likewise contained a stipulation on venue of actions, to wit:
“b. Should it be necessary that an action be brought in court to enforce the
terms of this Agreement or the duties or rights of the parties herein, it is
agreed that the proper court should be in the courts of Makati or Pasig, Metro
Manila, to the exclusion of the other courts at the option of the COMPANY.”
On November 3, 1998, respondent Monasterio, a resident of Naga City, filed
a complaint for collection of sum of money before the RTC of Naga City.
In his Complaint, Monasterio claimed P900,600 for unpaid cashiering fees.
He alleged that from September 1993 to September 1997 and May 1995 to
November 1997, aside from rendering service as warehouseman, he was
given the additional task of cashiering in SMC’s Sorsogon and Camarines
Norte sales offices for which he was promised a separate fee. He claims that
of approximately 290 million pesos in cash and checks of the sales office and
the risks of pilferage, theft, robbery and hold-up, he had assumed what
amounted to approximately 35 million pesos per annum for Sorsogon,
Sorsogon, and 60 million pesos for Daet, Camarines Norte. He also said that
he hired personnel for the job. Respondent added that it was only on
December 1, 1997, that petitioner SMC started paying him P11,400 per
month for his cashiering services.
Monasterio demanded P82,959.32 for warehousing fees, P11,400 for
cashiering fees for the month of September, 1998, as well as exemplary
damages, and attorney’s fees in the amount of P500,000 and P300,000,
respectively. Issue:
On November 19, 1998, SMC filed a Motion to Dismiss on the ground of
improper venue.
SMC contended that respondent’s money claim for alleged unpaid cashiering
services arose from respondent’s function as warehouse contractor thus the
EWA should be followed and thus, the exclusive venue of courts of Makati
or Pasig, Metro Manila is the proper venue as provided under paragraph 26(b)
of the Exclusive Warehouse Agreement. SMC cites in its favor Section 4(b)
in relation to Section 2 of Rule 4 of the Rules of Court allowing agreement
of parties on exclusive venue of actions.
Respondent filed an Opposition contending that the cashiering service he
rendered for the petitioner was separate and distinct from the services under
the EWA. Hence, the provision on venue in the EWA was not applicable to
said services. Hence, respondent insists that in accordance with Section 2 of
Rule 4 of the Rules of Court the venue should be in Naga City, his place of
residence.
RTC Naga denied the MTD holding that the services agreed upon in said
contract is limited to warehousing services and the claim of plaintiff in his
suit pertains to the cashiering services rendered to the defendant, a
relationship which was not documented, and is certainly a contract separate
and independent from the exclusive warehousing agreements.
While SMC’s MR was pending before the RTC, respondent filed an
Amended Complaint deleting his claim for unpaid warehousing but
increasing the exemplary damages from P500,000 to P1,500,000. MR denied.
On a R65, the CA found respondent’s claim for cashiering services
inseparable from his claim for warehousing services, thus, the venue
stipulated in the EWA is the proper venue. However, the Court of Appeals
noted that prior to the filing of SMC’s petition, respondent Monasterio filed
an amended complaint to which SMC filed an answer. Thus, the Court of
Appeals dismissed San Miguel’s petition for certiorari, stating that the case
was already moot and academic.
Hence this petition.
W/N the venue stipulation applies to respondent’s action – No.
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Held:
No.
On disputes relating to the enforcement of the rights and duties of the
contracting parties, the venue stipulation in the EWA should be construed as
mandatory. Nothing therein being contrary to law, morals, good custom or
public policy, this provision is binding upon the parties. The EWA stipulation
on venue is clear and unequivocal, thus it ought to be respected.
However, we note that the cause of action in the complaint filed by the
respondent before the RTC of Naga was not based on the EWA, but concern
services not enumerated in the EWA. Records show also that previously,
respondent received a separate consideration of P11,400 for the cashiering
service he rendered to SMC. Moreover, in the amended complaint, the
respondent’s cause of action was specifically limited to the collection of the
sum owing to him for his cashiering service in favor of SMC. He already
omitted petitioner’s non-payment of warehousing fees.
As previously ruled, allegations in the complaint determines the cause of
action or the nature of the case. Thus, given the circumstances of this case
now before us, we are constrained to hold that it would be erroneous to rule,
as the CA did, that the collection suit of the respondent did not pertain solely
to the unpaid cashiering services but pertain likewise to the warehousing
services.
contracting party will create unwarranted restrictions which the parties might
find unintended or worse, arbitrary and oppressive.
Moreover, since convenience is the raison d’’tre of the rules on venue, venue
stipulation should be deemed merely permissive, and that interpretation
should be adopted which most serves the parties’ convenience. Contrawise,
the rules mandated by the Rules of Court should govern. Accordingly, since
the present case for the collection of sum of money filed by herein respondent
is a personal action, we find no compelling reason why it could not be
instituted in the RTC of Naga City, the place where plaintiff resides.
Having settled the issue on venue, we need not belabor the issue of whether
SMC’s petition has become moot.
WHEREFORE, it is hereby ruled that no reversible error was committed by
the Regional Trial Court of Naga City, Branch 20, in denying petitioner’s
motion to dismiss. Said RTC is the proper venue of the amended complaint
for a sum of money filed by respondent against petitioner San Miguel
Corporation, in connection with his cashiering services. The case is hereby
REMANDED to the RTC of Naga City, Branch 20, for further proceedings
on respondent’s amended complaint, without further delay.
Costs against petitioner. SO ORDERED.

Exclusive venue stipulation embodied in a contract restricts or confines

parties thereto when the suit relates to breach of the said contract. But where
the exclusivity clause does not make it necessarily all 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. 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 such limitation on a

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3. URC v. Albert Lim, G.R. NO. 154338, October 05, 2007
Facts:
The present controversy stemmed from a contract of sale between Universal
Robina Corporation, petitioner, and Albert Lim, respondent. Pursuant to the
contract, petitioner sold to respondent grocery products in the total amount of
P808,059.88. After tendering partial payments, respondent refused to settle
his obligation despite petitioner’s repeated demands.
Petitioner filed with the RTC of QC a complaint for sum of money.
RTC motu proprio dismissed the complaint without prejudice on the ground
of improper venue and lack of jurisdiction. The RTC held:
“The case is misplaced with respect to jurisdiction and venue. There is not
even a remote connection by the parties to Quezon City, where this Regional
Trial Court sits, the plaintiff corporation has principal office at Pasig City
and the defendant is, as provided in the complaint, from Laoag City.
Wherefore, premises considered, this case is hereby DISMISSED without
prejudice for improper venue and for lack of jurisdiction.”
Petitioner filed an MR and an amended complaint with the RTC alleging
that the parties agreed that the proper venue for any dispute relative to the
transaction is Quezon City.
In an Order dated October 11, 1999, the trial court granted the motion and
admitted petitioner’s amended complaint.
On December 6, 1999, summons was served upon respondent. For his failure
to file an answer seasonably and upon motion of petitioner, the trial court
issued an Order dated September 12, 2000 declaring him in3 default and
allowing petitioner to present its evidence ex parte.
However, on April 17, 2001, the trial court, still unsure whether venue was
properly laid, issued an Order directing petitioner to file a memorandum of
authorities on whether it can file a complaint in Quezon City. Subsequently,
on May 11, 2001, the trial court again issued an Order dismissing the
complaint on the ground of improper venue.
CA dismissed due to petitioner’s failure to attach thereto an explanation why
copies of the petition were not served by personal service but by registered
mail, in violation of Section 11, Rule 14 of the 1997 Rules of Civil Procedure,
as amended.
Hence this petition.
Issue:
W/N the RTC may dismiss motu proprio petitioner’s complaint on the ground
of improper venue – No.
Held:
No.
Sec. 4. When Rule not applicable.—This Rule shall not apply— (a) In those
cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of
the action on the exclusive venue thereof.
In personal actions, the plaintiff may commence an action either in the place
of his or her residence or the place where the defendant resides. However, the
parties may agree to a specific venue which could be in a place where neither
of them resides.
Corollarily, Section 1, Rule 9 of the same Rules provides instances when the
trial court may motu proprio dismiss a claim, thus:
“Section 1. Defenses and objections not pleaded.—Defenses and objections
not pleaded either in a motion to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the evidence on record that
the court has no jurisdiction over the subject matter, that there is another
action pending between the same parties for the same cause, or that the action
is barred by a prior judgment or by statute of limitations, the court shall
dismiss the claim.”
Implicit from the above provision is that improper venue not impleaded in
the motion to dismiss or in the answer is deemed waived. Thus, a court may
not dismiss an action motu proprio on the ground of improper venue as it is
not one of the grounds wherein the court may dismiss an action motu proprio
on the basis of the pleadings.
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In Rudolf Lietz Holdings, Inc. v. Registry of Deeds of Parañaque, the Court
likewise held that a trial court may not motu proprio dismiss a complaint on
the ground of improper venue, thus:
“Rule 9, Section 1 of the 1997 Rules of Civil Procedure states that defenses
and objections not pleaded either in a motion to dismiss or in the answer are
deemed waived. The court may only dismiss an action motu proprio in
case of lack of jurisdiction over the subject matter, litis pendentia, res
judicata and prescription. Therefore, the trial court in this case erred
when it dismissed the petition motu proprio. It should have waited for a
motion to dismiss or a responsive pleading from respondent, raising the
objection or affirmative defense of improper venue, before dismissing
the petition.”

In the instant case, respondent, despite proper service of summons, failed to

file an answer and was thus declared in default by the trial court. Verily,
having been declared in default, he lost his standing in court and his right to
adduce evidence and present his defense, including his right to question the
propriety of the venue of the action.

WHEREFORE, the Petition for Review is GRANTED. The assailed

Resolutions of the Court of Appeals in CA-G.R. SP No. 67368 are
REVERSED. The Regional Trial Court, Branch 227, Quezon City is ordered
to REINSTATE Civil Case No. Q-99-37791 and conduct an ex parte hearing
for the reception of petitioner’s evidence and dispose of the case with
dispatch.
SO ORDERED.

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4. Irene Marcos Araneta v. Court of Appeals, G.R. No. 154096, August
22, 2008
Facts:
Sometime in 1968 and 1972, Ambassador Roberto S. Benedicto, now
deceased, and his business associates (Benedicto Group) organized Far East
Managers and Investors, Inc. (FEMII) and Universal Equity Corporation
(UEC), respectively.
As petitioner Irene Marcos-Araneta would later allege, both corporations
were organized pursuant to a contract or arrangement whereby Benedicto, as
trustor, placed in his name and in the name of his associates, as trustees, the
shares of stocks of FEMII and UEC with the obligation to hold those shares
and their fruits in trust and for the benefit of Irene to the extent of 65% of
such shares.
Several years after, Irene, through her trustee-husband, Gregorio Ma. Araneta
III, demanded the reconveyance of said 65% stockholdings, but the Benedicto
Group refused to oblige.
Thus, Irene filed two complaints for conveyance of shares of stock,
accounting and receivership before RTC Ilocos Norte against the
Benedicto Group with prayer for TRO.
The first, docketed as Civil Case No. 3341-17, covered the UEC shares and
named Benedicto, his daughter, and at least 20 other individuals as
defendants. The second, docketed as Civil Case No. 3342-17, sought the
recovery to the extent of 65% of FEMII shares held by Benedicto and the
other defendants named therein.
Respondent Francisca Benedicto-Paulino,3 Benedicto’s daughter, filed a
Motion to Dismiss Civil Case No. 3341-17, followed later by an Amended
Motion to Dismiss.
Benedicto, on the other hand, moved to dismiss4 Civil Case No. 3342-17,
adopting in toto the five (5) grounds raised by Francisca in her amended
motion to dismiss. Among these were:
(1) the cases involved an intra-corporate dispute over which the Securities
and Exchange Commission, not the RTC, has jurisdiction;
(2) venue was improperly laid; and
(3) the complaint failed to state a cause of action, as there was no allegation
therein that plaintiff, as beneficiary of the purported trust, has accepted the
trust created in her favor.
Upon Benedicto’s motion, both cases were consolidated.
During the preliminary proceedings on their motions to dismiss, Benedicto
and Francisca, by way of bolstering their contentions on improper venue,
presented the Joint Affidavit of Gilmia B. Valdez, Catalino A. Bactat, and
Conchita R. Rasco who all attested being employed as household staff at the
Marcos’ Mansion in Brgy. Lacub, Batac, Ilocos Norte and that Irene did not
maintain residence in said place as she in fact only visited the mansion
twice in 1999; that she did not vote in Batac in the 1998 national elections;
and that she was staying at her husband’s house in Makati City.
Against the aforesaid unrebutted joint affidavit, Irene presented her PhP5
community tax certificate6 (CTC) issued on “11/07/99” in Curimao, Ilocos
Norte to support her claimed residency in Batac, Ilocos Norte.
In the meantime, on May 15, 2000, Benedicto died and was substituted by his
wife, Julita C. Benedicto, and Francisca.
RTC dismissed both complaints stating that these partly constituted “real
actions,” and that Irene did not actually reside in Ilocos Norte, and, therefore,
venue was improperly laid.
Pending resolution of her motion for reconsideration with the RTC, Irene
filed on July 17, 2000 a Motion (to Admit Amended Complaint),9
attaching therewith a copy of the Amended Complaint10 dated July 14,
2000 in which the names of Daniel Rubio, Orlando G. Reslin, and Jose
G. Reslin appeared as additional plaintiffs. As stated in the amended
complaint, the added plaintiffs, all from Ilocos Norte, were Irene’s new
trustees. Parenthetically, the amended complaint stated practically the same
cause of action but, as couched, sought the reconveyance of the FEMII shares
only.
On October 9, 2000, RTC denied the MR but deferred action on her
motion to admit amended complaint and the opposition thereto. RTC ruled
that:
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(1) Pursuant to Section 2, Rule 10 of the Rules of Court,13 Irene may opt to
file, as a matter of right, an amended complaint.
(2) The inclusion of additional plaintiffs, one of whom was a Batac, an Ilocos
Norte resident, in the amended complaint setting out the same cause of action
cured the defect of improper venue.
(3) Secs. 2 and 3 of Rule 3 in relation to Sec. 2 of Rule 4 allow the filing of
the amended complaint in question in the place of residence of any of Irene’s
co-plaintiffs.
Respondents filed an MTD against the amended complaint. RTC denied
the MTD and ordered respondents to file their answer to the amended
complaint.
In said order, the RTC stood pat on its holding on the rule on amendments of
pleadings. And scoffing at the argument about there being no complaint to
amend in the first place as of October 9, 2000 (when the RTC granted the
motion to amend) as the original complaints were dismissed with finality
earlier, i.e., on August 25, 2000 when the court denied Irene’s motion for
reconsideration of the June 29, 2000 order dismissing the original complaints,
the court stated thusly: “there was actually no need to act on Irene’s motion
to admit, it being her right as plaintiff to amend her complaints absent any
responsive pleading thereto.” Pushing its point, the RTC added the
observation that the filing of the amended complaint on July 17, 2000 ipso
facto superseded the original complaints, the dismissal of which, per the June
29, 2000 Order, had not yet become final at the time of the filing of the
amended complaint.
Thereafter, respondents filed their Answer to the amended complaint. But on
the same day, they went to the CA via R65 questioning the following RTC
orders:
1. admitting the amended complaint
2. denying their MTD of the amended complaint and
3. denying their MR of the second issuance
Inasmuch as the verification portion of the joint petition and the certification
on non-forum shopping bore only Francisca’s signature, the CA required the
joint petitioners “to submit x x x either the written authority of Julita C.
Benedicto to Francisca B. Paulino authorizing the latter to represent her in
these proceedings, or a supplemental verification and certification duly
signed by x x x Julita C. Benedicto.”16 Records show the submission of the
corresponding authorizing Affidavit17 executed by Julita in favor of
Francisca.
CA reversed the RTC orders and dismissed the amended complaints.
Hence this petition.
Issues:
W/N CA erred in:
1. allowing the submission of an affidavit by Julita as sufficient compliance
with the requirement on verification and certification of non-forum shopping
– No, there was substantial compliance.
2. ruling on the merits of the trust issue which involves factual and evidentiary
determination, processes not proper in a petition for certiorari under Rule 65
of the Rules of Court - Yes, CA erred. Merits of the case cannot be resolved
on certiorari under R65.
3. ruling that the amended complaints in the lower court court should be
dismissed because, at the time it was filed, there was no more original
complaint to amend – No, admission of the amended complaints was proper
4. ruling that the respondents did not waive improper venue – No, CA
did not err. Respondent did not waive improper venue.
5. ruling that petitioner Irene was not a resident of Batac, Ilocos Norte
and that none of the principal parties are residents of Ilocos Norte – No,
CA did not err. Irene was not a resident of Batac, Ilocos Norte, as she claimed.
Also, venue was improperly laid.
Held:
I.
Verification not Jurisdictional; May be Corrected
Verification is, under the Rules, not a jurisdictional but merely a formal
requirement which the court may motu proprio direct a party to comply with
or correct, as the case may be. As the Court articulated in Kimberly
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Independent Labor Union for Solidarity, Activism and Nationalism
(KILUSAN)-Organized Labor Associations in Line Industries and
Agriculture (OLALIA) v. Court of Appeals, 528 SCRA 45 (2007):
“[V]erification is a formal, not a jurisdictional requisite, as it is mainly
intended to secure an assurance that the allegations therein made are done in
good faith or are true and correct and not mere speculation. The Court may
order the correction of the pleading, if not verified, or act on the unverified
pleading if the attending circumstances are such that a strict compliance with
the rule may be dispensed with in order that the ends of justice may be
served.” Given this consideration, the CA acted within its sound discretion in
ordering the submission of proof of Francisca’s authority to sign on Julita’s
behalf and represent her in the proceedings before the appellate court.
Signature by Any of the Principal Petitioners is Substantial Compliance
Regarding the certificate of non-forum shopping, the general rule is that all
the petitioners or plaintiffs in a case should sign it. However, as has been
ruled by the Court, the signature of any of the principal petitioners or principal
parties, as Francisca is in this case, would constitute a substantial compliance
with the rule on verification and certification of non-forum shopping.
It cannot be overemphasized that Francisca herself was a principal party in
Civil Case No. 3341-17 before the RTC and in the certiorari proceedings
before the CA. Besides being an heir of Benedicto, Francisca, with her
mother, Julita, was substituted for Benedicto in the instant case after his
demise. And should there exist a commonality of interest among the parties,
or where the parties filed the case as a “collective,” raising only one common
cause of action or presenting a common defense, then the signature of one of
the petitioners or complainants, acting as representative, is sufficient
compliance. We said so in Cavile v. Heirs of Clarita Cavile, 400 SCRA 255
(2003). Like Thomas Cavile, Sr. and the other petitioners in Cavile, Francisca
and Julita, as petitioners before the CA, had filed their petition as a collective,
sharing a common interest and having a common single defense to protect
their rights over the shares of stocks in question.
II. Merits of the Case cannot be Resolved on Certiorari under Rule 65
Whether a determinative question is one of law or of fact depends on the
nature of the dispute. A question of law exists when the doubt or controversy
concerns the correct application of law or jurisprudence to a certain given set
of facts; or when the issue does not call for an examination of the probative
value of the evidence presented, the truth or falsehood of facts being admitted.
A question of fact obtains when the doubt or difference arises as to the truth
or falsehood of facts or when the query invites the calibration of the whole
evidence considering mainly the credibility of the witnesses, the existence
and relevancy of specific surrounding circumstances, as well as their relation
to each other and to the whole, and the probability of the situation.
The CA overstepped its boundaries when, in disposing of private
respondents’ petition for certiorari, it did not confine itself to determining
whether or not lack of jurisdiction or grave abuse of discretion tainted the
issuance of the assailed RTC orders, but proceeded to pass on the factual issue
of the existence and enforceability of the asserted trust.
In the process, the CA virtually resolved petitioner Irene’s case for
reconveyance on its substantive merits even before evidence on the matter
could be adduced. Civil Case Nos. 3341-17 and 3342-17 in fact have not even
reached the pre-trial stage. To stress, the nature of the trust allegedly
constituted in Irene’s favor and its enforceability, being evidentiary in nature,
are best determined by the trial court. The original complaints and the
amended complaint certainly do not even clearly indicate whether the
asserted trust is implied or express. To be sure, an express trust differs from
the implied variety in terms of the manner of proving its existence. Surely,
the onus of factually determining whether the trust allegedly established in
favor of Irene, if one was indeed established, was implied or express properly
pertains, at the first instance, to the trial court and not to the appellate court
in a special civil action for certiorari, as here.
In the absence of evidence to prove or disprove the constitution and
necessarily the existence of the trust agreement between Irene, on one hand,
and the Benedicto Group, on the other, the appellate court cannot intelligently
pass upon the issue of trust. A pronouncement on said issue of trust rooted on
speculation and conjecture, if properly challenged, must be struck down. So
it must be here.
III. Admission of amended complaint was proper
We agree with petitioners and turn to the governing Sec. 2 of Rule 10 of the
Rules of Court which provides:
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SEC. 2. Amendments as a matter of right.—A party may amend his pleading
once as a matter of right at any time before a responsive pleading is served or
in the case of a reply, at any time within ten (10) days after it is served.
As the aforequoted provision makes it abundantly clear that the plaintiff may
amend his complaint once as a matter of right, i.e., without leave of court,
before any responsive pleading is filed or served.
Responsive pleadings are those which seek affirmative relief and/or set up
defenses, like an answer. A motion to dismiss is not a responsive pleading for
purposes of Sec. 2 of Rule 10.
Assayed against the foregoing perspective, the RTC did not err in admitting
petitioners’ amended complaint, Julita and Francisca not having yet answered
the original complaints when the amended complaint was filed. At that
precise moment, Irene, by force of said Sec. 2 of Rule 10, had, as a matter of
right, the option of amending her underlying reconveyance complaints. As
aptly observed by the RTC, Irene’s motion to admit amended complaint was
not even necessary. The Court notes though that the RTC has not offered an
explanation why it saw fit to grant the motion to admit in the first place.
It may be argued that the original complaints had been dismissed through the
June 29, 2000 RTC order. It should be pointed out, however, that the finality
of such dismissal order had not set in when Irene filed the amended complaint
on July 17, 2000, she having meanwhile seasonably sought reconsideration
thereof. Irene’ s motion for reconsideration was only resolved on August 25,
2000. Thus, when Irene filed the amended complaint on July 17, 2000, the
order of dismissal was not yet final, implying that there was strictly no legal
impediment to her amending her original complaints.35
IV. Respondent did not waive improper venue
Venue essentially concerns a rule of procedure which, in personal actions, is
fixed for the greatest convenience possible of the plaintiff and his witnesses.
The ground of improperly laid venue must be raised seasonably, else it is
deemed waived. Where the defendant failed to either file a motion to dismiss
on the ground of improper venue or include the same as an affirmative
defense, he is deemed to have waived his right to object to improper venue.
In the case at bench, Benedicto and Francisca raised at the earliest time
possible, meaning “within the time for but before filing the answer to the
complaint,” the matter of improper venue. They would thereafter reiterate and
pursue their objection on venue, first, in their answer to the amended
complaints and then in their petition for certiorari before the CA. Any
suggestion, therefore, that Francisca and Benedicto or his substitutes
abandoned along the way improper venue as ground to defeat Irene’s claim
before the RTC has to be rejected.
V.
RTC has no jurisdiction on the ground of improper venue
In a personal action, the plaintiff seeks the recovery of personal property, the
enforcement of a contract, or the recovery of damages. Real actions, on the
other hand, are those affecting title to or possession of real property, or
interest therein. In accordance with the wordings of Sec. 1 of Rule 4, the
venue of real actions shall be the proper court which has territorial jurisdiction
over the area wherein the real property involved, or a portion thereof, is
situated. The venue of personal actions is the court where the plaintiff or any
of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a non-resident defendant where
he may be found, at the election of the plaintiff.
In the instant case, petitioners are basically asking Benedicto and his Group,
as defendants a quo, to acknowledge holding in trust Irene’s purported 65%
stockownership of UEC and FEMII, inclusive of the fruits of the trust, and to
execute in Irene’s favor the necessary conveying deed over the said 65%
shareholdings. In other words, Irene seeks to compel recognition of the trust
arrangement she has with the Benedicto Group.
The fact that FEMII’s assets include real properties does not materially
change the nature of the action, for the ownership interest of a stockholder
over corporate assets is only inchoate as the corporation, as a juridical person,
solely owns such assets. It is only upon the liquidation of the corporation that
the stockholders, depending on the type and nature of their stockownership,
may have a real inchoate right over the corporate assets, but then only to the
extent of their stockownership.
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The amended complaint is an action in personam, it being a suit against
Francisca and the late Benedicto (now represented by Julita and Francisca),
on the basis of their alleged personal liability to Irene upon an alleged trust
constituted in 1968 and/or 1972.
They are not actions in rem where the actions are against the real properties
instead of against persons. We particularly note that possession or title to the
real properties of FEMII and UEC is not being disputed, albeit part of the
assets of the corporation happens to be real properties.
Interpretation of Secs. 2 and 3 of Rule 3; and Sec. 2 of Rule 4
We point out at the outset that Irene, as categorically and peremptorily found
by the RTC after a hearing, is not a resident of Batac, Ilocos Norte, as she
claimed. The Court perceives no compelling reason to disturb, in the confines
of this case, the factual determination of the trial court and the premises
holding it together.
Accordingly, Irene cannot, in a personal action, contextually opt for Batac as
venue of her reconveyance complaint. As to her, Batac, Ilocos Norte is not
what Sec. 2, Rule 4 of the Rules of Court adverts to as the place “where the
plaintiff or any of the principal plaintiffs resides” at the time she filed her
amended complaint.
That Irene holds CTC No. 17019451 issued sometime in June 2000 in Batac,
Ilocos Norte and in which she indicated her address as Brgy. Lacub, Batac,
Ilocos is really of no moment. Let alone the fact that one can easily secure a
basic residence certificate practically anytime in any Bureau of Internal
Revenue or treasurer’s office and dictate whatever relevant data one desires
entered, Irene procured CTC No. 17019451 and appended the same to her
motion for reconsideration following the RTC’s pronouncement against her
being a resident of Batac.
Pivotal to the resolution of the venue issue is a determination of the status of
Irene’s co-plaintiffs in the context of Secs. 2 and 3 of Rule 3 in relation to
Sec. 2 of Rule 4.
Venue is Improperly Laid
There can be no serious dispute that the real party-in-interest plaintiff is Irene.
As self-styled beneficiary of the disputed trust, she stands to be benefited or
entitled to the avails of the present suit. It is undisputed too that petitioners
Daniel Rubio, Orlando G. Reslin, and Jose G. Reslin, all from Ilocos Norte,
were included as co-plaintiffs in the amended complaint as Irene’s new
designated trustees. As trustees, they can only serve as mere
representatives of Irene.
Upon the foregoing consideration, the resolution of the crucial issue of
whether or not venue had properly been laid should not be difficult. Sec. 2 of
Rule 4 indicates quite clearly that when there is more than one plaintiff in a
personal action case, the residences of the principal parties should be the
basis for determining proper venue.
According to the late Justice Jose Y. Feria, “the word ‘principal’ has been
added [in the uniform procedure rule] in order to prevent the plaintiff from
choosing the residence of a minor plaintiff or defendant as the venue.”
Eliminate the qualifying term “principal” and the purpose of the Rule would,
to borrow from Justice Regalado, “be defeated where a nominal or formal
party is impleaded in the action since the latter would not have the degree of
interest in the subject of the action which would warrant and entail the
desirably active participation expected of litigants in a case.”
Before the RTC in Batac, in Civil Case Nos. 3341-17 and 3342- 17, Irene
stands undisputedly as the principal plaintiff, the real party-in-interest.
Following Sec. 2 of Rule 4, the subject civil cases ought to be commenced
and prosecuted at the place where Irene resides.
Principal Plaintiff not a Resident in Venue of Action
As earlier stated, no less than the RTC in Batac declared Irene as not a
resident of Batac, Ilocos Norte. Withal, that court was an improper venue for
her conveyance action.
The Court can concede that Irene’s three co-plaintiffs are all residents of
Batac, Ilocos Norte. But it ought to be stressed in this regard that not one of
the three can be considered as principal party-plaintiffs in Civil Case Nos.
3341-17 and 3342-17, included as they were in the amended complaint as
trustees of the principal plaintiff. As trustees, they may be accorded, by virtue
of Sec. 3 of Rule 3, the right to prosecute a suit, but only on behalf of the
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beneficiary who must be included in the title of the case and shall be deemed
to be the real party-in-interest. In the final analysis, the residences of Irene’s
co- plaintiffs cannot be made the basis in determining the venue of the subject
suit. This conclusion becomes all the more forceful considering that Irene
herself initiated and was actively prosecuting her claim against Benedicto, his
heirs, assigns, or associates, virtually rendering the impleading of the trustees
unnecessary.

And this brings us to the final point. Irene was a resident during the period
material of Forbes Park, Makati City. She was not a resident of Brgy. Lacub,
Batac, Ilocos Norte, although jurisprudence44 has it that one can have several
residences, if such were the established fact. The Court will not speculate on
the reason why petitioner Irene, for all the inconvenience and expenses she
and her adversaries would have to endure by a Batac trial, preferred that her
case be heard and decided by the RTC in Batac.

WHEREFORE, the instant petition is hereby DISMISSED.

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5. Heirs of the Late Flaviano Maglasang v. Manila Banking Corporation,
2013
Facts:
On June 16, 1975, spouses Flaviano and Salud Maglasang (Sps. Maglasang)
obtained a credit line from respondent5 in the amount of P350,000.00 which
was secured by a real estate mortgage executed over seven of their properties
located in Ormoc City and the Municipality of Kananga, Province of
Leyte.8 They availed of their credit line by securing loans in the amounts of
P209,790.50 and P139,805.83 on October 24, 1975 and March 15, 1976,
respectively,9 both of which becoming due and demandable within a period
of one year. Further, the parties agreed that the said loans would earn interest
at 12% per annum (p.a.) and an additional 4% penalty would be charged upon
default.10
After Flaviano Maglasang (Flaviano) died intestate on February 14, 1977, his
widow Salud Maglasang (Salud) and their surviving children, herein
petitioners appointed their brother Edgar Maglasang as their attorney-in-fact.
Edgar filed a verified petition for letters of administration of the intestate
estate of Flaviano before the then Court of First Instance of Leyte, Ormoc
City, Branch 5 (probate court), docketed as Sp. Proc. No. 1604-0.13 On
August 9, 1977, the probate court issued an Order14 granting the petition,
thereby appointing Edgar as the administrator15 of Flaviano’s estate.
In view of the issuance of letters of administration, the probate court, on
August 30, 1977, issued a Notice to Creditors for the filing of money claims
against Flaviano’s estate. Accordingly, as one of the creditors of Flaviano,
respondent notified the probate court of its claim in the amount of
P382,753.19 as of October 11, 1978, exclusive of interests and charges.
During the pendency of the intestate proceedings, Edgar and Oscar were
able to obtain several loans from respondent, secured by promissory notes18
which they signed.
In an Order19 dated December 14, 1978 (December 14, 1978 Order), the
probate court terminated the proceedings with the surviving heirs executing
an extrajudicial partition of the properties of Flaviano’s estate. The loan
obligations owed by the estate to respondent, however, remained unsatisfied
due to respondent’s certification that Flaviano’s account was undergoing a
restructuring. Nonetheless, the probate court expressly recognized the rights
of respondent under the mortgage and promissory notes executed by the Sps.
Maglasang, specifically, its “right to foreclose the same within the statutory
period.”20
In this light, respondent proceeded to extrajudicially foreclose the mortgage
covering the Sps. Maglasang’s properties and emerged as the highest bidder
at the public auction for the amount of P350,000.00. The sale took place in
Ormoc, Leyte.
There, however, remained a deficiency on Sps. Maglasang’s obligation to
respondent. Thus, on June 24, 1981, respondent filed a suit to recover the
deficiency amount of P250,601.05 as of May 31, 1981 against the estate of
Flaviano, his widow Salud and petitioners, docketed as Civil Case No. 1998-
0 before the same CFI, Ormoc.
RTC ruled for respondent bank and ordered petitioners to pay.
CA affirmed. At the outset, it pointed out that the probate court erred when
it, through the December 14, 1978 Order, closed and terminated the
proceedings in Sp. Proc. No. 1604-0 without first satisfying the claims of the
creditors of the estate — in particular, respondent — in violation of Section
1, Rule 90 of the Rules.30 As a consequence, respondent was not able to
collect from the petitioners and thereby was left with the option of foreclosing
the real estate mortgage.31 Further, the CA held that Section 7, Rule 86 of
the Rules does not apply to the present case since the same does not involve
a mortgage made by the administrator over any property belonging to the
estate of the decedent.32 According to the CA, what should apply is Act No.
3135 which entitles respondent to claim the deficiency amount after the
extrajudicial foreclosure of the real estate mortgage of Sps. Maglasang’s
properties.34
Hence this petition claiming that Rule 86 and not Act No. 3135 applies in this
case, and that the extrajudicial foreclosure of the subject properties was null
and void, not having been conducted in the capital (Tacloban) of the Province
of Leyte in violation of the stipulations in the real estate mortgage contract.
Issues:
1. What law or rule governs? Rule 86 of RoC primarily.
Avila 4B | 2016
2. W/N the extrajudicial foreclosure proceedings violated the venue
stipulation in the mortgage contract – No.
Held:
I. Rule 86 applies
Claims against deceased persons should be filed during the settlement
proceedings of their estate.41 Such proceedings are primarily governed by
special rules found under Rules 73 to 90 of the Rules, although rules
governing ordinary actions may, as far as practicable, apply suppletorily.
Rule 86, §7 generally speaks of “[a] creditor holding a claim against the
deceased secured by a mortgage or other collateral security” as above-
highlighted, it may be reasonably concluded that the aforementioned section
covers all secured claims, whether by mortgage or any other form of
collateral, which a creditor may enforce against the estate of the de ceased
debtor. On the contrary, nowhere from its language can it be fairly deducible
that the said section would — as the CA interpreted — narrowly apply only
to mortgages made by the administrator over any property belonging to the
estate of the decedent. To note, mortgages of estate property executed by the
administrator, are also governed by Rule 89 of the Rules, captioned as “Sales,
Mortgages, and Other Encumbrances of Property of Decedent.”
Jurisprudence breaks down the rule under Section 7, Rule 86 and explains
that the secured creditor has three remedies/options that he may alternatively
adopt for the satisfaction of his indebtedness. In particular, he may choose to:
(a) waive the mortgage and claim the entire debt from the estate of the
mortgagor as an ordinary claim;
(b) foreclose the mortgage judicially and prove the deficiency as an ordinary
claim; and
(c) rely on the mortgage exclusively, or other security and foreclose the same
before it is barred by prescription, without the right to file a claim for any
deficiency.45
It must, however, be emphasized that these remedies are distinct, independent
and mutually exclusive from each other; thus, the election of one effectively
bars the exercise of the others.
Anent the third remedy, it must be mentioned that the same includes the
option of extrajudicially foreclosing the mortgage under Act No. 3135, as
availed of by respondent in this case. However, the plain result of adopting
the last mode of foreclosure is that the creditor waives his right to recover any
deficiency from the estate.
To obviate any confusion, the Court observes that the operation of Act No.
3135 does not entirely discount the application of Section 7, Rule 86, or vice-
versa. Rather, the two complement each other within their respective spheres
of operation.
On the one hand, Section 7, Rule 86 lays down the options for the secured
creditor to claim against the estate and, according to jurisprudence, the
availment of the third option bars him from claiming any deficiency amount.
On the other hand, after the third option is chosen, the procedure governing
the manner in which the extrajudicial foreclosure should proceed would still
be governed by the provisions of Act No. 3135.
Simply put, Section 7, Rule 86 governs the parameters and the extent to which
a claim may be advanced against the estate, whereas Act No. 3135 sets out
the specific procedure to be followed when the creditor subsequently chooses
the third option — specifically, that of extrajudicially foreclosing real
property belonging to the estate. The application of the procedure under Act
No. 3135 must be concordant with Section 7, Rule 86 as the latter is a special
rule applicable to claims against the estate, and at the same time, since Section
7, Rule 86 does not detail the procedure for extrajudicial foreclosures, the
formalities governing the manner of availing of the third option — such as
the place where the application for extrajudicial foreclosure is filed, the
requirements of publication and posting and the place of sale — must be
governed by Act No. 3135.
In this case, respondent sought to extrajudicially foreclose the mortgage of
the properties previously belonging to Sps. Maglasang (and now, their
estates) and, therefore, availed of the third option.
II. The EJD foreclosure proceedings are valid.
As a final point, petitioners maintain that the extrajudicial foreclosure of the
subject properties was null and void since the same was conducted in
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violation of the stipulation in the real estate mortgage contract stating that the SO ORDERED.
auction sale should be held in the capital of the province where the properties
are located, i.e., the Province of Leyte.

The Court disagrees.

As may be gleaned from the records, the stipulation under the real estate
mortgage54 executed by Sps. Maglasang which fixed the place of the
foreclosure sale at Tacloban City lacks words of exclusivity which would bar
any other acceptable fora wherein the said sale may be conducted:

“It is hereby agreed that in case of foreclosure of this mortgage under Act
3135, the auction sale shall be held at the capital of the province if the
property is within the territorial jurisdiction of the province concerned, or
shall be held in the city if the property is within the territorial jurisdiction of
the city concerned…”

Case law states that absent such qualifying or restrictive words to indicate the
exclusivity of the agreed forum, the stipulated place should only be as an
additional, not a limiting venue.

As a consequence, the stipulated venue and that provided under Act No. 3135
can be applied alternatively.

In particular, Section 2 of Act No. 3135 allows the foreclosure sale to be done
within the province where the property to be sold is situated, viz.:
SEC. 2. Said sale cannot be made legally outside of the province which the
property sold is situated; and in case the place within said province in which
the sale is to be made is subject to stipulation, such sale shall be made in said
place or in the municipal building of the municipality in which the property
or part thereof is situated.

In this regard, since the auction sale was conducted in Ormoc City, which is
within the territorial jurisdiction of the Province of Leyte, then the Court finds
sufficient compliance with the above-cited requirement.

WHEREFORE, the petition is P ARTL Y GRANTED. The complaint for

the recovery of the deficiency amount after extrajudicial foreclosure filed by
respondent Manila Banking Corporation is hereby DISMISSED. The
extrajudicial foreclosure of the mortgaged properties, however, stands.

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6. Aceron v. Spouses Ang, G.R. 186993, August 22, 2012
Facts:
On September 2, 1992, spouses Alan and Em Ang (respondents) obtained
a loan in the amount of Three Hundred Thousand U.S. Dollars
(US$300,000.00) from Theodore and Nancy Ang (petitioners). On even date,
the respondents executed a promissory note5 in favor of the petitioners
wherein they promised to pay the latter the said amount, with interest at the
rate of ten percent (10%) per annum, upon demand. However, despite
repeated demands, the respondents failed to pay the petitioners.
Thus, on August 28, 2006, the petitioners sent the respondents a demand letter
asking them to pay their outstanding debt which, at that time, already
amounted to Seven Hundred Nineteen Thousand, Six Hundred Seventy-One
U.S. Dollars and Twenty-Three Cents (US$719,671.23), inclusive of the ten
percent (10%) annual interest that had accumulated over the years.
Notwithstanding the receipt of the said demand letter, the respondents still
failed to settle their loan obligation.
On August 6, 2006, the petitioners, who were then residing in Los Angeles,
California, United States of America (USA), executed their respective
Special Powers of Attorney in favor of Attorney Eldrige Marvin B. Aceron
(Atty. Aceron) for the purpose of filing an action in court against the
respondents.
On September 15, 2006, Atty. Aceron, in behalf of the petitioners, filed a
Complaint7 for collection of sum of money with the RTC of QC against
respondents.
Respondents filed an MTD on the grounds of improper venue and
prescription.8 Insisting that the venue of the petitioners’ action was
improperly laid, the respondents asserted that the complaint against them may
only be filed in the court of the place where either they or the petitioners
reside. They averred that they reside in Bacolod City while the petitioners
reside in Los Angeles, California, USA. Thus, the respondents maintain, the
filing of the complaint against them in the RTC of Quezon City was improper.
RTC denied the MTD holding that:
“Attached to the complaint is the Special Power of Attorney x x x which
clearly states that plaintiff Nancy Ang constituted Atty. Eldrige Marvin
Aceron as her duly appointed attorney-in-fact to prosecute her claim against
herein defendants. Considering that the address given by Atty. Aceron is in
Quezon City, hence, being the plaintiff, venue of the action may lie where he
resides as provided in Section 2, Rule 4 of the 1997 Rules of Civil Procedure.”
CA reversed holding that:
“the place of residence of the plaintiff’s attorney-in-fact is of no moment
when it comes to ascertaining the venue of cases filed in behalf of the
principal since what should be considered is the residence of the real parties
in interest, i.e.[,] the plaintiff or the defendant, as the case may be. Residence
is the permanent home―the place to which, whenever absent for business or
pleasure, one intends to return.”
Issue:
W/N the court of the place of residence of the attorney in fact Aceron is a
proper venue - No
Held:
No.
The petitioners’ complaint should have been filed in the RTC of Bacolod
City, the court of the place where the respondents reside, and not in RTC
of Quezon City.
It is a legal truism that the rules on the venue of personal actions are fixed for
the convenience of the plaintiffs and their witnesses. Equally settled,
however, is the principle that choosing the venue of an action is not left to a
plaintiff’s caprice; the matter is regulated by the Rules of Court.
The petitioners’ complaint for collection of sum of money against the
respondents is a personal action as it primarily seeks the enforcement of a
contract. The Rules give the plaintiff the option of choosing where to file his
complaint. He can file it in the place
(1) where he himself or any of them resides, or
(2) where the defendant or any of the defendants resides or may be found.
The plaintiff or the defendant must be residents of the place where the action
has been instituted at the time the action is commenced.
If the plaintiff does not reside in the Philippines, the complaint in such case
may only be filed in the court of the place where the defendant resides. In
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Cohen and Cohen v. Benguet Commercial Co., Ltd., 34 Phil. 526 (1916), this
Court held that there can be no election as to the venue of the filing of a
complaint when the plaintiff has no residence in the Philippines. In such case,
the complaint may only be filed in the court of the place where the defendant
resides.
Here, the petitioners are residents of Los Angeles, California, USA while the
respondents reside in Bacolod City. Applying the foregoing principles, the
petitioners’ complaint against the respondents may only be filed in the RTC
of Bacolod City―the court of the place where the respondents reside. The
petitioners, being residents of Los Angeles, California, USA, are not given
the choice as to the venue of the filing of their complaint.
Atty. Aceron is not a real party in interest in the case below; thus, his
residence is immaterial to the venue of the filing of the complaint.
Contrary to the petitioners’ claim, Atty. Aceron, despite being the attorney-
in-fact of the petitioners, is not a real party in interest in the case below.
Interest within the meaning of the Rules of Court means material interest
or an interest in issue to be affected by the decree or judgment of the
case, as distinguished from mere curiosity about the question involved. A real
party in interest is the party who, by the substantive law, has the right sought
to be enforced.
Applying the foregoing rule, it is clear that Atty. Aceron is not a real party in
interest in the case below as he does not stand to be benefited or injured
by any judgment therein. He was merely appointed by the petitioners as
their attorney-in-fact for the limited purpose of filing and prosecuting the
complaint against the respondents. Such appointment, however, does not
mean that he is subrogated into the rights of petitioners and ought to be
considered as a real party in interest.
Being merely a representative of the petitioners, Atty. Aceron in his personal
capacity does not have the right to file the complaint below against the
respondents. He may only do so, as what he did, in behalf of the
petitioners―the real parties in interest. To stress, the right sought to be
enforced in the case below belongs to the petitioners and not to Atty. Aceron.
Clearly, an attorney-in-fact is not a real party in interest.27
The petitioner’s reliance on Section 3, Rule 3 of the Rules of Court to support
their conclusion that Atty. Aceron is likewise a party in interest in the case
below is misplaced.
Nowhere in the rule cited above is it stated or, at the very least implied, that
the representative is likewise deemed as the real party in interest. The said
rule simply states that, in actions which are allowed to be prosecuted or
defended by a representative, the beneficiary shall be deemed the real party
in interest and, hence, should be included in the title of the case.
Indeed, to construe the express requirement of residence under the rules on
venue as applicable to the attorney-in-fact of the plaintiff would abrogate the
meaning of a “real party in interest”, as defined in Section 2 of Rule 3 of the
1997 Rules of Court vis-à-vis Section 3 of the same Rule.28
At this juncture, it bears stressing that the rules on venue, like the other
procedural rules, are designed to insure a just and orderly administration of
justice or the impartial and even-handed determination of every action and
proceeding. Obviously, this objective will not be attained if the plaintiff is
given unrestricted freedom to choose the court where he may file his
complaint or petition. The choice of venue should not be left to the plaintiff's
whim or caprice. He may be impelled by some ulterior motivation in choosing
to file a case in a particular court even if not allowed by the rules on venue.
WHEREFORE, in consideration of the foregoing disquisitions, the petition
is DENIED. The Decision dated August 28, 2008 and Resolution dated
February 20, 2009 rendered by the Court of Appeals in CA-G.R. SP No.
101159 are AFFIRMED.
SO ORDERED.
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VI. Summary Procedure (Rule 5; 1991 Rules on Summary Procedure as
amended)
1. Macadangdang v. Gaviola, G.R. No. 156809, March 4, 2009
Facts:
On 18 January 2000, Atty. Oswaldo Macadangdang (Atty. Macadangdang),
acting as administrator of the Estate of Felomina G. Macadangdang
(petitioner), filed an action for Unlawful Detainer with Damages against
respondents Gaviola et al.
Respondents were occupying, by mere tolerance, portions of four parcels of
land in the name of the late Felomina G. Macadangdang in Davao City.
MTC ruled for petitioner ordering respondents to vacate and pay back-rentals.
RTC Davao, in an Order dated September 14, 2000, dismissed the appeal
for respondents’ failure to file an appeal memorandum. RTC remanded
the case back to MTC for execution of judgment.
On 3 October 2000, respondents filed a Motion for Reconsideration/New
Trial.
In an Order7 dated 16 October 2000, the MTCC ordered the issuance of a
writ of execution after payment of the execution fee.
In an Order8 dated 30 October 2000, the RTC denied respondents’ motion
for reconsideration. The RTC ruled that it no longer had jurisdiction over the
motion after the dismissal of respondent’s appeal.
On a petition for review, CA reversed RTC and remanded the case back
to RTC. The Court of Appeals ruled that a distinction should be made
between failure to file a notice of appeal within the reglementary period and
failure to file the appeal memorandum within the period granted by the
appellate court. The Court of Appeals ruled that failure to file a notice of
appeal within the reglementary period would result to failure of the appellate
court to obtain jurisdiction over the appealed decision. Thus, the assailed
decision would become final and executory upon failure to move for
reconsideration. On the other hand, failure to file the appeal memorandum
within the period granted by the appellate court would only result to
abandonment of appeal, which could lead to its dismissal upon failure to
move for its reconsideration. Thus, the RTC erred in denying respondents’
motion for reconsideration on the ground of lack of jurisdiction.
Finally, the Court of Appeals ruled that while the negligence of counsel binds
the client, the rule is not without exceptions such as when its application
would result to outright deprivation of the client’s liberty or property, or when
a client would suffer due to the counsel’s gross or palpable mistake or
negligence.
MR denied, hence this petition.
Petitioners allege that the Court of Appeals erred when it allowed the filing
of a motion for reconsideration before the RTC. Petitioners allege that the
case stemmed from an unlawful detainer case where the Rules on Summary
Procedure apply. Petitioners allege that under the Rules on Summary
Procedure, a motion for reconsideration is a prohibited pleading. Petitioners
also allege that due to the mandatory character of Section 7(b), Rule 40 of the
1997 Rules of Civil Procedure, the RTC correctly dismissed the appeal.
Petitioners also pointed out that respondents’ Motion for
Reconsideration/New Trial was neither verified nor accompanied by
affidavits of merit as required under Section 2, Rule 37 of the 1997 Rules of
Civil Procedure.
Issue:
1. W/N the filing of an MR/MNT with the RTC is a prohibited pleading - No
2. W/N respondents’ appeal to the RTC should have been dismissed for
failure to file an appeal memorandum – Yes.
Held:
I.No
Jurisdiction over forcible entry and unlawful detainer cases falls on the
MTCs. Since the case before the the MTCC was an unlawful detainer case, it
was governed by the Rules on Summary Procedure. The purpose of the Rules
on Summary Procedure is to prevent undue delays in the disposition of cases
and to achieve this, the filing of certain pleadings is prohibited, including the
filing of a motion for reconsideration.
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However, the motion for reconsideration that petitioners allege to be a
prohibited pleading was filed before the RTC acting as an appellate court.
The appeal before the RTC is no longer covered by the Rules on Summary
Procedure. The Rules on Summary Procedure apply before the appeal to the
RTC. Hence, respondents’ motion for reconsideration filed with the RTC is
not a prohibited pleading.
II. Yes.
Section 7, Rule 40 of the 1997 Rules of Civil Procedure provides:
“Sec. 7. Procedure in the Regional Trial Court.—
(a) Upon receipt of the complete records or the record on appeal, the clerk of
court of the Regional Trial Court shall notify the parties of such fact.
(b) Within fifteen (15) days from such notice, it shall be the duty of the
appellant to submit a memorandum which shall briefly discuss the errors
imputed to the lower court, a copy of which shall be furnished by him to the
adverse party. Within fifteen (15) days from receipt of the appellant’s
memorandum, the appellee may file his memorandum. Failure of the
appellant to file a memorandum shall be a ground for dismissal of the
appeal. Xxx”
In this case, the RTC dismissed respondents’ appeal for their failure to file an
appeal memorandum in accordance with Section 7(b), Rule 40 of the 1997
Rules of Civil Procedure. The Court of Appeals reversed the RTC’s dismissal
of the appeal.
The Court of Appeals ruled that while the negligence of counsel binds the
client, the circumstances in this case warrant a departure from this general
rule. The Court of Appeals ruled that respondents’ counsel only realized his
failure to submit the appeal memorandum when he received a copy of the
dismissal of the appeal. The Court of Appeals ruled that exceptions to the
general rule are recognized to accord relief to a client who suffered by reason
of the counsel’s gross or palpable mistake or negligence.
We do not agree with the Court of Appeals.
The general rule is that a client is bound by the acts, even mistakes, of his
counsel in the realm of procedural technique.12 There are exceptions to this
rule, such as when the reckless or gross negligence of counsel deprives the
client of due process of law, or when the application of the general rule results
in the outright deprivation of one’s property through a technicality.13
In this case, respondents’ counsel advanced this reason for his failure to
submit the appeal memorandum:
“c. That there was a delay in the filing of defendants-appellants[’] appeal
memorandum due to the heavy backlog of legal paperwork piled on the table
of the undersigned counsel, and he realized his failure to submit defendants[’]
appeal memorandum when he received a copy of the dismissal of the case.
This is to consider that he is the only lawyer in his law office doing a
herculean task.”
We find no reason to exempt respondents from the general rule. The cause of
the delay in the filing of the appeal memorandum, as explained by
respondents’ counsel, was not due to gross negligence. It could have been
prevented by respondents’ counsel if he only acted with ordinary diligence
and prudence in handling the case. For a claim of gross negligence of counsel
to prosper, nothing short of clear abandonment of the client’s cause must be
shown.15 In one case, the Court ruled that failure to file appellant’s brief can
qualify as simple negligence but it does not amount to gross negligence to
justify the annulment of the proceedings below.16
Finally, respondents were not deprived of due process of law. The right to
appeal is not a natural right or a part of due process.17 It is merely a statutory
privilege and may be exercised only in the manner and in accordance with
the provisions of the law.18
WHEREFORE, we GRANT the petition. We SET ASIDE the 26 July 2002
Decision and the 10 December 2002 Resolution of the Court of Appeals in
CA-G.R. SP No. 62002.
SO ORDERED.
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2. Republic v. Sunvar Reality Development Corporation, G.R. No.
194880, June 20, 2012
Facts:
Petitioners Republic of the Philippines (Republic) and National Power
Corporation (NPC) are registered co-owners of several parcels of land
located along Pasong Tamo Extension and Vito Cruz in Makati City.
The main subject matter of the instant Petition is one of these four parcels of
land covered by TCT No. 458365, with an area of approximately 22,294
square meters (hereinafter, the subject property). Eighty percent (80%) of the
subject property is owned by petitioner Republic, while the remaining twenty
percent (20%) belongs to petitioner NPC.2 Petitioners are being represented
in this case by the Privatization Management Office (PMO), which is the
agency tasked with the administration and disposal of government assets.3
Meanwhile, respondent Sunvar Realty Development Corporation
(Sunvar) occupied the subject property by virtue of sublease agreements,
which had in the meantime expired.
On 26 December 1977,4 petitioners leased the four parcels of land, including
the subject property, to the Technology Resource Center Foundation, Inc.,
(TRCFI) for a period of 25 years beginning 01 January 1978 and ending on
31 December 2002.5 Under the Contract of Lease (the main lease contract),
petitioners granted TRCFI the right to sublease any portion of the four parcels
of land.
Exercising its right, TRCFI consequently subleased a majority of the subject
property to respondent Sunvar through several sublease agreements (the
sublease agreements).7
Although these agreements commenced on different dates, all of them
contained common provisions on the terms of the sublease and were
altogether set to expire on 31 December 2002, the expiration date of TRCFI’s
main lease contract with petitioners, but subject to renewal at the option of
respondent.
In 1987, following a reorganization of the government, TRCFI was dissolved.
In its stead, the Philippine Development Alternatives Foundation (PDAF)
was created, assuming the functions previously performed by TRCFI.13
On 26 April 2002, less than a year before the expiration of the main lease
contract and the sublease agreements, respondent Sunvar wrote to PDAF as
successor of TRCFI. Respondent expressed its desire to exercise the option
to renew the sublease over the subject property and proposed an increased
rental rate and a renewal period of another 25 years.14 On even date, it also
wrote to the Office of the President, Department of Environment and Natural
Resources and petitioner NPC. The letters expressed the same desire to renew
the lease over the subject property under the new rental rate and renewal
period.15
On 10 May 2002, PDAF informed respondent that the notice of renewal of
the lease had already been sent to petitioners, but that it had yet to receive a
response.16
Petitioners Republic and NPC notified PDAF of their decision not to renew
the lease contract.
The Republic reasoned that the parties had earlier agreed to shorten the
corporate life of PDAF and to transfer the latter’s assets to the former for the
purpose of selling them to raise funds.22 On 25 June 2002, PDAF duly
informed respondent Sunvar of petitioner Republic’s decision not to renew
the lease and quoted the Memorandum of Senior Deputy Executive Secretary
Flores.23
On 31 December 2002, the main lease contract with PDAF, as well as its
sublease agreements with respondent Sunvar, all expired. Hence, petitioners
recovered from PDAF all the rights over the subject property and the three
other parcels of land. Thereafter, petitioner Republic transferred the subject
property to the PMO for disposition. Nevertheless, respondent Sunvar
continued to occupy the property.
On 22 February 2008, or six years after the main lease contract expired,
petitioner Republic, through the Office of the Solicitor General (OSG),
advised respondent Sunvar to completely vacate the subject property within
thirty (30) days.
On 03 February 2009, respondent Sunvar received from respondent OSG a
final notice to vacate within 15 days.27 When the period lapsed, respondent
Sunvar again refused to vacate the property and continued to occupy it.
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On 23 July 2009, petitioners filed a complaint for unlawful detainer with
the MTC of Makati.
Respondent filed an MTD arguing that petitioners’ cause of action was more
properly an accion publiciana, which fell within the jurisdiction of the RTC,
and not the MeTC, considering that the petitioners’ supposed dispossession
of the subject property by respondent had already lasted for more than one
year.
MTC denied the MTD and the respondent’s MR. Respondent later on filed
its Answer35 to the Complaint.36
Despite the filing of its Answer in the summary proceedings for ejectment,
respondent Sunvar filed a Rule 65 Petition for Certiorari with the RTC of
Makati City to assail the denial by the MeTC of respondent’s Motion to
Dismiss.37
In answer to the Rule 65 Petition of respondent, petitioners placed in issue
the jurisdiction of the RTC and reasoned that the Rules on Summary
Procedure expressly prohibited the filing of a petition for certiorari against
the interlocutory orders of the MeTC.38 Hence, they prayed for the
outright dismissal of the certiorari Petition of respondent Sunvar.
The RTC denied the motion for dismissal and ruled that extraordinary
circumstances called for an exception to the general rule on summary
proceedings.39 Petitioners filed a Motion for Reconsideration,40 which was
subsequently denied by the RTC.41 Hence, the hearing on the certiorari
Petition of respondent proceeded, and the parties filed their respective
Memoranda.42
In the assailed Order dated 01 December 2010, which discussed the merits of
the certiorari Petition, the RTC granted the Rule 65 Petition and directed
the MeTC to dismiss the Complaint for Unlawful Detainer for lack of
jurisdiction, holding that the one-year period for the filing of an unlawful
detainer case was reckoned from the expiration of the main lease contract and
the sublease agreements on 31 December 2002. Petitioners should have then
filed an accion publiciana with the RTC in 2009, instead of an unlawful
detainer suit.
Hence this R45 petition directly with the Supreme Court raising a pure
question of law.
Issue:
W/N the RTC erred in taking cognizance of the R65 before it despite the
prohibition in the RSP – Yes, it erred.
Held:
Yes, it erred.
I.
In the instant case, petitioners raise only questions of law with respect to the
jurisdiction of the RTC to entertain a certiorari petition filed against the
interlocutory order of the MeTC in an unlawful detainer suit. At issue in the
present case is the correct application of the Rules on Summary Procedure;
or, more specifically, whether the RTC violated the Rules when it took
cognizance and granted the certiorari petition against the denial by the MeTC
of the Motion to Dismiss filed by respondent Sunvar.
Proceeding now to determine that very question of law, the Court finds that
it was erroneous for the RTC to have taken cognizance of the Rule 65 Petition
of respondent Sunvar, since the Rules on Summary Procedure expressly
prohibit this relief for unfavorable interlocutory orders of the MeTC.
Consequently, the assailed RTC Decision is annulled.
Under the Rules on Summary Procedure, a certiorari petition under Rule 65
against an interlocutory order issued by the court in a summary proceeding is
a prohibited pleading. The prohibition is plain enough, and its further
exposition is unnecessary verbiage. The RTC should have dismissed outright
respondent Sunvar’s Rule 65 Petition, considering that it is a prohibited
pleading. Petitioners have already alerted the RTC of this legal bar and
immediately prayed for the dismissal of the certiorari Petition. Yet, the RTC
not only refused to dismiss the certiorari Petition, but even proceeded to hear
the Rule 65 Petition on the merits.
Respondent Sunvar’s reliance on Bayog v. Natino56 and Go v. Court of
Appeals57 to justify a certiorari review by the RTC owing to “extraordinary
circumstances” is misplaced. In both cases, there were peculiar and specific
circumstances that justified the filing of the mentioned prohibited pleadings
Avila 4B | 2016
under the Revised Rules on Summary Procedure—conditions that are not
availing in the case of respondent Sunvar.
In Bayog, the SC held:
“Nevertheless, in view of the unusual and peculiar circumstances of this case,
unless some form of relief is made available to MAGDATO, the grave
injustice and irreparable injury that visited him through no fault or
negligence on his part will only be perpetuated. Thus, the petition for relief
from judgment which he filed may be allowed or treated, pro hac vice, either
as an exception to the rule, or a regular appeal to the RTC, or even an action
to annul the order (decision) of the MCTC of 20 September 1993.”
In Go v. CA, SC held:
“However, where the assailed interlocutory order is patently erroneous and
the remedy of appeal would not afford adequate and expeditious relief, the
Court may allow certiorari as a mode of redress.”
Contrary to the assertion of respondent Sunvar, the factual circumstances in
these two cases are not comparable with respondents’ situation, and our
rulings therein are inapplicable to its cause of action in the present suit. As
this Court explained in Bayog, the general rule is that no special civil action
for certiorari may be filed with a superior court from cases covered by the
Revised Rules on Summary Procedure.
Respondent Sunvar filed a certiorari Petition in an ejectment suit pending
before the MeTC. Worse, the subject matter of the Petition was the denial of
respondent’s Motion to Dismiss, which was necessarily an interlocutory
order, which is generally not the subject of an appeal. No circumstances
similar to the situation of the agricultural tenant-lessee in Bayog are present
to support the relaxation of the general rule in the instant case. Respondent
cannot claim to have been deprived of reasonable opportunities to argue its
case before a summary judicial proceeding.
Respondent Sunvar failed to substantiate its claim of extraordinary
circumstances that would constrain this Court to apply the exceptions
obtaining in Bayog and Go.
II.
Under the Rules of Court, lessors against whom possession of any land is
unlawfully withheld after the expiration of the right to hold possession may—
by virtue of any express or implied contract, and within one year after the
unlawful deprivation—bring an action in the municipal trial court against the
person unlawfully withholding possession, for restitution of possession with
damages and costs. Unless otherwise stipulated, the action of the lessor shall
commence only after a demand to pay or to comply with the conditions of the
lease and to vacate is made upon the lessee; or after a written notice of that
demand is served upon the person found on the premises, and the lessee fails
to comply therewith within 15 days in the case of land or 5 days in the case
of buildings.
Delos Reyes v. Odones:
“The action must be brought up within one year from the date of last
demand, and the issue in the case must be the right to physical possession.”
Contrary to the reasoning of the RTC,65 the one-year period to file an
unlawful detainer case is not counted from the expiration of the lease contract
on 31 December 2002. Indeed, the last demand for petitioners to vacate is
the reckoning period for determining the one-year period in an action for
unlawful detainer. “Such one year period should be counted from the date of
plaintiff’s last demand on defendant to vacate the real property, because only
upon the lapse of that period does the possession become unlawful.”66
In case several demands to vacate are made, the period is reckoned from the
date of the last demand.
WHEREFORE, the Court GRANTS the Petition for Review on Certiorari
dated 14 February 2011, filed by petitioners Republic and National Power
Corporation, which are represented here by the Privatization Management
Office. The assailed Decision dated 01 December 2010 of the Regional Trial
Court of Makati City, Branch 134, is hereby REVERSED and SET ASIDE.
The Metropolitan Trial Court of Makati City, Branch 63, is DIRECTED to
proceed with the summary proceedings for the unlawful detainer case in Civil
Case No. 98708.
SO ORDERED.
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3. Banares v. Balising, G.R. No. 132624, March 13, 2000
Facts:
Petitioners Banares et al. were the accused in 16 criminal cases for estafa filed
by the private respondents. The cases were assigned before the MTC of Rizal.
After the petitioners were arraigned and entered their plea of not guilty, they
filed a Motion to Dismiss the aforementioned cases on the ground that the
filing of the same was premature, in view of the failure of the parties to
undergo conciliation proceedings before the Lupong Tagapamayapa of
Barangay Dalig, Antipolo, Rizal.
Petitioners averred that since they lived in the same barangay as private
respondents, and the amount involved in each of the cases did not exceed
Two Hundred Pesos (P200.00), the said cases were required under Section
412 in relation to Section 408 of the Local Government Code of 1991 and
Section 18 of the 1991 Revised Rules on Summary Procedure to be referred
to the Lupong Tagapamayapa or Pangkat ng Tagapagkasundo of the
barangay concerned for conciliation proceedings before being filed in court.
MTC denied the MTD on the ground that they failed to seasonably invoke
the non-referral of the cases to the Lupong Tagapamayapa or Pangkat ng
Tagapagkasundo. It added that such failure to invoke non-referral of the case
to the Lupon amounted to a waiver by petitioners of the right to use the said
ground as basis for dismissing the cases. Section 18 of the Revised Rule on Summary Procedure.
Petitioners filed a motion for reconsideration of the aforementioned Order,
claiming that nowhere in the Revised Rules of Court is it stated that the
ground of prematurity shall be deemed waived if not raised seasonably in an
MTD.
On November 13, 1995, the MTC issued an Order dismissing the sixteen
criminal cases against petitioners without prejudice, pursuant to Section 18
of the 1991 Revised Rule on Summary Procedure. no motion to revive the case is filed within the reglementary fifteen-day
More than two months later, on February 26, 1996, private respondents
through counsel, filed a motion to revive the abovementioned criminal
cases against petitioners, stating that the requirement of referral to the Lupon
for conciliation had already been complied with. Attached to the motion was
a Certification, dated February 13, 1996 from the Lupong Tagapamayapa of
Barangay Dalig, Antipolo, Rizal stating that the parties appeared before said
body regarding the charges of estafa filed by private respondents against
petitioners but they failed to reach an amicable settlement with respect
thereto.
Petitioners filed a comment and opposition to motion to revive claiming that
the Order of the municipal trial court, dated November 13, 1995 dismissing
the cases had long become final and executory; hence, private respondents
should have re-filed the cases instead of filing a motion to revive.
On March 18, 1996, the municipal trial court issued an Order granting
private respondents’ motion to revive.
Petitioners filed a motion for reconsideration of the aforementioned Order
which was denied by the municipal trial court.
Petitioners filed a R65 with the RTC assailing the Order, dated March 18,
1996 of the municipal trial court. They claimed that the said Order, dated
November 13, 1995 dismissing the criminal cases against them had long
become final and executory considering that the prosecution did not file any
motion for reconsideration of said Order.
In response thereto, private respondents filed their Comment, arguing that the
motion to revive the said cases was in accordance with law, particularly
RTC denied certiorari and the subsequent MR.
Hence this petition directly with the SC raising pure questions of law.
Arguments:
Petitioners contend that an order dismissing a case or action without prejudice
may attain finality if not appealed within the reglementary period. Hence, if
period within which to appeal or to file a motion for reconsideration of the
court’s order, the order of dismissal becomes final and the case may only be
revived by the filing of a new complaint or information. Petitioners further
argue that after the order of dismissal of a case attains finality, the court which
issued the same loses jurisdiction thereon and, thus, does not have the
authority to act on any motion of the parties with respect to said case.
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On the other hand, private respondents submit that cases covered by the 1991
Revised Rule on Summary Procedure such as the criminal cases against
petitioners are not covered by the rule regarding finality of decisions and
orders under the Revised Rules of Court. They insist that cases dismissed
without prejudice for non-compliance with the requirement of conciliation
before the Lupong Tagapamayapa or Pangkat ng Tagapagkasundo of the
barangay concerned may be revived summarily by the filing of a motion to
revive regardless of the number of days which has lapsed after the dismissal
of the case. complaint.
Issue:
W/N the MTC’s order dismissing the complaints can still be subject to a
motion to revive despite the lapse of the reglementary period – No.
Held:
No.
Petitioners’ contentions are meritorious. MTC dismissing the case without prejudice had not attained finality and
A “final order” issued by a court has been defined as one which disposes of
the subject matter in its entirety or terminates a particular proceeding or
action, leaving nothing else to be done but to enforce by execution what has
been determined by the court. As distinguished therefrom, an “interlocutory
order” is one which does not dispose of a case completely, but leaves
something more to be adjudicated upon.
This Court has previously held that an order dismissing a case without
prejudice is a final order if no motion for reconsideration or appeal therefrom
is timely filed.
In Olympia International vs. Court of Appeals, we stated, thus: The dismissal
without prejudice of a complaint does not however mean that said dismissal
order was any less final. Such Order of dismissal is complete in all details,
and though without prejudice, nonetheless finally disposed of the matter. It
was not merely an interlocutory order but a final disposition of the complaint.
The law grants an aggrieved party a period of 15 days from his receipt of the
court’s decision or order disposing of the action or proceeding to appeal or
move to reconsider the same. After the lapse of the fifteen-day period, an
order becomes final and executory and is beyond the power or jurisdiction of
the court which rendered it to further amend or revoke. A final judgment or
order cannot be modified in any respect, even if the modification sought is
for the purpose of correcting an erroneous conclusion by the court which
rendered the same.
After the order of dismissal of a case without prejudice has become final and
therefore becomes outside the court’s power to amend and modify, a party
who wishes to reinstate the case has no other remedy but to file a new
Contrary to private respondents’ claim, the foregoing rule applies not only to
civil cases but to criminal cases as well. In Jaca vs. Blanco, the Court defined
a provisional dismissal of a criminal case as a dismissal without prejudice to
the reinstatement thereof before the order of dismissal becomes final or to the
subsequent filing of a new information for the offense.
Thus, the RTC erred when it denied the R65 and ruled that the order of the
hence, could be reinstated by the mere filing of a motion to revive.
II.
Equally erroneous is private respondents’ contention that the rules regarding
finality of judgments under the Revised Rules of Court do not apply to cases
covered by the 1991 Revised Rule on Summary Procedure. Private
respondents claim that Section 18 of the 1991 Revised Rule on Summary
Procedure allows the revival of cases which were dismissed for failure to
submit the same to conciliation at the barangay level, as required under
Section 412 in relation to Section 408 of the Local Government Code.
The said provision states:
Referral to Lupon.—Cases requiring referral to the Lupon for conciliation
under the provisions of Presidential Decree No. 1508 where there is no
showing of compliance with such requirement, shall be dismissed without
prejudice, and may be revived only after such requirement shall have been
complied’ with. This provision shall not apply to criminal cases where the
accused was arrested without a warrant.
There is nothing in the aforecited provision which supports private
respondents’ view. Section 18 merely states that when a case covered by the
1991 Revised Rule on Summary Procedure is dismissed without prejudice for
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non-referral of the issues to the Lupon, the same may be revived only after
the dispute subject of the dismissed case is submitted to barangay conciliation
as required under the Local Government Code. There is no declaration to the
effect that said case may be revived by mere motion even after the fifteen-
day period within which to appeal or to file an MR has lapsed.
Moreover, the 1991 Revised Rule on Summary Procedure expressly provides
that the Rules of Court applies suppletorily to cases covered by the former:
Sec. 22. Applicability of the regular rules.—The regular procedure prescribed
in the Rules of Court shall apply to the special cases herein provided for in a
suppletory capacity insofar as they are not inconsistent therewith.
Lupon prior to the filing of the cases as soon as they received the complaints
against them, petitioners raised the said ground only after their arraignment.
However, while the trial court committed an error in dismissing the criminal
cases against petitioners on the ground that the same were not referred to the
Lupon prior to the filing thereof in court although said ground was raised by
them belatedly, the said order may no longer be revoked at present
considering that the same had already become final and executory, and as
earlier stated, may no longer be annulled by the Municipal Trial Court, nor
by the Regional Trial Court or this Court.
WHEREFORE, the petition is hereby GRANTED.

A careful examination of Section 18 in relation to Section 22 of the 1991

Revised Rule of Summary Procedure and Rule 40, Section 2 in relation to
Rule 13, Sections 9 and 10, and Rule 36, Section 2 of the 1997 Rules of Civil
Procedure, as amended, leads to no other conclusion than that the rules
regarding finality of judgments also apply to cases covered by the rules
on summary procedure. Nothing in Section 18 of the 1991 Revised Rule
on Summary Procedure conflicts with the prevailing rule that a
judgment or order which is not appealed or made subject of a motion for
reconsideration within the prescribed fifteen-day period attains finality.

To construe Section 18 thereof as allowing the revival of dismissed cases by

mere motion even after the lapse of the period for appealing the same would
prevent the courts from settling justiciable controversies with finality, thereby
undermining the stability of our judicial system.

The Court also finds it necessary to correct the mistaken impression of

petitioners and the municipal trial court that the non-referral of a case for
barangay conciliation as required under the Local Government Code of 1991
may be raised in a motion to dismiss even after the accused has been
arraigned.

It is well-settled that the non-referral of a case for barangay conciliation when

so required under the law is not jurisdictional in nature and may therefore be
deemed waived if not raised seasonably in a motion to dismiss. The Court
notes that although petitioners could have invoked the ground of prematurity
of the causes of action against them due to the failure to submit the dispute to

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4. Angelina Soriente v. Estate of Arsenio Concepcion, G.R. No. 160239,
November 25, 2009
Facts:
Respondent Nenita Concepcion established that she was the registered
owner of a lot occupied by petitioner Angelina Soriente in Mandaluyong
City.
During the lifetime of Arsenio E. Concepcion, who acquired the lot in 1978,
he allowed and tolerated the occupancy of the lot by petitioner, who was
already staying on the property. Petitioner was allowed to stay on the lot for
free, but on a temporary basis until such time that Concepcion and/or his
family needed to develop the lot.
After Arsenio E. Concepcion died on December 27, 1989, his family initiated
steps to develop the lot, but petitioner’s occupancy of the lot prevented them
from pursuing their plan.
Verbal demands to vacate the lot was made on petitioner. Petitioner pleaded
for time to transfer to another place, but she never left.
In June 2000, Elizabeth Concepcion-Dela Cruz, daughter of respondent, filed
a complaint for conciliation proceedings before the barangay at the instance
of respondent. However, the parties did not reach a settlement, which resulted
in the issuance of a Certificate to File Action5 dated February 17, 2001 by
the Barangay Captain of Barangay Hagdan Bato Itaas, Mandaluyong City.
Respondent sent petitioner a demand letter dated September 22, 2000 by
registered mail, demanding that she peacefully surrender the property and
extending financial assistance for her relocation. Despite receipt of the
demand letter, petitioner did not vacate the premises.
Hence, respondent filed a complaint for unlawful detainer with the MTC
of Mandaluyong City (trial court).
It appears from the records of the case that petitioner Soriente, as a defendant
in the lower court, did not file a separate Answer, but affixed her signature
to the Answer filed by defendant Alfredo Caballero in another ejectment
case, docketed as Civil Case No. 17974, which was filed by respondent
against Caballero. Hence, respondent, through counsel, filed a Motion to
Render Judgment under Section 7, Rule 70 of the 1997 Revised Rules of
Civil Procedure for Soriente’s failure to file an Answer to the Complaint.
Petitioner filed an Opposition to the Motion to Render Judgment.8
In an Order dated December 5, 2001, the trial court denied the Motion to
Render Judgment. It stated that the allegations of the Complaint in Civil Case
No. 17973 and 17974 are similar, the only substantial difference being the
time when defendants occupied the subject property allegedly through the
tolerance of Arsenio Concepcion. The trial court believed that in signing
the Answer filed in Civil Case No. 17974, Soriente intended to adopt the
same as her own, as both defendants Caballero and Soriente had a
common defense against plaintiff’s (respondent’s) separate claim against
them. The trial court denied the Motion to Render Judgment in the interest
of justice and considered that the two cases, including Civil Case No. 17932
against Severina Sadol, had been consolidated.
Pursuant to Section 7 of the 1991 Revised Rule on Summary Procedure, the
trial court set a preliminary conference.
In the scheduled preliminary conference held on February 18, 2003, only
plaintiff’ s (respondent’s) counsel and defendants Severina Sadol and Alfredo
Caballero were present. Plaintiff’s (respondent’s) counsel submitted a
secretary’s certificate attesting to the existence of a board resolution
authorizing him to enter into a compromise agreement.
A representative of defendant (petitioner) Angelina Soriente appeared, but
failed to submit a Special Power of Attorney authorizing her to enter into a
compromise agreement. Counsel for defendants was not in court, and there
was no proof of service on her for the hearing. However, defendants Sadol
and Caballero informed the court that they informed their counsel of the
hearing scheduled that day.
In view of the absence of defendant Angelina Soriente or her authorized
representative, plaintiff’s (respondent’s) counsel moved that the case be
submitted for decision, and that he be given 15 days within which to submit
his position paper.11
In its Order12 dated February 18, 2003, the trial court granted the motion
of plaintiff’s (respondent’s) counsel and considered the case against
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defendant (petitioner) Angelina Soriente submitted for decision in
accordance with Section 7 of the Rules on Summary Procedure.13
MTC rendered judgment for respondents ordering petitioner to vacate and
pay.
On appeal, RTC affirmed MTC in toto.
Hence this petition with directly with the SC, claiming, among others, that
the RTC erred in holding that Section 7 of the RSP is applicable in this case.
Issue:
W/N petitioner Soriante is a sole defendant under §7 of RSP – No.
Held:
No.
The Court notes that petitioner raised both questions of fact and law in her
petition. The Court shall resolve only the pertinent questions of law raised.
Lastly, petitioner contends that the lower court erred in deciding this case in
accordance with Section 7 of the Rules on Summary Procedure, thus:
“SEC. 7. Preliminary conference; appearance of parties.—Not later than
thirty (30) days after the last answer is filed, a preliminary conference shall
be held. The rules on pre-trial in ordinary cases shall be applicable to the
preliminary conference unless inconsistent with the provisions of this Rule.
The failure of the plaintiff to appear in the preliminary conference shall be a
cause for the dismissal of his complaint. The defendant who appears in the
absence of the plaintiff shall be entitled to judgment on his counterclaim in
accordance with Section 6 hereof. All cross-claims shall be dismissed.
If a sole defendant shall fail to appear, the plaintiff shall be entitled to
judgment in accordance with Section 6 hereof. This Rule shall not apply
where one of two or more defendants sued under a common cause of
action who had pleaded a common defense shall appear at the
preliminary conference.”45
Section 6 of the 1991 Revised Rules on Summary Procedure, which is
referred to by Section 7 above, states:
“SEC. 6. Effect of failure to answer.—Should the defendant fail to answer the
complaint within the period above provided, the court, motu proprio, or on
motion of the plaintiff, shall render judgment as may be warranted by the
facts alleged in the complaint and limited to what is prayed for therein:
Provided, however, That the court may in its discretion reduce the amount of
damages and attorney’s fees claimed for being excessive or otherwise
unconscionable. This is without prejudice to the applicability of Section 4,
Rule 18 of the Rules of Court, if there are two or more defendants.”
Petitioner asserts that considering that the cases against her, defendants
Caballero and Sadol were consolidated, and she and defendant Caballero
signed and filed one common Answer to the Complaint, thus, pleading a
common defense, the trial court should not have rendered judgment on her
case based on Section 7 of the 1991 Revised Rules on Summary Procedure
when she failed to appear in the preliminary conference.
The contention lacks merit.
The Court notes that the ejectment case filed by respondent against petitioner
was docketed in the trial court as Civil Case No. 17973, the case against
Alfredo Caballero was docketed as Civil Case No. 17974, while the case
against Severina Sadol was docketed as Civil Case No. 17932. These cases
were consolidated by the trial court.
Under Section 7 of the 1991 Revised Rules on Summary Procedure, if a sole
defendant shall fail to appear in the preliminary conference, the plaintiff shall
be entitled to judgment in accordance with Section 6 of the Rule, that is, the
court shall render judgment as may be warranted by the facts alleged in the
Complaint and limited to what is prayed for therein. However, “[t]his Rule
(Sec. 7) shall not apply where one of two or more defendants sued under a
common cause of action, who had pleaded a common defense, shall appear
at the preliminary conference.”
Petitioner claims that the preceding provision applies to her as a defendant,
since the ejectment cases were consolidated by the trial court, and she and
Caballero filed the same Answer to the Complaint; hence, the trial court
should not have rendered judgment against her when she failed to appear in
the preliminary conference.46
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The Court holds that the italicized provision above does not apply in the case
of petitioner, since she and Caballero were not co-defendants in the same
case. The ejectment case filed against petitioner was distinct from that of
Caballero, even if the trial court consolidated the cases and, in the interest of
justice, considered the Answer filed by Caballero in Civil Case No. 17974 as
the Answer also of petitioner since she affixed her signature thereto.

Considering that petitioner was sued in a separate case for ejectment from
that of Caballero and Sadol, petitioner’s failure to appear in the preliminary
conference entitled respondent to the rendition of judgment by the trial court
on the ejectment case filed against petitioner, docketed as Civil Case No.
17973, in accordance with Section 7 of the 1991 Revised Rules on Summary
Procedure.

WHEREFORE, the petition is DENIED. The Order dated October 3, 2003 of

the Regional Trial Court of Mandaluyong City, Branch 213, National Capital
Judicial Region in Civil Case No. MC- 03-407-A is AFFIRMED.
No costs. SO ORDERED.

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VII. Pleadings (Rules 6 to 8)
1. Cosco Philippines Shipping v. Kemper Insurance Company,
G.R. No. 179488, April 23, 2012
Facts:
Respondent Kemper Insurance Company is a foreign insurance company
based in Illinois, United States of America (USA) with no license to engage
in business in the Philippines, as it is not doing business in the Philippines,
except in isolated transactions; while petitioner is a domestic shipping
company organized in accordance with Philippine laws.
In 1998, respondent insured the shipment of imported frozen boneless
beef (owned by Genosi, Inc.), which was loaded at a port in Brisbane,
Australia, for shipment to Genosi, Inc. (the importer- consignee) in the
Philippines. However, upon arrival at the Manila port, a portion of the
shipment was rejected by Genosi, Inc. by reason of spoilage arising from the
alleged temperature fluctuations of petitioner’s reefer containers.
Thus, Genosi, Inc. filed a claim against both petitioner shipping company
and respondent Kemper Insurance Company. The claim was referred to
McLarens Chartered for investigation, evaluation, and adjustment of the
claim. After processing the claim documents, McLarens Chartered
recommended a settlement of the claim in the amount of $64,492.58, which
Genosi, Inc. (the consignee-insured) accepted.
Thereafter, respondent paid the claim of Genosi, Inc. (the insured) in the
amount of $64,492.58. Consequently, Genosi, Inc., through its General
Manager, Avelino S. Mangahas, Jr., executed a Loss and Subrogation
Receipt3 dated September 22, 1999, stating that Genosi, Inc. received from
respondent the amount of $64,492.58 as the full and final satisfaction
compromise, and discharges respondent of all claims for losses and expenses
sustained by the property insured, under various policy numbers, due to
spoilage brought about by machinery breakdown which occurred on October
25, November 7 and 10, and December 5, 14, and 18, 1998; and, in
consideration thereof, subrogates respondent to the claims of Genosi, Inc. to
the extent of the said amount.
Respondent then made demands upon petitioner, but the latter failed and
refused to pay the said amount.
Hence, respondent filed a Complaint for Insurance Loss and Damages
against petitioner before the RTC, docketed as Civil Case No. 99-95561,
entitled Kemper Insurance Company v. Cosco Philippines Shipping, Inc.
In its Answer5 dated November 29, 1999, petitioner insisted, among others,
that respondent had no capacity to sue since it was doing business in the
Philippines without the required license; that the complaint has prescribed
and/or is barred by laches; that no timely claim was filed, etc. …
Petitioner later filed an MTD contending that the Complaint was filed by
one Atty. Rodolfo A. Lat, who failed to show his authority to sue and sign
the corresponding certification against forum shopping. It argued that
Atty. Lat’s act of signing the certification against forum shopping was a
clear violation of Section 5, Rule 7 of the 1997 Rules of Court.
RTC granted the MTD and dismissed the case without prejudice, ruling
that it is mandatory that the certification must be executed by the petitioner
himself, and not by counsel. Since respondent’s counsel did not have a
Special Power of Attorney (SPA) to act on its behalf, hence, the certification
against forum shopping executed by said counsel was fatally defective and
constituted a valid cause for dismissal of the complaint.
On appeal, CA reversed RTC and ruled that the required certificate of non-
forum shopping is mandatory and that the same must be signed by the
plaintiff or principal party concerned and not by counsel; and in case of
corporations, the physical act of signing may be performed in behalf of the
corporate entity by specifically authorized individuals. However, the CA
pointed out that the factual circumstances of the case warranted the liberal
application of the rules and, as such, ordered the remand of the case to the
trial court for further proceedings.
Hence this petition under R45.
Arguments:
Petitioner alleged that respondent failed to submit any board resolution or
secretary’s certificate authorizing Atty. Lat to institute the complaint and
sign the certificate of non-forum shopping on its behalf. Petitioner submits
that since respondent is a juridical entity, the signatory in the complaint must
show proof of his or her authority to sign on behalf of the corporation.
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Further, the SPA dated May 11, 2000, submitted by Atty. Lat, which was
notarized before the Consulate General of Chicago, Illinois, USA, allegedly
authorizing him to represent respondent in the pre-trial and other stages
of the proceedings was signed by one Brent Healy (respondent’s
underwriter), who lacks authorization from its board of directors.
In its Comment, respondent admitted that it failed to attach in the complaint
a concrete proof of Atty. Lat’s authority to execute the certificate of non-
forum shopping on its behalf. However, there was subsequent compliance as
respondent submitted an authenticated SPA empowering Atty. Lat to
represent it in the pre-trial and all stages of the proceedings. Further, it
averred that petitioner is barred by laches from questioning the purported
defect in respondent’s certificate of non-forum shopping (CONFS).
Issue:
W/N Atty. Lat was properly authorized by respondent to sign the CONFS on
its behalf – No.
Held:
No.
The petition is meritorious.
We have consistently held that the certification against forum shopping must
be signed by the principal parties. If, for any reason, the principal party cannot
sign the petition, the one signing on his behalf must have been duly
authorized. With respect to a corporation, the certification against forum
shopping may be signed for and on its behalf, by a specifically authorized
lawyer who has personal knowledge of the facts required to be disclosed
in such document.
A corporation has no power, except those expressly conferred on it by the
Corporation Code and those that are implied or incidental to its existence. In
turn, a corporation exercises said powers through its board of directors
and/or its duly authorized officers and agents. Thus, it has been observed
that the power of a corporation to sue and be sued in any court is lodged
with the board of directors that exercises its corporate powers. In turn,
physical acts of the corporation, like the signing of documents, can be
performed only by natural persons duly authorized for the purpose by
corporate by-laws or by a specific act of the board of directors.
In Philippine Airlines, Inc. v. Flight Attendants and Stewards Association of
the Philippines (FASAP), 479 SCRA 605 (2006), we ruled that only
individuals vested with authority by a valid board resolution may sign the
certificate of non-forum shopping on behalf of a corporation. We also
required proof of such authority to be presented. The petition is subject to
dismissal if a certification was submitted unaccompanied by proof of the
signatory’s authority.
In the present case, since respondent is a corporation, the certification must
be executed by an officer or member of the board of directors or by one who
is duly authorized by a resolution of the board of directors; otherwise, the
complaint will have to be dismissed.
The lack of certification against forum shopping is generally not curable by
mere amendment of the complaint, but shall be a cause for the dismissal of
the case without prejudice. The same rule applies to certifications against
forum shopping signed by a person on behalf of a corporation which are
unaccompanied by proof that said signatory is authorized to file the complaint
on behalf of the corporation.
There is no proof that respondent, a private corporation, authorized Atty. Lat,
through a board resolution, to sign the verification and certification against
forum shopping on its behalf. Accordingly, the certification against forum
shopping appended to the complaint is fatally defective, and warrants the
dismissal of respondent’s complaint for Insurance Loss and Damages (Civil
Case No. 99-95561) against petitioner.
In Republic v. Coalbrine International Philippines, Inc.,23 the Court cited
instances wherein the lack of authority of the person making the certification
of non-forum shopping was remedied through subsequent compliance by the
parties therein. Thus,
“[w]hile there were instances where we have allowed the filing of a
certification against non-forum shopping by someone on behalf of a
corporation without the accompanying proof of authority at the time of its
filing, we did so on the basis of a special circumstance or compelling
reason. Moreover, there was a subsequent compliance by the submission
of the proof of authority attesting to the fact that the person who signed
the certification was duly authorized.”
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Contrary to the CA’s finding, the Court finds that the circumstances of this
case do not necessitate the relaxation of the rules. There was no proof of
authority submitted, even belatedly, to show subsequent compliance with the
requirement of the law. Neither was there a copy of the board resolution or
secretary’s certificate subsequently submitted to the trial court that would
attest to the fact that Atty. Lat was indeed authorized to file said complaint
and sign the verification and certification against forum shopping, nor did
respondent satisfactorily explain why it failed to comply with the rules. Thus,
there exists no cogent reason for the relaxation of the rule on this matter.
Obedience to the requirements of procedural rules is needed if we are to
expect fair results therefrom, and utter disregard of the rules cannot justly be
rationalized by harking on the policy of liberal construction.25
Moreover, the SPA dated May 11, 2000, submitted by respondent allegedly
authorizing Atty. Lat to appear on behalf of the corporation, in the pre-trial
and all stages of the proceedings, signed by Brent Healy, was fatally
defective and had no evidentiary value. It failed to establish Healy’s
authority to act in behalf of respondent, in view of the absence of a
resolution from respondent’s board of directors or secretary’s certificate
proving the same. Like any other corporate act, the power of Healy to name,
constitute, and appoint Atty. Lat as respondent’s attorney-in-fact, with full
powers to represent respondent in the proceedings, should have been
evidenced by a board resolution or secretary’s certificate.
Respondent’s allegation that petitioner is estopped by laches from raising the
defect in respondent’s certificate of non- forum shopping does not hold water.
the subject matter and the parties. Courts acquire jurisdiction over the
plaintiffs upon the filing of the complaint, and to be bound by a decision, a
party should first be subjected to the court’s jurisdiction. Clearly, since no
valid complaint was ever filed with the RTC, Branch 8, Manila, the same did
not acquire jurisdiction over the person of respondent.
Since the court has no jurisdiction over the complaint and respondent,
petitioner is not estopped from challenging the trial court’s jurisdiction, even
at the pre-trial stage of the proceedings. This is so because the issue of
jurisdiction may be raised at any stage of the proceedings, even on appeal,
and is not lost by waiver or by estoppel.29
The factual setting attendant in Sibonghanoy is not similar to that of the
present case so as to make it fall under the doctrine of estoppel by laches.
Here, the trial court’s jurisdiction was questioned by the petitioner during the
pre-trial stage of the proceedings, and it cannot be said that considerable
length of time had elapsed for laches to attach.
WHEREFORE, the petition is GRANTED. The Decision and the Resolution
of the Court of Appeals, dated March 23, 2007 and September 3, 2007,
respectively, in CA-G.R. CV No. 75895 are REVERSED and SET ASIDE.
The Orders of the Regional Trial Court, dated March 22, 2002 and July 9,
2002, respectively, in Civil Case No. 99-95561, are REINSTATED.
SO ORDERED.

In Tamondong v. Court of Appeals, 444 SCRA 509 (2004), we held that if a

complaint is filed for and in behalf of the plaintiff who is not authorized to
do so, the complaint is not deemed filed. An unauthorized complaint does not
produce any legal effect. Hence, the court should dismiss the complaint on
the ground that it has no jurisdiction over the complaint and the plaintiff.
Accordingly, since Atty. Lat was not duly authorized by respondent to file
the complaint and sign the verification and certification against forum
shopping, the complaint is considered not filed and ineffectual, and, as a
necessary consequence, is dismissible due to lack of jurisdiction.

Jurisdiction is the power with which courts are invested for administering
justice; that is, for hearing and deciding cases. In order for the court to have
authority to dispose of the case on the merits, it must acquire jurisdiction over

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2. Iglesia ni Kristo v. Ponferrada, and Heirs of Santos G.R. No.
168943, October 27, 2006
Facts:
On October 24, 2001, Alicia, Alfredo, Roberto, Enrique and Susan, all
surnamed Santos, and Sonia Santos-Wallin, represented by Enrique G.
Santos, filed a complaint for Quieting of Title and/or Accion
Reinvindicatoria before the Regional Trial Court (RTC) of Quezon City
against the Iglesia Ni Cristo (INC), defendant therein.
In their complaint, plaintiffs alleged, among others, that they, as heirs,
derived their title from their predecessor Enrique Santos.
As gleaned from the caption of the complaint, plaintiffs appear to be the heirs
of Enrique Santos, represented by Enrique G. Santos. The latter signed the
Verification and Certificate of Non-Forum Shopping.
Defendant filed an MTD on the ground, among others, that (1) plaintiffs
failed to faithfully comply with the procedural requirements set forth in
Section 5, Rule 7 of the 1997 Rules of Civil Procedure…
Defendant asserted that the case involved more than one plaintiff but the
verification and certification against forum shopping incorporated in the
complaint was signed only by Enrique Santos.
Although the complaint alleges that plaintiffs are represented by Enrique
Santos, there is no showing that he was, indeed, authorized to so represent
the other plaintiffs to file the complaint and7to sign the verification and
certification of non-forum shopping. Thus, plaintiffs failed to comply with
Section 5, Rule 7 of the Rules of Court.
Defendant cited the ruling of this Court in Loquias v. Office of the
Ombudsman. Defendant maintained that the complaint is defective in that,
although there is an allegation that Enrique Santos represents the other heirs,
there is nothing in the pleading to show the latter’s authority to that effect;
the complaint fails to aver with particularity the facts showing the capacity of
defendant corporation to sue and be sued; and the pleading does not state the
address of plaintiffs.
In their Comment on the motion, plaintiffs averred that the relationship of a
co-owner to the other co-owners is fiduciary in character; thus, anyone of
them could effectively act for another for the benefit of the property without
need for an authorization.
Consequently, Enrique Santos had the authority to represent the other heirs
as plaintiffs and to sign the verification and certification against forum
shopping.
In its reply, defendant averred that absent any authority from his co-heirs,
Enrique Santos must implead them as plaintiffs as they are indispensable
parties. In response, plaintiffs aver that a co-owner of a property can execute
an action for quieting of title without impleading the other co-owners.
RTC issued an Order denying defendant’s motion to dismiss. It declared
that since Enrique Santos was one of the heirs, his signature in the verification
and certification constitutes substantial compliance with the Rules. The court
cited the ruling of this Court in Dar v. Alonzo-Legasto.
On a R65, CA affirmed the RTC. As the Court held in DAR v. Alonzo-
Legasto the certification signed by one with respect to a property over which
he shares a common interest with the rest of the plaintiffs (respondents herein)
substantially complied with the Rules. As to the issue of prescription, the
appellate court held that the prescriptive period should be reckoned from
1996, when petitioner claimed ownership and barred respondents from
fencing the property.
Hence this appeal.
Issue:
W/N the lone signature of Enrique Santos on the verification and the CONFS
was sufficient to comply with the rules – Yes.
Held:
Yes.
The purpose of verification is simply to secure an assurance that the
allegations of the petition (or complaint) have been made in good faith; or are
true and correct, not merely speculative. This requirement is simply a
condition affecting the form of pleadings, and noncompliance therewith does
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not necessarily render it fatally defective. Indeed, verification is only a
formal, not a jurisdictional requirement.
The issue in the present case is not the lack of verification but the sufficiency
of one executed by only one of plaintiffs. This Court held in Ateneo de Naga
University v. Manalo, 458 SCRA 325 (2005), that the verification
requirement is deemed substantially complied with when, as in the
present case, only one of the heirs-plaintiffs, who has sufficient
knowledge and belief to swear to the truth of the allegations in the
petition (complaint), signed the verification attached to it. Such
verification is deemed sufficient assurance that the matters alleged in the
petition have been made in good faith or are true and correct, not merely
speculative.
The same liberality should likewise be applied to the certification against
forum shopping. The general rule is that the certification must be signed by
all plaintiffs in a case and the signature of only one of them is insufficient.
However, the Court has also stressed in a number of cases that the rules on
forum shopping were designed to promote and facilitate the orderly
administration of justice and thus should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective. The rule
of substantial compliance may be availed of with respect to the contents
of the certification. This is because the requirement of strict compliance with
the provisions merely underscores its mandatory nature in that the
certification cannot be altogether dispensed with or its requirements
completely disregarded.
It is noteworthy that in all of the above cases, the Court applied the rule on
substantial compliance because of the commonality of interest of all the
parties with respect to the subject of the controversy.
Applying the doctrines laid down in the above cases, we find and so hold that
the CA did not err in affirming the application of the rule on substantial
compliance. In the instant case, the property involved is a 936-square-meter
real property. Both parties have their respective TCTs over the property.
Respondents herein who are plaintiffs in the case below have a common
interest over the property being the heirs of the late Enrique Santos, the
alleged registered owner of the subject property as shown in one of the TCTs.
As such heirs, they are considered co-owners pro indiviso of the whole
property since no specific portion yet has been adjudicated to any of the heirs.
Consequently, as one of the heirs and principal party, the lone signature of
Enrique G. Santos in the verification and certification is sufficient for the
RTC to take cognizance of the case. The commonality of their interest gave
Enrique G. Santos the authority to inform the RTC on behalf of the other
plaintiffs therein that they have not commenced any action or claim involving
the same issues in another court or tribunal, and that there is no other pending
action or claim in another court or tribunal involving the same issues. Hence,
the RTC correctly denied the motion to dismiss filed by petitioner.
Considering that at stake in the present case is the ownership and possession
over a prime property in Quezon City, the apparent merit of the substantive
aspects of the case should be deemed as a special circumstance or compelling
reason to allow the relaxation of the rule. Time and again, this Court has held
that rules of procedure are established to secure substantial justice.
Being instruments for the speedy and efficient administration of justice, they
may be used to achieve such end, not to derail it. In particular, when a strict
and literal application of the rules on non-forum shopping and verification
will result in a patent denial of substantial justice, these may be liberally
construed. The ends of justice are better served when cases are determined on
the merits—after all parties are given full opportunity to ventilate their causes
and defenses—rather than on technicality or some procedural imperfections.
Anent the issue of the authority of Enrique G. Santos to represent his co-
heirs/co- plaintiffs, we find no necessity to show such authority. Respondents
herein are co-owners of the subject property. As such co-owners, each of the
heirs may properly bring an action for ejectment, forcible entry and detainer,
or any kind of action for the recovery of possession of the subject properties.
Thus, a co-owner may bring such an action, even without joining all the other
co-owners as co-plaintiffs, because the suit is deemed to be instituted for the
benefit of all.
We uphold the validity of the complaint because of the following
circumstances:
(1) the caption of the instant case is Heirs of Enrique Santos v. Iglesia ni
Cristo;
(2) the opening statement of the complaint states that plaintiffs are the heirs
of Enrique Santos and likewise names the particular heirs of the latter who
instituted the complaint below;
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(3) the case involves a property owned by the predecessor-in-interest of
plaintiffs therein; and
(4) the verification signed by Enrique G. Santos clearly states that he is one
of the children of the late Enrique Santos and that he represents the heirs of
said Enrique Santos.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The

decision of the Court of Appeals in CA-G.R. SP No. 72686 is AFFIRMED.
Costs against petitioner.
SO ORDERED.

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3. Vallacar Transit, Inc. v. Jocelyn Catubig, G.R. No. 175512, May
30, 2011
Facts:
Petitioner Vallacar is engaged in the business of transportation and the
franchise owner of a Ceres Bulilit bus with Plate No. T-0604-1348. Quirino
C. Cabanilla (Cabanilla) is employed as a regular bus driver of petitioner.
On January 27, 1994, respondent’s husband, Quintin Catubig, Jr. (Catubig),
was on his way home from Dumaguete City riding in tandem on a motorcycle
with his employee, Teddy Emperado (Emperado). Catubig was the one
driving the motorcycle. While approaching a curve at kilometers 59 and 60,
Catubig tried to overtake a slow moving ten-wheeler cargo truck by crossing-
over to the opposite lane, which was then being traversed by the Ceres Bulilit
bus driven by Cabanilla, headed for the opposite direction. When the two
vehicles collided, Catubig and Emperado were thrown from the motorcycle.
Catubig died on the spot where he was thrown, while Emperado died while
being rushed to the hospital.
On February 1, 1994, Cabanilla was charged with reckless imprudence
resulting in double homicide in Criminal Case No. M- 15-94 before the
MTC of Negros Occidental.
After preliminary investigation, the MCTC issued a Resolution on December
22, 1994, dismissing the criminal charge against Cabanilla. It found that
Cabanilla was not criminally liable for the deaths of Catubig and
Emperado, because there was no negligence, not even contributory, on
Cabanilla’s part.
Thereafter, respondent filed before the RTC on July 19, 1995 a Complaint
for Damages against petitioner, seeking actual, moral, and exemplary
damages, in the total amount of P484,000.00, for the death of her husband,
Catubig, based on Article 2180, in relation to Article 2176, of the Civil Code.
Respondent alleged that petitioner is civilly liable because the latter’s
employee driver, Cabanilla, was reckless and negligent in driving the bus
which collided with Catubig’s motorcycle.
Petitioner, in its Answer with Counterclaim, contended that the proximate
cause of the vehicular collision, which resulted in the deaths of Catubig and
Emperado, was the sole negligence of Catubig when he imprudently overtook
another vehicle at a curve and traversed the opposite lane of the road.
As a special and affirmative defense, petitioner asked for the dismissal of
respondent’s complaint for not being verified and/or for failure to state
a cause of action, as there was no allegation that petitioner was negligent in
the selection or supervision of its employee driver.
On January 26, 2000, the RTC promulgated its Decision favoring
petitioner holding that the proximate cause of the collision of the bus and
motorcycle was the negligence of the driver of the motorcycle, Catubig. The
RTC, moreover, was convinced through the testimony of Maypa, the
Administrative and Personnel Manager of the Dumaguete branch of
petitioner, that petitioner had exercised due diligence in the selection and
supervision of its employee drivers, including Cabanilla.
On appeal, CA modified the RTC decision. It held that both Catubig and
Cabanilla were negligent. Thus, the court ruled that [herein petitioner] is
equally liable for the accident in question which led to the deaths of Quintin
Catubig, Jr. and Teddy Emperado and hereby award to the heirs of Quintin
Catubig, Jr. the amount [of] P250,000.00 as full compensation for the death
of the latter.
Hence this petition.
Petitioner claims, among others, that respondent’s complaint for damages
should be dismissed for the latter’s failure to verify the same. The
certification against forum shopping attached to the complaint, signed by
respondent, is not a valid substitute for respondent’s verification that she
“has read the pleading and that the allegations therein are true and correct of
her personal knowledge or based on authentic records.”20 Petitioner cited
jurisprudence in which the Court ruled that a pleading lacking proper
verification is treated as an unsigned pleading, which produces no legal effect
under Section 3, Rule 7 of the Rules of Court.
Issue:
W/N the failure to verify the complaint in this case warrants the dismissal of
the complaint – No.
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Held:
No.
At the outset, we find no procedural defect that would have warranted the
outright dismissal of respondent’s complaint.
Respondent filed her complaint for damages against petitioner on July 19,
1995, when the 1964 Rules of Court was still in effect. Rule 7, Section 6 of
the 1964 Rules of Court provided:
“Sec. 6. Verification.—A pleading is verified only by an affidavit stating that
the person verifying has read the pleading and that the allegations thereof are
true of his own knowledge.
Verifications based on “information and belief,” or upon “knowledge,
information and belief,” shall be deemed insufficient.”
On July 1, 1997, the new rules on civil procedure took effect. The foregoing
provision was carried on, with a few amendments, as Rule 7, Section 4 of the
1997 Rules of Court.
The same provision was again amended by A.M. No. 00-2-10, which became
effective on May 1, 2000. It now reads:
“SEC. 4. Verification.—Except when otherwise specifically required by law
or rule, pleadings need not be under oath, verified or accompanied by
affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading
and that the allegations therein are true and correct of his personal knowledge
or based on authentic records.
A pleading required to be verified which contains a verification based on
“information and belief” or upon “knowledge, information and belief,” or
lacks a proper verification, shall be treated as an unsigned pleading.”
The 1997 Rules of Court, even prior to its amendment by A.M. No. 00-2-10,
clearly provides that a pleading lacking proper verification is to be treated as
an unsigned pleading which produces no legal effect. However, it also just as
clearly states that “[e]xcept when otherwise specifically required by law
or rule, pleadings need not be under oath, verified or accompanied by
affidavit.” No such law or rule specifically requires that respondent’s
complaint for damages should have been verified.
Although parties would often submit a joint verification and certificate
against forum shopping, the two are different.
In Pajuyo v. Court of Appeals,21 we already pointed out that:
“A party’s failure to sign the certification against forum shopping is different
from the party’s failure to sign personally the verification. The certificate of
non-forum shopping must be signed by the party, and not by counsel. The
certification of counsel renders the petition defective.
On the other hand, the requirement on verification of a pleading is a formal
and not a jurisdictional requisite. It is intended simply to secure an assurance
that what are alleged in the pleading are true and correct and not the product
of the imagination or a matter of speculation, and that the pleading is filed in
good faith. The party need not sign the verification. A party’s representative,
lawyer or any person who personally knows the truth of the facts alleged in
the pleading may sign the verification.”
In the case before us, we stress that as a general rule, a pleading need not be
verified, unless there is a law or rule specifically requiring the same.
Examples of pleadings that require verification are:
(1) all pleadings filed in civil cases under the 1991 Revised Rules on
Summary Procedure;
(2) petition for review from the Regional Trial Court to the Supreme Court
raising only questions of law under Rule 41, Section 2;
(3) petition for review of the decision of the Regional Trial Court to the Court
of Appeals under Rule 42, Section 1;
(4) petition for review from quasi-judicial bodies to the Court of Appeals
under Rule 43, Section 5;
(5) petition for review before the Supreme Court under Rule 45, Section 1;
(6) petition for annulment of judgments or final orders and resolutions under
Rule 47, Section 4;
(7) complaint for injunction under Rule 58, Section 4;
(8) application for preliminary injunction or temporary restraining
order under Rule 58, Section 4;
(9) application for appointment of a receiver under Rule 59, Section 1;
(10) application for support pendente lite under Rule 61, Section 1;
(11) petition for certiorari against the judgments, final orders or resolutions
of constitutional commissions under Rule 64, Section 2;
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(12) petition for certiorari, prohibition, and mandamus under Rule 65,
Sections 1 to 3;
(13) petition for quo warranto under Rule 66, Section 1;
(14) complaint for expropriation under Rule 67, Section 1;
(15) petition for indirect contempt under Rule 71, Section 4, all from the 1997
Rules of Court;
(16) all complaints or petitions involving intra-corporate controversies
under the Interim Rules of Procedure on Intra-Corporate Controversies;
(17) complaint or petition for rehabilitation and suspension of payment
under the Interim Rules on Corporate Rehabilitation; and
(18) petition for declaration of absolute nullity of void marriages and
annulment of voidable marriages as well as petition for summary
proceedings under the Family Code.

In contrast, all complaints, petitions, applications, and other initiatory

pleadings must be accompanied by a certificate against forum shopping, first
prescribed by Administrative Circular No. 04- 94, which took effect on April
1, 1994, then later on by Rule 7, Section 5 of the 1997 Rules of Court. It is
not disputed herein that respondent’s complaint for damages was
accompanied by such a certificate.

In addition, verification, like in most cases required by the rules of procedure,

is a formal, not jurisdictional, requirement, and mainly intended to secure an
assurance that matters which are alleged are done in good faith or are true and
correct and not of mere speculation. When circumstances warrant, the court
may simply order the correction of unverified pleadings or act on it and waive
strict compliance with the rules in order that the ends of justice may thereby
be served.

WHEREFORE, premises considered, the petition is GRANTED. The

Decision dated November 17, 2005 and Resolution dated November 16, 2006
of the Court Appeals in CA-G.R. CV No. 66815 are SET ASIDE and the
Decision dated January 26, 2000 of the Regional Trial Court, Branch 30 of
Dumaguete City, dismissing Civil Case No. 11360 is REINSTATED.
SO ORDERED.

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4. Korean Technologies v. Alberto Lerma, G.R. No. 143581,
January 7, 2008
Facts: [sorry long case, just focus on compulsory counterclaim]
Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation
which is engaged in the supply and installation of Liquefied Petroleum
Gas (LPG) Cylinder manufacturing plants, while private respondent
Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic
corporation.
On March 5, 1997, PGSMC and KOGIES executed a Contract whereby
KOGIES would set up an LPG Cylinder Manufacturing Plant in
Carmona, Cavite. The contract was executed in the Philippines. On April 7,
1997, the parties executed, in Korea, an Amendment for Contract No. KLP-
970301 dated March 5, 1997 amending the terms of payment. The contract
and its amendment stipulated that KOGIES will ship the machinery and
facilities necessary for manufacturing LPG cylinders for which PGSMC
would pay USD 1,224,000. KOGIES would install and initiate the operation
of the plant for which PGSMC bound itself to pay USD 306,000 upon the
plant’s production of the 11-kg. LPG cylinder samples. Thus, the total
contract price amounted to USD 1,530,000.
For the remaining balance of USD306,000 for the installation and initial
operation of the plant, PGSMC issued two postdated checks.
When KOGIES deposited the checks, these were dishonored for the
reason “P A YMENT STOPPED.” Thus, on May 8, 1998, KOGIES sent a
demand letter to PGSMC threatening criminal action for violation of Batas
Pambansa Blg. 22 in case of nonpayment. On the same date, the wife of
PGSMC’s President faxed a letter dated May 7, 1998 to KOGIES’ President
who was then staying at a Makati City hotel. She complained that not only
did KOGIES deliver a different brand of hydraulic press from that agreed
upon but it had not delivered several equipment parts already paid for.
On May 14, 1998, PGSMC replied that the two checks it issued KOGIES
were fully funded but the payments were stopped for reasons previously made
known to KOGIES. equipment. Moreover, PGSMC averred that it has already paid PhP 2,257,920
On June 1, 1998, PGSMC informed KOGIES that PGSMC was canceling
their Contract dated March 5, 1997 on the ground that KOGIES had
altered the quantity and lowered the quality of the machineries and
equipment it delivered to PGSMC, and that PGSMC would dismantle and
transfer the machineries, equipment, and facilities installed in the Car-mona
plant.
Five days later, PGSMC filed before the Office of the Public Prosecutor an
Affidavit-Complaint for Estafa dock-eted as I.S. No. 98-03813 against Mr.
Dae Hyun Kang, President of KOGIES.
Thus, on July 1, 1998, KOGIES instituted an Application for Arbitration
before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea
pursuant to Art. 15 of the Contract as amended.
Rem Part
On July 3, 1998, KOGIES filed a Complaint for Specific Performance
against PGSMC before the RTC of Muntinlupa.
The RTC granted a temporary restraining order (TRO) on July 4, 1998,
which was subsequently extended until July 22, 1998. In its complaint,
KOGIES alleged that PGSMC had initially admitted that the checks that were
stopped were not funded but later on claimed that it stopped payment of the
checks for the reason that “their value was not received” as the former
allegedly breached their contract by “altering the quantity and lowering the
quality of the machinery and equipment” installed in the plant and failed to
make the plant operational although it earlier certified to the contrary as
shown in a January 22, 1998 Certificate. Likewise, KOGIES averred that
PGSMC violated Art. 15 of their Contract, as amended, by unilaterally
rescinding the contract without resorting to arbitration.
On July 17, 1998, PGSMC filed its Answer with Compulsory
Counterclaim asserting that it had the full right to dismantle and transfer the
machineries and equipment because it had paid for them in full as stipulated
in the contract; that KOGIES was not entitled to the PhP 9,000,000 covered
by the checks for failing to completely install and make the plant operational;
and that KOGIES was liable for damages amounting to PhP 4,500,000 for
altering the quantity and lowering the quality of the machineries and
in rent (covering January to July 1998) to Worth and it was not willing to
further shoulder the cost of renting the premises of the plant considering that
the LPG cylinder manufacturing plant never became operational.
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RTC denied the application for a writ of preliminary injunction. And
finally, the RTC held that Art. 15 of the Contract as amended was invalid as
it tended to oust the trial court or any other court jurisdiction over any dispute
that may arise between the parties.
On July 29, 1998, KOGIES filed its Reply to Answer and Answer to
Counterclaim. KOGIES denied it had altered the quantity and lowered the
quality of the machinery, equipment, and facilities it delivered to the plant. It
claimed that it had performed all the undertakings under the contract and had
already produced certified samples of LPG cylinders. It averred that whatever
was unfinished was PGSMC’s fault since it failed to procure raw materials
due to lack of funds. KOGIES, relying on Chung Fu Industries (Phils.), Inc.
v. Court of Appeals, insisted that the arbitration clause was without question
valid.
After KOGIES filed a Supplemental Memorandum with Motion to
Dismiss answering PGSMC’s memorandum of July 22, 1998 and seeking
dismissal of PGSMC’s counter-claims, KOGIES, on August 4, 1998, filed
its Motion for Re-consideration of the July 23, 1998 Order denying its
application for an injunctive writ.
RTC denied KOGIES’ motion to dismiss PGSMC’s compulsory
counterclaims as these counterclaims fell within the requisites of
compulsory counterclaims.
KOGIES filed an urgent MR of the September 21, 1998 RTC Order granting
inspection of the plant and denying dismissal of PGSMC’s compulsory
counterclaims.
Without waiting for the resolution of its October 2, 1998 urgent motion for
reconsideration, KOGIES filed before the Court of Appeals (CA) a
petition for certiorari seeking annulment of the July 23, 1998 and
September 21, 1998 RTC Orders.
CA affirmed the RTC Orders and dismissed the R65 certiorari filed by
KOGIES. The CA held, among others, that, on the issue of nonpayment of
docket fees and non-attachment of a certificate of non-forum shopping by
PGSMC, the counterclaims of PGSMC were compulsory ones and payment
of docket fees was not required since the Answer with counterclaim was not
an initiatory pleading. For the same reason, the CA said a certificate of non-
forum shopping was also not required.
Hence this petition.
Issue:
W/N CA erred in holding that respondent’s counterclaims are all compulsory
thus there is no need for a CONFS and no need for the payment of docket
fees – No, CA did not err.
Held:
No, CA did not err.
KOGIES strongly argues that when PGSMC filed the counterclaims, it should
have paid docket fees and filed a certificate of non-forum shopping, and that
its failure to do so was a fatal defect.
We disagree with KOGIES.
As aptly ruled by the CA, the counterclaims of PGSMC were incorporated in
its Answer with Compulsory Counter-claim dated July 17, 1998 in
accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil
Procedure, the rule that was effective at the time the Answer with
Counterclaim was filed. Sec. 8 on existing counterclaim or cross-claim states,
“A compulsory counterclaim or a cross-claim that a defending party has at
the time he files his answer shall be contained therein.”
On July 17, 1998, at the time PGSMC filed its Answer incorporating its
counterclaims against KOGIES, it was not liable to pay filing fees for said
counterclaims being compulsory in nature.
We stress, however, that effective August 16, 2004 under Sec. 7, Rule 141,
as amended by A.M. No. 04-2-04-SC, docket fees are now required to be
paid in compulsory counterclaim or cross-claims.
As to the failure to submit a certificate of forum shopping, PGSMC’s Answer
is not an initiatory pleading which requires a certification against forum
shopping under Sec. 5 of Rule 7, 1997 Revised Rules of Civil Procedure. It
is a responsive pleading, hence, the courts a quo did not commit reversible
Avila 4B | 2016
error in denying KOGIES’ motion to dismiss PGSMC’s compulsory
counterclaims.

WHEREFORE, this petition is PARTLY GRANTED, in that:

(1) The May 30, 2000 CA Decision in CA-G.R. SP No. 49249 is REVERSED
and SET ASIDE;
(2) The September 21, 1998 and October 19, 1998 RTC Orders in Civil Case
No. 98-117 are REVERSED and SET ASIDE;
(3) The parties are hereby ORDERED to submit themselves to the arbitration
of their dispute and differences arising from the subject Contract before the
KCAB; and
(4) PGSMC is hereby ALLOWED to dismantle and transfer the equipment
and machineries, if it had not done so, and ORDERED to preserve and
maintain them until the finality of whatever arbitral award is given in the
arbitration proceedings.
No pronouncement as to costs. SO ORDERED.

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5. Filipinas Textile v. Court of Appeals, G.R. No. 119800,
November 12, 2003
Facts:
On December 6, 1985, SIHI instituted a Complaint for the collection of the
sum of P3,118,949.75, with interest, penalties, exemplary damages,
attorney’s fees and costs of suit against herein petitioners Filtex and
Villanueva.
In its Complaint, SIHI alleged that sometime in 1983, Filtex applied for
domestic letters of credit to finance the purchase of various raw materials
for its textile business. Finding the application to be in order, SIHI issued on
various dates domestic letters of credit authorizing Indo-Philippine Textile
Mills, Inc. (“Indo-Phil”), Texfiber Corporation (“Texfiber”), and Philippine
Polyamide Industrial Corporation (“Polyamide”) “to value” on SIHI such
drafts as may be drawn by said corporations against Filtex for an aggregate
amount not exceeding P3,737,988.05.
Filtex used these domestic letters of credit to cover its purchase of various
textile materials from Indo-Phil, Texfiber and Polyamide. Upon the sale and
delivery of the merchandise, Indo-Phil, Texfiber and Polyamide issued
several sight drafts on various dates with an aggregate value of
P3,736,276.71 payable to the order of SIHI, which were duly accepted by
Filtex. Subsequently, the sight drafts were negotiated to and acquired in due
course by SIHI which paid the value thereof to Indo-Phil, Texfiber and
Polyamide for the account of Filtex.
Allegedly by way of inducement upon SIHI to issue the aforesaid domestic
letters of credit and “to value” the sight drafts issued by Indo-Phil, Texfiber
and Polyamide, Villanueva executed a comprehensive surety agreement
on November 9, 1982, whereby he guaranteed, jointly and severally with
Filtex, the full and punctual payment at maturity to SIHI of all the
indebtedness of Filtex. The essence of the comprehensive surety agreement
was that it shall be a continuing surety until such time that the total
outstanding obligation of Filtex to SIHI had been fully settled.
In order to ensure the payment of the sight drafts aforementioned, Filtex
executed and issued to SIHI several trust receipts of various dates, which
were later extended with the issuance of replacement trust receipts all dated
June 22, 1984, covering the merchandise sold.
Under the trust receipts, Filtex agreed to hold the merchandise in trust for
SIHI, with liberty to sell the same for SIHI’s account but without authority to
make any other disposition of the said goods. Filtex likewise agreed to hand
the proceeds, as soon as received, to SIHI “to apply” against any indebtedness
of the former to the latter. Filtex also agreed to pay SIHI interest at the rate
of 25% per annum from the time of release of the amount to Indo-Phil,
Texfiber and Polyamide until the same is fully paid, subject to SIHI’s option
to reduce the interest rate. Furthermore, in case of delay in the payment at
maturity of the aggregate amount of the sight drafts negotiated to SIHI, said
amount shall be subject to two percent (2%) per month penalty charge
payable from the date of default until the amount is fully paid.
Because of Filtex’s failure to pay its outstanding obligation despite demand,
SIHI filed a Complaint on December 6, 1985 praying that the petitioners be
ordered to pay, jointly and severally, the principal amount of P3,118,949.75,
plus interest and penalties, attorney’s fees, exemplary damages, costs of suit
and other litigation expenses.
In its Answer with Counterclaim, Filtex interposed special and affirmative
defenses, i.e., the provisions of the trust receipts, as well as the
comprehensive surety agreement, do not reflect the true will and intention of
the parties, full payment of the obligation, and lack of cause of action. For his
part, Villanueva interposed the same special and affirmative defenses and
added that the comprehensive surety agreement is null and void and damages
and attorney’s fees are not legally demandable. The petitioners, however,
failed to specifically deny under oath the genuineness and due execution
of the actionable documents upon which the Complaint was based.
RTC ruled for respondent holding Filtex and Villanueva jointly and
severally liable to SIHI.
Dissatisfied, Filtex and Villanueva filed an Appeal, primarily contending that
they have fully paid their indebtedness to SIHI and asserting that the letters
of credit, sight drafts, trust receipts and comprehensive surety agreement
upon which the Complaint is based are inadmissible in evidence supposedly
because of non-payment of documentary stamp taxes as required by the
Internal Revenue Code.
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On appeal, CA debunked the petitioners’ contention that the letters of credit,
sight drafts, trust receipts and comprehensive surety agreement are
inadmissible in evidence ruling that the petitioners had “in effect, admitted
the genuineness and due execution of said documents because of their failure
to have their answers placed under oath, the complaint being based on
actionable documents in line with Section 7, Rule 8 of the Rules of Court.”
The appellate court also ruled that there remained an unpaid balance as
of January 31, 1989 of P868,881.11 for which Filtex and Villanueva are
solidarily liable.
Hence this petition.
Petitioners argue, among others, that the CA should not have admitted in
evidence the letters of credit, sight drafts, trust receipts and comprehensive
surety agreement for lack of the requisite documentary stamps thereon. They
hypothesized that their implied admission of the genuineness and due
execution of these documents for failure to specifically deny the same under
oath should not be equated with an admission in evidence of the documents
and an admission of their obligation.
Traversing the allegations in the instant petition, SIHI stated in its Comment
that in their respective answers to the complaint, the petitioners expressly
admitted the due execution of the letters of credit, sight drafts and trust
receipts and their obligation arising from these documents. Having done so,
they could no longer question the admissibility of these documents.
Moreover, their allegation of inadmissibility of these documents is
inconsistent with their defense of full payment.
Issue:
W/N the documents (letters of credit etc.) are admissible in evidence despite
the absence of documentary stamps thereon as required by the NIRC – Yes.
Held:
Yes.
The threshold issue in this case is whether or not the letters of credit, sight
drafts, trust receipts and comprehensive surety agreement are admissible in
evidence despite the absence of documentary stamps thereon as required by
the Internal Revenue Code.
We rule in the affirmative.
As correctly noted by the respondent, the Answer with Counterclaim and
Answer, of Filtex and Villanueva, respectively, did not contain any specific
denial under oath of the letters of credit, sight drafts, trust receipts and
comprehensive surety agreement upon which SIHI’s Complaint was based,
thus giving rise to the implied admission of the genuineness and due
execution of these documents.
Under Sec. 8, Rule 8 of the Rules of Court, when an action or defense is
founded upon a written instrument, copied in or attached to the corresponding
pleading as provided in the preceding section, the genuineness and due
execution of the instrument shall be deemed admitted unless the adverse
party, under oath, specifically denies them, and sets forth what he claims to
be the facts.
In Benguet Exploration, Inc. vs. Court of Appeals, this Court ruled that the
admission of the genuineness and due execution of a document means that
the party whose signature it bears admits
1. that he voluntarily signed the document or it was signed by another for him
and with his authority;
2. that at the time it was signed it was in words and figures exactly as set out
in the pleading of the party relying upon it;
3. that the document was delivered; and
4. that any formalities required by law, such as a seal, an
acknowledgment, or revenue stamp, which it lacks, are waived by him.
Interestingly, the petitioners questioned the admissibility of these documents
rather belatedly, at the appeal stage even. Their respective answers to SIHI’s
Complaint were silent on this point. The rule is well-settled that points of law,
theories, issues and arguments not adequately brought to the attention of the
trial court need not, and ordinarily will not, be considered by a reviewing
court as they cannot be raised for the first time on appeal because this would
be offensive to the basic rules of fair play, justice and due process.
Hence, the petitioners can no longer dispute the admissibility of the letters of
credit, sight drafts, trust receipts and comprehensive surety agreement.
However, this does not preclude the petitioners from impugning these
documents by evidence of fraud, mistake, compromise, payment, statute of
limitations, estoppel and want of consideration.
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This brings us to the petitioners’ contention that they have already fully paid
their obligation to SIHI and have, in fact, overpaid by P415,722.53. This
matter is purely a factual issue. In Fortune Motors (Phils.) Corporation vs.
Court of Appeals, it was held that “the jurisdiction of this Court in cases
brought before it from the Court of Appeals under Rule 45 of the Rules of
Court is limited to reviewing or revising errors of law.”

As a final issue, Villanueva contended that the comprehensive surety

agreement is null and void for lack of consent of Filtex and SIHI. He also
alleged that SIHI materially altered the terms and conditions of the
comprehensive surety agreement by granting Filtex an extension of the period
for payment thereby releasing him from his obligation as surety. We find
these contentions specious.

In the first place, the consent of Filtex to the surety may be assumed from the
fact that Villanueva was the signatory to the sight drafts and trust receipts on
behalf of Filtex. Moreover, in its Answer with Counterclaim, Filtex admitted
the execution of the comprehensive surety agreement with the only
qualification that it was not a means to induce SIHI to issue the domestic
letters of credit. Clearly, had Filtex not consented to the comprehensive surety
agreement, it could have easily objected to its validity and specifically denied
the same. SIHI’s consent to the surety is also understood from the fact that it
demanded payment from both Filtex and Villanueva.

WHEREFORE, premises considered, the petition is DENIED and the

assailed Decision and Resolution of the Court of Appeals concurring with the
decision of the trial court are hereby AFFIRMED. Costs against the
petitioners. SO ORDERED.

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6. Borra et al. v. CA, Hawaiian Phil. Company, September 9, 2013
Facts:
On September 12, 1997, herein petitioners filed with the National Labor
Relations Commission (NLRC) Regional Arbitration Branch No. VI in
Bacolod City two separate complaints which were docketed as RAB Case
No. 06-09-10698-97 and RAB Case No. 06- 09-10699-97.
RAB Case No. 06-09-10698-97 was filed against herein private respondent
alone, while RAB Case No. 06-09-10699-97 impleaded herein private
respondent and a certain Fela Contractor as respondents.
In RAB Case No. 06-09-10698-97, herein petitioners asked that they be
recognized and confirmed as regular employees of herein private
respondent and further prayed that they be awarded various benefits
received by regular employees for three (3) years prior to the filing of the
complaint, while in RAB Case No. 06-09-10699-97, herein petitioners sought
for payment of unpaid wages, holiday pay, allowances, 13th month pay,
service incentive leave pay, moral and exemplary damages also during the
three (3) years preceding the filing of the complaint.
On October 16, 1997, private respondent filed a Motion to Consolidate the
abovementioned cases, but the Labor Arbiter in charge of the case denied the
said Motion in its Order5 dated October 20, 1997.
On January 9, 1998, private respondent filed a Motion to Dismiss RAB Case
No. 06-09-10698-97 on the ground of res judicata. Private respondent cited
an earlier decided case entitled “Humphrey Perez, et al. v. Hawaiian
Philippine Co., et al.” (Perez case) and docketed as RAB Case No. 06-04-
10169-95, which was an action for recovery of 13th month pay and service
incentive leave pay, and it includes herein petitioners among the
complainants and herein private respondent and one Jose Castillon
(Castillon) as respondents. Private respondent contended that the Perez
case, which has already become final and executory, as no appeal was taken
therefrom, serves as a bar to the litigation of RAB Case No. 06-09- 10698-
97, because it was ruled therein that petitioners are not employees of private
respondent but of Castillon.
LA granted the MTD and dismissed the complaint.
On appeal, NLRC reversed and reinstated the complaint in RAB Case No.
06-09- 10698-97 and remanded the same for further proceedings.
On appeal, CA affirmed NLRC.
On appeal, SC (case entitled Hawaiian Phil. Company v. Borra) affirmed
CA holding that the RAB Case No. 06-09- 10698-97 was not barred by
res judicata. SC held that
“the two cases in question indeed involved different causes of action. The
previous case of “Humphrey Perez vs. Hawaiian Philippine Company”
concerned a money claim and pertained to the years 1987 up until 1995.
During that period, private respondents were engaged by contractor Jose
Castillon to work for petitioner at its warehouse. It would appear that the
finding of the Labor Arbiter, to the effect that no employer-employee
relationship existed between petitioner and private respondents, was largely
predicated on the absence of privity between them.
The complaint for confirmation of employment, however, was filed by
private respondents on 12 September 1997, by which time, Jose Castillon was
no longer the contractor.
Stated differently, Perez pertains to private respondents’ employment from
1987 to 1995, while the instant case covers a different (subsequent) period.
Moreover, in Perez, the finding that no employer-employee relationship
existed between petitioner and private respondents was premised on absence
of privity between Castillon and petitioner. Consequently, Perez and the
instant case involve different subject matters and causes of action.”
In the meantime, on December 21, 1998, the Labor Arbiter rendered a
Decision in RAB Case No. 06-09-10699-97 holding that there is no
employer-employee relation between private respondent and petitioners.
No appeal was taken from the abovequoted Decision. Thus, the same
became final and executory.12
As a consequence of the finality of the Decision in RAB Case No. 06-09-
10699-97, herein private respondent again filed a Motion to Dismiss RAB
Case No. 06-09-10698-97 on the ground, among others, of res judicata.
Private respondent contended that the final and executory Decision of the
Labor Arbiter in RAB Case No. 06-09-10699-97, which found no employer-
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employee relations between private respondent and petitioners, serves as a
bar to the further litigation of RAB Case No. 06-09-10698-97.
LA denied respondent’s MTD.
On a R65, CA reversed LA ordered the dismissal of the complaint.
Hence this R65 with the SC.
Petitioner claims that:
1. this case is not barred by res judicata, and
2. the respondent was guilty of forum shopping because it filed a motion to
dismiss RAB Case No. 06-09-10698-97 in 1998, and another MTD, both
MTDs claiming res judicata
Issue:
1. W/N Case No. 06-09-10698-97 is already barred by res judicata RAB Case
No. 06-09-10699-97 – Yes.
2. W/N respondent was guilty of forum shopping – No.
Held:
Yes.
I.
At the outset, the underlying question which has to be resolved in both RAB
Case Nos. 06-09-10698-97 and 06-09-10699-97, before any other issue in
these cases could be determined, is the matter of determining petitioners’ real
employer. Is it Fela Contractor, or is it private respondent?
As earlier mentioned, this issue has already been settled. In the already final
and executory decision of the Labor Arbiter in RAB Case No. 06-09-10699-
97, it was ruled therein that no employer-employee relationship exists
between private respondent and petitioners because the latter’s real employer
is Fela Contractor.
Thus, insofar as the question of employer and employee relations between
private respondent and petitioners is concerned, the final judgment in RAB
Case No. 06-09-10699-97 has the effect and authority of res judicata by
conclusiveness of judgment.
Discussing the concept of res judicata, this Court held in Antonio v. Sayman
Vda. de Monje24 that:
“x x x [R]es judicata is defined as “a matter adjudged; a thing judicially acted
upon or decided; a thing or matter settled by judgment.” According to the
doctrine of res judicata, an existing final judgment or decree rendered on the
merits, and without fraud or collusion, by a court of competent jurisdiction,
upon any matter within its jurisdiction, is conclusive of the rights of the
parties or their privies, in all other actions or suits in the same or any other
judicial tribunal of concurrent jurisdiction on the points and matters in issue
in the first suit. To state simply, a final judgment or decree on the merits by
a court of competent jurisdiction is conclusive of the rights of the parties or
their privies in all later suits on all points and matters determined in the
former suit.
The principle of res judicata is applicable by way of (1) “bar by prior
judgment” and (2) “conclusiveness of judgment.” This Court had occasion to
explain the difference between these two aspects of res judicata as follows:
There is “bar by prior judgment” when, as between the first case where the
judgment was rendered and the second case that is sought to be barred, there
is identity of parties, subject matter, and causes of action. In this instance, the
judgment in the first case constitutes an absolute bar to the second action.
Otherwise put, the judgment or decree of the court of competent jurisdiction
on the merits concludes the litigation between the parties, as well as their
privies, and constitutes a bar to a new action or suit involving the same cause
of action before the same or other tribunal.
But where there is identity of parties in the first and second cases, but no
identity of causes of action, the first judgment is conclusive only as to those
matters actually and directly controverted and determined and not as to
matters merely involved therein. This is the concept of res judicata known as
“conclusiveness of judgment.”
Stated differently, any right, fact or matter in issue directly adjudicated
or necessarily involved in the determination of an action before a
competent court in which judgment is rendered on the merits is
conclusively settled by the judgment therein and cannot again be
litigated between the parties and their privies whether or not the claim,
demand, purpose, or subject matter of the two actions is the same.
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Stated differently, conclusiveness of judgment finds application when a fact
or question has been squarely put in issue, judicially passed upon, and
adjudged in a former suit by a court of competent jurisdiction. The fact
or question settled by final judgment or order binds the parties to that action
(and persons in privity with them or their successors-in-interest), and
continues to bind them while the judgment or order remains standing and
unreversed by proper authority on a timely motion or petition; the
conclusively-settled fact or question cannot again be litigated in any future or
other action between the same parties or their privies and successors-in-
interest, in the same or in any other court of concurrent jurisdiction, either for
the same or for a different cause of action. Thus, only the identities of parties
and issues are required for the operation of the principle of conclusiveness of
judgment.”
Hence, there is no point in determining the main issue raised in RAB Case
No. 06-09-10698-97, i.e., whether petitioners may be considered regular
employees of private respondent, because, in the first place, they are not even
employees of the latter. As such, the CA correctly held that the Labor Arbiter
committed grave abuse of discretion in denying private respondent’s motion
to dismiss RAB Case No. 06-09-10698-97.
II.
The question that follows is whether private respondent is guilty of forum
shopping, considering that it already filed a motion to dismiss RAB Case No.
06-09-10698-97 in 1998? The Court answers in the negative.
In Pentacapital Investment Corporation v. Mahinay, 623 SCRA 284 (2010),
this Court’s discussion on forum shopping is instructive, to wit:
“Forum-shopping is the act of a litigant who repetitively availed 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, to
increase his chances of obtaining a favorable decision if not in one court, then
in another.
What is important in determining whether forum-shopping exists is the
vexation caused the courts and parties-litigants by a party who asks different
courts and/or administrative agencies to rule on the same or related causes
and/or grant the same or substantially the same reliefs, in the process creating
the possibility of conflicting decisions being rendered by the different fora
upon the same issues.
Forum-shopping can be committed in three ways:
(1) by 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) by filing multiple cases based on the same cause of action and with the
same prayer, the previous case having been finally resolved (where the
ground for dismissal is res judicata); and
(3) by 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).
More particularly, the elements of forum-shopping are:
(a) identity of parties or at least such parties that represent the same interests
in both actions;
(b) identity of rights asserted and reliefs prayed for, the relief being founded
on the same facts;
(c) identity of the two preceding particulars, such that any judgment rendered
in the other action will, regardless of which party is successful, amount to res
judicata in the action under consideration.”
In the instant case, there can be no forum shopping, because the grounds
cited by private respondent in its motions to dismiss filed in 1998 and in
the present case are different. In 1998, the motion to dismiss is based on
the argument that the final and executory decision in the Perez case serves as
res judicata and, thus, bars the re-litigation of the issue of employer-
employee relations between private respondent and petitioners. In the instant
case, private respondent again cites res judicata as a ground for its motion to
dismiss. This time, however, the basis for such ground is not Perez but the
final and executory decision in RAB Case No. 06-09-10699- 97. Thus, the
relief prayed for in private respondent’s motion to dismiss subject of the
instant case is founded on totally different facts and issues.
WHEREFORE, the petition is DISMISSED. The assailed Decision and
Resolutions of the Court of Appeals in CA-G.R. SP No. 78729 are
AFFIRMED.
SO ORDERED.
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Avila 4B | 2016
7. Sy Tiong v. Sy Chim, G.R. No. 174168, March 30, 2009
Facts:
These consolidated petitions involving the same parties, although related,
dwell on different issues.
G.R. No. 174168. [skippable?]
On 30 May 2003, four criminal complaints were filed by Sy Chim and
Felicidad Chan Sy (Spouses Sy) against Sy Tiong Shiou, et al. before the City
Prosecutor’s Office of Manila.
The cases were later consolidated. Two of the complaints, I.S. Nos.
03E-15285 and 03E-15286,[3] were for alleged violation of Section 74 in
relation to Section 144 of the Corporation Code. In these complaints, the
Spouses Sy averred that they are stockholders and directors of Sy Siy Ho &
Sons, Inc. (the corporation) who asked Sy Tiong Shiou, et al., officers of the
corporation, to allow them to inspect the books and records of the business
on three occasions to no avail. In a letter[4] dated 21 May 2003, Sy Tiong
Shiou, et al. denied the request, citing civil and intra-corporate cases pending
in court.[5]
In the two other complaints, I.S. No. 03E-15287 and 03E-15288,[6] Sy Tiong
Shiou was charged with falsification under Article 172, in relation to Article
171 of the Revised Penal Code (RPC), and perjury under Article 183 of the
RPC. According to the Spouses Sy, Sy Tiong Shiou executed under oath the
2003 General Information Sheet (GIS) wherein he falsely stated that the
shareholdings of the Spouses Sy had decreased despite the fact that they had
not executed any conveyance of their shares.[7]
Sy Tiong Shiou, et al. argued before the prosecutor that the issues involved
in the civil case for accounting and damages pending before the RTC of
Manila were intimately related to the two criminal complaints filed by the
Spouses Sy against them, and thus constituted a prejudicial question that
should require the suspension of the criminal complaints.
They also argued that the Spouses Sys request for inspection was premature
as the latters concern may be properly addressed once an answer is filed in
the civil case. Sy Tiong Shiou, on the other hand, denied the accusations
against him, alleging that before the 2003 GIS was submitted to the Securities
and Exchange Commission (SEC), the same was shown to respondents, who
at that time were the President/Chairman of the Board and Assistant Treasurer
of the corporation, and that they did not object to the entries in the GIS. Sy
Tiong Shiou also argued that the issues raised in the pending civil case for
accounting presented a prejudicial question that necessitated the suspension
of criminal proceedings.
On 29 December 2003, the investigating prosecutor issued a resolution
recommending the suspension of the criminal complaints for violation of
the Corporation Code and the dismissal of the criminal complaints for
falsification and perjury against Sy Tiong Shiou.[8] The reviewing
prosecutor approved the resolution. The Spouses Sy moved for the
reconsideration of the resolution, but their motion was denied on 14 June
2004.[9]
The Spouses Sy thereupon filed a petition for review with the Department of
Justice (DOJ), which the latter denied in a resolution issued on 02 September
2004.[10] Their subsequent motion for reconsideration was likewise denied
in the resolution of 20 July 2005.
On a R65, CA reversed and directed the City Prosecutors Office to file the
appropriate informations against Sy Tiong Shiou, et al. for violation of
Section 74, in relation to Section 144 of the Corporation Code and of Articles
172 and 183 of the RPC. The appellate court ruled that the civil case for
accounting and damages cannot be deemed prejudicial to the maintenance or
prosecution of a criminal action for violation of the Corporation Code and the
RPC since a finding in the civil case that respondents mishandled or
misappropriated the funds would not be determinative of their guilt or
innocence in the criminal complaint.
Hence this petition. On 2 April 2008, the SC ordered the consolidation of
G.R. No. 179438 with G.R. No. 174168.
Issue:
W/N DOJ erred in suspending the hearing charges for violation of the
Corporation Code on the ground of prejudicial question and when it
dismissed the criminal complaints – Yes.
Held:
Yes.
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 in the falsification and perjury cases, what is material is the veracity of the
As correctly found by the Court of Appeals, the DOJ gravely abused its entries made by Sy Tiong Shiou in the sworn GIS.
discretion when it suspended the hearing of the charges for violation of the
Corporation Code on the ground of prejudicial question and when it
dismissed the criminal complaints.

A prejudicial question comes into play generally in a situation where a civil

action and a criminal action are both pending and there exists in the former
an issue which must be preemptively resolved before the criminal action may
proceed since howsoever the issue raised in the civil action is resolved would
be determinative juris et de jure of the guilt or innocence of the accused in
the criminal case.

The reason behind the principle of prejudicial question is to avoid two

conflicting decisions. It has two essential elements:
(a) the civil action involves an issue similar or intimately related to the issue
raised in the criminal action; and
(b) the resolution of such issue determines whether or not the criminal action
may proceed.

The civil action and the criminal cases do not involve any prejudicial
question.

The civil action for accounting and damages, Civil Case No. 03-106456
pending before the RTC Manila, Branch 46, seeks the issuance of an order
compelling the Spouses Sy to render a full, complete and true accounting of
all the amounts, proceeds and fund paid to, received and earned by the
corporation since 1993 and to restitute it such amounts, proceeds and funds
which the Spouses Sy have misappropriated.

The criminal cases, on the other hand, charge that the Spouses Sy were
illegally prevented from getting inside company premises and from
inspecting company records, and that Sy Tiong Shiou falsified the entries in
the GIS, specifically the Spouses Sys shares in the corporation.

Surely, the civil case presents no prejudicial question to the criminal cases
since a finding that the Spouses Sy mishandled the funds will have no effect
on the determination of guilt in the complaint for violation of Section 74 in
relation to Section 144 of the Corporation Code; the civil case concerns the
validity of Sy Tiong Shiou’s refusal to allow inspection of the records, while

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G.R. No. 179438.
Facts:
On 3 February 2003, Juanita Tan, corporate treasurer of Sy Siy Ho &
Sons, Inc. (the corporation), a family corporation doing business under the
name and style Guan Yiac Hardware, submitted a letter[46] to the
corporations Board of Directors (Board) stating that the control,
supervision and administration of all corporate funds were exercised by
Sy Chim and Felicidad Chan Sy (Spouses Sy), corporate president and
assistant treasurer, respectively.
In the same letter, Juanita Tan disclosed that Felicidad Chan Sy did not make
cash deposits to any of the corporations banks from 1 November 2001 to 31
January 2003, thus the total bank remittances for the past years were less than
reflected in the corporate financial statements, accounting books and records.
Finally, Juanita Tan sought to be free from any responsibility over all
corporate funds.
The Board granted Juanita Tans request and authorized the employment of
an external auditor to render a complete audit of all the corporate accounting
books and records.[47] Consequently, the Board hired the accounting firm
Banaria, Banaria & Company. In its Report[48] dated 5 April 2003, the
accounting firm attributed to the Spouses Sy P67,117,230.30 as unaccounted
receipts and disbursements from 1994 to 2002.[49]
A demand letter[50] was subsequently served on the Spouses Sy on 15 April
2003. On the same date, the children of the Spouses Sy allegedly stole from
the corporation cash, postdated checks and other important documents. After
the incident, the Spouses Sy allegedly transferred residence and ceased
reporting to the corporation. Thereupon, the corporation filed a criminal
complaint for robbery against the Spouses Sy before the City
Prosecutors Office of Manila.[51] A search warrant was subsequently
issued by the Regional Trial Court.[52]
On 26 April 2003, Sy Tiong Shiou, corporate Vice President and General
Manager, called a special meeting to be held on 6 May 2003 to fill up the
positions vacated by the Spouses Sy. Sy Tiong Shiou was subsequently
elected as the new president and his wife, Juanita Tan, the new Vice
President.[53]
Meanwhile, on 1 July 2003, the corporation, through Romer S. Tan, filed its
Amended Complaint for Accounting and Damages[55] against the Spouses
Sy before the RTC Manila, praying for a complete and true accounting of all
the amounts paid to, received and earned by the company since 1993 and for
the restitution of the said amount.[56] The complaint also prayed for a
temporary restraining order (TRO) and or preliminary injunction to restrain
Sy Chim from calling a stockholders meeting on the ground of lack of
authority.
By way of Answer,[57] the Spouses Sy averred that Sy Chim was a mere
figurehead and Felicidad Chan Sy merely performed clerical functions, as it
was Sy Tiong Shiou and his spouse, Juanita Tan, who have been authorized
by the corporations by-laws to supervise, control and administer corporate
funds, and as such were the ones responsible for the unaccounted funds. They
assailed the meetings called by Sy Tiong Shiou on the grounds that the same
were held without notice to them and without their participation, in violation
of the by-laws. The Spouses Sy also pursued their counter-claim for moral
and exemplary damages and attorneys fees.
On 9 September 2003, the Spouses Sy filed their Motion for Leave to File
Third-Party Complaint, [58] praying that their attached Third Party
Complaint[59] be allowed and admitted against Sy Tiong Shiou and his
spouse. In the said third-party complaint, the Spouses Sy accused Sy Tiong
Shiou and Juanita Tan as directly liable for the corporations claim for
misappropriating corporate funds.
On 8 October 2003, the RTC granted the motion for leave to file the
third-party complaint, and forthwith directed the issuance of summons
against Sy Tiong Shiou and Juanita Tan.[60]
On 16 January 2004, their counsel allegedly discovered that Sy Tiong Shiou
and Juanita Tan were not furnished with the copies of several pleadings, as
well as a court order, which resulted in their having been declared in default
for failure to file their answer to the third-party complaint; thus, they opted
not to file a motion for reconsideration anymore and instead filed a petition
for certiorari before the Court of Appeals.
CA granted the R65 and declared that a third-party complaint is not allowed
under the Interim Rules of Procedure Governing Intra-Corporate
Controversies Under R.A. No. 8799 (Interim Rules), it not being included in
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the exclusive enumeration of allowed pleadings under Section 2, Rule 2
thereof. Moreover, even if such a pleading were allowed, the admission of
the third-party complaint against Sy Tiong Shiou and Juanita Tan still would
have no basis from the facts or the law and jurisprudence.[62] The Court of
Appeals also ruled that the respondent judge committed a manifest error
amounting to lack of jurisdiction in admitting the third-party complaint and
in summarily declaring Sy Tiong Shiou and Juanita Tan in default for failure
to file their answer within the purported reglementary period. The Court of
Appeals set aside the trial courts 8 October 2003 Order admitting the
third-party complaint, as well as the 19 December 2003 Order, declaring Sy
Tiong Shiou and Juanita Tan in default for failure to file their answer. The
trial court was further ordered to dismiss the third-party complaint without
prejudice to any action that the corporation may separately file against Sy
Tiong Shiou and Juanita Tan. to the context, i.e., that every part of the statute must be considered together
Hence this petition claiming that a third-party complaint is not excluded or
prohibited by the Interim Rules, and that the Court of Appeals erred in ruling
that their third- party complaint is not actionable because their action is not
in respect of the corporation’s claims. They add that the disallowance of the
third-party complaint will result in multiplicity of suits.
Issue:
W/N the third-party complaint should be allowed - Yes
Held:
Yes.
The third-party complaint should be allowed.
The conflicting provisions of the Interim Rules of Procedure for
Inter-Corporate Controversies read:
“Rule 1, Sec. 8. Prohibited pleadings. The following pleadings are
prohibited: (1) Motion to dismiss;
(2) Motion for a bill of particulars; complaint is to avoid circuitry of action and unnecessary proliferation of law
(3) Motion for new trial, or for reconsideration of judgment or order, or for
re-opening of trial;
(4) Motion for extension of time to file pleadings, affidavits or any other
paper, except those filed due to clearly compelling reasons. Such motion must
be verified and under oath; and
(5) Motion for postponement and other motions of similar intent, except those
filed due to clearly compelling reasons. Such motion must be verified and
under oath.
Rule 2, Sec.2. Pleadings allowed. The only pleadings allowed to be filed
under these Rules are the complaint, answer, compulsory counterclaims or
cross-claims pleaded in the answer, and the answer to the counterclaims or
cross-claims.”
There is a conflict, for while a third-party complaint is not included in the
allowed pleadings, neither is it among the prohibited ones. Nevertheless, this
conflict may be resolved by following the well-entrenched rule in statutory
construction, that every part of the statute must be interpreted with reference
with the other parts, and kept subservient to the general intent of the whole
enactment.[66]
This spirit and intent can be gleaned from Sec. 3, Rule 1 of the Interim Rules,
which reads:
Sec. 3. Construction.These Rules shall be liberally construed in order to
promote their objective of securing a just, summary, speedy and inexpensive
determination of every action or proceeding.[69]
Now, a third-party complaint is a claim that a defending party may, with leave
of court, file against a person not a party to the action, called the third-party
defendant, for contribution, indemnity, subrogation or any other relief, in
respect of his opponents claim. It is actually a complaint independent of, and
separate and distinct from the plaintiff’s complaint. In fact, were it not for
Rule 6, Section 11 of the Rules of Court, such third-party complaint would
have to be filed independently and separately from the original complaint by
the defendant against the third-party defendant.
Jurisprudence is consistent in declaring that the purpose of a third-party
suits and of disposing expeditiously in one litigation all the matters arising
from one particular set of facts.[70]
It thus appears that the summary nature of the proceedings governed by the
Interim Rules, and the allowance of the filing of third-party complaints is
premised on one objective the expeditious disposition of cases. Moreover,
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following the rule of liberal interpretation found in the Interim Rules, and
taking into consideration the suppletory application of the Rules of Court
under Rule 1, Sec. 2[71] of the Interim Rules, the Court finds that a
third-party complaint is not, and should not be prohibited in
controversies governed by the Interim Rules. The logic and justness of this
conclusion are rendered beyond question when it is considered that Sy Tiong
Shiou and Juanita Tan are not complete strangers to the litigation as in fact
they are the moving spirit behind the filing of the principal complaint for
accounting and damages against the Spouses Sy.
The Court also rules that the third-party complaint of the Spouses Sy should
be admitted.
A prerequisite to the exercise of such right is that some substantive basis for
a third-party claim be found to exist, whether the basis be one of indemnity,
subrogation, contribution or other substantive right.
The bringing of a third-party defendant is proper if he would be liable to the
plaintiff or to the defendant or both for all or part of the plaintiffs claim
against the original defendant, although the third-party defendant’s liability
arises out of another transaction.
The defendant may implead another as third-party defendant:
(a) on an allegation of liability of the latter to the defendant for contribution,
indemnity, subrogation or any other relief;
(b) on the ground of direct liability of the third-party defendant to the
plaintiff; or
(c) the liability of the third-party defendant to both the plaintiff and the
defendant.[72]
In determining the sufficiency of the third-party complaint, the allegations in
the original complaint and the third-party complaint must be examined. A
third-party complaint must allege facts which prima facie show that the
defendant is entitled to contribution, indemnity, subrogation or other relief
from the third-party defendant.[73]
The complaint alleges that the Spouses Sy, as officers of the corporation, have
acted illegally in raiding its corporate funds, hence they are duty bound to
render a full, complete and true accounting of all the amounts, proceeds and
funds paid to, received and earned by the corporation since 1993 and to
restitute to the corporation all such amounts, proceeds, and funds which they
took and misappropriated for their own use and benefit, to the damage and
prejudice of the plaintiff and its stockholders.[74]
On the other hand, in the third-party complaint, the Spouses Sy claim that it
is Sy Tiong Shiou and Juanita Tan who had full and complete control of the
day-to day operations and complete control and custody of the funds of the
corporation, and hence they are the ones liable for any shortfall or
unaccounted difference of the corporations cash account. Thus, Sy Tiong
Shiou and Juanita Tan should render a full, complete and true accounting of
all the amounts, proceeds, funds paid to, received and earned by the
corporation since 1993, including the amount attributed to the Spouses Sy in
the complaint for accounting and damages. In their prayer, the Spouses Sy
moved that Sy Tiong Shiou and Juanita Tan be declared as directly and solely
liable in respect of the corporations claim for accounting and damages, and
that in the event that they, the Spouses Sy, are adjudged liable to the
corporation, Sy Tiong Shiou and Juanita Tan be ordered to pay all amounts
necessary to discharge their liability to the corporation by way of indemnity
or reimbursement.
The allegations in the third-party complaint impute direct liability on the part
of Sy Tiong Shiou and Juanita Tan to the corporation for the very same claims
which the corporation interposed against the Spouses Sy. It is clear therefore
that the Spouses Sys third-party complaint is in respect of the plaintiff
corporations claims,[75] and thus the allowance of the third-party complaint
is warranted.
WHEREFORE, these cases are resolved as follows:
G.R. No. 174168
The petition for review is DENIED. The Decision and Resolution of the
Court of Appeals dated 31 May 2006 and 8 August 2006, respectively, in
CA-G.R. SP No. 91416 are AFFIRMED. Costs against the petitioners.
G.R. No. 179438
The petition is GRANTED. The decision and resolution of the Court of
Appeals dated 26 May 2004 and 29 August 2007, respectively, in CA-G.R.
SP No. 81897 are SET ASIDE and the Orders of the Regional Trial Court of
Manila Branch 46 dated 8 October 2003 and 19 December 2003 are
REINSTATED.
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8. PTA of St. Matthew Academy v. Metrobank, G.R.No. 176518,
March 2, 2010
Facts:
Sometime in 2001, the spouses Denivin Ilagan and Josefina Ilagan (spouses
Ilagan) applied for and were granted a loan by the [Metropolitan Bank
and Trust Co.] in the amount of (P4,790,000.00) [secured by] a Real Estate
Mortgage over several parcels of land.
Upon default, an extrajudicial foreclosure was conducted with [Metropolitan
Bank and Trust Co.] being the highest bidder x x x and for which a Certificate
of Sale was issued in its favor.
During the period of redemption, the respondent Bank filed an Ex-Parte
Petition for Issuance of a Writ of Possession docketed as LRC Case No.
6438 by posting x x x the required bond which was subsequently approved.
[On June 30, 2005], the St. Mathew Christian Academy of Tarlac, Inc. filed
a Petition for Injunction with Prayer for Restraining Order docketed as
Special Civil Action No. 9793 against the respondent Bank and the Provincial
Sheriff of Tarlac.
On August 16, 2005, the x x x Judge issued a Joint Decision denying the
injunction and TRO, and affirming its issuance of the writ of possession.
It held that St. Matthew’s cannot be considered a third party because it is
practically owned by the mortgagors, spouses Denivin and Josefina Ilagan.
Pending resolution of the motion for reconsideration of the said Joint
Decision, herein petitioners Parents-Teachers Association (PTA) of St.
Mathew Christian Academy (SMCA) along with certain teachers and
students of SMCA filed a Motion for Leave to file Petition in Intervention3
in Special Civil Action No. 9793, which was granted by the trial court in an
Order dated November 10, 2005.4 However, in a subsequent Order dated
December 7, 2005, the trial court reversed its earlier Order by ruling that
petitioners’ intervention would have no bearing on the issuance and
implementation of the writ of possession. Thus, it directed that the writ be
implemented by placing respondent Metropolitan Bank and Trust Company
(MBTC) in physical possession of the property.5
Without filing a motion for reconsideration, petitioners assailed the trial
court’s Order through a Petition for Certiorari and Prohibition before the
CA. However, said petition was dismissed by the CA for lack of merit. CA
held that the petitioners should have filed a petition to set aside the sale and
the writ of possession. Also, petitioner should have first filed an MR.
Hence this petition.
Petitioners claim, among others, that the respondent’s Petition for the
Issuance of the Writ of Possession is void due to the lack of authority to sign
the certificate on non-forum shopping attached to the petition.
Issue:
W/N the lack of authority to sign the CONFS warranted the denial of
respondent’s Petition for the Issuance of the Writ of Possession – No.
Held:
No.
The lack of authority to sign the certificate of non-forum shopping attached
to the Petition for Issuance of Writ of Possession was an insignificant lapse.
Petitioners further claim that the lack of authority to sign the certificate on
non-forum shopping attached to the Petition for the Issuance of the Writ of
Possession rendered the same worthless and should be deemed as non-
existent.16 MBTC asserts otherwise, citing Spouses Arquiza v. Court of
Appeals17 where we held that an application for a writ of possession is a mere
incident in the registration proceeding which is in substance merely a
motion,18 and therefore does not require such a certification.
Petitioners’ contention lacks basis. In Green Asia Construction and
Development Corporation v. Court of Appeals,19 where the issue of validity
of the Certificate of Non-Forum Shopping was questioned in an application
for the issuance of a Writ of Possession, we held that:
“x x x it bears stressing that a certification on non-forum shopping is
required only in a complaint or a petition which is an initiatory pleading.
In this case, the subject petition for the issuance of a writ of possession filed
by private respondent is not an initiatory pleading. Although private
respondent denominated its pleading as a petition, it is more properly a
motion. What distinguishes a motion from a petition or other pleading is not
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its form or the title given by the party executing it, but its purpose. The
purpose of a motion is not to initiate litigation, but to bring up a matter arising
in the progress of the case where the motion is filed.”

It is not necessary to initiate an original action in order for the purchaser at

an extrajudicial foreclosure of real property to acquire possession. Even if the
application for the writ of possession was denominated as a “petition,” it was
in substance merely a motion. Indeed, any insignificant lapse in the
certification on non-forum shopping filed by the MBTC did not render the
writ irregular. After all, no verification and certification on non-forum
shopping need be attached to the motion.

Hence, it is immaterial that the certification on non-forum shopping in the

MBTC’s petition was signed by its branch head. Such inconsequential
oversight did not render the said petition defective in form.

WHEREFORE, premises considered, the Petition for Review on Certiorari

is DENIED for lack of merit. The temporary restraining order heretofore
issued is hereby LIFTED and SET ASIDE. The Decision of the Court of
Appeals dated November 29, 2006 and its Resolution dated January 29, 2007
are AFFIRMED.
SO ORDERED.

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9. Abbot Laboratories v. Alcaraz, 2013
Facts:
On June 27, 2004, petitioner Abbott Laboratories, Philippines (Abbott)
caused the publication in a major broadsheet newspaper of its need for
a Medical and Regulatory Affairs Manager (Regulatory Affairs
Manager) who would:
(a) be responsible for drug safety surveillance operations, staffing, and
budget;
(b) lead the development and implementation of standard operating
procedures/policies for drug safety surveillance and vigilance; and
(c) act as the primary interface with internal and external customers regarding
safety operations and queries.4
Alcaraz – who was then a Regulatory Affairs and Information Manager at
Aventis Pasteur Philippines, Incorporated (another pharmaceutical company
like Abbott) – showed interest and submitted her application on October 4,
2004.
On February 12, 2005, Alcaraz signed an employment contract which stated,
inter alia, that she was to be placed on probation for a period of six (6)
months beginning February 15, 2005 to August 14, 2005. The said contract
was also signed by Abbott’s General Manager, petitioner Edwin Feist (Feist).
On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible
where she was informed that she failed to meet the regularization standards
for the position of Regulatory Affairs Manager.18 Thereafter, Walsh and
Terrible requested Alcaraz to tender her resignation, else they be forced to
terminate her services. She was also told that, regardless of her choice, she
should no longer report for work and was asked to surrender her office
identification cards. She requested to be given one week to decide on the
same, but to no avail.19
On May 17, 2005, Alcaraz told her administrative assistant, Claude Gonzales
(Gonzales), that she would be on leave for that day. However, Gonzales told
her that Walsh and Terrible already announced to the whole Hospira ALSU
staff that Alcaraz already resigned due to health reasons.20
On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to
Alcaraz a letter stating that her services had been terminated effective May
19, 2005.21 The letter detailed the reasons for Alcaraz’s termination –
particularly, that Alcaraz: (a) did not manage her time effectively; (b) failed
to gain the trust of her staff and to build an effective rapport with them; (c)
failed to train her staff effectively; and (d) was not able to obtain the
knowledge and ability to make sound judgments on case processing and
article review which were necessary for the proper performance of her
duties.22
Rem Part
Alcaraz felt that she was unjustly terminated from her employment and thus,
filed a complaint for illegal dismissal and damages against Abbott and its
officers, namely, Misa, Bernardo, Almazar, Walsh, Terrible, and Feist.24 She
claimed that she should have already been considered as a regular and not a
probationary employee given Abbott’s failure to inform her of the reasonable
standards for her regularization upon her engagement as required under
Article 295 of the Labor Code.
She claims that while her employment contract stated that she was to be
engaged on a probationary status, the same did not indicate the standards on
which her regularization would be based.26 She further averred that the
individual petitioners maliciously connived to illegally dismiss her when: (a)
they threatened her with termination; (b) she was ordered not to enter
company premises even if she was still an employee thereof; and (c) they
publicly announced that she already resigned in order to humiliate her.27
LA dismissed Alcaraz’s complaint for lack of merit. The LA rejected
Alcaraz’s argument that she was not informed of the reasonable standards to
qualify as a regular employee considering her admissions that she was briefed
by Almazar on her work during her pre- employment orientation meeting30
and that she received copies of Abbott’s Code of Conduct and Performance
Modules which were used for evaluating all types of Abbott employees.31
As Alcaraz was unable to meet the standards set by Abbott as per her
performance evaluation, the LA ruled that the termination of her probationary
employment was justified.3
On appeal, NLRC reversed holding that Abbot committed illegal
dismissal. The NLRC reversed the findings of the LA and ruled that there
was no evidence showing that Alcaraz had been apprised of her probationary
status and the requirements which she should have complied with in order to
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be a regular employee.36 It held that Alcaraz’s receipt of her job description
and Abbott’s Code of Conduct and Performance Modules was not equivalent
to her being actually informed of the performance standards upon which she
should have been evaluated on.37 MR denied.
Petitioners filed a R65 certiorari with prayer for TRO (First CA
petition).
While pending, Alcaraz moved for the execution of the NLRC’s Decision
before the LA, which petitioners strongly opposed. The LA denied the said
motion in an Order dated July 8, 2008 which was, however, eventually
reversed on appeal by the NLRC.42 Due to the foregoing, petitioners filed
another Petition for Certiorari with the CA, docketed as CA G.R. SP No.
111318 (Second CA Petition), assailing the propriety of the execution of the
NLRC decision.43
CA dismissed the First CA Petition and affirmed the NLRC’s decision which
held that Alcaraz was illegally dismissed. MR denied.
CA also denied the Second CA Petition and affirmed NLRC’s decision in
ordering the execution of the NLRC’s decision.
Petitioners filed an MR. While pending, Alcaraz again moved for the
issuance of a writ of execution before the LA. On June 7, 2010, petitioners
received the LA’s order granting Alcaraz’s motion for execution which they
in turn appealed to the NLRC – through a Memorandum of Appeal dated
June 16, 2010 (June 16, 2010 Memorandum of Appeal ) – on the ground that
the implementation of the LA’s order would render its motion for
reconsideration moot and academic.50
Meanwhile, CA denied petitioner’s MR of the Second CA Petition. This
attained finality on January 10, 2011 for petitioners’ failure to timely appeal
the same.52 Hence, as it stands, only the issues in the First CA petition are
left to be resolved.
Arguments:
Incidentally, in her Comment dated November 15, 2010, Alcaraz also alleges
that petitioners were guilty of forum shopping when they filed the Second
CA Petition pending the resolution of their motion for reconsideration of the
CA’s December 10, 2009 Decision i.e., the decision in the First CA
Petition.53
She also contends that petitioners have not complied with the certification
requirement under Section 5, Rule 7 of the Rules of Court when they failed
to disclose in the instant R45 petition the filing of the June 16, 2010
Memorandum of Appeal filed before the NLRC.54
Issue:
W/N petitioners are guilty of forum shopping and w/n they violated the
certification requirement under Rule 7 §5 – No and no.
Held:
No and no.
At the outset, it is noteworthy to mention that the prohibition against forum
shopping is different from a violation of the certification requirement under
Section 5, Rule 7 of the Rules of Court. In Sps. Ong v. CA,55 the Court
explained that:
x x x The distinction between the prohibition against forum shopping and the
certification requirement should by now be too elementary to be
misunderstood. To reiterate, compliance with the certification against forum
shopping is separate from and independent of the avoidance of the act of
forum shopping itself. There is a difference in the treatment between failure
to comply with the certification requirement and violation of the prohibition
against forum shopping not only in terms of imposable sanctions but also in
the manner of enforcing them. The former constitutes sufficient cause for the
dismissal without prejudice [to the filing] of the complaint or initiatory
pleading upon motion and after hearing, while the latter is a ground for
summary dismissal thereof and for direct contempt. x x x. 56
I.
As to the first, forum shopping takes place when a litigant files multiple suits
involving the same parties, either simultaneously or successively, to secure a
favorable judgment. It exists where the elements of litis pendentia are present,
namely:
(a) identity of parties, or at least such parties who represent the same interests
in both actions;
(b) identity of rights asserted and relief prayed for, the relief being founded
on the same facts; and
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(c) the identity with respect to the two preceding particulars in the two (2)
cases is such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the
other case.57
In this case, records show that, except for the element of identity of parties,
the elements of forum shopping do not exist.
Petition – which in fact had already attained finality – the matter of disclosing
the June 16, 2010 Memorandum of Appeal is now moot and academic.
WHEREFORE, the petition is GRANTED. The Decision dated December
10, 2009 and Resolution dated June 9, 2010 of the Court of Appeals in CA-
G.R. SP No. 101045 are hereby REVERSED and SET ASIDE.

Evidently, the First CA Petition was instituted to question the ruling of the
NLRC that Alcaraz was illegally dismissed. On the other hand, the Second
CA Petition pertains to the propriety of the enforcement of the judgment
award pending the resolution of the First CA Petition and the finality of the
decision in the labor dispute between Alcaraz and the petitioners. Based on
the foregoing, a judgment in the Second CA Petition will not constitute res
judicata insofar as the First CA Petition is concerned. Thus, considering that
the two petitions clearly cover different subject matters and causes of action,
there exists no forum shopping.

II.
As to the second, Alcaraz further imputes that the petitioners violated the
certification requirement under Section 5, Rule 7 of the Rules of Court by not
disclosing the fact that it filed the June 16, 2010 Memorandum of Appeal
before the NLRC in the instant petition.

In this regard, Section 5(b), Rule 7 of the Rules of Court requires that a
plaintiff who files a case should provide a complete statement of the present
status of any pending case if the latter involves the same issues as the one that
was filed. If there is no such similar pending case, Section 5(a) of the same
rule provides that the plaintiff is obliged to declare under oath that to the best
of his knowledge, no such other action or claim is pending.

Records show that the issues raised in the instant petition and those in the
June 16, 2010 Memorandum of Appeal filed with the NLRC likewise cover
different subject matters and causes of action. In this case, the validity of
Alcaraz’s dismissal is at issue whereas in the said Memorandum of Appeal,
the propriety of the issuance of a writ of execution was in question. Thus,
given the dissimilar issues, petitioners did not have to disclose in the
present petition the filing of their June 16, 2010 Memorandum of Appeal
with the NLRC. In any event, considering that the issue on the propriety of
the issuance of a writ of execution had been resolved in the Second CA

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10. Permanent Savings Bank v. Velarde, G.R. No. 140608,
September 23, 2004
Facts:
In a complaint for sum of money filed before the Regional Trial Court of
Manila (Branch 37), docketed as Civil Case No. 94-71639, petitioner
Permanent Savings and Loan Bank sought to recover from respondent
Mariano Velarde, the sum of P1,000,000.00 plus accrued interests and
penalties, based on a loan obtained by respondent from petitioner bank,
evidenced by the following:
(1) promissory note dated September 28, 1983;
(2) loan release sheet dated September 28, 1983; and
(3) loan disclosure statement dated September 28, 1983.
Petitioner bank, represented by its Deputy Liquidator after it was placed
under liquidation, sent a letter of demand to respondent on July 27, 1988,
demanding full payment of the loan. Despite receipt of said demand letter,
respondent failed to settle his 6 account. Another letter of demand was sent
on February 22, 1994, and this time, respondent’s counsel replied, stating that
the obligation “is not actually existing but covered by contemporaneous or
subsequent agreement between the parties . . .”
In his Answer, respondent disclaims any liability on the instrument:
“on the existence of the alleged loan of P1-Million, and the purported
documents evidencing the same, only the signature appearing at the back of
the promissory note, Annex “A” seems to be that of herein defendant.
However, as to any liability arising therefrom, the receipt of the said amount
of P1-Million shows that the amount was received by another person, not the
herein defendant. Hence, no liability attaches and as further stated in the
special and affirmative defenses that, assuming the promissory note exists, it
does not bind much less is there the intention by the parties to bind the herein
defendant. In other words, the documents relative to the loan do not express
the true intention of the parties.”
Respondent’s Answer also contained a denial under oath, which reads:
“I, MARIANO Z. VELARDE, of age, am the defendant in this case, that I
caused the preparation of the complaint and that all the allegations thereat are
true and correct; that the promissory note sued upon, assuming that it
exists and bears the genuine signature of herein defendant, the same does
not bind him and that it did not truly express the real intention of the
parties as stated in the defenses.”
On September 6, 1995, petitioner bank presented its sole witness, Antonio
Marquez, the Assistant Department Manager of the Philippine Deposit
Insurance Corporation (PDIC) and the designated Deputy Liquidator for
petitioner bank, who identified the Promissory Note dated September 28,
1983, the Loan Release Sheet dated September 28, 1983, and the Disclosure
Statement of Loan Credit Transaction.
After petitioner bank rested its case, respondent, instead of presenting
evidence, filed with leave of court his demurrer to evidence, alleging the
grounds that:
1. plaintiff failed to prove its case by preponderance of evidence
2. the cause of action, concluding arguenti that it exists, is barred by
prescription and/or laches
RTC granted the demurrer and dismissed the complaint.
On appeal, CA affirmed. The appellate court found that petitioner failed to
present any evidence to prove the existence of respondent’s alleged loan
obligations, considering that respondent denied petitioner’s allegations in its
complaint. It also found that petitioner bank’s cause of action is already
barred by prescription.
Hence this petition.
Issue:
W/N petitioner has established the genuineness, due execution and
authenticity of the loan documents – Yes, lower courts erred.
Held:
Yes, lower courts erred.
The pertinent rule on actionable documents is found in Rule 8, Section 7 of
the Rules of Court which provides that when the cause of action is anchored
on a document, the genuineness or due execution of the instrument shall be
deemed impliedly admitted unless the defendant, under oath, specifically
denies them, and sets forth what he claims to be the facts.
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It was the trial court’s opinion that:
“The mere presentation of supposed documents regarding the loan, but absent
the testimony of a competent witness to the transaction and the documentary
evidence, coupled with the denial of liability by the defendant does not suffice
to meet the requisite preponderance of evidence in civil cases. The
documents, standing alone, unsupported by independent evidence of their
existence, have no legal basis to stand on. They are not competent
evidence…”
The Court of Appeals concurred with the trial court’s finding and
affirmed the dismissal of the complaint, viz.:
“. . . The bank should have presented at least a single witness qualified to
testify on the existence and execution of the documents it relied upon to prove
the disputed loan obligations of Velarde. . . . This falls short of the
requirement that (B)efore any private writing may be received in evidence, its
due execution and authenticity must be proved either: (a) By anyone who saw
the writing executed; (b) By evidence of the genuineness of the handwriting
of the maker; or (c) By a subscribing witness. (Rule 132, Sec. 21, Rules of
Court) . . .
It is not true, as the Bank claims, that there is no need to prove the loan and
its supporting papers as Velarde has already admitted these. Velarde had in
fact denied these in his responsive pleading. And consistent with his denial,
he objected to the presentation of Marquez as a witness to identify the
Exhibits of the Bank, and objected to their admission when these were offered
as evidence. Though these were grudgingly admitted anyway, still
admissibility of evidence should not be equated with weight of evidence…”
A reading of respondent’s Answer, however, shows that respondent did not
specifically deny that he signed the loan documents. What he merely stated
in his Answer was that the signature appearing at the back of the promissory
note seems to be his. Respondent also denied any liability on the promissory
note as he allegedly did not receive the amount stated therein, and the25loan
documents do not express the true intention of the parties. Respondent
reiterated these allegations in his “denial under oath,” stating that “the
promissory note sued upon, assuming that it exists and bears the genuine
signature of herein defendant, the same does not bind him and that it did not
truly express the real intention of the parties as stated in the defenses . . .” loan documents sued upon.
Respondent’s denials do not constitute an effective specific denial as
contemplated by law. In the early case of Songco vs. 27 Sellner, the Court
expounded on how to deny the genuineness and due execution of an
actionable document, viz.:
“. . . This means that the defendant must declare under oath that he did
not sign the document or that it is otherwise false or fabricated. Neither
does the statement of the answer to the effect that the instrument was procured
by fraudulent representation raise any issue as to its genuineness or due
execution. On the contrary such a plea is an admission both of the
genuineness and due execution thereof, since it seeks to avoid the instrument
upon a ground not affecting either.”
In fact, respondent’s allegations amount to an implied admission of the due
execution and genuineness of the promissory note. The admission of the
genuineness and due execution of a document means
1. that the party whose signature it bears admits that he voluntarily signed the
document or it was signed by another for him and with his authority;
2. that at the time it was signed it was in words and figures exactly as set out
in the pleading of the party relying upon it;
3. that the document was delivered; and
4. that any formalities required by law, such as a seal, an acknowledgment,
or revenue stamp, which it lacks, are waived by him.
Also, it effectively eliminated any defense relating to the authenticity and due
execution of the document, e.g., that the document was spurious, counterfeit,
or of different import on its face as the one executed by the parties; or that
the signatures appearing thereon were forgeries; or that the signatures were
unauthorized.
Clearly, both the trial court and the Court of Appeals erred in concluding that
respondent specifically denied petitioner’ s allegations regarding the loan
documents, as respondent’s Answer shows that he failed to specifically deny
under oath the genuineness and due execution of the promissory note and its
concomitant documents. Therefore, respondent is deemed to have admitted
the loan documents and acknowledged his obligation with petitioner; and
with respondent’s implied admission, it was not necessary for petitioner to
present further evidence to establish the due execution and authenticity of the
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While Section 22, Rule 132 of the Rules of Court requires that private
documents be proved of their due execution and authenticity before they can
be received in evidence, i.e., presentation and examination of witnesses to
testify on this fact; in the present case, there is no need for proof of execution
and authenticity with respect to the loan documents because of respondent’s
implied admission thereof.

Lastly, if a demurrer to evidence is granted but on appeal the order of

dismissal is reversed, the movant shall be deemed to have waived the right to
present evidence. The movant who presents a demurrer to the plaintiff’s
evidence retains the right to present their own evidence, if the trial court
disagrees with them; if the trial court agrees with them, but on appeal, the
appellate court disagrees with both of them and reverses the dismissal order,
the defendants lose the right to present their own evidence. The appellate
court shall, in addition, resolve the case and render judgment on the merits,
inasmuch as a demurrer aims to discourage prolonged litigations. Thus,
respondent may no longer offer proof to establish that he has no liability
under the loan documents sued upon by petitioner.

The promissory note signed and admitted by respondent provides for the loan
amount of P1,000,000.00, to mature on October 13, 1983, with interest at the
rate of 25% per annum. The note also provides for a penalty charge of 24%
per annum of the amount due and unpaid, and 25% attorney’s fees. Hence,
respondent should be held liable for these sums.

WHEREFORE, the petition is GRANTED. The Decisions of the Regional

Trial Court of Manila (Branch 37) dated January 26, 1996, and the Court of
Appeals dated October 27, 1999 are SET ASIDE. Respondent is ordered to
pay One Million Pesos (P1,000,000.00) plus 25% interest and 24% penalty
charge per annum beginning October 13, 1983 until fully paid, and 25% of
the amount due as attorney’s fees.
Costs against respondent.

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11. S.C. Megaworld Construction v. Parada, 2013
Facts:
S.C. Megaworld Construction and Development Corporation (petitioner)
bought electrical lighting materials from Genlite Industries, a sole
proprietorship owned by Engineer Luis U. Parada (respondent), for its
Read-Rite project in Canlubang, Laguna. The petitioner was unable to pay
for the above purchase on due date, but blamed it on its failure to collect under
its sub-contract with the Enviro Kleen Technologies, Inc. (Enviro Kleen). It
was however able to persuade Enviro Kleen to agree to settle its above
purchase, but after paying the respondent P250,000.00 on June 2, 1999,4
Enviro Kleen stopped making further payments, leaving an outstanding
balance of P816,627.00.
It also ignored the various demands of the respondent, who then filed a suit
in the RTC to collect from the petitioner the said balance, plus damages,
costs and expenses.
The petitioner in its answer denied liability, claiming that it was released from
its indebtedness to the respondent by reason of the novation of their contract,
which, it reasoned, took place when the latter accepted the partial payment of
Enviro Kleen in its behalf, and thereby acquiesced to the substitution of
Enviro Kleen as the new debtor in the petitioner’s place.
RTC ruled for respondent:
“WHEREFORE, judgment is hereby rendered for the [respondent]. [The
petitioner] is hereby ordered to pay the [respondent] the following: A. the
sum of [P]816,627.00 representing the principal obligation due;
B. the sum equivalent to twenty percent (20%) per month of the principal
obligation due from date of judicial demand until fully paid as and for
interest; and
C. the sum equivalent to twenty[-]five [percent] (25%) of the principal sum
due as and for attorney’s fees and other costs of suits.
The compulsory counterclaim interposed by the [petitioner] is hereby ordered
dismissed for lack of merit.
SO ORDERED.7 (Emphasis supplied)”
On appeal to the CA, the petitioner maintained that the trial court erred in
ruling that no novation of the contract took place through the substitution of
Enviro Kleen as the new debtor. But for the first time, it further argued that
the trial court should have dismissed the complaint for failure of the
respondent to implead Genlite Industries as “a proper party in interest”, as
provided in Section 2 of Rule 3 of the 1997 Rules of Civil Procedure.
In Section 1(g) of Rule 16 of the Rules of Court, it is also provided that the
defendant may move to dismiss the suit on the ground that it was not the
ground that it was not brought in the name of or against the real party in
interest, with the effect that the complaint is then deemed to state no cause of
action.
CA dismissed the appeal. The CA noted that the petitioner in its answer
below raised only the defense of novation, and that at no stage in the
proceedings did it raise the question of whether the suit was brought in the
name of the real party in interest. Moreover, the appellate court found from
the sales invoices and receipts that the respondent is the sole proprietor of
Genlite Industries, and therefore the real party-plaintiff.
Said the CA:
“Settled is the rule that litigants cannot raise an issue for the first time on
appeal as this would contravene the basic rules of fair play and justice.
In any event, there is no question that [respondent] Engr. Luis U. Parada is
the proprietor of Genlite Industries, as shown on the sales invoice and
delivery receipts. There is also no question that a special power of attorney
was executed by [respondent] Engr. Luis U. Parada in favor of Engr.
Leonardo A. Parada authorizing the latter to file a complaint against [the
petitioner].”
On MR, the petitioner raised for the first time the issue of the validity of
the verification and certification of non-forum shopping attached to the
complaint. CA denied the motion for lack of merit.
Hence this petition claiming that:
1. the complaint should have been dismissed outright by the RTC for an
invalid CONFS, and
2. CA erred in not declaring that there was a novation of the contract between
the parties through substitution of the debtor, which resulted in the release of
the petitioner from its obligation to pay the respondent the amount of its
purchase.
Issue:
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W/N the complaint should have been dismissed outright due to an invalid
CONFS – No.
Held:
No.
The petition is devoid of merit.
The verification and certification of non-forum shopping in the
complaint is not a jurisdictional but a formal requirement, and any
objection as to non-compliance therewith should be raised in the
proceedings below and not for the first time on appeal.
“It is well-settled that no question will be entertained on appeal unless it has
been raised in the proceedings below. Points of law, theories, issues and
arguments not brought to the attention of the lower court, administrative
agency or quasi-judicial body, need not be considered by a reviewing court,
as they cannot be raised for the first time at that late stage. Basic
considerations of fairness and due process impel this rule. Any issue raised
for the first time on appeal is barred by estoppel.”
Through a Special Power of Attorney (SPA), the respondent authorized Engr.
Leonardo A. Parada (Leonardo), the eldest of his three children, to perform
the following acts in his behalf:
a) to file a complaint against the petitioner for sum of money with damages;
and
b) to testify in the trial thereof and sign all papers and documents related
thereto, with full powers to enter into stipulation and compromise.15
Incidentally, the respondent, a widower, died of cardio-pulmonary arrest on
January 21, 2009,16 survived by his legitimate children, namely, Leonardo,
Luis, Jr., and Lalaine, all surnamed Parada. They have since substituted him
in this petition, per the Resolution of the Supreme Court dated September 2,
2009.17 Also, on July 23, 2009, Luis, Jr. and Lalaine Parada executed an SPA
authorizing their brother Leonardo to represent them in the instant petition.18
In the verification and certification of non-forum shopping attached to the
complaint in Civil Case No. Q01-45212, Leonardo as attorney-in-fact of his
father acknowledged as follows:
“That I/we am/are the Plaintiff in the above-captioned case;
That I/we have caused the preparation of this Complaint;
That I/we have read the same and that all the allegations therein are true and
correct to the best of my/our knowledge; x x x x.”
In this petition, the petitioner reiterates its argument before the CA that the
above verification is invalid, since the SPA executed by the respondent did
not specifically include an authority for Leonardo to sign the verification and
certification of non-forum shopping, thus rendering the complaint defective
for violation of §§4 and 5 of Rule 7.
The petitioner’s argument is untenable.
The petitioner failed to reckon that any objection as to compliance with the
requirement of verification in the complaint should have been raised in
the proceedings below, and not in the appellate court for the first time.
In KILUSAN-OLALIA v. CA, 528 SCRA 45 (2007) it was held that
verification is a formal, not a jurisdictional requisite: We have
emphasized, time and again, that verification is a formal, not a jurisdictional
requisite, as it is mainly intended to secure an assurance that the allegations
therein made are done in good faith or are true and correct and not mere
speculation. The Court may order the correction of the pleading, if not
verified, or act on the unverified pleading if the attending circumstances are
such that a strict compliance with the rule may be dispensed with in order that
the ends of justice may be served. Further, in rendering justice, courts have
always been, as they ought to be, conscientiously guided by the norm that on
the balance, technicalities take a backseat vis-à-vis substantive rights, and not
the other way around.
Moreover, granting that Leonardo has no personal knowledge of the
transaction subject of the complaint below, Section 4 of Rule 7 provides that
the verification need not be based on the verifier’s personal knowledge
but even only on authentic records. Sales invoices, statements of accounts,
receipts and collection letters for the balance of the amount still due to the
respondent from the petitioner are such records. There is clearly substantial
compliance by the respondent’s attorney-in-fact with the requirement of
verification.
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Lastly, it is well-settled that a strict compliance with the rules may be
dispensed with in order that the ends of sub-stantial justice may be served.25
It is clear that the present controversy must be resolved on its merits, lest for
a technical oversight the respondent should be deprived of what is justly due
him.
A sole proprietorship has no juridical personality separate and distinct from
that of its owner, and need not be impleaded as a party-plaintiff in a civil
case.
On the question of whether Genlite Industries should have been impleaded as
a party-plaintiff, Section 1 of Rule 3 of the Rules of Court provides that only
natural or juridical persons or entities authorized by law may be parties in a
civil case. Article 44 of the New Civil Code enumerates who are juridical
persons:
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose,
created by law; their personality begins as soon as they have been constituted
according to law;
(3) Corporations, partnerships and associations for private interest or purpose
to which the law grants a juridical personality, separate and distinct from that
of each shareholder, partner or member.
Genlite Industries is merely the DTI- registered trade name or style of the
respondent by which he conducted his business. As such, it does not exist as
a separate entity apart from its owner, and therefore it has no separate juridical
personality to sue or be sued. As the sole proprietor of Genlite Industries,
there is no question that the respondent is the real party in interest who stood
to be directly benefited or injured by the judgment in the complaint below.
There is then no necessity for Genlite Industries to be impleaded as a party-
plaintiff, since the complaint was already filed in the name of its proprietor,
Engr. Luis U. Parada. To heed the petitioner’s sophistic reasoning is to permit
a dubious technicality to frustrate the ends of substantial justice.
Pursuant to Article 2209 of the Civil Code, except as provided under
Central Bank Circular No. 905, and now under Bangko Sen- tral ng
Pilipinas Circular No. 799, which took effect on July 1, 2013, the
respondent may be awarded interest of six percent (6%) of the judgment
amount by way of actual and compensatory damages.
It appears from the recital of facts in the trial court’s decision that the
respondent demanded interest of two percent (2%) per month upon the
balance of the purchase price of P816,627.00, from judicial demand until full
payment. There is then an obvious clerical error committed in the fallo of the
trial court’s decision, for it incorrectly ordered the defendant therein to pay
“the sum equivalent to twenty percent (20%) per month of the principal
obligation due from date of judicial demand until fully paid as and for
interest.”
A clerical mistake is one which is visible to the eyes or obvious to the
understanding; an error made by a clerk or a transcriber; a mistake in copying
or writing. The Latin maxims Error placitandi aequitatem non tollit (“A
clerical error does not take away equity”), and Error scribentis nocere non
debit (“An error made by a clerk ought not to injure; a clerical error may be
corrected”) are apt in this case. Viewed against the landmark case of Medel
v. CA, 299 SCRA 481 (1998), an award of interest of 20% per month on the
amount due is clearly excessive and iniquitous. It could not have been the
intention of the trial court, not to mention that it is way beyond what the
plaintiff had prayed for below.
It is settled that other than in the case of judgments which are void ab initio
for lack of jurisdiction, or which are null and void per se, and thus may be
questioned at any time, when a decision is final, even the court which issued
it can no longer alter or modify it, except to correct clerical errors or mistakes.
The foregoing notwithstanding, of more important consideration in the case
before us is the fact that it is nowhere stated in the trial court’s decision that
the parties had in fact stipulated an interest on the amount due to the
respondent. Even granting that there was such an agreement, there is no
finding by the trial court that the parties stipulated that the outstanding debt
of the petitioner would be subject to two percent (2%) monthly interest. The
most that the decision discloses is that the respondent demanded a monthly
interest of 2% on the amount outstanding.
WHEREFORE, premises considered, the Decision dated April 30, 2008 of
the Court of Appeals in CA-G.R. CV No. 83811 is AFFIRMED with
MODIFICATION. Petitioner is ordered to pay respondent Engr. Luis A.
Parada, represented by Engr. Leonardo A. Parada, the principal amount due
of P816,627.00, plus interest at twelve percent (12%) per annum, reckoned
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from judicial demand until June 30, 2013, and six percent (6%) per annum
from July 1, 2013 until finality hereof, by way of actual and compensatory
damages. Thereafter, the principal amount due as adjusted by interest shall
likewise earn interest at six percent (6%) per annum until fully paid. The
award of attorney’s fees is DELETED. SO ORDERED.

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VIII. Default (Rule 9)
1. Anuncacion v. Bocanegra, G.R. No. 152496, July 30, 2009
Facts:
On September 29, 2000, petitioners filed before the RTC, Manila, a
complaint for Quieting of Title and Cancellation of TCT No. 122452,
docketed as Civil Case No. 00-98813.
The complaint averred that defendants (respondents) may be served with
summons and legal processes through Atty. Rogelio G. Pizarro, Jr., with
office address at 2830 Juan Luna St., Tondo, Manila.6 The summons,
together with the copies of the complaint, were then served on Atty. Pizarro.
The record shows that before the filing of the said complaint, Atty. Pizarro
wrote a demand letter7 on behalf of respondents and addressed to petitioner
German Anunciacion, among others, demanding that they vacate the land
owned by his clients (respondents), who needed the same for their own use.
On October 27, 2000, respondents, through their counsel, Atty. Norby C.
Caparas, Jr., filed a Motion to Dismiss on the ground that the complaint
stated no cause of action. Petitioners filed their Comment on the Motion to
Dismiss9 on November 6, 2000.
A Supplemental Motion to Dismiss and Reply to the Comment on the
Motion to Dismiss10 dated November 13, 2000 was filed by respondents,
alleging an additional ground that petitioners failed to pay the required
filing fee.
The petitioners filed, on November 27, 2000, their Opposition to the
Supplemental Motion to Dismiss and Comment to the Reply to the Comment
on the Motion to Dismiss.11
Thereafter, respondents filed a Second Supplemental Motion to Dismiss
and Manifestation dated November 27, 2000,12 citing the following grounds:
1.) That the court has no jurisdiction over the person of the defending
party.
2.) That the court has no jurisdiction over the subject matter of the claim.
3.) That the pleading asserting the claim states no cause of action.
Petitioners then filed their Additional Comment on the Motion to Dismiss,
Supplemental Motion to Dismiss and Comment on the Second Supplemental
Motion to Dismiss.13
RTC sustained the respondents and dismissed the complaint for lack of
jurisdiction over the persons of respondents as defendants:
“In point is Section 3, Rule 3 of the same Rules, which reads— “Where the
action is allowed to be prosecuted or defended by a representative or someone
acting in a fiduciary capacity, the beneficiary shall be included in the title of
the case and shall be deemed to be the real party in interest. A representative
may be a trustee of an express trust, a guardian, an executor or administrator,
or a party authorized by law or these Rules. x x x x”
In the case at bar Atty. Pizarro, Jr., has not been shown to be a trustee of an
express trust, a guardian, or any of the above for the action to be allowed to
be defended by a representative.
The fact that Atty. Pizarro, Jr., was the lawyer of the defendants in the demand
letters do not per se make him their representative for purposes of the present
action. To this effect, service on lawyer of defendant is an invalid service of
summons. (Cordova v. Provincial Sheriff of Iloilo, 89 SCRA 59)
Going to the other raised issue, Section 20, Rule 14 of the 1997 Rules of Civil
Procedure provides—
“The defendant’s voluntary appearance in the action shall be equivalent to
service of summons. The inclusion in a motion to dismiss of other grounds
aside from lack of jurisdiction over the person of the defendant shall not be
deemed a voluntary appearance.”
The presentation of all objections then available as was done by the movants
subserves the omnibus motion rule and the concomitant policy against
multiplicity of suits.”
On a R65, CA affirmed RTC. The CA dismissed the petition upon finding
that there was no waiver of the ground of lack of jurisdiction on the part of
respondents in the form of voluntary appearance. Applying Section 20, Rule
14 of the 1997 Rules of Civil Procedure, the CA held that although the
grounds alleged in the two (2) earlier Motion to Dismiss and Supplemental
Motion to Dismiss were lack of cause of action and failure to pay the required
filing fee, the filing of the said motions did not constitute a waiver of the
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ground of lack of jurisdiction on their persons as defendants. The CA then
concluded that there was no voluntary appearance on the part of
respondents/defendants despite the filing of the aforesaid motions. The CA
also rejected petitioners’ contention that the service made to Atty. Rogelio
Pizarro, Jr. was deemed service upon respondents/defendants:
“First of all, Atty. Rogelio Pizarro cannot be considered as counsel of record
wherein We could apply the jurisprudential rule that notice to counsel is
notice to client. Atty. Pizarro cannot be deemed counsel on record since
Defendants were not the one’s who instituted the action, like plaintiffs who
did the same thru counsel and therefore, obviously the one who signed the
pleadings is the counsel on record.
Sadly, the Motion to Dismiss filed by Private Respondents were signed not
by Atty. Pizarro but by someone else. How then could Petitioners claim that
Atty. Pizarro represents Private Respondents? Section 20, Rule 14 of the 1997 Rules of Civil Procedure (the Rules) states:
Secondly, the fact that Atty. Pizarro was the one who wrote and signed the
August 19, 2000 letter, on behalf of Private Respondents, demanding that
Petitioners vacate the premises of the former’s land does not fall under the
substituted service rule. To be sure, Section 7 of Rule 14 of the 1997 Rules,
provide thus:
Sec. 7. Substituted Services. — If, for justifiable causes the defendant cannot
be served within a reasonable time as provided in the preceding section;
service maybe reflected (a) by leaving copies of the summons at the
defendants’ residence with some person of suitable age and discretion then
residing therein or (b) by leaving the copies at defendant (sic) office or regular
place of business with some competent person in charge thereof.
In the case at bench, service upon Atty. Pizarro did not fall under the
aforequoted rule and therefore cannot qualify as substituted service. Since the
service made by Petitioners was defective, the Public Respondent court never
did acquire jurisdiction over the persons of defendants and therefore correctly
ordered the dismissal of the complaint.”
MR denied. Hence this petition.
Issue:
W/N the RTC acquired jurisdiction over the persons of the defendants – Yes.
Held:
Yes.
Respondents, through counsel, filed a motion to dismiss dated October 25,
2000,18 with only one ground, i.e., that the pleading asserting the claim
“states no cause of action.”
Under this ground, respondents raised the issues quoted hereunder:
I. Defendants19 anchored their complaint on a WRONG Decree of
Registration;
II. The Government of the Republic of the Philippines has recognized the
authenticity of TCT No. 122452; and
III. Plaintiffs do NOT have the legal personality to “quiet the title” of the
subject property.
“Sec. 20. Voluntary Appearance.—The defendant’s voluntary appearance in
the action shall be equivalent to service of summons. The inclusion in a
motion to dismiss of other grounds aside from lack of jurisdiction over
the person of the defendant shall not be deemed a voluntary
appearance.” (Underscoring ours)
The filing of the above-mentioned Motion to Dismiss, without invoking the
lack of jurisdiction over the person of the respondents, is deemed a voluntary
appearance on the part of the respondents under the aforequoted provision of
the Rules. The same conclusion can be drawn from the filing of the
Supplemental Motion to Dismiss and Reply to the Comment on the Motion
to Dismiss dated November 13, 2000 which alleged, as an additional ground
for the dismissal of petitioners’ complaint, the failure of plaintiffs to pay the
required filing fee again but failed to raise the alleged lack of jurisdiction of
the court over the person of the respondents.
It was only in respondents’ Second Supplemental Motion to Dismiss dated
November 27, 2000 that respondents for the first time raised the court’s lack
of jurisdiction over their person as defendants on the ground that summons
were allegedly not properly served upon them. The filing of the said Second
Supplemental Motion to Dismiss did not divest the court of its jurisdiction
over the person of the respondents who had earlier voluntarily appeared
before the trial court by filing their motion to dismiss and the supplemental
motion to dismiss.
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The dismissal of the complaint on the ground of lack of jurisdiction over the
person of the respondents after they had voluntarily appeared before the trial
court clearly constitutes grave abuse of discretion amounting to lack of
jurisdiction or in excess of jurisdiction on the part of the RTC.
Quite apart from their voluntary appearance, Motion to Dismiss were clearly
in violation of Rule 15, Section 8 in relation to Rule 9, Section 1 of the Rules.
Rule 15, Section 8 of the Rules provides:
“Sec. 8. Omnibus motion.—Subject to the provisions of Section 1 of Rule 9,
a motion attacking a pleading, order, judgment, or proceeding shall include
all objections then available, and all objections not so included shall be
deemed waived.” (emphasis ours)
Rule 9, Section 1, in turn, states:
“Sec. 1. Defenses and objections not pleaded.—Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the evidence on record that
the court has no jurisdiction over the subject matter, that there is another
action pending between the same parties for the same cause, or that the action
is barred by prior judgment or by statute of limitations, the court shall dismiss
the claim.” (emphasis ours)
Applying the foregoing rules, respondents’ failure to raise the alleged lack of
jurisdiction over their persons in their very first motion to dismiss was fatal
to their cause. They are already deemed to have waived that particular ground
for dismissal of the complaint. The trial court plainly abused its discretion
when it dismissed the complaint on the ground of lack of jurisdiction over the
person of the defendants. Under the Rules, the only grounds the court could
take cognizance of, even if not pleaded in the motion to dismiss or answer,
are:
(a) lack of jurisdiction over the subject matter;
(b) existence of another action pending between the same parties for the same
cause; and
(c) bar by prior judgment or by statute of limitations.
We likewise cannot approve the trial court’s act of entertaining supplemental
motions to dismiss which raise grounds that are already deemed waived. To
do so would encourage lawyers and litigants to file piecemeal objections to a
com plaint in order to delay or frustrate the prosecution of the plaintiff’s cause
of action.
Although the CA correctly observed that Atty. Pizarro, as the lawyer of the
respondents in the demand letters, does not per se make him their
representative for purposes of the present action, a scrutiny of the record
shows that the address of Atty. Pizarro and Atty. Norby Caparas, Jr.,
(the counsel who eventually entered his appearance for respondents) is
the same. This circumstance leads us to believe that respondents’ belated
reliance on the purported improper service of summons is a mere
afterthought, if not a bad faith ploy to avoid answering the complaint.
We find it appropriate to cite Philippine American Life & General Insurance
Company v. Breva, 442 SCRA 217 (2004), where this Court held that: The
trial court did not commit grave abuse of discretion when it denied the motion
to dismiss filed by the petitioner due to lack of jurisdiction over its person. In
denying the motion to dismiss, the CA correctly relied on the ruling in
Lingner & Fisher GMBH vs. Intermediate Appellate Court, 125 SCRA 522
(1983), thus: A case should not be dismissed simply because an original
summons was wrongfully served. It should be difficult to conceive, for
example, that when a defendant personally appears before a Court
complaining that he had not been validly summoned, that the case filed
against him should be dismissed. An alias summons can be actually served
on said defendant”
In the recent case of Teh vs. Court of Appeals, 401 SCRA 576 (2003), the
petitioner therein also filed a motion to dismiss before filing his answer as
defendant in the trial court on the ground of failure to serve the summons on
him. In that case, the Court agreed with the appellate court’s ruling that there
was no abuse of discretion on the part of the trial court when the latter denied
the petitioner’s motion to dismiss the complaint and ordered the issuance of
an alias summons.
A trial court should be cautious before dismissing complaints on the sole
ground of improper service of summons considering that it is well within its
discretion to order the issuance and service of alias summons on the correct
person in the interest of substantial justice. Accordingly, the Court finds that
the CA erred in dismissing the petition and affirming the challenged orders
of the RTC which dismissed the complaint on the ground of lack of
jurisdiction over the person of the respondents who were the defendants.
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2. Martinez v. Republic, G.R. No. 160895, October 30, 2006
Facts:
On 24 February 1999, petitioner Jose R. Martinez (Martinez) filed a petition
for the registration in his name of three (3) parcels of land included in the
Cortes, Surigao del Sur Cadastre.
The case was docketed as Land Registration Case No. N-30 and raffled to the
Regional Trial Court (RTC) of Surigao del Sur, Branch 27. The Office of
the Solicitor General (OSG) was furnished a copy of the petition. The trial
court set the case for hearing and directed the publication of the
corresponding Notice of Hearing in the Official Gazette.
On 30 September 1999, the OSG, in behalf of the Republic of the
Philippines, opposed the petition on the grounds that appellee’s possession
was not in accordance with Section 48(b) of Commonwealth Act No. 141;
that his muniments of title were insufficient to prove bona-fide acquisition
and possession of the subject parcels; and that the properties formed part of
the public domain and thus not susceptible to private appropriation. Issue:
Despite the opposition filed by the OSG, the RTC issued an order of
general default, even against the Republic of the Philippines, on 29 March
2000. This ensued when during the hearing of even date, no party appeared
before the Court to oppose Martinez’s petition. Afterwards, the trial court
proceeded to receive Martinez’s oral and documentary evidence in support of
his petition. On 1 August 2000, the RTC rendered a Decision concluding
that Martinez and his predecessors-in-interest had been for over 100
years in possession characterized as continuous, open, public, and in the
concept of an owner.
The RTC thus decreed the registration of the three (3) lots in the name of
Martinez.
From this Decision, the OSG filed a Notice of Appeal dated 28 August 2000,
which was approved by the RTC. However, after the records had been
transmitted to the Court of Appeals, the RTC received a letter dated 21
February 2001 from the Land Registration Authority (LRA) stating that only
Lot Nos. 464-A and 464-B were referred to in the Notice of Hearing
published in the Official Gazette; and that Lot No. 370, Cad No. 597 had been
deliberately omitted due to the lack of an approved survey plan for that
property. Accordingly, the LRA manifested that this lot should not have been
adjudicated to Martinez for lack of jurisdiction. This letter was referred by
the RTC to the Court of Appeals for appropriate action.
On 10 October 2003, CA reversed the RTC and ordered the dismissal of
the petition for registration. In light of the opposition filed by the OSG, the
appellate court found the evidence presented by Martinez as insufficient to
support the registration of the subject lots. The Court of Appeals concluded
that the oral evidence presented by Martinez merely consisted of general
declarations of ownership, without alluding to specific acts of ownership
performed by him or his predecessors-in-interest. It likewise debunked the
documentary evidence presented by Martinez, adjudging the same as either
inadmissible or ineffective to establish proof of ownership.
No motion for reconsideration appears to have been filed with the Court of
Appeals by Martinez, who instead directly assailed its Decision before this
Court through the present petition.
W/N the OSG could have still appealed the RTC decision after it had been
declared in default – Yes.
Held:
Yes.
We note at the onset that the OSG does not impute before this Court that the
RTC acted improperly in declaring public respondent in default, even though
an opposition had been filed to Martinez’s petition. Under Section 26 of
Presidential Decree No. 1529, as amended, the order of default may be issued
“[i]f no person appears and answers within the time allowed.” The RTC
appears to have issued the order of general default simply on the premise that
no oppositor appeared before it on the hearing of 29 March 2000. But it
cannot be denied that the OSG had already duly filed its Opposition to
Martinez’s petition long before the said hearing.
As we held in Director of Lands v. Santiago:
“it was improper for the respondent Judge taking cognizance of such
registration case to declare the oppositor in default simply because he failed
to appear on the day set for the initial hearing…”
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Strangely, the OSG did not challenge the propriety of the default order,
whether in its appeal before the Court of Appeals or in its petition before this
Court. It would thus be improper for the Court to make a pronouncement on
the validity of the default order since the same has not been put into issue.
Nonetheless, we can, with comfort, proceed from same apparent premise of
the OSG that the default order was proper or regular. was removed from Section 2, Rule 41. On the other hand, Section 3 of Rule
The juridical utility of a declaration of default cannot be disputed. By
forgoing the need for adversarial proceedings, it affords the opportunity for
the speedy resolution of cases even as it penalizes parties who fail to give
regard or obedience to the judicial processes.
The extent to which a party in default loses standing in court has been the
subject of considerable jurisprudential debate.
For around thirty-odd years, there was no cause to doubt that a defaulted
defendant had the right to appeal the adverse decision of the trial court even
without seeking to set aside the order of default. Then, in 1997, the Rules of
Civil Procedure were amended, providing for a new Section 2, Rule 41. The
new provision reads:
“SECTION 1. Subject of appeal. —An appeal may be taken from a judgment
or final order that completely disposes of the case, or of a particular matter
therein when declared by these Rules to be appealable.
No appeal may be taken from:
(a) An order denying a motion for new trial or reconsideration;
(b) An order denying a petition for relief or any similar motion seeking relief
from judgment;
(c) An interlocutory order;
(d) An order disallowing or dismissing an appeal;
(e) An order denying a motion to set aside a judgment by consent, confession
or compromise on the ground of fraud, mistake or duress, or any other ground
vitiating consent;
(f) An order of execution;
(g) A judgment or final order for or against or one or more of several parties
or in separate claims, coun terclaims, cross-claims and third-party
complaints, while the main case is pending, unless the court allows an appeal
therefrom; and
(h) An order dismissing an action without prejudice.
In all the above instances where the judgment or final order is not appealable,
the aggrieved party may file an appropriate special civil action under Rule
65.”
Evidently, the prior warrant that a defaulted defendant had the right to appeal
9 of the 1997 Rules incorporated the particular effects on the parties of an
order of default.
By 1997, the doctrinal rule concerning the remedies of a party declared in
default had evolved into a fairly comprehensive restatement as offered in
Lina v. Court of Appeals:
1. The defendant in default may, at any time after discovery thereof
and before judgment, file a motion, under oath, to set aside the order
of default on the ground that his failure to answer was due to fraud,
accident, mistake or excusable neglect, and that he has meritorious
defenses; (Sec. 3, Rule 18)
2. If the judgment has already been rendered when the defendant
discovered the default, but before the same has become final and
executory, he may file a motion for new trial under Section 1(a) of
Rule 37;
3. If the defendant discovered the default after the judgment has
become final and executory, he may file a petition for relief under
Section 2 of Rule 38; and
4. He may also appeal from the judgment rendered against him as
contrary to the evidence or to the law, even if no petition to set aside
the order of default has been presented by him. (Sec. 2, Rule 41)
The fourth remedy, that of appeal, is anchored on Section 2, Rule 41 of the
1964 Rules. Yet even after that provision’s deletion under the 1997 Rules,
the Court did not hesitate to expressly rely again on the Lina doctrine,
including the pronouncement that a defaulted defendant may appeal from the
judgment rendered against him.
Yet even if it were to assume the doubtful proposition that this contested right
of appeal finds no anchor in the 1997 Rules, the doctrine still exists, applying
the principle of stare decisis. Jurisprudence applying the 1997 Rules has
continued to acknowledge the Lina doctrine which embodies this right to
appeal as among the remedies of a defendant, and no argument in this petition
persuades the Court to rule otherwise.
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In Rural Bank of Sta. Catalina, Inc. v. Land Bank of the Philippines, 435
SCRA 183 (2004), the Court, through Justice Callejo, Sr., again provided a
comprehensive restatement of the remedies of the defending party declared
in default, which we adopt for purposes of this decision:
“It bears stressing that a defending party declared in default loses his standing
in court and his right to adduce evidence and to present his defense. He,
however, has the right to appeal from the judgment by default and assail said
judgment on the ground, inter alia, that the amount of the judgment is
excessive or is different in kind from that prayed for, or that the plaintiff failed
to prove the material allegations of his complaint, or that the decision is
contrary to law.

Such party declared in default is proscribed from seeking a modification or

reversal of the assailed decision on the basis of the evidence submitted by
him in the Court of Appeals, for if it were otherwise, he would thereby be
allowed to regain his right to adduce evidence, a right which he lost in the
trial court when he was declared in default, and which he failed to have
vacated. In this case, the petitioner sought the modification of the decision of
the trial court based on the evidence submitted by it only in the Court of
Appeals.”

If it cannot be made any clearer, we hold that a defendant party declared in

default retains the right to appeal from the judgment by default on the ground:
1. that the plaintiff failed to prove the material allegations of the complaint,
or
2. that the decision is contrary to law, even without need of the prior filing of
a motion to set aside the order of default.

We reaffirm that the Lim Toco doctrine, denying such right to appeal unless
the order of default has been set aside, was no longer controlling in this
jurisdiction upon the effectivity of the 1964 Rules of Court, and up to this
day.

WHEREFORE, the petition is DISMISSED. Costs against petitioner.

SO ORDERED.

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3. Dico v. Vizcaya Management Corporation, 2013
Facts:
Celso Dico was the registered owner of Lot No. 486 of the Cadiz Cadastre.
Lot No. 486 was adjacent to Lot No. 29-B and Lot No. 1412 (formerly Lot
No. 1118-B), both also of the Cadiz Cadastre. Celso and his wife Angeles
resided on Lot No. 486 since 1958.
Respondent Vizcaya Management Corporation (VMC) was the registered
owner under TCT No. T-41835 of Lot No. 29-B, also of the Cadiz Cadastre,
comprising an area of 369,606 square meters, more or less.3 VMC derived
its title to Lot No. 29-B from Eduardo and Cesar, both surnamed Lopez, the
registered owners under TCT No. T-14827, which emanated from TCT No.
RT-9933 (16739) in the names of Victoria, Eduardo and Cesar, all surnamed
Lopez. TCT No. RT-9933 (16739) was a transfer from TCT No. T- 14281,
which had been transferred from Original Certificate of Title (OCT) No.
21331 in the name of Negros Philippines Lumber Company.
VMC likewise claimed to be the owner of Lot No. 1412, formerly known
as Lot No. 1118-B, also of the Cadiz Cadastre, containing an area of 85,239
square meters, more or less, and registered in its name under TCT No. T-
41834.
In 1981, respondent VMC filed against the Dicos a complaint for
unlawful detainer in the City Court of Cadiz (Civil Case No. 649). On
April 24, 1981, the City Court of Cadiz rendered its decision in favor of
VMC, ordering the Dicos to demolish the concrete water gate or sluice gate
(locally known as trampahan) located inside Lot No. 1, Block 3 of the
Cristina Village Subdivision. Inasmuch as the Dicos did not appeal, the
decision attained finality. On July 3, 1981, the City Court of Cadiz issued
a writ of execution. On November 11, 1985, a second alias writ of execution
was issued.
On May 12, 1986, the Dicos commenced an action for the annulment and
cancellation of the titles of VMC (Civil Case No. 180-C), impleading VMC,
the National Land Titles and Deeds Registration Administration, and the
Director of the Bureau of Lands.
On March 12, 1987, the Dicos amended the complaint. They averred,
among others, that they were the registered owners of Lot No. 486 and
the possessors-by- succession of Lot No. 1412 (formerly Lot No. 1118)
and Lot No. 489; that VMC had land-grabbed a portion of their Lot No.
486 totaling 111,966 square meters allegedly brought about by the expansion
of Cristina Village Subdivision; and that on May 30, 1964 they had filed free
patent applications in the Bureau of Lands for Lot No. 1412 and Lot No.
489.6 They prayed that the possession of Lot No. 486, Lot No. 1412, and Lot
No. 489 be restored to them; and that the judgment in Civil Case No. 649 be
annulled.
Celso died during the pendency of the action, and was substituted by Angeles
and their children pursuant to the order of November 22, 1991.
RTC ruled for petitioners, declared them as the absolute owners and
ordered the respondent to vacate the lot.
CA reversed RTC and declared respondent as the absolute owner holding
that petitioners’ action has already prescribed. According to the CA:
“their complaint filed on May 12, 1986, or about 29 years after the issuance
of the certificate of title to respondent VMC, indeed came too late. They were
deemed to have discovered the fraud as early as September 20, 1934 when
TCT No. RT-9933 (16739) of the Lopezes was recorded or on November
10, 1956 when TCT No. T-41835 of respondent VMC was registered.
Their right to seek reconveyance of a portion of Lot No. 29-B, if it existed at
all, had already prescribed.”
Hence this petition.
The Dicos claim, among others, that prescription could not be used by the CA
to bar their claim for reconveyance by virtue of VMC’s failure to aver them
in a motion to dismiss or in the answer.
Issue:
W/N petitioner’s action is barred by prescription despite VMC’s failure to
aver this defense in a MTD or answer – Yes.
Held:
Yes.
We find and hold that the action of the Dicos for reconveyance was properly
dismissed.
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To start with, the CA’s explanations for reversing the RTC were very
thorough, well-founded and well-reasoned.
We have examined the factual bases of the CA in reaching its decision, and
have found that its aforequoted findings of fact and conclusions were based
on the evidence presented at the trial. In view of this, the Court accepts the
findings of fact and conclusions of the CA, not just because we are not a trier
of facts, but, more importantly, because the CA creditably performed its main
task of conducting a thorough review of the evidence and records of the case
in order to eruditely and carefully address each of the issues raised and argued
by the Dicos.
Secondly, the CA correctly pointed out that under Article 1456 of the Civil
Code, the person obtaining property through mistake or fraud is considered
by force of law a trustee of an implied trust for the benefit of the person from
whom the property comes. Under Article 1144, Civil Code, an action upon
an obligation created by law must be brought within 10 years from the time
the right of action accrues. Consequently, an action for reconveyance based
on implied or constructive trust prescribes in 10 years.
Here, the CA observed that even granting that fraud intervened in the issuance
of the transfer certificates of title, and even assuming that the Dicos had the
personality to demand the reconveyance of the affected property on the basis
of implied or constructive trust, the filing of their complaint for that purpose
only on May 12, 1986 proved too late for them.
That observation was correct and in accord with law and jurisprudence.
Verily, the reckoning point for purposes of the Dicos’ demand of
reconveyance based on fraud was their discovery of the fraud. Such
discovery was properly pegged on the date of the registration of the
transfer certificates of title in the adverse parties’ names, because
registration was a constructive notice to the whole world.19 The long
period of 29 years that had meanwhile lapsed from the issuance of the
pertinent transfer certificate of title on September 30, 1934 (the date of
recording of TCT No. RT-9933 [16739] in the name of the Lopezes) or on
November 10, 1956 (the date of recording of TCT No. T- 41835 in VMC’s
name) was way beyond the prescriptive period of 10 years.
And, lastly, the insistence of the Dicos that prescription could not be used by
the CA to bar their claim for reconveyance by virtue of VMC’s failure to
aver them in a motion to dismiss or in the answer was unwarranted.
Although defenses and objections not pleaded in a motion to dismiss or in an
answer are deemed waived, it was really incorrect for the Dicos to insist that
prescription could not be appreciated against them for that reason.
Their insistence was contrary to Section 1, Rule 9 of the Rules of Court, which
provides as follows:
Section 1. Defenses and objections not pleaded.—Defenses and objections
not pleaded either in a motion to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the evidence on record
that the court has no jurisdiction over the subject matter, that there is
another action pending between the same parties for the same cause, or
that the action is barred by a prior judgment or by statute of limitations,
the court shall dismiss the claim. (2a)
Under the rule, the defenses of lack of jurisdiction over the subject matter,
litis pendentia, res judicata, and prescription of action may be raised at any
stage of the proceedings, even for the first time on appeal, except that the
objection to the lack of jurisdiction over the subject matter may be barred by
laches.
WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals
promulgated on September 11, 2002; and ORDERS the petitioners to pay the
costs of suit.
SO ORDERED.
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4. Heirs of Medrano v. Estanislao De Vera, G.R. No. 165770,
August 09, 2010
Facts:
This case concerns a 463-square meter parcel of land5 covered by Transfer
Certificate of Title (TCT) No. 41860 in the name of Flaviana De Gracia
(Flaviana).
In 1980, Flaviana died intestate, leaving her half-sisters Hilaria Martin-
Paguyo (Hilaria) and Elena Martin-Alvarado (Elena) as her compulsory
heirs.
In September 1982, Hilaria and Elena, by virtue of a private document
denominated “Tapno Maamoan ti Sangalobongan,”7 waived all their
hereditary rights to Flaviana’s land in favor of Francisca Medrano
(Medrano). It stated that the waiver was done in favor of Medrano in
consideration of the expenses that she incurred for Flaviana’s medication,
hospitalization, wake and burial.
In the same year, Medrano built her concrete bungalow on the land in
question without any objection from Hilaria and Elena or from their children.
When Hilaria and Elena died, some of their children affirmed the contents of
the private document executed by their deceased mothers. To that end, they
executed separate Deeds of Confirmation of Private Document and
Renunciation of Rights in favor of Medrano.8 They likewise affirmed in said
documents that Medrano had been occupying and possessing the subject
property as owner since September 1982.
Due to the refusal of the other children9 to sign a similar renunciation,
Medrano filed a Complaint on April 27, 2001 for quieting of title,
reconveyance, reformation of instrument, and/or partition with damages
against Pelagia M. Paguyo-Diaz (Pelagia), Faustina Paguyo-Asumio
(Faustina), Jesus Paguyo (Jesus), Veneranda Paguyo- Abrenica, Emilio a.k.a.
Antonio Alvarado, Francisca Alvarado-Diaz (Francisca) and Estrellita
Alvarado-Cordero (Estrellita).
Summons upon the original complaint was duly served upon Pelagia and
Estrellita.
On August 29, 2001, Medrano filed an Amended Complaint impleading
the widow and children of Antonio Alvarado, in view of the latter’s death.14
Summons upon the amended complaint was served upon the other
defendants,15 but no longer served upon Pelagia and Estrellita.
On April 2, 2002, respondent Estanislao D. De Vera (De Vera) filed an
Answer with Counterclaim.16 De Vera presented himself as the real party-
in-interest on the ground that some of the named defendants (Faustina,
Pelagia, Francisca, Elena Kongco-Alvarado, Jesus, and Estrellita) had
executed a Deed of Renunciation of Rights in his favor on March 23, 2002.
He maintained that the “Tapno Maamoan ti Sangalobongan” that was
executed by the defendants’ predecessors in favor of Medrano was null and
void for want of consideration. Thus, while some children affirmed the
renunciation of their deceased mothers’ rights in the lot in favor of Medrano,
the other children renounced their hereditary rights in favor of De Vera.
Medrano filed a Motion to Expunge Answer with Counterclaim of
Estanislao D. De Vera and to Declare Defendants in Default.18 She argued
that respondent De Vera had no personality to answer the complaint since he
was not authorized by the named defendants to answer in their behalf.
RTC disagreed with Medrano’s argument and admitted De Vera’s
Answer with Counterclaim. The trial court opined that De Vera did not need
a special power of attorney from the defendants because he did not answer
the complaint in their behalf. De Vera made a voluntary appearance in the
case as the transferee of the defendants’ rights to the subject property. The
trial court further explained that when the presence of other parties is required
for granting complete relief, the court shall order them to be brought in as
defendants. While it was unsure whether De Vera was an indispensable party
to the case, the trial court opined that at the very least he was a necessary
party for granting complete relief. It thus held that the admission of De Vera’s
Answer with Counterclaim is proper in order to avoid multiplicity of suits.20
In the same Order, the court declared the named defendants in default for
not answering the complaint despite valid service of summons. Thus, it
appears that the court a quo treated the named defendants and De Vera as as
distinct and separate parties.
Medrano’s response to the aforesaid order was two-fold.
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With regard to the order declaring the named defendants in default, Medrano
filed on February 13, 2003 a Motion to Set Reception of Evidence Before
the Branch Clerk of Court.21 She argued that she could present evidence ex
parte against the defaulting defendants on the ground that she presented
alternative causes of action against them in her complaint. Her cause of action
on the basis of acquisitive prescription can be raised solely against the
defaulting original defendants.22 She thus prayed to be allowed to present
evidence ex parte with respect to her claim of acquisitive prescription against
the defaulting defendants.
As for the order admitting De Vera’s Answer with Counterclaim, Medrano
filed on February 21, 2003 a Motion for Reconsideration of Order dated
July 30, 2002. She asked the court to order De Vera to file a pleading in-
intervention so that he could be properly named as a defendant in the case.
In an Order24 dated March 6, 2003, the trial court resolved to grant
Medrano’s Motion to Set Reception of Evidence. It ordered the conduct of
ex parte presentation of evidence on the same day and the continuation
thereof to proceed on March 10, 2003. Thus, Medrano presented her evidence
ex parte on the set dates. On March 10, 2003, the case was submitted for
resolution.25
Given the court’s standing order which admitted De Vera’s Answer with
Counterclaim, De Vera filed a Motion to Set the Case for Preliminary
Conference on March 27, 2003.26 The trial court resolved petitioners’ and
De Vera’s respective pending motions in its March 31, 2003 Order.27 The
trial court granted Medrano’s motion and set aside its Order which
admitted De Vera’s Answer with Counterclaim. Citing Rule 19 of the
Rules of Court, the court ordered De Vera to file a pleading-in-
intervention so that he could be recognized as a party-defendant. As a
necessary consequence to this ruling, the trial court denied De Vera’s
motion to set the case for preliminary conference for prematurity.
De Vera did not comply with the court’s order despite service upon his
lawyer, Atty. Simplicio M. Sevilleja, on April 2, 2003.
RTC ruled for petitioner and declared her the owner of the property.
MR denied.
On September 10, 2003, De Vera filed a Manifestation34 informing the trial
court of his intention to file a petition for certiorari and mandamus before
the CA, pursuant to Rule 41, Section 1, second paragraph and Rule 65 of the
Rules of Court.
On October 7, 2003, petitioners filed a Motion for Entry of Judgment and
Execution35 before the trial court. They also filed a Counter-
Manifestation36 to De Vera’s Manifestation. Petitioners insisted that De
Vera, as a transferee pendente lite, was bound by the final judgment or decree
rendered against his transferors. Even assuming that De Vera had a right to
appeal, the period therefor had already lapsed on August 12, 2003.
RTC, in its Order37 dated December 10, 2003, maintained that De Vera was
not a party to the suit, hence his appeal would not stay the finality and
execution of judgment. Thus the trial court ordered the entry of judgment
in Civil Case No. U-7316. The writ of execution was issued on December
12, 2003.
On a R65 certiorari and mandamus with the CA, he insisted that he
stepped into the shoes of the defendants with regard to the subject property
by virtue of the quitclaim that the defendants executed in his favor. Thus, the
trial court should have considered the defendants as properly substituted by
De Vera when he filed his Answer. The standing order of the trial court with
regard to De Vera at the time that it allowed Medrano to present her evidence
was to admit De Vera’s Answer with Counterclaim. Thus, De Vera argued
that it was improper for the trial court to have allowed Medrano to present
her evidence ex parte because it had yet to rule on whether De Vera had
personality to participate in the proceedings.
CA reversed and remanded the case back to RTC to afford De Vera an
opportunity to present his evidence. It held that the RTC gravely abused its
discretion by allowing Medrano to present her evidence ex parte while De
Vera’s personality to participate in the case still remained unresolved. The
premature ex parte presentation of evidence rendered a pleading-in-
intervention moot and academic.
The CA pointed out that the trial court should have exercised its authority to
order the substitution of the original defendants instead of requiring De Vera
to file a pleading-in-intervention. This is allowed under Rule 3, Section 19 of
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the Rules of Court. Since a transferee pendente lite is a proper party42 to the
case, the court can order his outright substitution for the original defendants.
Hence this petition.
Issue:
W/N RTC erred in refusing to allow respondent De Vera to participate in the
case and in requiring him to file a complaint to intervene – Yes, RTC erred.
CA affirmed.
Held:
Yes, RTC erred. CA affirmed.
We sustain the CA’s ruling that the trial court gravely abused its discretion in
refusing to allow De Vera to participate in the case and requiring him to file
a motion to intervene.
The trial court misjudged De Vera’s interest in Civil Case No. U-7316. It held
that De Vera’s right to participate in the case was independent of the named
defendants. Because of its ruling that De Vera had an “independent interest,”
the trial court considered his interest as separate from Medrano’s claims
against the named defendants, and allowed the latter to be tried separately.
Thus, it admitted De Vera’s Answer with Counterclaim but declared the
named defendants in default and allowed the ex parte presentation of
evidence by Medrano against the named defendants.
The trial court’s approach is seriously flawed because De Vera’s interest is
not independent of or severable from the interest of the named defendants.
De Vera is a transferee pendente lite of the named defendants (by virtue of
the Deed of Renunciation of Rights that was executed in his favor during the
pendency of Civil Case No. U-7316). His rights were derived from the named
defendants and, as transferee pendente lite, he would be bound by any
judgment against his transferors under the rules of res judicata. Thus, De
Vera’s interest cannot be considered and tried separately from the interest of
the named defendants.
It was therefore wrong for the trial court to have tried Medrano’s case against
the named defendants (by allowing Medrano to present evidence ex parte
against them) after it had already admitted De Vera’s answer. What the trial
court should have done is to treat De Vera (as transferee pendente lite) as
having been joined as a party-defendant, and to try the case on the basis of
the answer De Vera had filed and with De Vera’s participation. As transferee
pendente lite, De Vera may be allowed to join the original defendants under
Rule 3, Section 19.
The above provision gives the trial court discretion to allow or disallow the
substitution or joinder by the transferee. Discretion is permitted because, in
general, the transferee’s interest is deemed by law as adequately represented
and protected by the participation of his transferors in the case. There may be
no need for the transferee pendente lite to be substituted or joined in the case
because, in legal contemplation, he is not really denied protection as his
interest is one and the same as his transferors, who are already parties to the
case.
While the rule allows for discretion, the paramount consideration for the
exercise thereof should be the protection of the parties’ interests and their
rights to due process. In the instant case, the circumstances demanded that
the trial court had already admitted De Vera’s answer when it declared the
original defendants in default.
As there was a transferee pendente lite whose answer had already been
admitted, the trial court should have tried the case on the basis of that answer,
based on Rule 9, Section 3 (c):
“Effect of partial default.—When a pleading asserting a claim states a
common cause of action against several defending parties, some of whom
answer and the others fail to do so, the court shall try the case against all upon
the answers thus filed and render judgment upon the evidence presented.”
Thus, the default of the original defendants should not result in the ex parte
presentation of evidence because De Vera (a transferee pendente lite who
may thus be joined as defendant under Rule 3, Section 19) filed the answer.
The trial court should have tried the case based on De Vera’s answer, which
answer is deemed to have been adopted by non-answering defendants.47
To proceed with the ex parte presentation of evidence against the named
defendants after De Vera’s answer had been admitted would not only be a
violation of Rule 9, Section 3(c), but would also be a gross disregard of De
Vera’s right to due process. This is because the ex parte presentation of
evidence would not result in a default judgment which would bind not just
the defaulting defendants, but also De Vera, precisely because he is a
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transferee pendente lite.48 This would result in an anomaly wherein De Vera
would by a default judgment even if he filed an answer and expressed a desire
to participate in the case.

We note that under Rule 3, Section 19, the substitution or joinder of the
transferee is “upon motion”, and De Vera did not file any motion for
substitution or joinder. However, this technical flaw may be disregarded for
the fact remains that the court had already admitted his answer and such
answer was on record when the ex parte presentation of evidence was allowed
by the court. Because De Vera’s answer had already admitted, the court
should not have allowed the ex parte presentation of evidence.

We are not persuaded by petitioners’ insistence that De Vera could not have
participated in the case because he did not file a motion to intervene. The
purpose of intervention is to enable a stranger to an action to become a party
in order for him to protect his interest and for the court to settle all conflicting
claims. Intervention is allowed to avoid multiplicity of suits more than on due
process considerations. The intervenor can choose not to participate in the
case and he will not be bound by the judgment.

In this case, De Vera is not a stranger to the action but a transferee pendente
lite. As mentioned, a transferee pendente lite is deemed joined in the pending
action from the moment when the transfer of interest is perfected. His
participation in the case should have been allowed by due process
considerations.

Given the Court’s finding that the ex parte presentation of evidence

constituted a violation of due process rights, the trial court’s judgment by
default cannot bind De Vera. A void judgment cannot attain finality and its
execution has no basis in law. The case should be remanded to the trial court
for trial based on De Vera’s answer and with his participation.

WHEREFORE, the petition is DENIED. The June 25, 2004 Decision of the
Court of Appeals in CA-G.R. SP No. 80053 and its October 6, 2004
Resolution are AFFIRMED.
Cost against petitioners. SO ORDERED.

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5. Aquino v. Aure, G.R. No. 153567, February 18, 2008
Facts:
The subject of the present controversy is a parcel of land situated in Roxas
District, Quezon City, with an area of 449 square meters and covered by
Transfer Certificate of Title (TCT) No. 205447 registered with the Registry
of Deeds of Quezon City (subject property).7
Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a
Complaint for ejectment against Aquino before the MeTC docketed as
Civil Case No. 17450. In their Complaint, Aure and Aure Lending alleged
that they acquired the subject property from Aquino and her husband Manuel
(spouses Aquino) by virtue of a Deed of Sale executed on 4 June 1996. Aure
claimed that after the spouses Aquino received substantial consideration for
the sale of the subject property, they refused to vacate the same.9
In her Answer,10 Aquino countered that the Complaint in Civil Case No.
17450 lacks cause of action for Aure and Aure Lending do not have any legal
right over the subject property.
Aquino admitted that there was a sale but such was governed by the
Memorandum of Agreement11 (MOA) signed by Aure. As stated in the
MOA, Aure shall secure a loan from a bank or financial institution in his own
name using the subject property as collateral and turn over the proceeds
thereof to the spouses Aquino. However, even after Aure successfully
secured a loan, the spouses Aquino did not receive the proceeds thereon or
benefited therefrom.
[During the pre-trial, Aquino pointed out to the MTC that there was non-
compliance with the barangay conciliation requirement.]
MTC dismissed the complaint for non-compliance with barangay
conciliation process, among other grounds. The MeTC observed that Aure
and Aquino are residents of the same barangay but there is no showing that
any attempt has been made to settle the case amicably at the barangay level.
The MeTC further observed that Aure Lending was improperly included as
plaintiff in Civil Case No. 17450 for it did not stand to be injured or benefited
by the suit. Finally, the MeTC ruled that since the question of ownership was
put in issue, the action was converted from a mere detainer suit to one
“incapable of pecuniary estimation” which properly rests within the original
exclusive jurisdiction of the RTC.
RTC affirmed the dismissal of the Complaint on the same ground that the
dispute was not brought before the Barangay Council for conciliation before
it was filed in court.
On appeal, CA reversed the MTC and RTC decisions and remanded the
case back to the MTC for further proceedings and a final determination of
the substantive rights of the parties. The appellate court declared that the
failure of Aure to subject the matter to barangay conciliation is not a
jurisdictional flaw and it will not affect the sufficiency of Aure’s Complaint
since Aquino failed to seasonably raise such issue in her Answer. The
Court of Appeals further ruled that mere allegation of ownership does not
deprive the MeTC of jurisdiction over the ejectment case for jurisdiction over
the subject matter is conferred by law and is determined by the allegations
advanced by the plaintiff in his complaint. Hence, mere assertion of
ownership by the defendant in an ejectment case will not oust the MeTC of
its summary jurisdiction over the same.
Hence this petition.
Issue:
W/N non-compliance with barangay conciliation proceedings is a
jurisdictional defect that warrants the dismissal of the complaint – No.
Held:
No. CA affirmed.
There is no dispute herein that the present case was never referred to the
Barangay Lupon for conciliation before Aure and Aure Lending instituted
Civil Case No. 17450. In fact, no allegation of such barangay conciliation
proceedings was made in Aure and Aure Lending’s Complaint before the
MeTC.
The only issue to be resolved is whether non-recourse to the barangay
conciliation process is a jurisdictional flaw that warrants the dismissal of the
ejectment suit filed with the MeTC.
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Aquino posits that failure to resort to barangay conciliation makes the action
for ejectment premature and, hence, dismissible. She likewise avers that this
objection was timely raised during the pre-trial and even subsequently in
her Position Paper submitted to the MeTC.
We do not agree.
It is true that the precise technical effect of failure to comply with the
requirement of Section 412 of the Local Government Code on barangay
conciliation (previously contained in Section 5 of Presidential Decree No.
1508) is much the same effect produced by non-exhaustion of administrative
remedies—the complaint becomes afflicted with the vice of pre-maturity; and
the controversy there alleged is not ripe for judicial determination. The
complaint becomes vulnerable to a motion to dismiss.22
Nevertheless, the conciliation process is not a jurisdictional requirement,
so that non-compliance therewith cannot affect the jurisdiction which the
court has otherwise acquired over the subject matter or over the person
of the defendant.
As enunciated in the landmark case of Royales v. Intermediate Appellate
Court:24
“Ordinarily, non-compliance with the condition precedent prescribed by P.D.
1508 could affect the sufficiency of the plaintiff's cause of action and make
his complaint vulnerable to dismissal on ground of lack of cause of action or
prematurity; but the same would not prevent a court of competent
jurisdiction from exercising its power of adjudication over the case
before it, where the defendants, as in this case, failed to object to such
exercise of jurisdiction in their answer and even during the entire
proceedings a quo.
While petitioners could have prevented the trial court from exercising
jurisdiction over the case by seasonably taking exception thereto, they instead
invoked the very same jurisdiction by filing an answer and seeking
affirmative relief from it. What is more, they participated in the trial of the
case by cross-examining respondent Planas. Upon this premise, petitioners
cannot now be allowed belatedly to adopt an inconsistent posture by
attacking the jurisdiction of the court to which they had submitted
themselves voluntarily. x x x”
In the case at bar, we similarly find that Aquino cannot be allowed to attack
the jurisdiction of the MeTC over Civil Case No. 17450 after having
submitted herself voluntarily thereto. We have scrupulously examined
Aquino’s Answer before the MeTC in Civil Case No. 17450 and there is utter
lack of any objection on her part to any deficiency in the complaint which
could oust the MeTC of its jurisdiction.
We thus quote with approval the disquisition of the Court of Appeals:
“Moreover, the Court takes note that the defendant [Aquino] herself did not
raise in defense the aforesaid lack of conciliation proceedings in her answer,
which raises the exclusive affirmative defense of simulation. By this
acquiescence, defendant [Aquino] is deemed to have waived such objection.
As held in a case of similar circumstances, the failure of a defendant [Aquino]
in an ejectment suit to specifically allege the fact that there was no
compliance with the barangay conciliation procedure constitutes a waiver of
that defense. x x x.”
By Aquino’s failure to seasonably object to the deficiency in the Complaint,
she is deemed to have already acquiesced or waived any defect attendant
thereto. Consequently, Aquino cannot thereafter move for the dismissal of
the ejectment suit for Aure and Aure Lending’s failure to resort to the
barangay conciliation process, since she is already precluded from doing so.
The fact that Aquino raised such objection during the pre-trial and in her
Position Paper is of no moment, for the issue of non-recourse to barangay
mediation proceedings should be impleaded in her Answer.
As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure:
“Section 1. Defenses and objections not pleaded.—Defenses and objections
not pleaded either in a motion to dismiss or in the answer are deemed
waived. However, when it appears from the pleadings or the evidence on
record that the court has no jurisdiction over the subject matter, that there is
another action pending between the same parties for the same cause, or that
the action is barred by a prior judgment or by statute of limitations, the court
shall dismiss the claim.” (Emphasis supplied.)
While the aforequoted provision applies to a pleading (specifically, an
Answer) or a motion to dismiss, a similar or identical rule is provided for all
other motions in Section 8 of Rule 15 of the same Rule which states:
“Sec. 8. Omnibus Motion.—Subject to the provisions of Section 1 of Rule 9,
a motion attacking a pleading, order, judgment, or proceeding shall include
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all objections then available, and all objections not so included shall be
deemed waived.”

The spirit that surrounds the foregoing statutory norm is to require the party
filing a pleading or motion to raise all available exceptions for relief during
the single opportunity so that single or multiple objections may be avoided.
It is clear and categorical in Section 1, Rule 9 of the Revised Rules of Court
that failure to raise defenses and objections in a motion to dismiss or in an
answer is deemed a waiver thereof; and basic is the rule in statutory
construction that when the law is clear and free from any doubt or ambiguity,
there is no room for construction or interpretation.

As has been our consistent ruling, where the law speaks in clear and
categorical language, there is no occasion for interpretation; there is only
room for application. Thus, although Aquino’s defense of non-compliance
with Presidential Decree No. 1508 is meritorious, procedurally, such defense
is no longer available for failure to plead the same in the Answer as required
by the omnibus motion rule.

Neither could the MeTC dismiss Civil Case No. 17450 motu proprio. The
1997 Rules of Civil Procedure provide only three instances when the court
may motu proprio dismiss the claim, and that is when the pleadings or
evidence on the record show that
(1) the court has no jurisdiction over the subject matter;
(2) there is another cause of action pending between the same parties for the
same cause; or
(3) where the action is barred by a prior judgment or by a statute of
limitations.

Thus, it is clear that a court may not motu proprio dismiss a case on the
ground of failure to comply with the requirement for barangay conciliation,
this ground not being among those mentioned for the dismissal by the trial
court of a case on its own initiative.

WHEREFORE, premises considered, the instant Petition is DENIED. The

Court of Appeals Decision dated 17 October 2001 and its Resolution dated 8
May 2002 in CA-G.R. SP No. 63733 are hereby AFFIRMED. Costs against
the petitioner.
SO ORDERED.

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6. Republic v. Hidalgo, G.R. No. 161657, October 04, 2007
Facts:
Sometime in June 1999, Mendoza filed a suit with the RTC of Manila for
reconveyance and the corresponding declaration of nullity of a deed of
sale and title against the Republic, the Register of Deeds of Manila and one
Atty. Fidel Vivar. In her complaint, as later amended, docketed as Civil Case
No. 99-94075 and eventually raffled to Branch 35 of the court, Mendoza
essentially alleged being the owner of the disputed Arlegui property which
the Republic forcibly dispossessed her of and over which the Register of
Deeds of Manila issued TCT No. 118911 in the name of the Republic.
Answering, the Republic set up, among other affirmative defenses, the
State’s immunity from suit.
RTC of Manila, Branch 35, dismissed Mendoza’s complaint. Mendoza’s
omnibus MR denied. On a petition for certiorari, however, the CA reversed
the trial court’s assailed orders and remanded the case to the court a quo for
further proceedings. SC affirmed CA’s remand.
On May 5, 2003, Mendoza filed a Motion for Leave of Court to file a Third
Amended Complaint with a copy of the intended third amended complaint
thereto attached.
RTC, in open court and in the presence of the Republic’s counsel, admitted
the third amended complaint, ordered the Republic to file its answer
thereto within five (5) days from May 16, 2003 and set a date for pre-trial.
In her adverted third amended complaint for recovery and reconveyance
of the Arlegui property, Mendoza sought the declaration of nullity of a
supposed deed of sale dated July 15, 1975 which provided the
instrumentation toward the issuance of TCT No. 118911 in the name of the
Republic. And aside from the cancellation of TCT No. 118911, Mendoza4
also asked for the reinstatement of her TCT No. 118527. In the same third
amended complaint, Mendoza averred that, since time immemorial, she and
her predecessors-in-interest had been in peaceful and adverse possession of
the property as well as of the owner’s duplicate copy of TCT No. 118527.
Such possession, she added, continued “until the first week of July 1975 when
a group of armed men representing themselves to be members of the
Presidential Security Group [PSG] of the then President Ferdinand E.
Marcos, had forcibly entered [her] residence and ordered [her] to turn over
to them her ⁄ Copy of TCT No. 118525 ⁄ and compelled her and the members
of her household to vacate the same ⁄; thus, out of fear for their lives, [she]
handed her Owner’s Duplicate Certificate Copy of TCT No. 118527 and had
left and/or vacated the subject property.”
Mendoza prayed for a judgment ordering, among others, the following:
“4. Ordering the ⁄ Republic to pay plaintiff [Mendoza] a reasonable
compensation or rental for the use or occupancy of the subject property in the
sum of FIVE HUNDRED THOUSAND (P500,000.00) PESOS a month
with a five (5%) per cent yearly increase, plus interest thereon at the
legal rate, beginning July 1975 until it finally vacates the same;
5. Ordering the ⁄ Republic to pay plaintiff’s counsel a sum equivalent to
TWENTY FIVE (25%) PER CENT of the current value of the subject
property and/or whatever amount is recovered under the premises; Further,
plaintiff prays for such other relief, just and equitable under the premises.”
On May 21, 2003, the Republic, represented by the OSG, filed a Motion for
Extension (With Motion for Cancellation of scheduled pre-trial). In it, the
Republic manifested its inability to simply adopt its previous answer and,
accordingly, asked that it be given a period of 30 days or until June 20, 2003
within which to submit an Answer. June 20, 2003 came and went, but no
answer was filed. On July 18, 2003 and again on August 19, 2003, the OSG
moved for a 30-day extension at each instance.
The filing of the last two motions for extension proved to be an idle gesture,
however, since the trial court had meanwhile issued an order dated July
7, 2003 declaring the petitioner Republic as in default and allowing the
private respondent to present her evidence ex parte.
Eventually, RTC rendered a judgment by default for Mendoza and against
the Republic. To the trial court, the Republic had veritably confiscated
Mendoza’s property, and deprived her not only of the use thereof but also
denied her of the income she could have had otherwise realized during all the
years she was illegally dispossessed of the same.
Thus, the RTC awarded around P2BILLION total to respondent.
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Subsequently, the Republic moved for, but was denied, a new trial per
order of the trial court of October 7, 2003.12 Denied also was its subsequent
plea for reconsideration. These twin denial orders were followed by several
orders and processes issued by the trial court on separate dates as hereunder
indicated:
“1. November 27, 2003—Certificate of Finality declaring the August 27,
2003 decision final and
executory.
2. December 17, 2003—Order denying the Notice of Appeal filed on
November 27, 2003, the same having been filed beyond the reglementary
period
3. December 19, 2003—Order granting the private respondent’s motion for
execution. to have every litigated case tried on its full merits, the act of the respondent
4. December 22, 2003—Writ of Execution.” judge in rendering the default judgment after an order of default was properly
Hence this R65 certiorari directly filed with the SC.
In this recourse, the petitioner urges the Court to strike down as a nullity the
trial court’s order declaring it in default and the judgment by default that
followed. Sought to be nullified, too, also on the ground that they were issued
in grave abuse of discretion amounting to lack or in excess of jurisdiction, are
the orders and processes enumerated immediately above issued after the
rendition of the default judgment.
Petitioner lists five (5) overlapping grounds for allowing its petition. It starts
off by impugning the order of default and the judgment by default. To the
petitioner, the respondent judge committed serious jurisdictional error when
he proceeded to hear the case and eventually awarded the private respondent
a staggering amount without so much as giving the petitioner the opportunity
to present its defense.
Issue:
1. W/N the RTC deprived the Republic of due process in rendering a
judgment against it without allowing it to present evidence – No.
2. W/N RTC erred in awarding P2 Billion – Yes.
Held:
I. No.
Petitioner’s posture is simply without merit.
Deprivation of procedural due process is obviously the petitioner’s threshold
theme. Due process, in its procedural aspect, guarantees in the minimum the
opportunity to be heard. Grave abuse of discretion, however, cannot plausibly
be laid at the doorstep of the respondent judge on account of his having issued
the default order against the petitioner, then proceeding with the hearing and
eventually rendering a default judgment. For, what the respondent judge did
hew with what Section 3, Rule 9 of the Rules of Court prescribes and allows
in the event the defending party fails to seasonably file a responsive pleading.
While the ideal lies in avoiding orders of default, the policy of the law being
issued cannot be struck down as a case of grave abuse of discretion.
Under the premises, the mere issuance by the trial court of the order of default
followed by a judgment by default can easily be sustained as correct and
doubtless within its jurisdiction. Surely, a disposition directing the Republic
to pay an enormous sum without the trial court hearing its side does not,
without more, vitiate, on due procedural ground, the validity of the default
judgment. The petitioner may have indeed been deprived of such hearing, but
this does not mean that its right to due process had been violated. For,
consequent to being declared in default, the defaulting defendant is deemed
to have waived his right to be heard or to take part in the trial.
The handling solicitors simply squandered the Republic’s opportunity to be
heard. But more importantly, the law itself imposes such deprivation of the
right to participate as a form of penalty against one unwilling without
justification to join issue upon the allegations tendered by the plaintiff.
And going to another point, the petitioner would ascribe jurisdictional error
on the respondent judge for denying its motion for new trial based on any or
a mix of the following factors, viz., (1) the failure to file an answer is
attributable to the negligence of the former handling solicitor; (2) the
meritorious nature of the petitioner’s defense; and (3) the value of the
property involved.
The Court is not convinced. Even as the Court particularly notes what the trial
court had said on the matter of negligence: that all of the petitioner’s
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pleadings below bear at least three signatures, that of the handling solicitor,
the assistant solicitor and the Solicitor General himself, and hence
accountability should go up all the way to the top of the totem pole of
authority, the cited reasons advanced by the petitioner for a new trial are not
recognized under Section 1, Rule 37 of the Rules of Court for such recourse.
Withal, there is no cogent reason to disturb the denial by the trial court of the
motion for new trial and the denial of the reiterative motion for
reconsideration.
II. Yes
The evidence adduced below indeed adequately supports a conclusion that
the Office of the President, during the administration of then President
Marcos, wrested possession of the property in question and somehow secured
a certificate of title over it without a conveying deed having been executed to
legally justify the cancellation of the old title (TCT No. 118527) in the name
of the private respondent and the issuance of a new one (TCT No. 118911) in
the name of petitioner Republic.
As may be noted, private respondent fixed the assessed value of her
Arlegui property at P2,388,990.00. And in the prayer portion of her third
amended complaint for recovery, she asked to be restored to the possession
of her property and that the petitioner be ordered to pay her, as reasonable
compensation or rental use or occupancy thereof, the sum of P500,000.00 a
month, or P6 Million a year, with a five percent (5%) yearly increase plus
interest at the legal rate beginning July 1975. From July 1975 when the PSG
allegedly took over the subject property to July 2003, a month before the trial
court rendered judgment, or a period of 28 years, private respondent’s total
rental claim would, per the OSG’s computation, only amount to
P371,440,426.00.
In its assailed decision, however, the RTC ordered the petitioner to pay
private respondent the total amount of over P1.48 Billion or the mind-
boggling amount of P1,480,627,688.00, to be exact, representing the
reasonable rental for the property, the interest rate thereon at the legal rate
and the opportunity cost. This figure is on top of the P143,600,000.00 which
represents the acquisition cost of the disputed property. All told, the trial court
would have the Republic pay the total amount of about P1.624 Billion,
exclusive of interest, for the taking of a property with a declared assessed
value of P2,388,900.00. This is not to mention the award of attorney’s fees in
an amount equivalent to 15% of the amount due the private respondent.
In doing so, the respondent judge brazenly went around the explicit
command of Rule 9, Section 3(d) of the Rules of Court which defines the
extent of the relief that may be awarded in a judgment by default, i.e.,
only so much as has been alleged and proved. The court acts in excess of
jurisdiction if it awards an amount beyond the claim made in the complaint
or beyond that proved by the evidence.
While a defaulted defendant may be said to be at the mercy of the trial court,
the Rules of Court and certainly the imperatives of fair play see to it that any
decision against him must be in accordance with law.
In the abstract, this means that the judgment must not be characterized by
outrageous onesidedness, but by what is fair, just and equitable that always
underlie the enactment of a law.
Given the above perspective, the obvious question that comes to mind is the
level of compensation which—for the use and occupancy of the Arlegui
property—would be fair to both the petitioner and the private respondent
and, at the same time, be within acceptable legal bounds. The process of
balancing the interests of both parties is not an easy one. But surely, the
Arlegui property cannot possibly be assigned, even perhaps at the present
real estate business standards, a monthly rental value of at least P500,000.00
or P6,000,000.00 a year, the amount private respondent particularly sought
and attempted to prove. This asking figure is clearly unconscionable, if not
downright ridiculous, attendant circumstances considered.
To the Court, an award of P20,000.00 a month for the use and occupancy of
the Arlegui property, while perhaps a little bit arbitrary, is reasonable and
may be granted pro hac vice considering the following hard realities which
the Court takes stock of:
1. The property is relatively small in terms of actual area and had an assessed
value of only P2,388,900.00;
2. What the martial law regime took over was not exactly an area with a new
and imposing structure, if there was any; and
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3. The Arlegui property had minimal rental value during the relatively long
martial law years, given the very restrictive entry and egress conditions
prevailing at the vicinity at that time and even after.”

WHEREFORE, the decision of the Regional Trial Court of Manila dated

August 27, 2003 insofar as it nullified TCT No. 118911 of petitioner Republic
of the Philippines and ordered the Register of Deeds of Manila to reinstate
private respondent Tarcila L. Mendoza’s TCT No. 118527, or to issue her a
new certificate of title is AFFIRMED. Should it be necessary, the Register
of Deeds of Manila shall execute the necessary conveying deed to effect the
reinstatement of title or the issuance of a new title to her.

It is MODIFIED in the sense that for the use and occupancy of the Arlegui
property, petitioner Republic is ordered to pay private respondent the
reasonable amount of P20,000.00 a month beginning July 1975 until it
vacates the same and the possession thereof restored to the private
respondent, plus an additional interest of 6% per annum on the total amount
due upon the finality of this Decision until the same is fully paid. Petitioner
is further ordered to pay private respondent attorney’s fees equivalent to 15%
of the amount due her under the premises.

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IX. Amendment and Supplement (Rule 10)
1. PAGCOR v. Lopez, A.M. RTJ-04-1848, October 25, 2005
Facts:
This administrative complaint filed by PAGCOR against RTC Manila
Judge Lopez stemmed from the proceedings in Civil Case No. 00-99133,
entitled, Filipinas Gaming Entertainment Totalizator Corporation
(FILGAME) vs. PAGCOR, Department of Interior and Local Government
(DILG), and Secretary Alfredo S. Lim, filed with the RTC of Manila and
assigned by raffle to Branch 34 presided by respondent Judge. The
antecedents and the pertinent proceedings that transpired therein are as
follows:
On June 17, 1999, PAGCOR entered into an Agreement with FILGAME and
BELLE Jai-Alai Corporation (BELLE) for the resumption of the Jai-Alai
operations in the country. FILGAME and BELLE jointly agreed to provide
funds, at no cost to complainant, for pre-operating expenses and working
capital. PAGCOR shall manage, operate and control all aspects of the Jai-
Alai operations.
On October 19, 2000, the Office of the President of the Philippines issued a
Memorandum addressed to Alicia Ll. Reyes, then PAGCOR Chairperson and
Chief Executive Officer, directing her to take immediate steps to close down
all PAGCOR facilities and outlets in Jai-Alai, on-line bingo and internet
casino gaming.
On October 20, 2000, DILG, through then Secretary Alfredo S. Lim, caused
the closure of the Jai-Alai main fronton.
Thus, on November 6, 2000, FILGAME and BELLE filed the case for
Specific Performance and Injunction with prayer for Damages and
Temporary Restraining Order (TRO), and Writ of Preliminary Injunction
against PAGCOR, DILG and Secretary Alfredo Lim, docketed as Civil Case
No. 00-99133 and raffled to herein respondent Judge.
On November 10, 2000, respondent issued a writ of temporary restraining
order effective for 20 days.
On November 29, 2000, the Supreme Court rendered a decision in the
cases, entitled, Raoul B. Del Mar vs. PAGCOR, BELLE and FILGAME and
Federico S. Sandoval II and Michael T. Defensor vs. 4 PAGCOR, holding
that PAGCOR, Belle Jai-Alai Corporation and Filipinas Gaming
Entertainment Totalizator Corporation are enjoined from managing,
maintaining and operating jai-alai games, and from enforcing the
agreement entered into by them for that purpose.
MRs filed by PAGCOR, BELLE and FILGAME were denied.
Consequently, FILGAME and BELLE filed a Motion to Admit Amended
Complaint with the trial court where the cause of action was changed, i.e.,
from Specific Performance to Recovery of Sum of Money, inasmuch as
plaintiffs could no longer ask for specific performance of their agreement
with complainant since the Supreme Court had declared the agreement
without force and effect. Thus, FILGAME and BELLE sought to recover
their pre-operating expenses and/or investments totaling P1,562,145,661.87
including the goodwill money of P200,000,000.00 which they allegedly
invested with the complainant.
Complainant filed an opposition on the ground that there is a substantial
change in the complaint and cause of action.
Respondent judge issued an Order admitting the amended complaint and
directing complainant and DILG to file their answer.
Complainant filed a motion to dismiss the amended complaint on the
ground that the trial court had not acquired jurisdiction over the case for
failure of the plaintiffs to pay the prescribed docket fees considering that
the docket fee originally paid was only P1,212.00.
It claimed that per the affidavit of Atty. Ma. Concepcion Gloria,
complainant’s representative, she attested to the fact that as computed by the
Docket Fee Assessor, the amended complaint, which sought recovery of
the P1,562,145,661.87 including the P200,000,000 goodwill money,
should have docket fees of P15,775,903.68.
Respondent denied the MTD and directed complainant PAGCOR to file its
answer. Respondent RTC judge held:
Avila 4B | 2016
“there is no basis for dismissing the amended complaint since the original
complaint was filed and the corresponding docket fee was paid by the
plaintiff, the Court had acquired jurisdiction over the said complaint. Having
done so, and considering the rule for the payment of the docket fees set forth
in the Sun Insurance Office, Ltd. with respect to initiatory pleadings, there is
no firm ground to dismiss the Amended Complaint.
Under the said ruling “where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the Court may allow payment of
the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.” If a late payment of the docket fee is
allowed in filing initiatory pleading to vest jurisdiction to the Court, with
more reason the same leniency should be afforded in an amended
pleading/complaint which sets out additional/new cause of action
necessitating the increase of the docket fee. The plaintiff is correct in not
immediately paying the additional filing fee before the amended complaint is
admitted for why will it pay when there is no assurance that the amended
complaint will be admitted.
Once jurisdiction is acquired and vested in a Court, said Court maintains its
jurisdiction until judgment is had. (Aruego, Jr., et al. vs. CA, 254 SCRA 711-
719). Such acquired jurisdiction is not lost by the amendment of a pleading
that raises additional/new cause(s) of action. The jurisdiction of a Court is not
lost even if additional docket fees are required by reason of the amendment.
In the same ruling in Sun Insurance case, “any additional filing (docket) fee
shall constitute a lien on the judgment and that it shall be the responsibility
of the Clerk of Court or his duly authorized deputy to enforce said lien and
assess and collect the additional fee provided that the cause of action has not
prescribed.”
Moreover in Yuchengco vs. Republic, 333 SCRA 368, 381, the Supreme
Court even allowed the payment of the filing fees beyond the prescriptive
period.”
Complainant then filed its Answer with compulsory counter-claim.
During the pre-trial, FILGAME and BELLE manifested their intention to file
a Motion for Summary Judgment which they subsequently filed.
Complainant filed its opposition thereto. Respondent did not conduct any
hearing on the motion for summary judgment.
On May 19, 2003, respondent rendered his decision by way of Summary
Judgment in favor of FILGAME and BELLE where complainant was
ordered to return and pay the sum of P1,562,145,661.87, representing the
amount of pre-operating expenses and/or investment including the goodwill
money given by plaintiffs and the release of P500,000.00 cash bond posted
in support of the TRO.
PAGCOR filed a R65 certiorari with the CA. It also filed the present
administrative case against respondent judge.
CA rendered a judgment by compromise agreement.
Thereafter, complainant sought the continuation of the pending
administrative case because there was no longer any legal impediment with
the resolution of the certiorari case.
Complainant charges respondent for gross ignorance of the law and
procedure in (1) admitting the amended complaint of plaintiffs FILGAME
and BELLE in Civil Case No. 00-99133 despite the fact that (a) the amended
complaint is a total change of theory of the case; and (b) that the required
filing fees for the amended complaint were not paid; …
Issue:
W/N respondent judge erred in admitting the amended complaint – No.
Held:
No.
The Court finds no gross ignorance of law committed by respondent when he
admitted the amended complaint notwithstanding that such amended
complaint substantially altered the cause of action of plaintiffs FILGAME
and BELLE.
Section 3, Rule 10 of the Rules of Court, provides:
SECTION 3. Amendments by leave of court. Except as provided in the next
preceding section, substantial amendments may be made only upon leave of
court. But such leave may be refused if it appears to the court that the motion
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was made with intent to delay. Orders of the court upon the matters provided
in this section shall be made upon motion filed in court, and after notice to
the adverse party, and an opportunity to be heard.
As held in Valenzuela vs. CA,
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure
amended the former rule in such manner that the phrase “or that the cause of
action or defense is substantially altered” was stricken-off and not retained in
the new rules. The clear import of such amendment in Section 3, Rule 10
is that under the new rules, “the amendment may (now) substantially
alter the cause of action or defense.” This should only be true, however,
when despite a substantial change or alteration in the cause of action or
defense, the amendments sought to be made shall serve the higher interests
of substantial justice, and prevent delay and equally promote the laudable
objective of the rules which is to secure a “just, speedy and inexpensive
disposition of every action and proceeding.” (emphasis supplied).
Although the amended complaint substantially changed the cause of action
of plaintiffs FILGAME and BELLE, the admission thereof by respondent is
allowed under Section 3, Rule 10 and jurisprudence.
II.
The Court also finds that respondent was not guilty of gross ignorance of the
law when he admitted the amended complaint despite the non-payment by
plaintiffs FILGAME and BELLE of additional docket fees on the amended
complaint. This was done in accordance with the Sun Insurance case.
Respondent is correct in ruling in his Order dated June 19, 2002 that the court
had jurisdiction over the amended complaint as it had acquired jurisdiction
over the case when the original complaint was filed and the corresponding
docket fee was paid thereon. Plainly, while the payment of the prescribed
docket fee is a jurisdictional requirement, even its non-payment at the time
of filing does not automatically cause the dismissal of the case, as long as the
fee is paid within the applicable prescriptive or reglementary period.
Respondent also stated in the same order that this Court in the Sun Insurance
case had further declared that “any additional filing (docket) fee shall
constitute a lien on the judgment and that it shall be the responsibility of the
Clerk of Court or his duly authorized deputy to enforce said lien and assess
and collect the additional fee provided that the cause of action has not
prescribed.”
Pursuant to PNOC Shipping v. CA, the unpaid additional docket fees in this
case should be considered as a lien on the judgment even though plaintiffs
had specified the amount of P1,562,145,661.87 in the prayer of the amended
complaint.
Moreover, the issue of jurisdiction for non-payment of additional docket fees
is deemed abandoned as there was neither a motion for reconsideration nor a
petition questioning such Order filed by complainant. In fact, when the
amended complaint was admitted and respondent directed complainant to file
its answer, the latter filed its Answer with compulsory counterclaim and
without questioning the jurisdiction of the trial court on the ground of
insufficient payment of docket fees. Complainant even invoked the court’s
authority when it asked for affirmative relief on its counterclaim, thus it is
estopped from challenging the court’s jurisdiction.
Respondent, in his Order dated February 19, 2004, after the entry of judgment
on the compromise agreement, directed plaintiffs BELLE and FILGAME to
cause the computation of the additional docket on the amended complaint, of
which the Clerk of Court of Manila is directed to collect. Plaintiffs paid the
amount of P1,058,732.48. However, it appeared that based on the affidavit of
the collecting agent, she assessed the docket fees based on the judgment on
the compromise which was presented to her by the plaintiffs and not on the
amended complaint as stated in the respondent’s Order dated February 19,
2004, thus docket fees collected were still insufficient. If the amount of
docket fees paid is insufficient considering the amount of the claim, the clerk
of court of the lower court involved or his duly authorized deputy has the
responsibility of making a deficiency assessment, thus it is no longer the fault
of respondent when there was a mistake in the assessment.
However, when the matter was brought to the attention of respondent by
complainant in its sur-rejoinder in this administrative complaint, respondent
called the attention of the clerk of court where she was asked to recompute
the same so that proper order can be issued. Respondent, on November 18,
2004, issued another Order based on the compliance report submitted by the
Clerk of Court that plaintiffs have still to pay the amount of P14,717,171.19
based on the claim in the amended complaint by directing the plaintiffs to pay
within 15 days from receipt. These actuations of respondent are in accordance
with the Sun Insurance case.
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[issue on summary judgment omitted]

WHEREFORE, the instant administrative complaint against respondent

Judge Romulo A. Lopez is DISMISSED.
SO ORDERED.

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2. Asean Pacific v. City of Urdaneta, G.R. No. 162525, September
23, 2008
Facts:
This case stemmed from a Complaint for annulment of contracts with
prayer for preliminary prohibitory injunction and temporary restraining order
filed by respondent Waldo C. Del Castillo, in his capacity as taxpayer,
against respondents City of Urdaneta and Ceferino J. Capalad doing
business under the name JJEFWA Builders, and petitioners Asean Pacific
Planners (APP) represented by Ronilo G. Goco and Asean Pacific Planners
Construction and Development Corporation (APPCDC) represented by
Cesar D. Goco.
Del Castillo alleged that then Urdaneta City Mayor Rodolfo E. Parayno
entered into five contracts for the preliminary design, construction and
management of a four-storey twin cinema commercial center and hotel
involving a massive expenditure of public funds amounting to P250 million,
funded by a loan from the Philippine National Bank (PNB). For minimal
work, the contractor was allegedly paid P95 million. Del Castillo also claimed
that all the contracts are void because the object is outside the commerce of
men. The object is a piece of land belonging to the public domain and which
remains devoted to a public purpose as a public elementary school.
Additionally, he claimed that the contracts, from the feasibility study to
management and lease of the future building, are also void because they were
all awarded solely to the Goco family.
In their Answer,3 APP and APPCDC claimed that the contracts are valid.
Urdaneta City Mayor Amadeo R. Perez, Jr., who filed the city’s
Answer,4 joined in the defense and asserted that the contracts were
properly executed by then Mayor Parayno with prior authority from the
Sangguniang Panlungsod. Mayor Perez also stated that Del Castillo has no
legal capacity to sue and that the complaint states no cause of action. For
respondent Ceferino J. Capalad, Atty. Oscar C. Sahagun filed an Answer5
with compulsory counterclaim and motion to dismiss on the ground that Del
Castillo has no legal standing to sue.
After pre-trial, the Lazaro Law Firm entered its appearance as counsel for
Urdaneta City and filed an Omnibus Motion7 with prayer to (1) withdraw
Urdaneta City’s Answer; (2) drop Urdaneta City as defendant and be
joined as plaintiff; (3) admit Urdaneta City’s complaint; and (4) conduct a
new pre-trial. Urdaneta City allegedly wanted to rectify its position and
claimed that inadequate legal representation caused its inability to file the
necessary pleadings in representation of its interests.
In its Order8 dated September 11, 2002, the Regional Trial Court (RTC) of
Urdaneta City, Pangasinan, Branch 45, admitted the entry of appearance
of the Lazaro Law Firm and granted the withdrawal of appearance of the City
Prosecutor. It also granted the prayer to drop the city as defendant and
admitted its complaint for consolidation with Del Castillo’s complaint,
and directed the defendants to answer the city’s complaint.
RTC denied reconsideration of the September 11, 2002 Order. It also granted
Capalad’s motion to expunge all pleadings filed by Atty. Sahagun in his
behalf. Capalad was dropped as defendant, and his complaint filed by Atty.
Jorito C. Peralta was admitted and consolidated with the complaints of Del
Castillo and Urdaneta City. The RTC also directed APP and APPCDC to
answer Capalad’s complaint.
On a R65 by petitioners APP and APPCDC, CA affirmed RTC. It dismissed
the petition on the following grounds: (1) defective verification and
certification of non-forum shopping, (2) failure of the petitioners to submit
certified true copies of the RTC’s assailed orders as mere photocopies were
submitted, and (3) lack of written explanation why service of the petition to
adverse parties was not personal.10
The Court of Appeals also denied APP and APPCDC’s motion for
reconsideration in its February 4, 2004 Resolution.11
Hence this petition claiming, among others, that Urdaneta City is estopped to
reverse admissions in its Answer that the contracts are valid and, in its pre-
trial brief, that the execution of the contracts was in good faith.
Issue:
W/N Urdaneta City is bound by the admissions in its Answer that the
contracts are valid and, in its pre-trial brief, that the execution of the contracts
was in good faith – No.
Held:
No.
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Section 5, Rule 10 of the Rules of Court pertinently provides that if evidence
is objected to at the trial on the ground that it is not within the issues raised
by the pleadings, the court may allow the pleadings to be amended and shall
do so with liberality if the presentation of the merits of the action and the ends
of substantial justice will be subserved thereby.

Objections need not even arise in this case since the Pre-trial Order dated
April 1, 2002 already defined as an issue whether the contracts are valid.
Thus, what is needed is presentation of the parties’ evidence on the issue. Any
evidence of the city for or against the validity of the contracts will be relevant
and admissible. Note also that under Section 5, Rule 10, necessary
amendments to pleadings may be made to cause them to conform to the
evidence.

In addition, despite Urdaneta City’s judicial admissions, the trial court is still
given leeway to consider other evidence to be presented for said admissions
may not necessarily prevail over documentary evidence, e.g., the contracts
assailed. A party’s testimony in open court may also override admissions in
the Answer.

WHEREFORE, we (1) GRANT the petition; (2) SET ASIDE the Resolutions
dated April 15, 2003 and February 4, 2004 of the Court of Appeals in CA-
G.R. SP No. 76170; (3) DENY the entry of appearance of the Lazaro Law
Firm in Civil Case No. U-7388 and EXPUNGE all pleadings it filed as
counsel of Urdaneta City; (4) ORDER the City Prosecutor to represent
Urdaneta City in Civil Case No. U-7388; (5) AFFIRM the RTC in admitting
the complaint of Capalad; and (6) PROHIBIT Atty. Oscar C. Sahagun from
representing Capalad and EXPUNGE all pleadings that he filed in behalf of
Capalad.

Let the records of Civil Case No. U-7388 be remanded to the trial court for
further proceedings.

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3. Tiu v. PBCOM, G.R. No. 151932, August 19, 2009
Facts:
In June 1993, Asian Water Resources, Inc. (AWRI), represented by herein
petitioners Tiu, Go and Co, applied for a real estate loan with the Philippine
Bank of Communications (PBCOM) to fund its purified water
distribution business. In support of the loan application, petitioners
submitted a Board Resolution2 dated June 7, 1993. The loan was guaranteed
by collateral over the property covered by Transfer Certificate of Title No. T-
13020.3
The loan was eventually approved.4 In August 1996, AWRI applied for a
bigger loan from PBCOM for additional capitalization using the same Board
Resolution, but without any additional real estate collateral. Considering that
the proposed additional loan was unsecured, PBCOM required all the
members of the Board of Directors of AWRI to become sureties. Thus,
on August 16, 1996, a Surety Agreement5 was executed by its Directors and
acknowledged by a notary public on the same date. All copies of the Surety
Agreement, except two, were kept by PBCOM. Of the two copies kept by the
notary public, one copy was retained for his notarial file and the other was
sent to the Records Management and Archives Office, through the Office of
the RTC Clerk of Court.6
Thereafter, on December 16, 1998, AWRI informed the bank of its desire to
surrender and/or assign in its favor, all the present properties of the former to
apply as dacion en pago for AWRI’s existing loan obligation to the bank.7
On January 11, 1999, PBCOM sent a reply denying the request. On May 12,
1999, PBCOM sent a letter to petitioners demanding full payment of its
obligation to the bank.8
Its demands having remained unheeded, PBCOM instructed its counsel to file
a complaint for collection against petitioners. The case was docketed as
Civil Case No. 99-352.
On July 3, 1999, petitioners filed their Answer. It alleged, among other
things, that they were not personally liable on the promissory notes, because
they signed the Surety Agreement in their capacities as officers of AWRI.
They claimed that the Surety Agreement attached to the complaint as
Annexes “A” to “A-2”9 were falsified, considering that when they signed
the same, the words “In his personal capacity” did not yet appear in the
document and were merely intercalated thereon without their knowledge
and consent.10
In support of their allegations, petitioners attached to their Answer a certified
photocopy of the Surety Agreement issued on March 25, 1999 by the
Records Management and Archives Office in Davao City,11 showing that
the words “In his personal capacity” were not found at the foot of page two
of the document where their signatures appeared.12
Because of this development, PBCOM’s counsel searched for and retrieved
the file copy of the Surety Agreement. The notarial copy showed that the
words “In his personal capacity” did not appear on page two of the Surety
Agreement.13
PBCOM then filed a Reply and Answer to Counterclaim with Motion for
Leave of Court to Substitute Annex “A” of the Complaint,16 wherein it
attached the duplicate original copy retrieved from the file of the notary
public. PBCOM also admitted its mistake in making the insertion and
explained that it was made without the knowledge and consent of the notary
public. PBCOM maintained that the insertion was not a falsification, but was
made only to speak the truth of the parties’ intentions. PBCOM also
contended that petitioners were already primarily liable on the Surety
Agreement whether or not the insertion was made, having admitted in their
pleadings that they voluntarily executed and signed the Surety Agreement in
the original form. PBCOM, invoking a liberal application of the Rules,
emphasized that the motion incorporated in the pleading can be treated
as a motion for leave of court to amend and admit the amended
complaint pursuant to Section 3, Rule 10 of the Rules of Court.
RTC allowed the substitution of the altered document with the original Surety
Agreement.
Petitioners filed MR which was denied.
On a R65, CA affirmed RTC in toto.
Hence this petition.
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Arguments:
Petitioners claim that RTC erred in allowing the substitution of the document
by relying on Section 3, Rule 10 of the Rules of Court. Petitioners assert that
the Rules do not allow the withdrawal and substitution of a “falsified
document” once discovered by the opposing party.
Petitioners maintain that PBCOM’s cause of action was solely and principally
founded on the alleged “falsified document” originally marked as Annexes
“A” to “A-2.” Thus, the “withdrawal” of the document results in the
automatic withdrawal of the whole complaint on the ground that there is no
more cause of action to be maintained or enforced by plaintiff against
petitioners. Also, petitioners argue that if the substitution will be allowed,
their defenses that were anchored on Annexes “A” to “A-2” would be gravely
affected. Moreover, considering that the said document was already removed,
withdrawn, and disregarded by the RTC, the withdrawal and substitution of
the document would prevent petitioners from introducing the falsified
documents during the trial as part of their evidence.23
For its part, PBCOM argues that since the complaint is based on an actionable
document, i.e., the surety agreement, the original or a copy thereof should be
attached to the pleading as an exhibit, which shall be deemed part of the
pleading. Considering that the surety agreement is annexed to the complaint,
it is an integral part thereof and its substitution with another copy is in the
nature of a substantial amendment, which is allowed by the Rules, but with
prior leave of court.
Moreover, PBCOM alleges that since the Rules provides that substantial
amendments may be made upon leave of court, the authority of the RTC to
allow the amendment is discretionary. Thus, the CA correctly held that the
act of granting the said substitution was within the clear and proper discretion
of the RTC.
Issue:
W/N the RTC erred in allowing the substitution of the document – No, it did
not err.
Held:
No, it did not err.
As to the substitution of the earlier surety agreement that was annexed to the
complaint with the original thereof, this Court finds that the RTC did not err
in allowing the substitution.
The pertinent rule on actionable documents is found in Section 7, Rule 8 of
the Rules of Court, which provides that when the cause of action is anchored
on a document, its substance must be set forth, and the original or a copy
thereof “shall” be attached to the pleading as an exhibit and deemed a part
thereof.
With respect to PBCOM’s right to amend its complaint, including the
documents annexed thereto, after petitioners have filed their answer, Section
3, Rule 10 of the Rules of Court specifically allows amendment by leave of
court. The said Section states:
“SECTION 3. Amendments by leave of court.—Except as provided in the
next preceding section, substantial amendments may be made only upon
leave of court. But such leave may be refused if it appears to the court that
the motion was made with intent to delay. Orders of the court upon the
matters provided in this section shall be made upon motion filed in court, and
after notice to the adverse party, and an opportunity to be heard.”
This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules
of Civil Procedure in Valenzuela v. Court of Appeals,26 thus:
“Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure
amended the former rule in such manner that the phrase “or that the cause of
action or defense is substantially altered” was stricken-off and not retained in
the new rules. The clear import of such amendment in Section 3, Rule 10 is
that under the new rules, “the amendment may (now) substantially alter
the cause of action or defense.” This should only be true, however, when
despite a substantial change or alteration in the cause of action or
defense, the amendments sought to be made shall serve the higher
interests of substantial justice, and prevent delay and equally promote the
laudable objective of the rules which is to secure a “just, speedy and
inexpensive disposition of every action and proceeding.”27
The granting of leave to file amended pleading is a matter particularly
addressed to the sound discretion of the trial court; and that discretion is
broad, subject only to the limitations that the amendments should not
substantially change the cause of action or alter the theory of the case, or
that it was not made to delay the action. Nevertheless, as enunciated in
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Valenzuela, even if the amendment substantially alters the cause of action
or defense, such amendment could still be allowed when it is sought to
serve the higher interest of substantial justice; prevent delay; and secure
a just, speedy and inexpensive disposition of actions and proceedings.
The courts should be liberal in allowing amendments to pleadings to avoid a
multiplicity of suits and in order that the real controversies between the
parties are presented, their rights determined, and the case decided on the
merits without unnecessary delay. This liberality is greatest in the early stages
of a lawsuit, especially in this case where the amendment was made before
the trial of the case, thereby giving the petitioners all the time allowed by law
to answer and to prepare for trial.
Furthermore, amendments to pleadings are generally favored and should be
liberally allowed in furtherance of justice in order that every case, may so far
as possible, be determined on its real facts and in order to speed up the trial
of the case or prevent the circuity of action and unnecessary expense. That is,
unless there are circumstances such as inexcusable delay or the taking of the
adverse party by surprise or the like, which might justify a refusal of
permission to amend.
In the present case, there was no fraudulent intent on the part of PBCOM in
submitting the altered surety agreement. In fact, the bank admitted that it was
a mistake on their part to have submitted it in the first place instead of the
original agreement. It also admitted that, through inadvertence, the copy that
was attached to the complaint was the copy wherein the words “IN HIS
PERSONAL CAPACITY” were inserted to conform to the bank’s standard
practice. This alteration was made without the knowledge of the notary
public. PBCOM’s counsel had no idea that what it submitted was the altered
document, thereby necessitating the substitution of the surety agreement with
the original thereof, in order that the case would be judiciously resolved.
complaint, which consequently included the substitution of the altered surety
agreement with a copy of the original.
Moreover, contrary to petitioners’ contention, they could not be prejudiced
by the substitution since they can still present the substituted documents,
Annexes “A” to A-2,” as part of the evidence of their affirmative defenses.
The substitution did not prejudice petitioners or delay the action. On the
contrary, it tended to expedite the determination of the controversy. Besides,
the petitioners are not precluded from filing the appropriate criminal action
against PBCOM for attaching the altered copy of the surety agreement to the
complaint. The substitution of the documents would not, in any way, erase
the existence of falsification, if any. The case before the RTC is civil in
nature, while the alleged falsification is criminal, which is separate and
distinct from another. Thus, the RTC committed no reversible error when it
allowed the substitution of the altered surety agreement with that of the
original.
WHEREFORE, premises considered, the petition is DENIED. Subject to the
above disquisitions, the Decision of the Court of Appeals in CA-G.R. SP No.
57732, dated September 28, 2001, and the Orders of the Regional Trial Court
of Cagayan de Oro City, Branch 21, in Civil Case No. 99-352, dated
December 14, 1999 and January 11, 2000, are AFFIRMED.
SO ORDERED.

Verily, it is a cardinal rule of evidence, not just one of technicality but of

substance, that the written document is the best evidence of its own contents.
It is also a matter of both principle and policy that when the written contract
is established as the repository of the parties’ stipulations, any other evidence
is excluded, and the same cannot be used to substitute for such contract, or
even to alter or contradict the latter.31 The original surety agreement is the
best evidence that could establish the parties’ respective rights and
obligations. In effect, the RTC merely allowed the amendment of the

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4. Biglang Awa v. Philippine Trust Company, G.R. NO. 158998,
March 28, 2008
Facts:
On November 22, 2000, herein petitioners, together with their mother,
Encarnacion Cleofas Vda. de Biglang-awa (Encarnacion), filed a
Complaint3 for declaration of nullity of deeds, cancellation of titles,
reconveyance and recovery with damages before the RTC of Quezon City,
Branch 93, against Roberth B. Tolentino (Tolentino), Philippine Trust
Company (respondent) and the Register of Deeds of Quezon City.
In the Complaint, petitioners and Encarnacion alleged that they are the
legitimate owners of eight parcels of land, all located along Quirino Highway,
Novaliches, Quezon City.
Petitioners averred that in 1977, without the knowledge and consent of
Encarnacion and through fraudulent manipulations, misrepresentations and
the use of falsified documents, Tolentino succeeded in having four of the
eight subject parcels of land, which are in the name of Encarnacion,
encumbered by way of mortgage to secure a loan made by Tolentino with
respondent; that on separate occasions in 1998 and 2000, and using similar
fraudulent manipulations, misrepresentations and use of falsified documents,
Tolentino was able to secure in his name new Torrens titles over all the eight
subject parcels of land.
Subsequently, petitioners caused the annotation of a notice of lis pendens on
all the titles registered in the name of Tolentino.
On January 3, 2001, Tolentino filed a Motion to Dismiss4 on the ground that
Ligaya lacked capacity to sue on behalf of the other plaintiffs; and that she
had no cause of action considering that she had sold her property to Tolentino.
On January 4, 2001, Encarnacion filed a Notice of Dismissal5 claiming
that the subject complaint was filed without her permission and/or
conformity; that the four parcels of land, titled under her name, and which
formed part of the subject matter of the said complaint, were solely her own;
and that she freely and satisfactorily sold them to Tolentino.
On even date, respondent filed its Answer with Compulsory Counterclaim6
praying that the complaint be dismissed for failure to state a cause of action
against it; and for failure of Encarnacion to verify and certify the complaint
against it.
On February 2, 2001, RTC confirmed the notice of dismissal and
dismissed the case with prejudice.
Thereafter, Tolentino filed a Motion for Issuance of a Certificate of Finality
of the Court’s Order of February 2, 2001.
On February 19, 2001, herein petitioners filed a Motion for Reconsideration
of the Order of the RTC dated February 2, 2001.8
Subsequently, petitioners filed a Motion for Leave to Amend Complaint
and to Admit Attached Amended Complaint.9 The Amended Complaint
seeks to implead Encarnacion and petitioners’ sister, Liwayway Biglang-awa
(Liwayway), as party defendants. Petitioners contend that they, together with
Encarnacion and Liwayway, are co-owners, pro indiviso, of the subject
parcels of land; that through manipulations and misrepresentations,
Tolentino, Encarnacion and Liwayway were able to secure a partition of and
titles over the disputed properties.
On April 16, 2001, RTC issued a Resolution which:
1. denied the motion for issuance of a certificate of finality because an MR
was seasonably filed.
2. denied the MR because the MR was not filed by Encarnacion, but by her
co-plaintiffs, and since the notice of dismissal is personal to Encarnacion, the
MR must be denied.
3. granted the MTD
4. denied the motion for leave to amend complaint holding that:
“With the grant of the motion to dismiss, the consequent denial of the motion
for leave to amend complaint ought to follow but there is need for some
discussion on the matter.
During the hearing on the notice of dismissal and motion to dismiss, plaintiff
Encarnacion Cleofas vda. de Biglang-awa unequivocally told the court
among others, that she never met plaintiff’s counsel before and that she never
authorized nor engaged counsel to file the present complaint. Thus, her notice
to dismiss the action. This repudiation of a presumed client-attorney
relationship is quite disturbing to the court. It indicates that some “short-cuts”
Avila 4B | 2016
or “cutting corners,” to put it mildly, may have been resorted to by counsel
appearing for the plaintiffs.
In light of the foregoing, the motion for leave to amend complaint filed by
the same counsel for the plaintiffs would not appear to be deserving of a
favorable response from the court. Moreover, the amendment sought to be
made appears to have drastically altered the causes of action of the parties
plaintiffs and parties defendants between and among themselves.
It is true that an unwilling party plaintiff may be joined as a defendant but
this must be set out at the inception of the complaint. Even if, for the sake of
argument, that this joinder may be made via an amendment, the allegations
of the complaint do not clearly indicate that the case involves a party who
refuses to give her consent to be joined as a plaintiff. As revealed in open
court during the hearing on the incidents, the plaintiff Encarnacion Cleaofas
vda. de Biglang-awa has not been made aware at all of the filing of the
complaint and of the reasons therefore. It may not therefore be correctly said
that she was an unwilling co-plaintiff.”
The RTC resolution ultimately dismissed the complaint without prejudice.
Tolentino, filed a Motion for Cancellation of Notice of Lis Pendens11 with
respect to the four parcels of land covered by TCT Nos. N-198629, N-
198630, N-198631 and N- 198632 derived from the TCTs of Encarnacion.
Petitioners filed a Motion for Reconsideration of the April 16, 2001 RTC
Resolution and an Opposition to Tolentino’s Motion for Cancellation of
Notice of Lis Pendens.12 Respondent filed its Opposition and Reply to
petitioners’ Motion for Reconsideration and Opposition. Petitioners filed
their Rejoinder to Opposition and Reply.
RTC denied petitioner’s MR and Tolentino’s Motion for Cancellation of
Notice of Lis Pendens.
On August 20, 2001, the RTC issued an Entry of Judgment declaring
that its Order of February 2, 2001 dismissing the complaint of
Encarnacion had become final and executory.
Respondent filed an MR on the ground that the RTC Order which declared
that there was no further obstacle to the cancellation of the notice of lis
pendens had already become final and executory.
RTC denied the MR on the ground that the cancellation of the notice of lis
pendens was “simply not reasonable.”
Respondent filed a R65 with the CA against the denial of the motion for
cancellation of lis pendens.
Petitioners also filed a R65 against the granting of Tolentino’ s Motion
to Dismiss and denied petitioner’s Motion for Leave to Admit Amended
Complaint. This was dismissed by the CA. The dismissal attained
finality.
Meanwhile, the CA granted the R65 regarding the lis pendens and ordered
the cancellation of the lis pendens.
Hence this petition.
Petitioners aver, among others, that under Section 2, Rule 10 of the Rules of
Court, as well as in several rulings of this Court, a party may amend his
pleading once as a matter of right at any time before a responsive pleading is
served; that prior to the filing of Tolentino’s Answer, petitioners filed an
amended complaint wherein they alleged that they are co-owners of the
subject parcels of land and that they have been deprived of their proper shares
in the partition of the said lands through the falsifications committed by the
defendants impleaded in the original and amended complaints.
Respondent further argues that the complaint filed by petitioners was already
dismissed by the RTC per its Order dated February 2, 2001 and Resolution
dated April 16, 2001; that the Order of February 2, 2001 was a “dismissal
with prejudice” insofar as it affects the four properties formerly owned by
Encarnacion and insofar as respondent is concerned, considering that the
latter was merely impleaded as a mortgagee of these properties; that the
Resolution of the RTC dated April 16, 2001 did not amend its February 2,
2001 Order, as the “dismissal without prejudice” being contemplated by the
April 16, 2001 Resolution refers to the remaining four properties allegedly
owned by petitioners excluding those parcels of land formerly owned by
Avila 4B | 2016
Encarnacion; and that the February 2, 2001 Order and April 16, 2001
Resolution of the RTC had already become final and executory.
Issue:
W/N the RTC should have allowed petitioners to amend their complaint –
No.
Held:
No.
With respect to petitioners’ right to amend their Complaint after respondent
had filed its Answer, Rule 10 of the Rules of Court provides:
“Sec. 2. Amendments as a matter of right.—A party may amend his pleading
once as a matter of right at any time before a responsive pleading is served
or, in the case of a reply, at any time within ten (10) days after it is served.
Sec. 3. Amendments by leave of court.—Except as provided in the next
preceding Section, substantial amendments may be made only upon leave of
court. But such leave may be refused if it appears to the court that the
motion was made with intent to delay. Orders of the Court upon the matters
provided in this Section shall be made upon motion filed in court, and after
notice to the adverse party, and an opportunity to be heard.” (Emphasis
Supplied)
In Republic of the Philippines v. Africa, 531 SCRA 533 (2007), this Court
held that where some but not all of the defendants have answered, plaintiffs
may amend their complaint once, as a matter of right, in respect to claims
asserted solely against the non-answering defendants, but not as to claims
asserted against the other defendants.
In the present case, prior to petitioners’ filing of their Motion for Leave to
Amend Complaint and to Admit Attached Amended Complaint, respondent
already filed its Answer with Counterclaim. Hence, since respondent had
already filed its answer, it follows that petitioners may no longer amend their
complaint against the former as a matter of right. They may do so only upon
leave of court, as provided under Section 3, Rule 10 of the same Rules, which
they did by filing their Motion for Leave to Amend Complaint.
In Philippine Ports Authority v. William Gothong & Aboitiz (WG&A), Inc.,
542 SCRA 514 (2008), this Court, in discussing the import of Section 3, Rule
10 of the Rules of Court, as amended, held that: Interestingly, Section 3, Rule
10 of the 1997 Rules of Civil Procedure amended the former rule in such
manner that the phrase “or that the cause of action or defense is substantially
altered” was stricken-off and not retained in the new rules. The clear import
of such amendment in Section 3, Rule 10 is that under the new rules, “the
amendment may (now) substantially alter the cause of action or defense.”
This should only be true, however when despite a substantial change or
alteration in the cause of action or defense, the amendments sought to be
made shall serve the higher interests of substantial justice, and prevent delay
and equally promote the laudable objective of the rules which is to secure a
“just, speedy and inexpensive disposition of every action and proceeding.”
On the basis of the foregoing ruling, the denial of petitioners’ Motion for
Leave to Amend Complaint on the ground that the amendment “drastically
altered the causes of action of the parties plaintiffs and parties defendants
between and among themselves” is erroneous. The RTC did not make any
finding that the motion was filed with intent to delay.
Nonetheless, the Court finds that the RTC correctly denied petitioners’
Motion for Leave to Amend Complaint, although for a different reason.
In their original complaint, petitioners claim that the properties covered by
TCT Nos. N-198629 to N-198632 were owned exclusively by Encarnacion.
There was no mention whatsoever that Encarnacion’s titles over these parcels
of land were obtained through fraud or any other illegal means. However, in
their Amended Complaint, in which petitioners sought to make Encarnacion
and Liwayway as defendants, they subsequently seek the nullification of
Encarnacion’s titles over the above-mentioned parcels of land by alleging that
petitioners, together with Encarnacion and Liwayway, are co-owners of all
the subject lots, and the titles thereto were obtained on the basis of falsified
subdivision agreements and subdivision plans.
It should be noted, however, that the basis of the February 2, 2001 Order
and April 16, 2001 Resolution of the trial court, both of which had
already become final and executory, is its finding that the four parcels of
land covered by TCT Nos. N-198629 to N-198632 were exclusively owned
by Encarnacion.
Since the February 2, 2001 Order and the April 16, 2001 Resolution of the
RTC have already become final and executory, petitioners are already
Avila 4B | 2016
precluded from claiming otherwise. If petitioners are permitted to amend their
complaint, they would, in effect, alter a factual conclusion of the RTC which
it used as its basis in rendering its February 2, 2001 Order and April 16, 2001
Resolution. Settled is the rule that a decision that has acquired finality
becomes immutable and unalterable.28 A final judgment may no longer be
modified in any respect, even if the modification is meant to correct erroneous
conclusions of fact or law; and whether it will be made by the court that
rendered it or by the highest court in the land.29 The only exceptions to this
rule are the correction of
(1) clerical errors;
(2) the so-called nunc pro tunc entries which cause no prejudice to any party;
and
(3) void judgments.30 None of these exceptions are present in the instant
case.

Moreover, the RTC already dismissed the Complaint filed by petitioners for
lack of jurisdiction over the action, because petitioners failed to pay the
appropriate docket fees. Petitioners did not appeal this ruling of the RTC. In
any case, such order of dismissal have already become final and executory
pending resolution of the present petition. On this basis, the Motion for Leave
to Amend Complaint is rendered moot.

WHEREFORE, the petition is DENIED. The Decision of the Court of

Appeals dated April 30, 2003 and its Resolution of July 4, 2003 are
AFFIRMED.
SO ORDERED.

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X. Bill of Particulars (Rule 12)
1. Baritua v. Mercader, G.R. No. 136048, January 23, 2001
Facts:
The original complaint was filed by respondents against JB Lines, Inc.
seeking to claim damages. They allege that Dominador Mercader died due
to an accident while riding JB Line’s bus, then driven by Baritua’s driver.
The complaint prayed, among others, for an award of:
“c) P1,660,000.00 or more as may be proven during the trial, by way of loss
of earnings; pass sub silencio the trial court’s failure to rule frontally on petitioners’ plea
g) An amount equivalent to 25% of whatever amount the plaintiffs would be
able to collect from the defendant but in no case less than P50,000.00 plus an
additional amount of P1,000.00 per hearing as and by way of Attorney’s
fees;” of earnings;
Petitioner JB Lines, Inc. filed a motion to dismiss complaint, to strike out
false- impertinent matters therefrom, and/or for bill of particulars on the
primary grounds that [respondents] failed to implead Jose Baritua as an
indispensable party and that the cause of action is a suit against a wrong
and non-existent party.
Respondents filed an opposition to the said motion and an amended
complaint which impleaded Baritua.
RTC denied the MTD and admitted the amended complaint of respondents
which impleaded Baritua and alleged that Dominador Mercader, a passenger
in petitioners’ bus, died because the bus fell into a river due to the driver’s
negligence.
Respondents then filed a motion to declare [petitioners] in default which
motion was opposed by [petitioners]. [Respondents] withdrew the said
motion prompting the trial court to cancel the scheduled hearing of the said
motion to declare [petitioners] in default.
Petitioners filed an Answer which specifically denied all the material
allegations in the complaint.
RTC ruled for respondents and ordered petitioners to pay damages.
CA affirmed but modified the RTC decision as to the amount of loss of
earnings of Mercader.
Hence this petition.
Petitioners argue, among others, that the Court of Appeals erred when it
passed sub silencio on the trial Court’s failure to rule frontally on their plea
for a bill of particulars.
Petitioners claim that the CA gravely abuse its discretion when it allowed to
for a bill of particulars, and ignored the nature of respondents’ prayer in the
complaint pleading for an award of—
“c) P1,660,000.00 or more as may be proven during the trial, by way of loss
g) An amount equivalent to 25% of whatever amount the plaintiffs would be
able to collect from the defendant but in no case less than P50,000.00 plus an
additional amount of P1,000.00 per hearing as and by way of Attorney’s
fees;”
Issue:
W/N the RTC erred in not ruling on petitioners’ MBOP – No.
Held:
No.
Petitioners argue that the Court of Appeals erred when it passed sub silencio
on the trial Court’s failure to rule frontally on their plea for a bill of
particulars.
We are not impressed.
It must be noted that petitioners’ counsel manifested in open court his desire
to file a motion for a bill of particulars. The RTC gave him ten days from
March 12, 1985 within which to do so. He, however, filed the aforesaid
motion only on April 2, 1985 or eleven days past the deadline set by the trial
court. Moreover, such motion was already moot and academic because, prior
to its filing, petitioners had already filed their answer and several other
pleadings to the amended Complaint.
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Section 1, Rule 12 of the Rules of Court, provides: “Section 1. When applied
for; purpose.—Before responding to a pleading, a party may move for a more
definite statement or for a bill of particulars of any matter which is not averred
with sufficient definiteness or particularity to enable him properly to prepare
his responsive pleading. If the pleading is a reply, the motion must be filed
within ten (10) days from service thereof. Such motion shall point out the
defects complained of, the paragraphs wherein they are contained, and the
details desired.” (emphasis supplied)

WHEREFORE, the Petition is hereby DENIED, and the assailed

Decision AFFIRMED. Costs against petitioners. SO ORDERED.

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2. Reyes v. RTC of Makati, G.R. No. 165744, August 11, 2008
Facts:
Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four
children of the spouses Pedro and Anastacia Reyes. Pedro, Anastacia,
Oscar, and Rodrigo each owned shares of stock of Zenith Insurance
Corporation (Zenith), a domestic corporation established by their family.
Pedro died in 1964, while Anastacia died in 1993. Although Pedro’s estate
was judicially partitioned among his heirs sometime in the 1970s, no similar
settlement and partition appear to have been made with Anastacia’s estate,
which included her shareholdings in Zenith.
As of June 30, 1990, Anastacia owned 136,598 shares of Zenith; Oscar and
Rodrigo owned 8,715,637 and 4,250 shares, respectively.3
On May 9, 2000, Zenith and Rodrigo filed a complaint4 with the Securities
and Exchange Commission (SEC) against Oscar, docketed as SEC Case No.
05-00-6615. The complaint stated that it is “a derivative suit initiated and
filed by the complainant Rodrigo C. Reyes to obtain an accounting of the
funds and assets of ZENITH INSURANCE CORPORATION which are now
or formerly in the control, custody, and/or possession of respondent [herein
petitioner Oscar] and to determine the shares of stock of deceased spouses
Pedro and Anastacia Reyes that were arbitrarily and fraudulently
appropriated [by Oscar] for himself [and] which were not collated and taken
into account in the partition, distribution, and/or settlement of the estate of
the deceased spouses, for which he should be ordered to account for all the
income from the time he took these shares of stock, and should now deliver
to his brothers and sisters their just and respective shares.”5 [Emphasis
supplied.]
In his Answer with Counterclaim, Oscar denied the charge that he illegally
acquired the shares of Anastacia Reyes. He asserted, as a defense, that he
purchased the subject shares with his own funds from the unissued stocks of
Zenith, and that the suit is not a bona fide derivative suit because the
requisites therefor have not been complied with. He thus questioned the
SEC’s jurisdiction to entertain the complaint because it pertains to the
settlement of the estate of Anastacia Reyes.
When Republic Act (R.A.) No. 8799 took effect, the SEC’s exclusive and
original jurisdiction over cases enumerated in Section 5 of Presidential
Decree (P.D.) No. 902-A was transferred to the RTC designated as a
special commercial court.8 The records of Rodrigo’s SEC case were thus
turned over to the RTC, Branch 142, Makati, and docketed as Civil Case No.
00-1553.
On October 22, 2002, Oscar filed a Motion to Declare Complaint as
Nuisance or Harassment Suit.9 He claimed that the complaint is a mere
nuisance or harassment suit and should, according to the Interim Rules of
Procedure for Intra-Corporate Controversies, be dismissed; and that it is not
a bona fide derivative suit as it partakes of the nature of a petition for the
settlement of estate of the deceased Anastacia that is outside the jurisdiction
of a special commercial court.
RTC denied the motion holding that
“the Complaint disclosed the presence of two (2) causes of action, namely:
a) a derivative suit for accounting of the funds and assets of the corporation
which are in the control, custody, and/or possession of the respondent [herein
petitioner Oscar] with prayer to appoint a management committee; and
b) an action for determination of the shares of stock of deceased spouses
Pedro and Anastacia Reyes allegedly taken by respondent, its accounting and
the corresponding delivery of these shares to the parties’ brothers and sisters.
The latter is not a derivative suit and should properly be threshed out in a
petition for settlement of estate. Accordingly, the motion is denied. However,
only the derivative suit consisting of the first cause of action will be taken
cognizance of by this Court.”
On a R65, CA affirmed. MR denied.
Hence this petition.
Petitioner Oscar claims that:
1. the complaint is a mere nuisance or harassment suit that should be
dismissed under the Interim Rules of Procedure of Intra-Corporate
Controversies; and
2. the complaint is not a bona fide derivative suit but is in fact in the nature
of a petition for settlement of estate; hence, it is outside the jurisdiction of the
RTC acting as a special commercial court.
Avila 4B | 2016

Issue:
W/N the trial court, sitting as a special commercial court, has jurisdiction over
the subject matter of Rodrigo’s complaint – No.
Held:
No. CA decision is reversed.
The core question for our determination is whether the trial court, sitting as a
special commercial court, has jurisdiction over the subject matter of
Rodrigo’s complaint. To resolve it, we rely on the judicial principle that
“jurisdiction over the subject matter of a case is conferred by law and is
determined by the allegations of the complaint, irrespective of whether the
plaintiff is entitled to all or some of the claims asserted therein.”12
Under PD 902-A, the SEC (now RTC acting as special commercial court) has
exclusive jurisdiction over:
“a) Devices or schemes employed by or any acts of the board of directors,
business associates, its officers or partners, amounting to fraud and
misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, members of associations or organizations
registered with the Commission.
b) Controversies arising out of intra-corporate or partnership relations,
between and among stockholders, members, or associates; between any or all
of them and the corporation, partnership or association of which they are
stockholders, members, or associates, respectively; and between such
corporation, partnership or association and the State insofar as it concerns
their individual franchise or right to exist as such entity; and
c) Controversies in the election or appointment of directors, trustees, officers,
or managers of such corporations, partnerships, or associations.”
The allegations set forth in Rodrigo’s complaint principally invoke Section
5, paragraphs (a) and (b) above as basis for the exercise of the RTC’s special
court jurisdiction. Our focus in examining the allegations of the complaint
shall therefore be on these two provisions.
Fraudulent Devices and Schemes
The rule is that a complaint must contain a plain, concise, and direct statement
of the ultimate facts constituting the plaintiff’s cause of action and must
specify the relief sought.13 Section 5, Rule 8 of the Revised Rules of Court
provides that in all averments of fraud or mistake, the circumstances
constituting fraud or mistake must be stated with particularity.14 These
rules find specific application to Section 5(a) of P.D. No. 902-A which speaks
of corporate devices or schemes that amount to fraud or misrepresentation
detrimental to the public and/or to the stockholders.
In an attempt to hold Oscar responsible for corporate fraud, Rodrigo alleged
in the complaint the following:
“3. This is a complaint . . . to determine the shares of stock of the deceased
spouses Pedro and Anastacia Reyes that were arbitrarily and
fraudulently appropriated for himself [herein petitioner Oscar]…
3.1. Respondent Oscar C. Reyes, through other schemes of fraud
including misrepresentation, unilaterally, and for his own benefit,
capriciously transferred and took possession and control of the
management of Zenith Insurance Corporation which is considered as a
family corporation, and other properties and businesses belonging to Spouses
Pedro and Anastacia Reyes…
5. The complainant Rodrigo C. Reyes discovered that by some manipulative
scheme, the shareholdings of their deceased mother, Doña Anastacia C.
Reyes, shares of stocks and [sic] valued in the corporate books at
P7,699,934.28, more or less, excluding interest and/or dividends, had been
transferred solely in the name of respondent…
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C.
Reyes valued at P7,099,934.28 were illegally and fraudulently
transferred solely to the respondent’s [herein petitioner Oscar] name
and installed himself as a majority stockholder of Zenith Insurance
Corporation [and] thereby deprived his brothers and sisters of their
respective equal shares thereof including complainant hereto…
10.1 By refusal of the respondent to account of his [sic] shareholdings in
the company, he illegally and fraudulently transferred solely in his name
wherein [sic] the shares of stock of the deceased Anastacia C. Reyes
[which] must be properly collated and/or distributed equally amongst
the children, including the complainant Rodrigo C. Reyes herein, to their
damage and prejudice.” [Emphasis supplied.]
Allegations of deceit, machination, false pretenses, misrepresentation, and
threats are largely conclusions of law that, without supporting statements of
the facts to which the allegations of fraud refer, do not sufficiently state an
effective cause of action.15 The late Justice Jose Feria, a noted authority in
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Remedial Law, declared that fraud and mistake are required to be averred
with particularity in order to enable the opposing party to controvert the
particular facts allegedly constituting such fraud or mistake.16
Tested against these standards, we find that the charges of fraud against Oscar
were not properly supported by the required factual allegations. While the
complaint contained allegations of fraud purportedly committed by him,
these allegations are not particular enough to bring the controversy within the
special commercial court’s jurisdiction; they are not statements of ultimate
facts, but are mere conclusions of law: how and why the alleged appropriation
of shares can be characterized as “illegal and fraudulent” were not explained
nor elaborated on.
specifically alleged corporate fraud that will call for the exercise of the court’s
special commercial jurisdiction. Thus, we cannot affirm the RTC’s
assumption of jurisdiction over Rodrigo’s complaint on the basis of Section
5(a) of P.D. No. 902-A.
WHEREFORE, we hereby GRANT the petition and REVERSE the decision
of the Court of Appeals dated May 26, 2004 in CA- G.R. SP No. 74970. The
complaint before the Regional Trial Court, Branch 142, Makati, docketed as
Civil Case No. 00-1553, is ordered DISMISSED for lack of jurisdiction.
SO ORDERED.

Not every allegation of fraud done in a corporate setting or perpetrated by

corporate officers will bring the case within the special commercial court’ s
jurisdiction. To fall within this jurisdiction, there must be sufficient nexus
showing that the corporation’s nature, structure, or powers were used to
facilitate the fraudulent device or scheme. Contrary to this concept, the
complaint presented a reverse situation. No corporate power or office was
alleged to have facilitated the transfer of the shares; rather, Oscar, as an
individual and without reference to his corporate personality, was alleged to
have transferred the shares of Anastacia to his name, allowing him to become
the majority and controlling stockholder of Zenith, and eventually, the
corporation’s President.

In ordinary cases, the failure to specifically allege the fraudulent acts

does not constitute a ground for dismissal since such defect can be cured
by a bill of particulars. In cases governed by the Interim Rules of Procedure
on Intra-Corporate Controversies, however, a bill of particulars is a
prohibited pleading. It is essential, therefore, for the complaint to show on its
face what are claimed to be the fraudulent corporate acts if the complainant
wishes to invoke the court’s special commercial jurisdiction.

We note that twice in the course of this case, Rodrigo had been given the
opportunity to study the propriety of amending or withdrawing the complaint,
but he consistently refused. The court’s function in resolving issues of
jurisdiction is limited to the review of the allegations of the complaint and,
on the basis of these allegations, to the determination of whether they are of
such nature and subject that they fall within the terms of the law defining the
court’s jurisdiction. Regretfully, we cannot read into the complaint any

Avila 4B | 2016
3. Republic v. Sandiganbayan, G.R. No. 148154, December 17,
2007
Facts:
The propriety of filing and granting of a motion for a bill of particulars filed
for the estate of a defaulting and deceased defendant is the main issue in this
saga of the protracted legal battle between the Philippine government and the
Marcoses on alleged ill-gotten wealth.
The administration of then President Corazon C. Aquino successively sued
former President Ferdinand E. Marcos and former First Lady Imelda
Romualdez-Marcos (Mrs. Marcos), and their alleged cronies or dummies
before the anti-graft court to recover the alleged ill-gotten wealth that they
amassed during the former president’s 20-year rule. Roman A. Cruz, Jr.
(Cruz), the president and chairmant of GSIS, PAL, Hotel Enterprises,
Manila Hotel and Commercial Bank of Manila, is the alleged crony in
this case.
On July 21, 1987, the Presidential Commission on Good Government
(PCGG), through the Office of the Solicitor General, filed a Complaint with
the Sandiganbayan for reconveyance, reversion, accounting, restitution
and damages alleging that Cruz and the Marcoses stole public assets and
invested them in several institutions here and abroad. Specifically, Cruz
allegedly purchased, in connivance with the Marcoses, assets whose values
are disproportionate to their legal income, to wit: two residential lots and two
condominiums in Baguio City; a residential building in Makati; a parcel of
land and six condominium units in California, USA; and a residential land in
Metro Manila. The PCGG also prayed for the payment of moral damages of
P50 billion and exemplary damages of P1 billion.
On September 18, 1987, Cruz filed an Omnibus Motion to Dismiss, strike
out averments in the complaint, and for a bill of particulars.
SB ordered that alias summonses be served on the Marcoses who were then
in exile in Hawaii. The court likewise admitted the PCGG’s Expanded
Complaint dated April 25, 1988, then denied Cruz’s omnibus motion on
July 28, 1988 after finding that the expanded complaint sufficiently states
causes of action and that the matters alleged are specific enough to allow
Cruz to prepare a responsive pleading and for trial.
On September 15, 1988, Cruz filed his answer ad cautelam.
On November 10, 1988, the alias summonses on the Marco-ses were served
at 2338 Makiki Heights, Honolulu, Hawaii. The Marcoses, however, failed
to file an answer and were accordingly declared in default by the anti-graft
court on April 6, 1989. In Imelda R. Marcos, et al. v. Garchitorena, et al.,
this Court upheld the validity of the Marcoses’ default status for failure to file
an answer within 60 days from No-vember 10, 1988 when the alias
summonses were validly served in their house address in Hawaii.
On September 29, 1989, former President Marcos died in Hawaii. He was
substituted by his estate, represented by Mrs. Marcos and their three children,
upon the motion of the PCGG.
On July 13, 1992, Mrs. Marcos filed a Motion to Set Aside Order of
Default, which was granted by the anti-graft court on October 28, 1992.
In Republic v. Sandiganbayan, this Court affirmed the resolution of the anti-
graft court, ruling that Mrs. Marcos had a meritorious defense, and that failure
of a party to properly respond to various complaints brought about by the
occurrence of circumstances which ordinary prudence could not have
guarded against, such as being barred from returning to the Philippines,
numerous civil and criminal suits in the United States, deteriorating health of
her husband, and the complexities of her legal battles, is considered as due to
fraud, accident and excusable negligence.
On September 6, 1995, Mrs. Marcos filed her answer, arguing that the
former President Marcos’ wealth is not ill-gotten and that the civil complaints
and proceedings are void for denying them due process. She also questioned
the legality of the PCGG’s acts and asked for P20 billion moral and
exemplary damages and P10 million attorney’s fees.
On January 11, 1999, after pre-trial briefs had been filed by Cruz, the
PCGG, and Mrs. Marcos, the court directed for-mer President Marcos’
children to appear before it or it will proceed with pre-trial and subsequent
proceedings.
On March 16, 1999, respondent filed a Motion for Leave to File a
Responsive Pleading as executor of his late father’s estate. The PCGG
Avila 4B | 2016
opposed the motion, citing as ground the absence of a motion to set aside the
default order or any order lifting the default status of former President
Marcos. On May 28, 1999, the court granted respondent’s motion.
Respondent asked for three extensions totaling 35 days to file an answer. The
court granted the motions and gave him until July 17, 1999 to file an answer.
But instead of filing an answer, respondent filed on July 16, 1999, a Motion
For Bill of Particulars, praying for clearer statements of the allegations
which he called “mere conclusions of law, too vague and general to
enable defendants to intelligently answer.”
The PCGG opposed the motion, arguing that the requested particulars were
evidentiary matters; that the motion was dilatory; and that it contravened the
May 28, 1999 Resolution granting respondent’s Motion for Leave to File a
Responsive Pleading. No.
The anti-graft court, however, granted the MBOP upheld respondent,
explaining that the allegations against former President Marcos were vague,
general, and were mere conclusions of law. It pointed out that the accusations
did not specify the ultimate facts of former President Marcos’ participation
in Cruz’s alleged accumulation of ill-gotten wealth, effectively preventing
respondent from intelligently preparing an answer.
It noted that this was not the first time the same issue was raised before it,
and stressed that this Court had consistently ruled in favor of the motions for
bills of particulars of the defendants in the other ill-gotten wealth cases
involving the Marcoses.
MR by petitioner denied.
Hence this petition claiming, among others, that:
1. since the default order against former President Marcos has not been lifted
by any court order, respondent cannot file a motion for a bill of particulars.
Petitioner stresses that respondent did not file a motion to lift the default order
as executor of his father’s estate; thus, he and the estate cannot take part in
the trial; and
2. respondent was granted leave to file an answer to the expanded complaint,
not a motion for a bill of particulars. The anti-graft court should not have
accepted the motion for a bill of particulars after he had filed a motion for
leave to file responsive pleading and three successive motions for extension
as the motion for a bill of particulars is dilatory. Petitioner insists that
respondent impli-edly admitted that the complaint sufficiently averred factual
matters with definiteness to enable him to properly prepare a responsive
pleading because he was able to prepare a draft answer, as stated in his second
and third motions for extension. Petitioner adds that the factual matters in the
expanded complaint are clear and sufficient as Mrs. Marcos and Cruz had
already filed their respective answers.
Hence this R65 with the SC.
Issue:
W/N the SB erred in granting the MBOP – No.
Held:
In a nutshell, the ultimate issue is: Did the court commit grave abuse of
discretion amounting to lack or excess of jurisdiction in granting respondent’s
motion for a bill of particulars as executor of former President Marcos’ estates
considering that the deceased defendant was then a defaulting defendant
when the motion was filed?
We rule in the negative, and dismiss the instant petition for utter lack of merit.
I.
In this case, former President Marcos was declared in default for failure to
file an answer. He died in Hawaii as an exile while this case was pending,
since he and his family fled to Hawaii in February 1986 during a people-
power revolt in Metro Manila. His representatives failed to file a motion to
lift the order of default. Nevertheless, respondent, as executor of his father’s
estate, filed a motion for leave to file a responsive pleading, three motions for
extensions to file an answer, and a motion for bill of particulars all of which
were granted by the anti-graft court.
Given the existence of the default order then, what is the legal effect of the
granting of the motions to file a responsive pleading and bill of particulars?
In our view, the effect is that the default order against the former president is
deemed lifted.
Avila 4B | 2016
Considering that a motion for extension of time to plead is not a litigated
motion but an ex parte one, the granting of which is a matter addressed to the
sound discretion of the court; that in some cases we have allowed defendants
to file their answers even after the time fixed for their presentation; that we
have set aside orders of default where defendants’ failure to answer on time
was excusable; that the pendency of the motion for a bill of particulars
interrupts the period to file a responsive pleading; and considering that no
real injury would result to the interests of petitioner with the granting of the
motion for a bill of particulars, the three motions for extensions of time to file
an answer, and the motion with leave to file a responsive pleading, the anti-
graft court has validly clothed respondent with the authority to represent his
deceased father. The only objection to the action of said court would be on a
technicality. But on such flimsy foundation, it would be erroneous to sacrifice
the substantial rights of a litigant. Rules of procedure should be liberally
construed to promote their objective in assisting the parties obtain a just,
speedy and inexpensive determination of their case. But as defaulted defendants are not actually thrown out of court because the
While it is true that there was no positive act on the part of the court to lift
the default order because there was no motion nor order to that effect, the
anti-graft court’s act of granting respondent the opportunity to file a
responsive pleading meant the lifting of the default order on terms the court
deemed proper in the interest of justice. It was the operative act lifting the
default order and thereby reinstating the position of the original defendant
whom respondent is representing, founded on the court’s discretionary power
to set aside orders of default. in time and dispatch of immediately trying the case. The fact that former
Thus, the act of the court in entertaining the motions to file a responsive
pleading during the pre-trial stage of the proceedings effectively meant that
respondent has acquired a locus standi in this case. That he filed a motion for
a bill of particulars instead of an answer does not pose an issue because he,
as party defendant representing the estate, is allowed to do so under the Rules
of Court to be able to file an intelligent answer. It follows that petitioner’s
filing of a bill of particulars in this case is merely a condition precedent to the
filing of an answer.
Indeed, failure to file a motion to lift a default order is not procedurally fatal
as a defaulted party can even avail of other remedies mentioned above
(referring to Lina Doctrine on remedies of defaulted party).
II.
As default judgments are frowned upon, we have been advising the courts
below to be liberal in setting aside default orders to give both parties every
chance to present their case fairly without resort to technicality. Judicial
experience shows, however, that resort to motions for bills of particulars is
sometimes intended for delay or, even if not so intended, actually result in
delay since the reglementary period for filing a responsive pleading is
suspended and the subsequent proceedings are likewise set back in the
meantime. As understood under Section 1 of Rule 12, mentioned above, a
motion for a bill of particulars must be filed within the reglementary period
for the filing of a responsive pleading to the pleading sought to be clarified.
This contemplates pleadings which are required by the Rules to be answered
under pain of procedural sanctions, such as default or implied admission of
the facts not responded to.
Rules see to it that judgments against them must be in accordance with the
law and competent evidence, this Court prefers that the lifting of default
orders be effected before trial courts could receive plaintiffs’ evidence and
render judgments. This is so since judgments by default may result in
considerable injustice to defendants, necessitating careful and liberal
examination of the grounds in motions seeking to set them aside. The
inconvenience and complications associated with rectifying resultant errors,
if defendant justifies his omission to seasonably answer, far outweigh the gain
President Marcos was in exile when he was declared in default, and that he
later died still in exile, makes the belated filing of his answer in this case
understandably excusable.
III.
As to the propriety of the granting of the motion for a bill of particulars, we
find for respondent as the allegations against former President Marcos appear
obviously couched in general terms. They do not cite the ultimate facts to
show how the Marcoses acted “in unlawful concert” with Cruz in illegally
amassing assets, property and funds in amounts disproportionate to Cruz’s
lawful income, except that the former President Marcos was the president at
the time.
The pertinent allegations in the expanded complaint subject of the motion for
a bill of particulars read as follows:
Avila 4B | 2016
“11. Defendant Roman A. Cruz, Jr. served as public officer during the Marcos
administration. During his . . . incumbency as public officer, he acquired
assets, funds and other property grossly and manifestly disproportionate to
his salaries, lawful income and income from legitimately acquired property.
12. . . . Cruz, Jr., in blatant abuse of his position as Chairman and General
Manager of the Government Service Insurance System (GSIS), as President
and Chairman of the Board of Directors of the Philippine Airlines (PAL), and
as Executive Officer of the Commercial Bank of Manila, by himself and/or
in unlawful concert with defendants Ferdinand E. Marcos and Imelda R.
Marcos, among others: xxx”
In his motion for a bill of particulars, respondent wanted clarification on the
specific nature, manner and extent of participation of his father in the
acquisition of the assets cited above under Cruz; particularly whether former
President Marcos was a beneficial owner of these properties; and the specific
manner in which he acquired such beneficial control.
Also, respondent wanted to know the specific nature, manner, time and extent
of support, participation and collaboration of his father in
(1) Cruz’s alleged “blatant abuse” as GSIS president and general manager,
PAL president and chairman of the board, and executive officer of the CBM;
(2) the purchase of a lot and building in California using GSIS funds and
Cruz’s allowing Lichauco as broker in the sale of the lot and building contrary
to PAL policies;
(3) Cruz’ s appropriating to himself CBM funds;
(4) Cruz’ s disbursement of P81,152 CBM funds for personal services
rendered to him by Tuazon;
(5) Cruz’s entering into an agency agreement for GSIS with IFC to solicit,
insure, and effect reinsurance of GSIS, as result of which IFC effected a great
part of its reinsurance with INRE Corporation, a London-registered non-
insurance company, of which Cruz was one of the directors;
(6) Cruz’s allowing IFC to service the accounts emanating from government
agencies which were required under the law to insure and deal directly with
the GSIS for their insurance needs;
(7) the GSIS-AIC agreement wherein GSIS ceded and conveyed to AIC five
parcels of land in Manila in exchange for AIC’s Pinugay Estate in Tanay,
Rizal;
(8) PAL’s purchase of three Airbus 300 jets for a higher price than the market
price; and
(9) if former President Marcos was connected in any way to IFC and INRE
Corporation.
Respondent likewise asked, what is the specific amount of damages
demanded?
The 1991 Virata-Mapa Doctrine prescribes a motion for a bill of
particulars, not a motion to dismiss, as the remedy for perceived
ambiguity or vagueness of a complaint for the recovery of ill-gotten
wealth, which was similarly worded as the complaint in this case. That
doctrine provided protective precedent in favor of respondent when he filed
his motion for a bill of particulars.
While the allegations as to the alleged specific acts of Cruz were clear, they
were vague and unclear as to the acts of the Marcos couple who were
allegedly “in unlawful concert with” the former. There was no factual
allegation in the original and expanded complaints on the collaboration of or
on the kind of support extended by former President Marcos to Cruz in the
commission of the alleged unlawful acts constituting the alleged plunder. All
the allegations against the Marcoses, aside from being maladroitly laid, were
couched in general terms. The alleged acts, conditions and circumstances that
could show the conspiracy among the defendants were not particularized and
sufficiently set forth by petitioner.
That the late president’s co-defendants were able to file their respective
answers to the complaint does not necessarily mean that his estate’s executor
will be able to file an equally intelligent answer, since the answering
defendants’ defense might be personal to them.
Phrases like “in flagrant breach of public trust and of their fiduciary
obligations as public officers with grave and scandalous abuse of right and
power and in brazen violation of the Constitution and laws,” “unjust
enrichment,” “embarked upon a systematic plan to accumulate ill-gotten
wealth,” “arrogated unto himself all powers of government,” are easy and
easy to read; they have potential media quotability and they evoke passion
with literary flair, not to mention that it was populist to flaunt those statements
in the late 1980s.
But they are just that, accusations by generalization. Motherhood statements
they are, although now they might be a politically incorrect expression and
an affront to mothers everywhere, although they best describe the accusations
against the Marcoses in the case at bar.
Avila 4B | 2016
 containing the ultimate facts as prayed for by respondent within twenty (20)
In Justice Laurel’s words, “the administration of justice is not a matter of days from notice.
guess-work.” The name of the game is fair play, not foul play. We cannot SO ORDERED.
allow a legal skirmish where, from the start, one of the protagonists enters the
arena with one arm tied to his back. We must stress anew that the
administration of justice entails a painstaking, not haphazard, preparation of
pleadings.

The facile verbosity with which the legal counsel for the government flaunted
the accusation of excesses against the Marcoses in general terms must be
soonest refurbished by a bill of particulars, so that respondent can properly
prepare an intelligent responsive pleading and so that trial in this case will
proceed as expeditiously as possible. To avoid a situation where its pleadings
may be found defective, thereby amounting to a failure to state a cause of
action, petitioner for its part must be given the opportunity to file a bill of
particulars. Thus, we are hereby allowing it to supplement its pleadings now,
considering that amendments to pleadings are favored and liberally allowed
especially before trial.

Lastly, the allowance of the motion for a more definite statement rests with
the sound discretion of the court. As usual in matters of a discretionary nature,
the ruling of the trial court will not be reversed unless there has been a
palpable abuse of discretion or a clearly erroneous order. This Court has been
liberal in giving the lower courts the widest latitude of discretion in setting
aside default orders justified under the right to due process principle. Plain
justice demands and the law requires no less that defendants must know what
the complaint against them is all about.

What is important is that this case against the Marcoses and their alleged
crony and dummy be decided by the anti-graft court on the merits, not merely
on some procedural faux pas. In the interest of justice, we need to dispel the
impression in the individual respondents’ minds that they are being railroaded
out of their rights and properties without due process of law.

WHEREFORE, finding no grave abuse of discretion on the part of the

Sandiganbayan in granting respondent’s Motion for Bill of Particulars, the
petition is DISMISSED. The Resolutions of the Sandiganbayan dated
January 31, 2000 and March 27, 2001 in Civil Case No. 0006 are
AFFIRMED. Petitioner is ordered to prepare and file a bill of particulars

Avila 4B | 2016
4. Estardante v. People, G.R. Nos. 156851-55, February 18, 2008
Facts:
Petitioner Heide M. Estandarte was the school principal of the Ramon
Torres National High School (RTNHS) in Bago City, Negros Occidental.4
Sometime in 1998, a group of concerned RTNHS teachers, composed of
the Faculty and Personnel Club Officers and department heads (private
complainants), sent an undated letter to the Schools Division of Bago City
(Schools Division)5 attaching a list of 15 irregularities allegedly
committed by the petitioner, which the private complainants requested to
be investigated.6
Two complaints were eventually filed by private complainants against
petitioner with the Office of the Ombudsman-Visayas (Ombudsman-
Visayas) docketed as OMB-VIS-Crim-99-1094 and OMB-VIS-Crim-2000-
1127.
The Ombudsman-Visayas forwarded the complaint docketed as OMB-VIS-
Crim-99-1094 to the Office of the City Prosecutor of Bago City (City
Prosecutor) for preliminary investigation, pursuant to Section 31 of
Republic Act (R.A.) No. 6770, otherwise known as the Ombudsman Act of
1989.7 The City Prosecutor served the petitioner with a subpoena on
August 28, 2000 and another on August 30, 2000, requiring her to submit her
counter-affidavit.8
On September 6, 2000, instead of filing a counter-affidavit, petitioner filed
before the City Prosecutor a Motion for Bill of Particulars with Motion for
Extension of Time to File Counter- Affidavit.9 In the Motion for Bill of
Particulars, petitioner alleged that there were no specific criminal charges that
were stated in the subpoenas. Thus, petitioner insisted that she cannot
intelligently prepare her counter-affidavit unless the criminal charges and the
laws she violated are specified.10
The City Prosecutor issued an Order11 attaching the private complainants’
Bill of Particulars,12 pertinent portions of which read:
“1. That complainants are charging respondent for violation of Sec. 68 and
69 of PD 1445 in connection with the above-entitled case;
2. That to support their complaint, private complainants adopt the
investigation report of the provincial [sic] Auditor on [sic] complaint No. 23
and 25 which states:
Complaint 23 & 25
The principal Ms. Estandarte accepted cash and in kind donations without
being properly channeled and accounted first by the property custodian and
the cash without first deposited in the Trust Fund.”
And directing petitioner to file her counter-affidavit.
Petitioner filed her counter-affidavit limiting herself only to the charges
specified in the Bill of Particulars.15
Thereafter, the City Prosecutor referred the case back to the Ombudsman-
Visayas. The latter found sufficient grounds to hold petitioner liable for
five counts of violation of Section 3(e) of R.A. No. 3019, as amended, or
the Anti-Graft and Corrupt Practices Act, and filed before the RTC the
corresponding Informations, with the following charges:
“1. In Criminal Case No. 1918, for receiving cash donations from private
individuals and establishments in the total amount P163,400.00;18
2. In Criminal Case No. 1919, for collecting contributions or allowing the
collection of contributions in the amount of P10.00 from the enrollees of the
school without authority of law;19
3. In Criminal Case No. 1920, for purchasing guns using the students’ Trust
Fund and registering the same in her name, depriving the Security Guard of
the school of the use of said guns;20
4. In Criminal Case No. 1921, for double charging of the expenses of
P1,500.00 incurred for the video coverage of the coronation night;21
5. In Criminal Case No. 1922, for double charging of the expenses amounting
to P45,000.00 incurred in the repairs of the Home Economics Building of the
school.”
The criminal cases were consolidated.
Petitioner filed a Motion for Reinvestigation before the RTC on the ground
that she cannot allegedly be charged with violation of Sections 68 and 69 of
Presidential Decree (P.D.) No. 1445 since she was not a collecting officer.
She also asserts that she cannot be charged under Section 3(e) of R.A. No.
Avila 4B | 2016
3019, as the acts which she was charged with, did not constitute “manifest
partiality, evident bad faith or inexcusable negligence.”24
RTC denied the motion. In denying the Motion for Reinvestigation, the
RTC held that the petitioner’s claim that her acts for which she is charged do
not constitute “manifest partiality, evident bad faith or grossly inexcusable
negligence” and is evidentiary in nature, and the same can only be appreciated
after a full-blown trial.
Feeling aggrieved, the petitioner filed a Motion for Reconsideration28 of the
September 24, 2002 Order. Petitioner maintains that when the five
Informations for the violation of Section 3(e) of R.A. No. 3019 were filed by
the Ombudsman- Visayas, her right to due process was violated; and that the
Ombudsman-Visayas in effect went beyond the Bill of Particulars filed by
the private complainants.29
RTC denied the MR.
Hence this petition directly with the SC under a R45.
On the first assigned error, petitioner insists that the Ombudsman-Visayas
should have limited the charges filed against her to the crimes mentioned in
the Bill of Particulars, and that the filing of the Informations charging her
with crimes different from those specified in the Bill of Particulars violates
her right to due process.
On the second assigned error, petitioner claims that her right to due process
was violated when the Ombudsman-Visayas filed the Informations charging
her with violations of R.A. No. 3019, which went beyond the charges
specified in the Bill of Particulars.
Issue:
1. W/N R45 is proper – No, because what is assailed is an interlocutory order,
but SC will treat is as a R65 in the interest of justice.
2. W/N the OMB should have limited the charges filed against her to the
crimes mentioned in the Bill of Particulars – No.
3. W/N petitioner’s right to due process was violated when the OMB filed the
Informations charging her with violations of R.A. No. 3019, which went
beyond the charges specified in the Bill of Particulars – Yes.
Held:
I. No.
From the RTC, petitioner went straight to this Court via a petition for review
on certiorari under Rule 45 apparently on the basis of Section 2(c), Rule 41
of the Rules of Court, which provides that in all cases where only questions
of law are raised, the appeal from a decision or final order of the RTC shall
be to the Supreme Court by a petition for review on certiorari in accordance
with Rule 45.34
However, considering that herein assailed Orders are obviously interlocutory
orders, the proper recourse of petitioner should have been by way of a petition
for certiorari as prescribed in Section 1, Rule 41 of the Rules of Court, which
specifically allows the aggrieved party to file a petition for certiorari under
Rule 65.35
The herein petition for review on certiorari assails the jurisdiction of the RTC
in issuing the Orders in question denying petitioner’s Motion for
Reinvestigation, on the ground that the five Informations filed against the
petitioner contained charges beyond the Bill of Particulars filed by the private
complainants, thereby depriving her of due process.
Moreover, in the exercise of its equity jurisdiction, the Court may disregard
procedural lapses so that a case may be resolved on its merits based on records
and evidence of the parties.37 Proceeding from the time-honored principle
that rules of procedure should promote, not defeat substantial justice, the
Court may opt to apply the Rules liberally to resolve the substantial issues
raised by the parties.38
Accordingly, the Court shall treat the instant petition as a petition for
certiorari under Rule 65 of the Rules of Court since the primordial issue to
be resolved is whether the trial court acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in denying petitioner’s Motion for
Reinvestigation.
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II. No.
On the first assigned error, petitioner insists that the Ombudsman-Visayas
should have limited the charges filed against her to the crimes mentioned in
the Bill of Particulars, and that the filing of the Informations charging her
with crimes different from those specified in the Bill of Particulars violates
her right to due process.
The Office of the Solicitor General (OSG) counters that a bill of particulars
is not allowed by Administrative Order No. 7, entitled Rules of Procedure in
the Office of the Ombudsman (A.O. No. 7); and that therefore the
Ombudsman cannot be bound by the Bill of Particulars submitted by private
complainants.
The Court agrees with the OSG. Clearly, the act of the prosecutor in granting
the petitioner’s Motion for Bill of Particulars is an act contrary to the express
mandate of A.O. No. 7, to wit:
“Section 4. Procedure.—The preliminary investigation of cases falling under
the jurisdiction of the Sandiganbayan and Regional Trial Courts shall be
conducted in the manner prescribed in Section 3, Rule 112 of the Rules of
Court, subject to the following provisions: x x x x
d) No motion to dismiss shall be allowed except for lack of jurisdiction.
Neither may a motion for a bill of particulars be entertained. If the respondent
desires any matter in the complainant’s affidavit to be clarified, the
particularization thereof may be done at the time of clarificatory questioning
in the manner provided in paragraph (f) of this section.”
The Court finds the argument of petitioner that when the City Prosecutor was
deputized by the Ombudsman-Visayas to conduct the preliminary
investigation, any action taken therein is, in effect, an action of the
Ombudsman, who is bound by the act of the City Prosecutor in granting the
Motion for Bill of Particulars, and is not tenable.
Section 31 of R.A. No. 6770 or The Ombudsman Act of 1989 expressly
provides that those designated or deputized to assist the Ombudsman shall be
under his supervision and control. Indubitably, when the City Prosecutor is
deputized by the Office of the Ombudsman, he comes under the “supervision
and control” of the Ombudsman which means that he is subject to the power
of the Ombudsman to direct, review, approve, reverse or modify the
prosecutor’s decision.
Consequently, in the present case, petitioner has no valid basis for insisting
that the Ombudsman-Visayas must be bound by the erroneous act of the City
Prosecutor in granting petitioner’s Motion for Bill of Particulars. Laws and
jurisprudence grant the Office of the Ombudsman the authority to reverse or
nullify the acts of the prosecutor pursuant to its power of control and
supervision over deputized prosecutors. Hence, it was within the prerogative
of the Ombudsman-Visayas not to consider the Bill of Particulars submitted
by the private complainants.
III. Yes.
On the second assigned error, petitioner claims that her right to due process
was violated when the Ombudsman-Visayas filed the Informations charging
her with violations of R.A. No. 3019, which went beyond the charges
specified in the Bill of Particulars.
While the Bill of Particulars is not allowed under the Rules of Procedure of
the Office of the Ombudsman and therefore should not be the basis for
determining what specific criminal charges should be filed against herein
petitioner, it behooves the Ombudsman to accord the petitioner her basic
rights to due process in the conduct of the preliminary investigation.
In a preliminary investigation, Section 3, Rule 112 of the Rules of Court
guarantees the petitioner’s basic due process rights, such as the right to be
furnished a copy of the complaint, the affidavits, and other supporting
documents, and the right to submit counter-affidavits and other supporting
documents in her defense.
In the pleadings submitted before this Court, petitioner complained that the
subpoenas served on her did not state the law allegedly violated by her.44
In the Motion for Bill of Particulars she filed before the City Prosecutor, she
declared that she was served with “subpoena together with the documents
attached therein.”45
However, after a thorough examination of the records, the Court does not find
the subpoenas and the alleged documents served on her. Absent the
subpoenas and the documents attached to the subpoenas, how could it be
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intelligently determined whether she was fully apprised of the acts
complained of and imputed to her; whether she was given the opportunity to
submit an appropriate counter- affidavit to the charges; and whether the
charges in the five Informations filed against petitioner were based on the
same acts complained of and stated in the subpoena and the documents
attached thereto?
Trial Court of Bago City, Branch 62 are SET ASIDE. The case is remanded
to the trial court for determination whether petitioner was denied due process
in the conduct of the preliminary investigation.
SO ORDERED.

While there is no rule that the initial complaint filed against an accused with
the prosecutor’s office should specifically state the particular law under
which he is being charged, it is a basic elementary rule that the complaint
should specifically allege the criminal acts complained of, so as to enable the
accused to prepare his answer or counter-affidavit accurately and
intelligently.

The determination of the issue whether the criminal charges were indeed
alleged or specified in the subpoenas and in the documents attached thereto,
is a factual issue and therefore outside the province of this Court. It is a well-
settled rule that the Supreme Court is not the proper venue in which to
consider a factual issue, as it is not a trier of facts.46

In resolving the question whether petitioner was denied due process, the RTC
or this Court cannot rely on the disputable presumption that official duties
have been regularly performed. The RTC should have required the petitioner
to submit the subpoenas and the attached documents served on her to enable
it to examine the same and resolve whether the petitioner’s right to be
informed was violated. It was only upon ascertaining this fact that the RTC
could have validly determined whether petitioner was denied due process.

It must be stressed that the primordial issue in the present petition is not
whether the Ombudsman-Visayas had correctly found a probable cause to
justify the filing of the five Informations against herein petitioner, but
whether she was not accorded due process in the conduct of the preliminary
investigation as to entitle her to a reinvestigation. A valid and just
determination of whether there is a probable cause on the part of the
Ombudsman to bring the cases to court against petitioner would ensue only
when the petitioner has been fully accorded due process in the conduct of the
preliminary investigation.

WHEREFORE, the petition is PARTIALLY GRANTED. The assailed

Orders dated September 24, 2002 and December 20, 2002 of the Regional

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XI. Service and Filing (Rule 13)
1. Domingo v. Court of Appeals, G.R. No. 169122, February 2,
2010
Facts:
Before he died, Julio Domingo (Julio) allegedly executed a Deed of Absolute
Sale over a 4.1358-hectare parcel of land in favor of Marcelino’s wife,
Carmelita Mananghaya (Mananghaya). The property was situated in
Burgos, Sto. Domingo, Nueva Ecija.
The Domingos filed before the Regional Trial Court (RTC), Judicial Region
3, Branch 37, Baloc, Sto. Domingo, Nueva Ecija, a complaint against
Marcelino and Mananghaya for the annulment of the Deed of Absolute
Sale. The Domingos alleged that Julio’s signature in the deed was forged.
RTC ruled for the Domingos holding that Julio’s signature in the Deed of
Absolute Sale was forged and thus void. RTC ordered Marcelino and
Mananghaya to deliver the possession of the property to the Domingos.
On appeal, the CA affirmed. This decision attained finality. Thus, the RTC
issued a writ of execution.
Later, the Domingos gained possession of the property.
Marcelino filed with the DAR a petition that he be declared the tenant-
beneficiary of the property. Around April 2004, Marcelino reentered and
retook possession of the property.
The Domingos filed before the RTC a motion to cite Marcelino in contempt.
Marcelino and Manang haya filed before the CA a petition,7 dated 28 April
2004, for certiorari, prohibition and mandamus to annul and enjoin the
implementation of the writ of execution, and to order the denial of the motion
to cite the in contempt.
RTC found Marcelino in contempt, fined him P25,000 and ordered his arrest
and imprisonment. However, the sheriff of the RTC no longer served the 26
May 2004 Order because Marcelino declared in writing that he would deliver
possession of the property to the Domingos.
CA dismissed outright Marcelino and Mananghaya’s 28 April 2004 petition.
DAR granted Marcelino’s petition and named Marcelino as one of the tenant-
beneficiaries.
Agapita Domingo (Agapita) filed a motion for reconsideration of the 4
October 2004 Order. Marcelino reentered and retook possession of the
property. DAR granted the MR and reversed itself.
The Domingos filed before the RTC another motion to cite Marcelino in
contempt, and for the issuance of a warrant for his arrest.
RTC granted the motion, cited him in contempt, and ordered the arrest of
Marcelino. RTC denied Marcelino’s MR.
Marcelino filed a R65 with the CA assailing the RTC’s order granting the
motion to cite him in contempt.
CA dismissed the R65 petition outright on the ground that, among
others, there is no written explanation to justify service by mail in lieu of
the preferred mode of personal service, this in violation of Section 11,
Rule 13, of the Rules of Court, thus the petition is deemed NOT filed.
MR denied by the CA. The CA held that Marcelino’s “failure to file a written
explanation to justify service by mail in lieu of the preferred mode of personal
service is an absolutely insurmountable obstacle to the success of this motion
for reconsideration.”19 Marcelino filed another motion20 for
reconsideration. In its 19 July 2005 Resolution, the Court of Appeals noted
the motion. The Court of Appeals held that, “We cannot accept the motion
for reconsideration for the reason that a second motion for reconsideration of
a final order is a prohibited pleading.”21
Hence this petition claiming that:
“Section 11, Rule 13 of the 1997 Rules of Civil Procedure is “merely
directory” and it is incumbent upon the court to use its discretion in
determining whether substantial justice will be served (or rights unjustifiably
prejudiced) if it resolves to dismiss a petition because of non-compliance with
a mere directory rule.”
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Issue:
W/N the CA erred in dismissing outright the R65 petition for failure to
provide a written explanation to justify service by mail in lieu of personal
service – No, CA did not err. §11 is mandatory.
Held:
No, CA did not err. §11 is mandatory.
Section 11 is mandatory. In Solar Team Entertainment, Inc. v. Judge Ricafort,
293 SCRA 661 (1998), the Court held that:
“Pursuant x x x to Section 11 of Rule 13, service and filing of pleadings and
other papers must, whenever practicable, be done personally; and if
made through other modes, the party concerned must provide a written
explanation as to why the service or filing was not done personally. x x x
Personal service and filing are preferred for obvious reasons. Plainly, such
should expedite action or resolution on a pleading, motion or other paper; and
conversely, minimize, if not eliminate, delays likely to be incurred if service
or filing is done by mail, considering the inefficiency of postal service.
Likewise, personal service will do away with the practice of some lawyers
who, wanting to appear clever, resort to the following less than ethical
practices:
(1) serving or filing pleadings by mail to catch opposing counsel off- guard,
thus leaving the latter with little or no time to prepare, for instance, responsive
pleadings or an opposition; or
(2) upon receiving notice from the post office that the registered parcel
containing the pleading of or other paper from the adverse party may be
claimed, unduly procrastinating before claiming the parcel, or, worse, not
claiming it at all, thereby causing undue delay in the disposition of such
pleading or other papers.
If only to underscore the mandatory nature of this innovation to our set
of adjective rules requiring personal service whenever practicable,
Section 11 of Rule 13 then gives the court the discretion to consider a
pleading or paper as not filed if the other modes of service or filing were
resorted to and no written explanation was made as to why personal
service was not done in the first place. The exercise of discretion must,
necessarily, consider the practicability of personal service, for Section 11
itself begins with the clause “whenever practicable.”
We thus take this opportunity to clarify that under Section 11, Rule 13 of the
1997 Rules of Civil Procedure, personal service and filing is the general
rule, and resort to other modes of service and filing, the exception.
Henceforth, whenever personal service or filing is practicable, in light of
the circumstances of time, place and person, personal service or filing is
mandatory. Only when personal service or filing is not practicable may
resort to other modes be had, which must then be accompanied by a
written explanation as to why personal service or filing was not
practicable to begin with. In adjudging the plausibility of an explanation, a
court shall likewise consider the importance of the subject matter of the case
or the issues involved therein, and the prima facie merit of the pleading
sought to be expunged for violation of Section 11. This Court cannot rule
otherwise, lest we allow circumvention of the innovation introduced by the
1997 Rules in order to obviate delay in the administration of justice.
[F]or the guidance of the Bench and Bar, strictest compliance with
Section 11 of Rule 13 is mandated.”24 (Emphasis supplied)
Liberal application of procedural rules is allowed only when two requisites
are present:
(1) there is a plausible explanation for the non-compliance, and
(2) the outright dismissal would defeat the administration of justice.
In Tible & Tible Company, Inc. v. Royal Savings and Loan Association,27
the Court held that “the two pre-requisites for the relaxation of the rules are:
(1) justifiable cause or plausible reason for non-compliance; and
(2) compelling reason to convince the court that outright dismissal of the
petition would seriously impair the orderly administration of justice.”28 Both
requisites are lacking in the present case.
WHEREFORE, we DISMISS the petition. We AFFIRM the 5 April and 10
June 2005 Resolutions of the Court of Appeals in CA-G.R. SP No. 89023.
SO ORDERED.
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2. Romulo v. Peralta, G.R. No. 165665, January 31, 2007
Facts:
On December 3, 2003, President Gloria Macapagal Arroyo issued
Executive Order (E.O.) No. 253,3 providing for an “open skies” policy in
the aviation industry. Pursuant to this E.O. the Diosdado Macapagal
International Airport at Clark Field, Pampanga and the Subic Bay
International Airport at Subic, Zambales were opened to international air
cargo transportation providers and foreign airlines.
On February 23, 2004, the PAL Employees Association (PALEA), the
National Labor Union (NLU), and the National Federation of Labor Unions
(NAFLU), as legitimate labor organizations representing the bulk of workers
in the local aviation industry, herein respondents, filed with the RTC, Branch
17, Manila a petition for certiorari, prohibition, and injunction, assailing
the constitutionality of E.O. No. 253. Impleaded therein as respondents
were then Executive Secretary Alberto Romulo, substituted subsequently by
Executive Secretary Eduardo I. Ermita, the Office of the President, Mr.
Leandro Mendoza, in his capacity as Secretary of the Department of
Transportation and Communication (DOTC), the DOTC, the Civil
Aeronautics Board (CAB), and the CAB Chairman, herein petitioners.
The OSG filed an MTD on the ground of lack of cause of action.
OSG served by registered mail a copy of its motion upon Atty. Froilan
M. Bacungan, counsel for petitioners in Civil Case No. 04-109201 (now
respondent labor unions).
The RTC dismissed the MTD because the motion did not contain proof
of transmittal by registered mail of the MTD pursuant to the Rules of
Court.
The OSG filed a motion for reconsideration. Attached thereto is a
photocopy of registry return receipt No. 4096. But this motion was denied
by the trial court in its Order dated June 21, 2004, thus:
“In the absence of any indication on the photocopy of the registry return
receipt (Annex “A,” Motion for Reconsideration dated May 17, 2004) that
it was, in fact a copy of the Motion to Dismiss dated April 5, 2004 from
the Office of the Solicitor General as supposedly addressed to petitioner’s
counsel (Sapida v. Villanueva, 48 SCRA 19, 23, 27, 29-30 [1972]), the Office
of the Solicitor General’s Motion for Reconsideration dated May 17, 2004 is
hereby DENIED. SO ORDERED.”
OSG again filed a motion for reconsideration. Attached thereto are the
following: (1) a certified photocopy of the OSG’s original registry return
receipt No. 4096; (2) a certified photocopy of page 374, Official Records
Book of the OSG Docket Division; and (3) the affidavit of Josephine S.
Masangkay-Bayongan, Records Officer III, OSG Docket Division, stating
that the mail matter sent by the OSG to Atty. Bacungan on April 6, 2004 was,
in fact, a copy of the motion to dismiss the petition in Civil Case No. 04-
109201 dated April 5, 2004.
RTC denied the OSG’s second MR:
““In view of the judicial admission on the face of the Motion for
Reconsideration dated July 23, 2004, particularly paragraph 2 thereof to the
effect that a copy of the Motion to Dismiss dated [April 5, 2004] was
received by the petitioners’ counsel only on April 20, 2004 after the slated
hearing thereof on April 16, 2004, consistent with the caveat under Section
4, Rule 15 of the 1997 Rules of Civil Procedure, the Motion for
Reconsideration dated July 23, 2004 from the OSG is hereby DENIED.”
Hence this R65 petition directly with the SC.
Issue:
W/N the RTC erred in denying the MTD – No.
Held:
No.
In the instant case, there is no dispute that Atty. Bacungan, counsel for
respondent labor unions, received a copy of the OSG’s motion to dismiss
dated April 5, 2004 on April 20, 2004, or four (4) days after it was set for
hearing. Petitioners insist though that they sent a copy of their motion to
him by registered mail on April 6, 2004.
Under the Rules:
“SEC. 10. Completeness of service. — Personal service is complete upon
actual delivery. Service by ordinary mail is complete upon the expiration of
ten (10) days after mailing, unless the court otherwise provides. Service by
registered mail is complete upon actual receipt by the addressee, or after
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five (5) days from the date he received the first notice of the postmaster,
whichever date is earlier.
SEC. 13. Proof of service. — Proof of personal service shall consist of a
written admission of the party served, or the official return of the server, or
the affidavit of the party serving, containing a full statement of the date, place,
and manner of service. If the service is by ordinary mail, proof thereof shall
consist of an affidavit of the person mailing of facts showing compliance
with section 7 of this Rule. If service is made by registered mail, proof
shall be made by such affidavit and the registry receipt issued by the
mailing office. The registry return card shall be filed immediately upon its
receipt by the sender or in lieu thereof, the unclaimed letter together with the
certified or sworn copy of the notice given by the postmaster to the
addressee.”
It is clear that where service of a pleading is by registered mail, proof of such
service consists of the following:
(1) an affidavit of the person mailing the pleading containing a full statement
of the date, place, and manner of service; and
(2) the registry receipt issued by the mailing office.
Anent the affidavit of Josephine S. Masangkay- Bayongan, she stated that
“On April 6, 2004, I caused to be served by registered mail a copy of a Motion
to Dismiss dated April 5, 2004 in Civil Case No. 04-109021...” Clearly, she
merely directed that the motion be served by registered mail. She did not
actually post the motion by registered mail. The rule requires that the
affidavit must be executed by “the person mailing” the motion.
In sum, registry return receipt No. 4096 does not indicate that what was
mailed to Atty. Bacugan, counsel for respondent labor unions, was a copy of
petitioners’ motion to dismiss; and that Bayongan’s affidavit shows she was
not the one who mailed such copy. It follows that in dismissing the motion to
dismiss on the ground that a copy thereof was not validly served upon private
respondents’ counsel, respondent judge acted pursuant to the Rules.
WHEREFORE, we DISMISS the petition and AFFIRM the assailed Orders
of the Regional Trial Court, Branch 17, Manila in Civil Case No. 04-109201.
No costs.
SO ORDERED.

We recall that in their first motion for reconsideration, petitioners attached

thereto only a photocopy of registry return receipt No. 4096. The trial court
declared it could not determine on its face whether the registered matter was
actually a copy of the motion to dismiss.

In Cayetano v. Ceguerra,13 SCRA 73 (1965), we held that actual knowledge

of a decision cannot be attributed to the addressee of a registered matter where
there is no showing that the registry notice itself contains any indication that
the registered matter is a copy of the decision or that the registry notice refers
to the case being ventilated.

Then, in Sapida v. Villanueva citing Cayetano, 48 SCRA 19 (1972), we ruled

that we could not justly attribute to respondents “actual knowledge of the
order of denial of their motion for new trial through registered mail...because
there is no showing that the registry notice itself or the envelope or the return
card for that matter contained any indication or annotation that the registered
matter was indeed and in fact a copy of the said order.”

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3. Spouses Topacio v. Banco Filipino, G.R. No. 157644, November
17, 2010
Facts:
Petitioners obtained a loan amounting to P400k from respondent, as secured
by a REM. The petitioners failed to pay the loan, prompting the respondent
to file a Petition for Extrajudicial Foreclosure of Mortgage. Respondent
emerged as the highest bidder. Accordingly, a Certification of Sale was issued
in favor of the respondent and registered with the Registry of Deeds.4
On May 26, 1983, the respondent filed a Petition for the Issuance of a Writ
of Possession over the mortgaged property.
RTC granted the petition. Upon posting of the required bond, the RTC
issued, on February 16, 1984, a writ of possession, commanding the sheriff
to place the respondent in possession of the property.
The writ of possession was not implemented7 because, on February 27, 1984,
the petitioners, filed with the RTC, a petition to set aside the auction sale
and the writ of possession (with application for a temporary restraining
order and a writ of preliminary injunction).8
RTC granted the writ of preliminary injunction.
Sometime in April 1984, the respondent filed with the RTC its Motion to
Admit Answer with Opposition to the Petition to Set Aside Auction Sale
and Writ of Possession with Motion to Dissolve or Lift Preliminary
Injunction (Answer) which was granted on April 26, 1984.11 On May 21,
1984, the petitioners filed their Reply thereto, praying that the writ of
preliminary injunction previously issued be maintained.12
More than two years after the filing of the Answer and the Reply, and
after a series of postponements at the instance of both parties, then Presiding
Judge Teresita D. Capulong issued an Order dated December 16, 1986,
dismissing the respondent’s petition for the issuance of a writ of
possession on the ground of “failure to prosecute.”
The Order reads in full:
“When this case was called for hearing, counsel for the oppositors [now
petitioners], Atty. Constancio R. Gallamos, was present. Atty. Francisco
Rivera [counsel for the respondent] was absent despite notice. Upon petition
of the counsel for the oppositors, this case is hereby ordered dismissed for
failure to prosecute.
SO ORDERED.”
No copy of the above Order was served on the respondent14 whose
operations the Monetary Board (Central Bank of the Philippines) shut down
on January 25, 1985, for reasons not relevant to the present case.15
Nearly six (6) years later (after the Court ordered the reorganization and
resumption of the respondent’s operations in G.R. No. 70054)16 or on August
19, 1992, the respondent filed a Motion to Clarify the Order of December
16, 1986. In the same motion, the respondent likewise moved for the
issuance of an alias writ of possession.17
RTC, in an Order, made a clarification that the Order of Dismissal of
December 16, 1986 refers to the dismissal of the “main case for issuance
of a writ of possession.” In that same Order, the RTC denied the
respondent’s motion for the issuance of an alias writ of possession. On
MR, RTC reversed itself and granted the respondent’s prayer for the
issuance of an alias writ of possession.
Petitioners filed an MR which was denied by the RTC.
Petitioners filed a R65 with the CA. Before the CA, the petitioners argued
that the RTC acted without jurisdiction or with grave abuse of discretion
when it: (1) reinstated the respondent’s case more than seven (7) years after
the December 16, 1986 Dismissal Order became final and executory, and (2)
issued an alias writ of execution upon a mere motion for reconsideration and
not by an independent action pursuant to Section 6, Rule 39 of the Rules of
Court.
CA affirmed the RTC decision in toto.
Hence this petition claiming that:
1) the December 16, 1986 Dismissal Order constitutes an adjudication on the
merits which has already attained finality, and
2) a writ of possession may not be enforced upon mere motion of the applicant
after the lapse of more than five (5) years from the time of its issuance.
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On the first assignment of error, the petitioners submit that the December 16,
1986 Dismissal Order for failure to prosecute constitutes adjudication upon
the merits, considering that the RTC did not declare otherwise, pursuant to
Section 3, Rule 17 of the Rules of Court. The petitioners further contend that
the Dismissal Order has become final and executory since the respondent
belatedly filed the Motion to Clarify the Order of December 16, 1986 on
August 19, 1992 or almost six years later. On these premises, the petitioners
argue that res judicata has set in and consequently, the RTC had no
jurisdiction to grant the motion for reconsideration and to issue an alias writ
of possession in favor of the respondent.35
Issue:
W/N the RTC erred in issuing a writ of alias possession and in reinstating the
case on the ground that it was already barred by res judicata – No.
Held:
No.
The doctrine of res judicata embraces two (2) concepts:
the first is “bar by prior judgment” under paragraph (b) of Rule 39, Section
47 of the Rules of Court, and the second is “conclusiveness of judgment”
under paragraph (c) thereof.
Res judicata applies in the concept of “bar by prior judgment” if the following
requisites concur:
(1) the former judgment or order must be final;
(2) the judgment or order must be on the merits;
(3) the decision must have been rendered by a court having jurisdiction over
the subject matter and the parties; and
(4) there must be, between the first and the second action, identity of parties,
of subject matter and of causes of action.40
The petitioners claim that res judicata under the first concept applies in the
present case because all of the elements thereof are present.
In response, the respondent argues that res judicata did not set in as the first
element is lacking.
We agree with the respondent.
The December 16, 1986 Dismissal Order never attained finality as it was
not properly served
The following provisions under Rule 13 of the Rules of Court define the
proper modes of service of judgments: xxx
As a rule, judgments are sufficiently served when they are delivered
personally, or through registered mail to the counsel of record, or by leaving
them in his office with his clerk or with a person having charge thereof. After
service, a judgment or order which is not appealed nor made subject of a
motion for reconsideration within the prescribed 15-day period attains
finality.
In Philemploy Services and Resources, Inc. v. Rodriguez,43 the Court ruled
that the Resolution of the National Labor Relations Commission, denying the
respondent’s motion for reconsideration, cannot be deemed to have become
final and executory as there is no conclusive proof of service of the said
resolution. In the words of the Court, “there was no proof of actual receipt of
the notice of the registered mail by the respondent’s counsel.”44 Based on
these findings, the Court concluded that the CA properly acquired jurisdiction
over the respondent’s petition for certiorari filed before it; in the absence of
a reckoning date of the period provided by law for the filing of the petition,
the Court could not assume that it was improperly or belatedly filed.
Similarly, in Tomawis v. Tabao-Cudang,45 the Court held that the decision
of the Regional Trial Court did not become final and executory where, from
the records, the respondent had not received a copy of the resolution denying
her motion for reconsideration.46 The Court also noted that there was no
sufficient proof that the respondent actually received a copy of the said Order
or that she indeed received a first notice. Thus, the Court concluded that there
could be no valid basis for the issuance of the writ of execution as the decision
never attained finality.
In the present case, we note that the December 16, 1986 Dismissal Order
cannot be deemed to have become final and executory in view of the absence
of a valid service, whether personally or via registered mail, on the
respondent’s counsel.
We note in this regard that the petitioners do not dispute the CA finding that
the “records failed to show that the private respondent was furnished with a
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copy of the said order of dismissal[.]”47 Accordingly, the Dismissal Order
never attained finality.

In sum, based on these considerations, we find that the RTC committed no

grave abuse of discretion in issuing an alias writ of possession in favor of the
respondent.

WHEREFORE, the present petition is DENIED. The August 26, 2002

Decision and the March 17, 2003 Resolution of the Court of Appeals in CA-
G.R. SP No. 32389 are AFFIRMED. Costs against the petitioners.
SO ORDERED.

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4. Atlantic Erectors v. Herbal Cove, G.R. No. 148568, March 20,
2003
Facts:
On June 20, 1996, [respondent] and [petitioner] entered into a
Construction Contract whereby the petitioner agreed to construct four (4)
units of [townhouses] and one (1) single detached unit for an adjusted to
P16,726,745.19 as a result of additional works.
The contract period is 180 days commencing [on] July 7, 1996 and to
terminate on January 7, 1997.
[Petitioner] claimed that the said period was not followed due to reasons
attributable to [respondent], namely: suspension orders, additional works,
force majeure, and unjustifiable acts of omission or delay on the part of said
[respondent].
[Respondent], however, denied such claim and instead pointed to [petitioner]
as having exceeded the 180 day contract period aggravated by defective
workmanship and utilization of materials which are not in compliance with
specifications.
Petitioner filed a complaint for sum of money with damages with the RTC
against respondent.
On the same day of November 21, 1997, [petitioner] filed a notice of lis
pendens for annotation of the pendency of Civil Case No. 97-707 on titles
TCTs nos. T-30228, 30229, 30230, 30231 and 30232. When the lots covered
by said titles were subsequently subdivided into 50 lots, the notices of lis
pendens were carried over to the titles of the subdivided lots, i.e., Transfer
Certificate of Title Nos. T-36179 to T-36226 and T-36245 to T-36246 of the
Register of Deeds of Tagaytay City.
Respondent and Ernest Escaler filed an MTD for lack of jurisdiction and
for failure to state a cause of action. They claimed [that] the Makati RTC has
no jurisdiction over the subject matter of the case because the parties’
Construction Contract contained a clause requiring them to submit their
dispute to arbitration.
RTC dismissed the complaint for failure to resort to arbitration first and,
as against Escaler, for failure to state a cause of action.
Respondent filed a Motion to Cancel Notice of Lis Pendens. It argued that
the notices of lis pendens are without basis because [petitioner’s] action is a
purely personal action to collect a sum of money and recover damages and
does not directly affect title to, use or possession of real property.
RTC granted respondent’s motion to cancel notice of lis pendens.
Petitioner filed an MR.
The RTC, while finding no merit in the grounds raised by [petitioner] in its
Motion for Reconsideration, reversed his July 30, 1998 Order and reinstated
the notices of lis pendens, as follows:
“‘As correctly argued by defendant Herbal Cove, a notice of lis pendens
serves only as a precautionary measure or warning to prospective buyers of a
property that there is a pending litigation involving the same.
The Court notes that when it issued the Order of 30 July 1998 lifting the
notice of lis pendens, there was as yet no appeal filed by plaintiff.
Subsequently, on 10 September 1998, after a notice of appeal was filed by
plaintiff on 4 September 1998, the Branch Clerk of Court was ordered by the
Court to elevate the entire records of the above-entitled case to the Court of
Appeals. It therefore results that the above-entitled case is still pending. After
a careful consideration of all matters relevant to the lis pendens, the Court
believes that justice will be better served by setting aside the Order of 30 July
1998.”
Respondent filed and was denied an MR.
On a R65 against the RTC order reinstating the notice of lis pendens, CA
reversed the RTC. According to the appellate court, the re-annotation of
those notices was improper for want of any legal basis. It specifically cited
Section 76 of Presidential Decree No. 1529 (the Property Registration
Decree). The decree provides that the registration of such notices is allowed
only when court proceedings directly affect the title to, or the use or the
occupation of, the land or any building thereon. According to the CA, the
complaint filed by petitioner was intended purely to collect a sum of money
and to recover damages. The appellate court ruled that the Complaint did not
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aver any ownership claim to the subject land or any right of possession over
the buildings constructed thereon. It further declared that absent any claim on
the title to the buildings or on the possession thereof, the notices of lis
pendens had no leg to stand on.
Hence this petition.
Issue:
W/N the notice of lis pendens should remain – No.
Held:
No. CA affirmed.
First Issue: Proper Basis for a Notice of Lis Pendens
Petitioner avers that its money claim on the cost of labor and materials for the
townhouses it constructed on the respondent’s land is a proper lien that
justifies the annotation of a notice of lis pendens on the land titles. According
to petitioner, the money claim constitutes a lien that can be enforced to secure
payment for the said obligations. It argues that, to preserve the alleged
improvement it had made on the subject land, such annotation on the property
titles of respondent is necessary.
On the other hand, Respondent Herbal Cove argues that the annotation is
bereft of any factual or legal basis, because petitioner’s Complaint9 does not
directly affect the title to the property, or the use or the possession thereof. It
also claims that petitioner’s Complaint did not assert ownership of the
property or any right to possess it. Moreover, respondent attacks as baseless
the annotation of the Notice of Lis Pendens through the enforcement of a
contractor’s lien under Article 2242 of the Civil Code. It points out that the
said provision applies only to cases in which there are several creditors
carrying on a legal action against an insolvent debtor.
As a general rule, the only instances in which a notice of lis pendens may be
availed of are as follows:
(a) an action to recover possession of real estate;
(b) an action for partition; and
(c) any other court proceedings that directly affect the title to the land or the
building thereon or the use or the occupation thereof.
Additionally, this Court has held that resorting to lis pendens is not
necessarily confined to cases that involve title to or possession of real
property. This annotation also applies to suits seeking to establish a right
to, or an equitable estate or interest in, a specific real property; or to
enforce a lien, a charge or an encumbrance against it.
Apparently, petitioner proceeds on the premise that its money claim involves
the enforcement of a lien. Since the money claim is for the nonpayment of
materials and labor used in the construction of townhouses, the lien referred
to would have to be that provided under Article 2242 of the Civil Code.
This provision describes a contractor’s lien over an immovable property as
follows:
“Art. 2242. With reference to specific immovable property and real rights of
the debtor, the following claims, mortgages and liens shall be preferred, and
shall constitute an encumbrance on the immovable or real right: xxx”
However, a careful examination of petitioner’s Complaint, as well as the
reliefs it seeks, reveals that no such lien or interest over the property was ever
alleged. The Complaint merely asked for the payment of construction
services and materials plus damages, without mentioning — much less
asserting — a lien or an encumbrance over the property. Verily, it was a
purely personal action and a simple collection case. It did not contain any
material averment of any enforceable right, interest or lien in connection with
the subject property.
As it is, petitioner’s money claim cannot be characterized as an action that
involves the enforcement of a lien or an encumbrance, one that would thus
warrant the annotation of the Notice of Lis Pendens. Indeed, the nature of an
action is determined by the allegations of the complaint.12
Even assuming that petitioner had sufficiently alleged such lien or
encumbrance in its Complaint, the annotation of the Notice of Lis Pendens
would still be unjustified, because a complaint for collection and damages is
not the proper mode for the enforcement of a contractor’s lien.
“However, Article 2242 finds application when there is a concurrence of
credits, i.e., when the same specific property of the debtor is subjected to the
claims of several creditors and the value of such property of the debtor is
insufficient to pay in full all the creditors. In such a situation, the question of
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preference will arise, that is, there will be a need to determine which of the
creditors will be paid ahead of the others. Fundamental tenets of due process
will dictate that this statutory lien should then only be enforced in the context
of some kind of a proceeding where the claims of all the preferred creditors
may be bindingly adjudicated, such as insolvency proceedings.”
When a complaint or an action is determined by the courts to be in personam,
the rationale for or purpose of the notice of lis pendens ceases to exist. To be
sure, this Court has expressly and categorically declared that the annotation
of a notice of lis pendens on titles to properties is not proper in cases wherein
the proceedings instituted are actions in personam.
Clearly then, neither Article 2242 of the Civil Code nor the enforcement of
the lien thereunder is applicable here, because petitioner’s Complaint failed
to satisfy the foregoing requirements. Nowhere does it show that respondent’s
property was subject to the claims of other creditors or was insufficient to pay
for all concurring debts. Moreover, the Complaint did not pertain to
insolvency proceedings or to any other action in which the adjudication of
claims of preferred creditors could be ascertained.
Another factor negates the argument of petitioner that its money claim
involves the enforcement of a lien or the assertion of title to or possession of
the subject property: the fact that it filed its action with the RTC of
Makati, which is undisputedly bereft of any jurisdiction over
respondent’s property in Tagaytay City. Certainly, actions affecting title
to or possession of real property or the assertion of any interest therein
should be commenced and tried in the proper court that has jurisdiction over
the area, where the real property involved or a portion thereof is situated.15
If petitioner really intended to assert its claim or enforce its supposed lien,
interest or right over respondent’s subject properties, it would have instituted
the proper proceedings or filed a real action with the RTC of Tagaytay City,
which clearly had jurisdiction over those properties.16
Narciso Peña, a leading authority on the subject of land titles and registration,
gives an explicit exposition on the inapplicability of the doctrine of lis
pendens to certain actions and proceedings that specifically include money
claims. He explains in this wise:
“By express provision of law, the doctrine of lis pendens does not apply to
attachments, levies of execution, or to proceedings for the probate of wills,
or for administration of the estate of deceased persons in the Court of First
Instance. Also, it is held generally that the doctrine of lis pendens has no
application to a proceeding in which the only object sought is the recovery of
a money judgment, though the title or right of possession to property be
incidentally affected. It is essential that the property be directly affected, as
where the relief sought in the action or suit includes the recovery of
possession, or the enforcement of a lien, or an adjudication between
conflicting claims of title, possession, or the right of possession to specific
property, or requiring its transfer or sale.”1
Peña adds that even if a party initially avails itself of a notice of lis pendens
upon the filing of a case in court, such notice is rendered nugatory if the case
turns out to be a purely personal action. We quote him as follows:
“It may be possible also that the case when commenced may justify a resort
to lis pendens, but during the progress thereof, it develops to be purely a
personal action for damages or otherwise. In such event, the notice of lis
pendens has become functus officio.”18 (Emphasis supplied)
Thus, when a complaint or an action is determined by the courts to be in
personam, the rationale for or purpose of the notice of lis pendens ceases to
exist. To be sure, this Court has expressly and categorically declared that the
annotation of a notice of lis pendens on titles to properties is not proper in
cases wherein the proceedings instituted are actions in personam.19
WHEREFORE, the Petition is hereby DENIED and the assailed Decision
AFFIRMED. Costs against petitioner.
SO ORDERED.
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5. St. Mary of the Woods School v. Office of the Registry of Deeds
of Makati, G.R.No. 174290, January 20, 2009
Facts:
Petitioner SMWSI is an educational institution incorporated and existing by
virtue of the laws of the Republic of the Philippines. It is the current registered
owner of the three parcels of land (subject properties), located in Makati City
and covered by TCTs No. 175029, No. 220977 and No. 220978. Petitioner
Marcial P. Soriano is the President of petitioner SMWSI.
Private respondent Hilario P. Soriano, on the other hand, is one of the
siblings of petitioner Marcial P. Soriano.
The consolidated cases presently before this Court originated from the
Complaint filed by the private respondent with the RTC for the
declaration of nullity of deed of assignment, deed of sale and cancellation
of
1. TCTs No. 156249, No. 156250, and No. 156251 of the Register of Deeds
of Makati, Metro Manila,10 registered in the name of Oro Development
Corporation (ODC); and
2. TCT No. 175029, registered in the name of petitioner SMWSI.
Named defendants therein were the petitioners, together with ODC, Antonio
P. Soriano, Aurelia P. Soriano-Hernandez, Rosario P. Soriano-Villasor,
Eugenia Ma. P. Soriano-Lao and Josefina P. Soriano (hereinafter collectively
referred to as petitioners, et al.). The Complaint was docketed as Civil Case
No. 03-954.
In his Complaint, private respondent alleged that during the marriage of his
parents, Tomas Q. Soriano and Josefina P. Soriano, the couple acquired both
real and personal properties, including the subject properties, which were
then covered by TCTs No. 169941,11 No. 114408,12 and No. 114409.13
The Soriano couple allegedly executed a Deed of Assignment15 in favor of
ODC involving the subject properties to pay for Tomas Q. Soriano’s
subscription of stocks in the said corporation. On 14 June 1988, Tomas Q.
Soriano died16 intestate.
By virtue of the said Deed of Assignment, the ownership and title over the
subject properties were transferred to ODC.
Thereafter, on 26 April 1991, ODC executed in favor of petitioner SMWSI
a Deed of Sale21 over the subject property covered by TCT No. 156249. By
virtue of the sale, petitioner SMWSI acquired ownership and title over the
particular property. Thus, TCT No. 156249 was cancelled and the new TCT
No. 175209 was issued in the name of petitioner SMWSI.
Private respondent claimed that several years after his father Tomas Q.
Soriano’s death, he discovered that the latter’s signature in the Deed of
Assignment of 10 May 1988 in favor of ODC was a forgery. Being very
familiar with his father’s signature, private respondent compared Tomas Q.
Soriano’s purported signature in the Deed of Assignment of 10 May 1988
with Tomas Q. Soriano’s genuine signature in another document captioned
Second Amendment of Credit Agreement.22 Private respondent also
presented a Certification23 from the Records Management and Archives
Office which stated that the forged Deed of Assignment dated 10 May 1988
was not available in the files of the Office.
Meanwhile, by reason of the pendency of Civil Case No. 03-954, a Notice of
Lis Pendens was annotated on TCTs No. 156249, No. 156250, and No.
156251, in the name of ODC. With the subsequent cancellation of TCT No.
156249 and the issuance of TCT No. 175209 in the name of petitioner
SMWSI, the Notice of Lis Pendens was carried over to the new certificate of
title.
In a Joint Affidavit dated 18 July 1990 executed by petitioner Marcial P.
Soriano, it appears that the other individual defendants in Civil Case No. 03-
954, and private respondent, recognized and acknowledged the validity,
legality and propriety of the transfer of the subject properties from Tomas Q.
Soriano to ODC.
On this basis, defendants filed with the RTC a Motion to Dismiss25 Civil
Case No. 03-954 on the grounds that: (1) the Complaint states no cause of
action; (2) the claim set forth in the Complaint has been paid, waived,
abandoned or otherwise extinguished; (3) the Complaint is barred by estoppel
or laches; (4) the Complaint is barred by prescription; (5) the titles to the
subject properties are incontestable and can no longer be annulled; and (6) a
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condition precedent for filing the claim has not been complied with, i.e., the
compromise agreement failed despite earnest efforts towards that end.
RTC dismissed the respondent’s complaint.
In the interim, the subject properties covered by TCTs No. 156250 and No.
156251 in the name of ODC were also transferred to petitioner SMWSI by
virtue of a Deed of Sale dated 3 February 2005. TCTs No. 156250 and No.
156251 in the name of ODC were then cancelled and the new TCTs No.
220977 and No. 220978 were issued in the name of petitioner SMWSI. The
Notice of Lis Pendens annotated on the cancelled TCTs was copied into the
new TCTs in the name of petitioner SMWSI.
On 16 May 2005, petitioners, et al., filed with the RTC a Motion to Cancel
Notice of Lis Pendens31 annotated on the titles covering the subject
properties, which Motion was opposed by the private respondent.
The very next day, 17 May 2005, private respondent filed a Notice of
Appeal stating his intention to elevate the RTC Orders dated 17 January 2005
and 26 April 2005 to the Court of Appeals. Private respondent’s appeal before
the Court of Appeals was docketed as CA-G.R. CV No. 85561.
Meanwhile, the RTC granted the Motion to Cancel Notice of Lis Pendens
annotated on TCTs No. 156249, No. 156250, No. 156251 in the name of
ODC and TCT No. 175029 in the name of petitioner SMWSI, holding that:
“As mentioned in the case, the notice of lis pendens can be cancelled if it is
not necessary to protect the interest of the party who caused it to be recorded.
In this case, the [herein private respondent’s] interest should be considered
on whether the notice of lis pendens should be cancelled or not. As it is the
Court believes that the cancellation is proper in this case. First, the Court still
has jurisdiction of the case considering that the Notice of Appeal was only
filed on [17 May 2005], while the Motion to cancel Notice of Lis Pendens
was filed on [16 May 2005].
Second, [private respondent] Hilario P. Soriano has no interest to be protected
insofar as the subject properties are concerned because of his
acknowledgment that he already received his share in the estate of Tomas
Soriano.
Lastly, the contention of the [private respondent] that the motion is premature
is not tenable. The authority of the Court to Cancel Notice of Lis Pendens is
even evident in the Comment/Opposition of the [private respondent] which
states that “While it may be true that the cancellation of a notice of lis pendens
may be ordered at any given time even before final judgment…”
The petitioners, et al., filed with the RTC a Motion for Issuance of
Supplement to Order Cancelling Notice of Lis Pendens34 to clarify that
TCTs No. 156249, No. 156250, and No. 156251 in the name of ODC were
already cancelled and replaced with TCTs No. 175209, No. 220977, and No.
220978 all registered in the name of petitioner SMWSI in which the Notice
of Lis Pendens was carried over.
RTC issued another Order35 by way of supplement to its Order dated 20 June
2005, directing anew the Registrer of Deeds of Makati City to cancel the
Notice of Lis Pendens annotated on TCTs No. 175029, No. 220977 and No.
220978 in the name of petitioner SMWSI.
While the case was pending before the CA, and since the Notice of Lis
Pendens annotated on the TCTs of the subject properties in the name of
petitioner SMWSI was already cancelled per RTC Orders dated 20 June 2005
and 15 July 2005, petitioner SMWSI mortgaged the subject properties on 15
February 2006 for the amount of P8,000,000.00.
Private respondent filed before the Court of Appeals a Motion to
Reinstate/Re-annotate Notice of Lis Pendens on the TCTs of the subject
properties given that there was yet no final judgment of dismissal of his
Complaint, as its dismissal had been duly appealed.
CA granted the Motion to Reinstate/Re-annotate Notice of Lis Pendens on
the TCTs of the subject properties. The Court of Appeals ruled that although
the RTC found that private respondent had no interest to be protected by the
Notice of Lis Pendens, since the appellate court already acquired jurisdiction
over the case, it was the latter which must ascertain the propriety of canceling
the Notice of Lis Pendens upon proper motion and hearing.
Without filing an MR with the CA, petitioners filed this R65 with the SC
claiming that CA erred in granting the motion to reinstate the notice of lis
pendens.
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Issue:
W/N CA erred in reinstating the notice of lis pendens – No.
Held:
No.
Given the foregoing, the Court dismisses the instant Petition for Certiorari
for petitioners’ failure to comply with a condition precedent (non-filing of
MR) for filing such a petition.
Granting arguendo that the present special civil action for certiorari can be
given due course, the Court still finds that the Court of Appeals did not
commit any grave abuse of discretion in granting private respondent’s Motion
to Reinstate/Re-annotate Notice of Lis Pendens.
Lis pendens, which literally means pending suit, refers to the jurisdiction,
power or control which a court acquires over property involved in a suit,
pending the continuance of the action, and until final judgment. Founded
upon public policy and necessity, lis pendens is intended
(1) to keep the properties in litigation within the power of the court until the
litigation is terminated and to prevent the defeat of the judgment or decree by
subsequent alienation; and
(2) to announce to the whole world that a particular property is in litigation
and serves as a warning that one who acquires an interest over said property
does so at his own risk, or that he gambles on the result of the litigation over
said property.
A trial court has, however, the inherent power to cancel a notice of lis
pendens, under the express provisions of law. As provided for by Sec. 14,
Rule 13 of the 1997 Rules of Civil Procedure, a notice of lis pendens may be
cancelled on two grounds:
(1) if the annotation was for the purpose of molesting the title of the adverse
party; or
(2) when the annotation is not necessary to protect the title of the party who
caused it to be recorded.
Considering that the dismissal of private respondent’s Complaint by the RTC
was appealed to the Court of Appeals, which Complaint refers to the
properties covered by TCTs No. 175209, No. 220977, and No. 220978 that
bear the annotations of lis pendens, and such properties therefore are
irrefragably still the subject matter of litigation, the appellate court rightly
saw the need for giving notice to the public of such a fact.
The necessity becomes even more compelling considering that petitioner
SMWSI had already entered into transactions with third parties involving the
subject properties.
On the issue of jurisdiction of the Court of Appeals to entertain the issue on
the notice of lis pendens, we adhere to the Court of Appeals’ ratiocination,
thus:
“However, as the dismissal of this case by the lower court has been appealed
to us, we now have jurisdiction over the case.
The doctrine of lis pendens is based on consideration of public policy and
convenience, under the view that once a court has taken cognizance of a
controversy, it should be impossible to interfere with the consummation of
the judgment by any ad interim transfer, encumbrance, or change of
possession.
Now that the case is pending before us on appeal, there is no certainty as to
the outcome of the case. There is a need to warn the whole world that a
particular property is in litigation, serving as a warning that the one who
acquires an interest over said property does so at his own risk, or that he
gambles on the result of the litigation over said property.
Although the lower court made a finding that [herein private respondent]
Hilario has no interest to be protected by the annotation of the notice of the
pendency of the case as we now have jurisdiction over the case, we have to
ascertain for ourselves the propriety of canceling the annotation of the notice
of lis pendens upon proper motion and hearing.”
WHEREFORE, premises considered, these consolidated Petitions for
Certiorari are hereby DISMISSED.
SO ORDERED.
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6. Vicente v. Avera, G.R. No. 169970, January 20, 2009
Facts:
Jovencio Rebuquiao was the registered owner of the property in dispute,
then covered by Transfer Certificate of Title (TCT) No. 34351.4
On October 1, 1987, Rebuquiao executed a Deed of Absolute Sale in favor
of petitioners, spouses Protacio Vicente and Dominga Vicente, over the
property in dispute.5
Respondent Delia Soledad Avera alleges that on October 9, 1987, Jose
Rebuquiao, pursuant to a Special Power of Attorney granted to him by
Jovencio Rebuquiao, executed a Deed of Absolute Sale with Assumption
of Mortgage in favor of Roberto Domingo, Avera’s spouse at the time,
and herself.6
On May 29, 1991, Avera filed a Petition for Declaration of Nullity of
Marriage before the RTC, Branch 70, Pasig City, entitled “Delia Soledad
Domingo, etc. v. Roberto Domingo” and docketed as JDRC Case No. 1989-
J (JDRC case).7 In this case, Avera asserted exclusive ownership over the
property in dispute.8
On January 23, 1992, a notice of lis pendens was inscribed on TCT No.
34351, pertaining to the JDRC case pending at the time.9
Since 1997, petitioners possessed the property in dispute.10 On July 22, 1998,
TCT No. 34351 was cancelled, and in lieu thereof, the Registry of Deeds
issued petitioners TCT No. 14216 for the property in dispute, on the basis of
the deed of sale executed on October 1, 1987.11 The notice of lis pendens
was carried over to TCT No. 14216.
RTC (in the JDRC case) declared the marriage of Avera and Domingo void
and ordered the property acquired during their cohabitation to be put in the
custody of Avera, including the property in dispute.13 After the decision in
the JDRC case became final and executory, the RTC, Branch 70, Pasig City,
issued an Alias Writ of Execution.14
Pursuant to the Alias Writ of Execution, respondent Ronberto Valino, in his
capacity as Sheriff IV of the RTC, Branch 70, Pasig City, served a Notice to
Vacate dated August 15, 2001, on petitioners.16
On August 17, 2001, petitioners filed an Affidavit of Third Party Claim
before the RTC, Branch 70, Pasig City.17
On August 22, 2001, petitioners filed a Complaint for Injunction with
Prayer for a Temporary Restraining Order (TRO) before the RTC to
enjoin Sheriff Valino from implementing the alias writ of execution.
RTC eventually issued a permanent writ of preliminary injunction
holding that petitioners were entitled to permanent injunction considering the
following:
(1) it is undisputed that petitioners are the registered owners of the subject
property, which certificate of title confers upon them conclusive ownership
of the property; and
(2) the writ of execution issued in the JDRC case could only be issued against
a party to the action, and thus not to the petitioners.22
CA reversed RTC and dissolved the writ of preliminary injunction,
holding that petitioners are bound by the outcome of the JDRC case,
because the annotation of the notice of lis pendens (January 23, 1992) was
ahead of petitioners’ registration of the deed of sale executed on October 1,
1987 (July 22, 1998).
Hence this petition.
Issue:
W/N the CA erred in dissolving the writ of injunction on the ground that
petitioners were bound by the notice of lis pendens – Yes, it erred.
Held:
Yes, it erred.
Injunction, as a preservative remedy, aims to protect substantive rights and
interests.27 To be entitled to a writ of injunction, the complainant must
establish the following requisites: (1) there must be a right in esse or the
existence of a right to be protected; and (2) the act against which injunction
is to be directed is a violation of such right.28 The grant of the writ is
conditioned on the existence of the complainant’s clear legal right, which
means one clearly founded in or granted by law or is “enforceable as a matter
of law.”29
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As the registered owners and actual possessors of the property in question,
petitioners have a clear legal right to the property in dispute.
In the case at bar, it is undisputed that petitioners are the registered owners
and actual possessors of the subject property. Moreover, as the registered
owners, petitioners have the right to the possession of the property, which is
one of the attributes of ownership.32
It was erroneous for respondents to assail the deed of sale executed on
October 1, 1987 in favor of petitioners, because this constitutes a collateral
attack on petitioners’ TCT. Section 48 of P.D. No. 1529 prohibits a collateral
attack on a Torrens title.33 This Court has held that a petition which, in effect,
questioned the validity of a deed of sale for registered land constitutes a
collateral attack on a certificate of title.34 In the case at bar, respondents’
allegation, that the deed of sale executed on October 1, 1987 in favor of
petitioners does not exist, clearly constitutes a collateral attack on a certificate
of title. The allegation of the inexistence of the deed of sale in effect attacks
the validity of the TCT issued in the petitioners’ names.
Petitioners’ title to the property in dispute is not subject to the outcome
of the litigation covered by the notice of lis pendens annotated on January
23, 1992. Section 24, Rule 14 of the 1964 Rules of Civil Procedure provides
that a purchaser of the property affected by the notice of lis pendens is deemed
to have constructive notice of the pendency of the action only from the time
of filing such notice.35 Section 14, Rule 13 of the 1997 Rules of Civil
Procedure reiterates this rule.36 Thus, a notice of lis pendens affects a
transferee pendente lite, who by virtue of the notice, is bound by any
judgment, which may be rendered for or against the transferor, and his title is
subject to the results of the pending litigation.37
A notice of lis pendens neither affects the merits of a case nor creates a
right or a lien. It serves to protect the real rights of the registrant while the
case involving such rights is pending resolution. While the notice of lis
pendens remains on a certificate of title, the registrant could rest secure that
he would not lose the property or any part of it during the litigation. Once a
notice of lis pendens has been duly registered, any subsequent transaction
affecting the land involved would have to be subject to the outcome of the
litigation. For this reason, the Court has pronounced that a “purchaser who
buys registered land with full notice of the fact that it is in litigation between
the vendor and a third party stands in the shoes of his vendor and his title is
subject to the incidents and result of the pending litigation.”
In the case at bar, the notice of lis pendens does not affect petitioners’
title to the property in dispute. A notice of lis pendens concerns litigation
between a transferor and a third party, where the transferee who acquires land
with a notice of lis pendens annotated on the corresponding certificate of title
stands in the shoes of his predecessor and in which case the transferee’s title
is subject to the results of the pending litigation.
The notice of lis pendens does not concern litigation involving Rebuquiao,
who transferred his title to the property in dispute to petitioners, and his
title. The notice of lis pendens pertains to the JDRC case, an action for
nullity of the marriage between Avera and Domingo. Since Rebuquiao’s
title to the property in dispute is not subject to the results of the JDRC case,
petitioners’ title to the same property is also not subject to the results of the
JDRC case.
We must stress that until petitioners’ title is annulled in a proper proceeding,
Avera has no enforceable right over the property in dispute. At this point,
petitioners’ possession of the subject property must be respected. Since Avera
failed to prove her indubitable right over the subject property, we rule that
petitioners possess a clear and unmistakable right over the property in dispute
that requires the issuance of a writ of injunction to prevent any damage to
their interests as registered owners.
IN VIEW WHEREOF, the petition is GRANTED. The Decision and
Resolution of the Court of Appeals in CA-G.R. CV No. 79327, dated June
16, 2005 and October 4, 2005 respectively, are REVERSED and SET ASIDE.
SO ORDERED.
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7. Aberca et al. v. Ver, et al., G.R. No. 166216, March 14, 2012
Facts:
On 25 January 1983, several suspected subversives who were arrested and
detained by the military filed a complaint for damages with the Regional
Trial Court of Quezon City against Gen. Fabian Ver, then AFP Chief of
Staff, and Several subordinate officers.
In their complaint, the plaintiff-appellees alleged that they were arrested and
detained by Task Force Makabansa, a composite group of various intelligence
units of the AFP, on the strength of defective search warrants; that while
under detention and investigation, they were subjected to physical and
psychological harm, torture and other brutalities to extort from them
confessions and other information that would incriminate them; and that by
reason thereof, they suffered actual and moral damages.
Defendants-appellants, through their counsel, the then Solicitor General
Estelito Mendoza, filed a motion to dismiss on the following grounds: (1)
since the privilege of the writ of habeas corpus was then suspended, the trial
court cannot inquire into the circumstances surrounding plaintiffs-appellees’
arrests; (2) the defendants-appellants are immune from liability for the reason
that they were then performing their official duties; and (3) the complaint
states no cause of action.
RTC granted the MTD and dismissed the complaint.
On March 15, 1985, plaintiffs-appellees went to the Supreme Court on a
petition for review on certiorari.
While the case was pending in the Supreme Court, the so-called EDSA
revolution took place. As a result, the defendants-appellants lost their official
positions and were no longer in their respective office addresses as appearing
in the record. Also, in the meantime, the case was re-raffled to Branch 107.
On April 15, 1988, the Supreme Court rendered a decision annulling and
setting aside the assailed orders and remanded the case to the trial court
for further proceedings.
However, trial could not proceed immediately because on June 11, 1988, the
record of the case was destroyed when fire razed the City Hall of Quezon
City. It was only on October 9, 1989 when plaintiffs-appellees sought a
reconstitution of the record of the case. The record shows that the petition
for reconstitution was set for hearing on October 27, 1989. However, there
is nothing in the record to show that defendants-appellants or their counsel
were notified. For lack of an opposition, the petition for reconstitution was
granted in an order dated March 12, 1990.
On August 15, 1990, plaintiffs-appellees filed a motion praying that
defendants-appellants be required to file their answer. However, the
record as reconstituted did not show who are the lawyers of the defendants-
appellants considering that Estelito Mendoza, who had represented them in
his capacity as Solicitor General, was no longer holding that position.
Furthermore, defendants-appellants were also no longer occupying the
positions they held at the time the complaint was filed. Thus, in an order dated
August 17, 1990, RTC ordered plaintiffs-appellees to report to the trial
court the addresses and whereabouts of defendants- appellants so that
they could be properly notified.
Instead of complying with the order of August 17, 1990, plaintiffs-appellees
filed a motion to declare defendants-appellants in default.
The trial court deferred resolution of this motion and instead, it issued an
order on September 10, 1990 directing that a copy of the order dated August
17, 1990 be furnished to new Solicitor General Francisco Chavez to enable
him to take action pursuant to Section 18, Rule 3 of the Rules of Court, and
to former Solicitor General Estelito Mendoza to enable him to give notice as
to whether he [would] continue to represent the defendants-appellants in his
private capacity. As it said in its order, the trial court took this action “in view
of the change in government and corresponding change in the addresses and
circumstances of the defendants- appellants who may not even be aware of
the decision of the Supreme Court in case G.R. No. L-69866 and of the
reconstitution of records in this case…”
In an order dated December 27, 1990, the trial court denied plaintiffs-
appellees’ motion to declare defendants-appellants in default,
emphatically pointing out that defendants-appellants were not duly notified
of the decision of the Supreme Court. In the same order, the trial court
directed plaintiffs-appellees to comply with the order of August 17, 1990
within ten (10) days from notice, with a warning that the case [would] be
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archived and eventually dismissed if plaintiffs-appellees failed to furnish to
the court the addresses of defendants-appellants.
Plaintiffs-appellees moved to reconsider the order dated December 27, 1990
but in an order dated February 1, 1991, the trial court denied the motion,
stating that “without actual notice of the judgment of the Supreme Court xxx
the defendants- appellants herein would not be aware that they should file a
responsive pleading” and that, therefore, “to consider the defendants-
appellants in default would be tantamount to lack of due process xxx.”
For failure of the plaintiffs-appellees to comply with the orders dated
August 17, 1990 and December 27, 1990, the trial court dismissed the
case without prejudice in its order dated March 7, 1991.
Subsequently, however, in an order dated June 4, 1991, the trial court set
aside the order of dismissal and reinstated the case. It also approved
plaintiffs-appellees’ request to serve the notice to file answer or
responsive pleading by publication.
In a compliance dated September 12, 1991, plaintiffs-appellees informed the
trial court that the following notice was published in the Tagalog newspaper
BALITA in its issues of August 29, 1991 and September 5, 1991: xxx
No answer was filed by defendants-appellants within the period stated in the
notice. On motion of plaintiffs-appellees, the trial court in its order dated
December 5, 1991 declared defendants-appellants in default and directed
plaintiffs-appellees to present their evidence ex-parte.
RTC ruled for petitioners and ordered the respondents to pay damages.
Subsequently, respondents Col. Fidel Singson (Col. Singson), Lt. Col. Panfilo
M. Lacson (Lt. Col. Lacson), and Col. Rolando Abadilla (Col. Abadilla) filed
their Omnibus Motion praying as follows:
1) that the order of default dated December 5, 1991 be reversed and set aside;
2) that the decision dated February 19, 1993 be reversed and set aside;
3) that the entire proceedings be declared null and void; and
4) that they be given fifteen (15) days from notice to file answer to the
complaint and present their evidence. Col. Gerardo B. Lantoria (Col.
Lantoria) filed his own Motion for Reconsideration.
RTC denied the omnibus motion.
CA reversed RTC.
The CA ruled, among others, that the RTC committed four (4) errors in
declaring the respondents in default and proceeding to hear the case.
The RTC committed its first error when it abandoned the proper modes of
service of notices, orders, resolutions or judgments as the petitioners failed
to comply with its order dated August 17, 1990, directing them to report the
addresses and whereabouts of the respondents so that they could be properly
notified.
The second error was the failure of the RTC to avail of substituted service
after failing to effect personal service or service by mail. It perpetrated its
third error when it authorized service by publication after dismissing the
case for failure of the petitioners to furnish the current addresses of the
respondents. The CA reasoned out that there was nothing in the rules which
would authorize publication of a notice of hearing to file answer and for what
was authorized to be published were summons and final orders and
judgments. The fourth error was committed when the respondents were
declared in default because they were not duly notified and, therefore, were
denied due process.
Hence this petition.
Issue:
W/N respondents’ right to due process was violated – Yes.
Held:
Yes. CA affirmed.
Procedural due process is that which hears before it condemns, which
proceeds upon inquiry and renders judgment only after trial. It contemplates
notice and opportunity to be heard before judgment is rendered affecting
one’s person or property.
Moreover, pursuant to the provisions of Section 5(5) of Article VIII of the
1987 Constitution, the Court adopted and promulgated the following rules
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concerning, among others, the protection and enforcement of constitutional
rights, pleading, practice and procedure in all courts:
“Rule 13.
SEC. 5. Modes of service. — Service of pleadings, motions, notices, orders,
judgments and other papers shall be made either personally or by mail.
SEC. 6. Personal service. — Service of the papers may be made by delivering
personally a copy to the party or his counsel, or by leaving it in his office with
his clerk or with a person having charge thereof. If no person is found in his
office, or his office is not known, or he has no office, then by leaving the
copy, between the hours of eight in the morning and six in the evening, at the
party’s or counsel’s residence, if known, with a person of sufficient age and
discretion then residing therein.
SEC. 7. Service by mail. — Service by registered mail shall be made by
depositing the copy in the office, in a sealed envelope, plainly addressed to
the party or his counsel at his office, if known, otherwise at his residence, if
known, with postage fully prepaid, and with instructions to the postmaster to
return the mail to the sender after ten (10) days if undelivered. If no registry
service is available in the locality of either the sender or the addressee, service
may be done by ordinary mail.
SEC. 8. Substituted service. — If service of pleadings, motions, notices,
resolutions, orders and other papers cannot be made under the two preceding
sections, the office and place of residence of the party or his counsel being
unknown, service may be made by delivering the copy to the clerk of court,
with proof of failure of both personal service and service by mail. The service
is complete at the time of such delivery.”
The above rules, thus, prescribe the modes of service of pleadings, motions,
notices, orders, judgments, and other papers, namely: (1) personal service;
(2) service by mail; and (3) substituted service, in case service cannot be
effected either personally or by mail.
In the case at bench, the respondents were completely deprived of due
process when they were declared in default based on a defective mode of
service — service of notice to file answer by publication. The rules on
service of pleadings, motions, notices, orders, judgments, and other papers
were not strictly followed in declaring the respondents in default. The Court
agrees with the CA that the RTC committed procedural lapses in declaring
the respondents in default and in allowing the petitioners to present evidence
ex-parte.
As correctly observed by the CA, the RTC’s August 17, 1990 Order was an
attempt to serve a notice to file answer on the respondents by personal service
and/or by mail. These proper and preferred modes of service, however, were
never resorted to because the OSG abandoned them when the petitioners
failed to comply with the August 17, 1990 RTC order requiring them to report
the addresses and whereabouts of the respondents. Nevertheless, there was
still another less preferred but proper mode of service available — substituted
service — which is service made by delivering the copy to the clerk of court,
with proof of failure of both personal service and service by mail.
Unfortunately, this substitute mode of service was not resorted to by the RTC
after it failed to effect personal service and service by mail. Instead, the RTC
authorized an unrecognized mode of service under the Rules, which was
service of notice to file answer by publication.
Considering the fact that the OSG could no longer represent the respondents,
the RTC should have been more patient in notifying the respondents through
personal service and/or service by mail. It should not have simply abandoned
the preferred modes of service when the petitioners failed to comply with its
August 17, 1990 order with the correct addresses of the respondents. More
so, it should not have skipped the substituted service prescribed under the
Rules and authorized a service of notice on the respondents to file answer by
publication.
In view of the peculiar circumstances surrounding the case, the RTC should
have instead directed the petitioners to exert diligent efforts to notify the
respondents either personally or by registered mail. In case the preferred
modes were impractical, the Court should have required the petitioners to at
least report in writing why efforts exerted towards personal service or service
by mail failed. In other words, a convincing proof of an impossibility of
personal service or service by mail to the respondents should have been
shown first.
The RTC, thus, erred when it ruled that the publication of a notice to file
answer to the respondents substantially cured the procedural defect
equivalent to lack of due process. The RTC cannot just abandon the basic
requirement of personal service and/or service by mail.
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At any rate, the Court is of the view that personal service to the respondents
was practicable under the circumstances considering that they were well-
known persons who used to occupy high government positions.
To stress, the only modes of service of pleadings, motions, notices, orders,
judgments and other papers allowed by the rules are personal service, service
by mail and substituted service if either personal service or service by mail
cannot be made, as stated in Sections 6, 7 and 8 of Rule 13 of the Rules of
Court.
Nowhere under this rule is service of notice to file answer by publication is
mentioned, much less recognized.
Furthermore, the Court would like to point out that service by publication
only applies to service of summons stated under Rule 14 of the Rules of
Court where the methods of service of summons in civil cases are: (1)
personal service; (2) substituted service; and (3) service by publication.
Similarly, service by publication can apply to judgments, final orders and
resolutions as provided under Section 9, Rule 13 of the Rules of Court, as
follows:
SEC. 9. Service of judgments, final orders or resolutions. — Judgments, final
orders or resolutions shall be served either personally or by registered mail.
When a party summoned by publication has failed to appear in the action,
judgments, final orders or resolutions against him shall be served upon
him also by publication at the expense of the prevailing party.
On this point, the petitioners argue that the publication was a valid and
justified procedure because following the ruling of the RTC, it was “an extra
step to safeguard the interest of the defendants done pursuant to the inherent
power of the courts to control its proceedings to make them comfortable to
law and justice.” The petitioners further argue that “the defendants in a civil
case cannot seize control of the proceedings or cause them to be suspended
indefinitely by the simple expedient of not filing their answers or by feigning
ignorance of the proceedings. All these could have been avoided had the
defendants not been so inexplicably complacent and utterly lacking in
ordinary prudence.”
The Court is not convinced.
As already discussed above, the basic rules on modes of service of pleadings,
motions, notices, orders, judgments, and other papers are mandatory in nature
and, therefore, must be strictly observed. The Court is not unaware of the
inherent power of courts to control its proceedings. Nonetheless, the exercise
of such inherent power must not violate basic court procedures. More
importantly, it must not disregard one’s basic constitutional right to
procedural due process.
This was precisely the reason for the RTC’s denial of the petitioner’s default
motion in its August 17, 1990 Order, and for the eventual dismissal of the
case in its December 27, 1990 Order.
It must be noted that as the RTC orders stated, the respondents were not
notified of the April 15, 1988 Decision of this Court, which ordered the re-
opening and remanding of this case to the RTC. They were neither notified
of the reconstitution proceedings that took place pertaining to the burned
records of the case. The RTC further stated that the respondents were no
longer holding their official government positions and that they were no
longer represented by the OSG on account of the change in government. In
other words, the respondents had no counsel of record and no notice of
subsequent proceedings. In short, due process was absent.
Next, the court records got burned during the June 11, 1988 fire that hit the
Quezon City Hall where the records were kept. On March 12, 1990, the RTC
granted the petitioners’ petition for reconstitution. Again, the records do not
show that the RTC initiated extra efforts to notify the respondents about the
reconstitution proceedings. The entire records of this case tend to show that
the respondents were completely out of the picture until after the
promulgation of the RTC decision.
WHEREFORE, the petition is DENIED. SO ORDERED.
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8. FEU-NRMF v. FEU-NRMF AFW, G.R. No. 168362, October 16,
2006
Facts:
Petitioner Far Eastern University-Dr. Nicanor Reyes Medical Foundation’s
(FEU- NRMF) is a medical institution duly organized and existing under the
Philippine laws. On the other hand, respondent union is a legitimate labor
organization and is the duly recognized representative of the rank and file
employees of petitioner FEU-NRMF.
The parties had disagreements over the economic and non-economic
provisions of their CBA.
In an effort to arrive at a compromise, subsequent conciliation proceedings
were conducted before the National Conciliation and Mediation Board-
National Capital Region (NCMB-NCR) but because of the unyielding stance
of both parties, the negotiation failed. NRMF to accept them under the same terms and conditions prevailing before
On 6 August 1996, respondent union filed a Notice of Strike before NCMB-
NCR on the ground of bargaining deadlock. A strike vote was conducted on
23 August 1996 and the result thereof was submitted to NCMB-NCR on 26
August 1996. After the expiration of the thirty-day cooling off period and the
seven-day strike ban, respondent union, on 6 Sep-tember 1996, staged a
strike.6
Before the strike was conducted, respondent union, on 4 September 1996,
offered a skeletal force of nursing and health personnel who will man the
hospital’s operation for the duration of the strike. For reasons unknown to
respondent union, however, petitioner FEU-NRMF failed or refused to accept
the offer.
For its part, petitioner FEU-NRMF, on 29 August 1996, filed a Petition
for the Assumption of Jurisdiction or for Certification of Labor Dispute
with the National Labor Relations Commission (NLRC), underscoring the
fact that it is a medical institution engaged in the business of providing health
care for its patients.7
Acting on the petition, the Secretary of Labor, on 5 September 1996,
granted the petition and thus issued an Order8 assuming jurisdiction
over the labor dispute, thereby prohibiting any strike or lockout whether
actual or impending, and enjoining the parties from committing any acts
which may exacerbate the situation.
On 6 September 1996, Francisco Escuadra, the NLRC process server,
certified that, on 5 September 1996 at around 4:00 P.M., he attempted to serve
a copy of the Assumption of Jurisdiction Order to the union officers but since
no one was around at the strike area, he just posted copies of the said Order
at several conspicuous places within the premises of the hospital.
Claiming that they had no knowledge that the Secretary of Labor already
assumed jurisdiction over the pending labor dispute as they were not able to
receive a copy of the Assumption of Jurisdiction Order, striking employees
continued holding a strike until 12 September 1996.
On 12 September 1996, the Secretary of Labor issued another Order9
directing all the striking employees to return to work and the petitioner FEU-
the strike. Accordingly, on 13 September 1996, a Return to Work Agreement
was executed by the disputing parties, whereby striking employees agreed to
return to their work and the petitioner FEU-NRMF undertook to accept them
under status pro ante. On the same day, the striking employees returned to
their respective stations.
Subsequently, petitioner FEU-NRMF filed a case before the NLRC,
contending that respondent union staged the strike in defiance of the
Assumption of Jurisdiction Order; hence, it was illegal. Further, the said
strike was conducted in a deleterious and prejudicial manner, endangering the
lives of the patients confined at the hospital.
The LA declared the strike illegal and dismissed the union officers for
conducting the strike in defiance of the Assumption of Jurisdiction Order.
NLRC affirmed the LA in toto.
On a R65, CA reversed the NLRC holding that no personal service was
validly effected by the process server that could bind the striking
employees.
Hence this petition.
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Issue:
W/N the service of the Assumption of Jurisdiction Order was validly effected
by the process server so as to bind the respondent union and hold them liable
for the acts committed subsequent to the issuance of the said Order – No.
Held:
No.
The certification/proof of service of the process server, Francisco A.
Escuadra, dated 6 September 1996, reads:
“Since none of the officials of the said union was available to receive a copy
of the said Order, I posted copies of the same at several conspicuous places
within the premises of Far Eastern University Nicanor Reyes Medical
Foundation (FEU-NRMF).”
It can be inferred from the foregoing that the process server resorted to
posting the Order when personal service was rendered impossible since the
striking employees were not present at the strike area.
This mode of service, however, is not sanctioned by either the NLRC Revised
Rules of Procedure or the Revised Rules of Court.
The pertinent provisions of the NLRC Revised Rules of Procedure read:
“Section 6. Service of Notices and Resolutions. (a) Notices or summons and
copies of orders, shall be served on the parties to the case personally by the
Bailiff or duly authorized public officer within three (3) days from receipt
thereof or by registered mail; Provided that in special circumstances, service
of summons may be effected in accordance with the pertinent provisions of
the Rules of Court; Provided further, that in cases of decisions and final
awards, copies thereof shall be served on both parties and their counsel or
representative by registered mail;
Provided further, that in cases where a party to a case or his counsel on record
personally seeks service of the decision upon inquiry thereon, service to said
party shall be deemed effected upon actual receipt thereof;
Provided finally, that where parties are so numerous, service shall be made
on counsel and upon such number of complainants, as may be practicable,
which shall be considered substantial compliance with Article 224(a) of the
Labor Code, as amended.” (Emphasis supplied.)
An Order issued by the Secretary of Labor assuming jurisdiction over the
labor dispute is not a final judgment for it does not dispose of the labor dispute
with finality. Consequently, the rule on service of summons and orders, and
not the proviso on service of decisions and final awards, governs the service
of the Assumption of Jurisdiction Order.
Under the NLRC Revised Rules of Procedure, service of copies of orders
should be made by the process server either personally or through registered
mail. However, due to the urgent nature of the Assumption of Jurisdiction
Order and the public policy underlying the injunction carried by the issuance
of the said Order, service of copies of the same should be made in the most
expeditious and effective manner, without any delay, ensuring its immediate
receipt by the intended parties as may be warranted under the circumstances.
Accordingly, in this case, personal service is the proper mode of serving
the Assumption of Jurisdiction Order.
It is also provided under the same rules that in special circumstances, service
of summons may be effected in accordance with the pertinent provisions of
the Rules of Court.
Parenthetically, the manner upon which personal service may be made is
prescribed by the following provisions of the Revised Rules of Court:
“Rule 13. Filing and Service of Pleadings, Judgments And Other Papers.
Section 6. Personal service. — Service of the papers may be made by
delivering personally a copy to the party or his counsel, or by leaving it in his
office with his clerk or with a person having charge thereof. if no person is
found in his office, or his office is not known, or he has no office, then by
leaving a copy, between the hours of eight in the morning and six in the
evening, at the party’s or counsel’s residence, if known, with a person of
sufficient age and discretion then residing therein.”
Let it be recalled that the process server merely posted copies of the
Assumption of Jurisdiction Order in conspicuous places in the hospital. Such
posting is not prescribed by the rules, nor is it even referred to when the said
rules enumerated the different modes of effecting substituted service, in case
personal service is impossible by the absence of the party concerned.
Clearly, personal service effectively ensures that the notice desired under the
constitutional requirement of due process is accomplished. If, however,
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efforts to find the party concerned personally would make prompt service
impossible, service may be completed by substituted service, that is, by
leaving a copy, between the hours of eight in the morning and six in the
evening, at the party’s or counsel’s residence, if known, with a person of
sufficient age and discretion then residing therein.
Substituted service derogates the regular method of personal service. It is
therefore required that statutory restrictions for effecting substituted service
must be strictly, faithfully and fully observed. Failure to comply with this rule
renders absolutely void the substituted service along with the proceedings
taken thereafter. The underlying principle of this rigid requirement is that the
person, to whom the orders, notices or summons are addressed, is made to
answer for the consequences of the suit even though notice of such action is
made, not upon the party concerned, but upon another whom the law could
only presume would notify such party of the pending proceedings.
Respondent union could not therefore be adjudged to have defied the said
Order since it was not properly apprised thereof. Accordingly, the strike
conducted by the respondent union was valid under the circumstances.
Prescinding from the above, as the strike conducted by the respondent union
is valid and legal, there is therefore no cogent reason to dismiss the union
officers.
WHEREFORE, premises considered, the instant Petition is DENIED. Costs
against the petitioner.
SO ORDERED.

Applying this principle in the case at bar, presumption of receipt of the copies
of the Assumption of Jurisdiction Order could not be lightly inferred from the
circumstances considering the adverse effect in case the parties failed to heed
to the injunction directed by such Order.

Worthy to note that in a number of cases, we have ruled that defiance of the
assumption and return-to-work orders of the Secretary of Labor after he has
assumed jurisdiction is a valid ground for the loss of employment status of
any striking union officer or member. Employment is a property right of
which one cannot be deprived of without due process.

Due process here would demand that the respondent union be properly
notified of the Assumption of Jurisdiction Order of the Secretary of Labor
enjoining the strike and requiring its members to return to work. Thus, there
must be a clear and unmistakable proof that the requirements prescribed by
the Rules in the manner of effecting personal or substituted service had been
faithfully complied with.

Merely posting copies of the Assumption of Jurisdiction Order does not

satisfy the rigid requirement for proper service outlined by the above stated
rules. Needless to say, the manner of service made by the process server was
invalid and irregular.

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9. Republic v. BPI, 2013
Facts:
On 12 February 1998, Department the of Public Works and Highways
(DPWII) filed with the Regional Trial Court, National Capital Region, Las
Piñas City, Branch 275 (trial court), a case for expropriation against
portions of the properties of Bank of the Philippine Islands (BPI) and of
Bayani Villanueva (Villanueva) situated in Pamplona, Las Piñas City. DPWH
needed 281 square meters of BPI’s lot covered by Transfer Certificate of Title
(TCT) No. T-59156 and 177 square meters from Villanueva’s lot covered by
TCT No. T-64556 for the construction of the Zapote- Alabang Fly-Over.5
Neither BPI nor Villanueva objected to the propriety of the expropriation;6
hence, the trial court constituted a Board of Commissioners to determine the
just compensation.7 In their Report dated 29 September 1998,8 the Board of
Commissioners recommended the amount of P40,000.00 per square meter as
the fair market value.
RTC set the fair market value at P40,000.00 per square meter and ordered the
Republic to pay to pay defendant Bank of the Philippine Islands the amount
of P10,607,750.00 and Defendant Bayani Villanueva the amount
P4,425,000.00, as just compensation for their properties which were
expropriated.
On 15 December 1998, the acting branch clerk of court issued a
Certification11 stating that:
“the Decision in this case dated November 25, 1998 has become FINAL,
EXECUTORY and UNAPPEALABLE as of December 11, 1998 considering
that the Office of the Solicitor General failed to file any Notice of Appeal or
Motion for Reconsideration despite receipt of a copy thereof on November
26, 1998.
This certification is being issued upon the request of Atty. Jansen Rodriguez
for whatever legal purpose it may serve.”
Meanwhile, BPI filed on 16 December 1998 a Motion for Partial New
Trial to determine the just compensation of its building, which was not
included in the Decision dated 25 November 1998 that fixed the just
compensation for the parcels of land. In the motion, BPI claimed that its
motion was timely filed since it received a copy of the Decision on 01
December 1998.13
The trial court granted partial new trial in an Order dated 06 January 1999.
Due to the failure of counsel for petitioner, despite notice, to appear
during the scheduled hearing for the determination of the just compensation
of the building, the trial court allowed BPI to present its evidence ex-
parte.14 On 01 September 1999, the trial court admitted the exhibits
presented by BPI.15 On the same day, the trial court also appointed as
commissioner the Officer-In-Charge of the trial court, Leticia B. Agbayani
(Agbayani), and ordered her to conduct an ocular inspection of the building.
RTC held that just compensation for the building was due and ordered
petitioner to pay BPI the amount of P2,633,000.00
Petitioner moved for the reconsideration of the 10 September 1999
Decision on the ground that the proceeding fixing the just compensation of
the building is null and void for not complying with the mandatory procedure
set forth in Sections 5 to 8 of Rule 67 of the Rules of Court.21
After due hearing, the trial court granted petitioner’s motion for
reconsideration and ordered that the Decision dated 10 September 1999 be
set aside and vacated.22 From this order, BPI filed a motion for
reconsideration,23 on the ground that there was substantial compliance with
the Rules. The trial court denied BPI’s motion for reconsideration.24
On 19 September 2000, the trial court appointed Atty. Edgar Allan C.
Morante, the branch clerk of court, as the chairman of the Board of
Commissioners, and gave petitioner and BPI ten days to submit their
respective nominees and their oaths of office.25 On 28 September 2000, BPI
nominated Roland Savellano (Savellano), and submitted his oath of office.26
Instead of submitting its nominee, petitioner filed on 13 October 2000 a
Manifestation and Motion27 objecting to the propriety of paying just
compensation for BPI’s building and praying that BPI’s claim for additional
just compensation be denied. Petitioner claimed that the building was never
taken by the government.
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On 07 May 2001, the trial court denied33 petitioner’s motion dated 09
October 2000, and ruled that the demolition of the old building of BPI can be
construed as a consequential damage suffered by BPI as a result of the
expropriation. Petitioner was thus ordered to submit its nominee to the Board
of Commissioners.
RTC adopted the recommendation of Gervacio of P1,905,600.00.
Before the CA, petitioner claims that the decision dated November 25,
1998 has already attained finality there being no appeal filed within the
reglementary period as provided in Section 3, Rule 41 of the 1997 Rules of
Civil Procedure.
The CA affirmed RTC holding that:
“However, there is no showing, that defendant-appellee through its counsel
received a copy of the trial court’s decision on a definite date. No official
return nor affidavit of the party serving the decision was attached to the
records of the case. Neither was the presence of a registry receipt issued by
the mailing office nor a registry return card containing the date of receipt of
the decision be found among its records. Since there was no showing as to
the exact date of receipt of defendant-appellee of the said decision, the
running of the period of 15 days within which to file a motion for new trial
did not begin to run.
Therefore, the filing of defendant- appellee of a motion for partial new
trial on December 16, 1998 was never delayed but timely filed thus
preventing the decision dated November 25, 1998 from attaining finality
as against them. Moreover, We find the admission of defendant-appellee
in its brief filed on June 2, 2005, that it received a copy of the trial court’s
decision on December 1, 1998, sufficient to comply with the requirement of
a written admission of a party served with a judgment as provided in Sec. 13
of Rule 13, of the Rules of Civil Procedure.
It should also be noted that the certification issued by Edgar Allan C.
Morante, the acting clerk of court, as to the finality of judgment as of
December 11, 1998 will not stand against defendant-appellee because the
15-day period to file an appeal will only start to commence upon the
receipt of the decision which is on December 1, 1998. Counting the 15- day
period from the first of December, the period within which to file an appeal
will expire on December 16, 1998. Thus, the trial court did not err in granting
the motion for partial new trial of the defendant-appellee as the same was
amply filed with the reglementary period prescribed by law.”
Hence this petition.
Issue:
W/N the the case was already final such that the RTC erred in granting the
Motion for Partial New Trial which can only be filed within the reglementary
period before the case attains finality – No.
Held:
No. CA affirmed.
On whether BPI’s motion for partial new trial was filed out of time
Petitioner contends that the trial court’s Decision dated 25 November 1998
had already become final and executory as of 11 December 1998, as stated in
the Certification issued by the acting branch clerk of court. On the other hand,
BPI asserts that its motion for partial new trial filed on 16 December 1998
was timely filed because it received a copy of the Decision on 01 December
1998.
A perusal of the Certification reveals that it certifies that the 25 November
1998 Decision had already become final, executory and unappealable as to
petitioner:
“x x x the Decision in this case dated November 25, 1998 has become FINAL,
EXECUTORY and UNAPPEALABLE as of December 11, 1998
considering that the Office of the Solicitor General failed to file any
Notice of Appeal or Motion for Reconsideration despite receipt of a copy
thereof on November 26, 1998.
This certification is being issued upon the request of Atty. Jansen Rodriguez
for whatever legal purpose it may serve.43 (Emphasis supplied)”
There can be no other reading of this certificate that would be supported by
the record.
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Section 9 of Rule 13 of the Rules of Court states that judgments, final orders
or resolutions shall be served either personally or by registered mail. Section
13 of the same Rule provides what consists proof of service:
“Proof of personal service shall consist of a written admission of the party
served, or the official return of the server, or the affidavit of the party serving,
containing a full statement of the date, place and manner of service. x x x If
service is made by registered mail, proof shall be made by such affidavit and
the registry receipt issued by the mailing office. The registry return card shall
be filed immediately upon its receipt by the sender x x x.”

A careful review of the record shows the absence of any proof that the
Decision of 25 November 1998 was served upon BPI. Hence, the Court of
Appeals correctly held that absent any proof of service to BPI of the Decision,
the period of 15 days within which to file its motion for partial new trial did
not begin to run against BPI. However, BPI’s admission that it received a
copy of the Decision on 01 December 1998 is binding on it, and was correctly
considered by the Court of Appeals as the reckoning date to count the 15-day
period.

WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals’

Decision dated 14 September 2011 and Resolution dated 06 August 2012 in
CA-G.R. CV No. 79843.
SO ORDERED.

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XII. Summons (Rule 14)
1. Cada v. Time Saver, G.R. No. 181480, January 30, 2009
Facts:
The Petition at bar stemmed from a Complaint7 dated 21 May 2003 filed
before the NLRC by petitioner against respondents for illegal dismissal,
underpayment of salary, nonpayment of overtime pay, holiday pay, premium
pay for holiday and rest day pay, service incentive leave pay, 13th month pay,
ECOLA, separation pay and attorney’s fees. The Complaint was docketed as
NLRC-NCR Case No. 05- 06071-03.
Respondent TSL is a sole proprietorship engaged in the laundry business.
Respondent Leslie Perez is the owner/proprietor of TSL.8
Respondents failed to appear for the entire proceedings before the Labor
Arbiter. The Labor Arbiter heard the case ex parte directing the petitioner to
file her position paper.9 On the basis of the petitioner’s position paper, the
case was submitted for decision.
LA ruled for petitioner and awarded her a total of P141,871.88.
Respondents appealed to the NLRC essentially arguing that they were denied
due process on the ground of improper service of summons and that the
monetary award in favor of petitioner was without basis.
NLRC affirmed LA. The NLRC did not give credence to respondents’
argument that they were denied due process:
“The issue interposed by the [respondents] that their right to due process was
denied in the discernment of the present dispute is now rendered moot and
academic as We give (sic) them the opportunity to explain and be heard
through the judicious resolution of the substantive merits of this case:
The party who has had ample opportunity to present its side of the
controversy not only before the Labor Arbiter but also the NLRC on appeal,
it cannot interpose lack of due process for what the fundamental law abhors
is simply the absolute absence of opportunity to be heard.”
MR denied.
On a R65, CA reversed NLRC and ruled that respondents were denied due
process:
“As above-quoted, service of summons in cases before the Labor Arbiters
shall be served on the parties personally or by registered mail, provided that
in special circumstances, service of summons may be effected in accordance
with the pertinent provisions of the Rules of Court. In this case, since [herein
respondent] Leslie Perez is the sole proprietor of Time Saver Laundry,
service of summons must be made to her personally or by registered mail.
The bailiff chose to serve the summons personally upon [respondent Perez].
However, said service of summons was invalid as it was not personally
received by [respondent Perez] herself. The records show that the summons
was received by one Alfredo Perez on June 7, 2003. It appears that Alfredo
Perez is a co-employee of [herein petitioner].
The lack of proper service of summons clearly deprived [respondent Perez]
of her right to due process of law. She should have been afforded her day
before the labor arbiter. She was deprived of her right to be heard and to
present evidence which are essential ingredients of due process of law. While
it is true that the Labor Arbiters and the NLRC are not bound by technical
rules of evidence and procedure, such should not be interpreted so as to
dispense with the fundamental and essential right of every person to due
process of law.”
Hence this petition.
Issue:
W/N CA erred in ruling that respondents were deprived of due process due
to the improper service of summons – Yes
Held:
Yes.
Under the NLRC Rules, notices or summonses shall be served on the parties
to the case personally. The same rule allows under special circumstances, that
service of summons may be effected in accordance with the provisions of the
Rules of Court.
Pertinent provisions of the Rules of Court regarding service of summons read:
“RULE 14 SUMMONS
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Sec. 6. Service in person on defendant. — Whenever practicable, the
summons shall be served by handing a copy thereof to the defendant in
person, or, if he refuses to receive and sign for it by tendering it to him.
Sec. 7. Substituted service. — If, for justifiable causes, the defendant cannot
be served within a reasonable time as provided in the preceding section,
service may be affected (a) by leaving copies of the summons at the
defendant’s residence with some person of suitable age and discretion then
residing therein, or (b) by leaving the copies at defendant’s office or regular
place of business with some competent person in charge thereof.”
As borne by the records:
1. summons was received by Alfredo Perez, employee of TSL
2. the 5 notices of hearing were received by Beth Diapolet (the cashier of
TSL), Vivian Bon (supervisor), and Benjie (delivery boy of TSL).
Following the explicit language of the NLRC Rules, service of summons on
respondent Perez should be made personally. But was personal service of
summons practicable? Conversely, was substituted service of summons
justified?
Obviously, in this case, personal service of summons was not practicable. By
respondent Perez’s own admission, she was out of town during the entire
proceedings before the Labor Arbiter.34 Given this admission, she would be
unable to personally receive the summons and later the notices from the Labor
Arbiter. Thus, even if the bailiff would return at some other time to personally
serve the summons on respondent Perez, it would still yield the same result.
To proceed with personal service of summons on respondent Perez who
unequivocally admits that she was out of town during the entire proceedings
before the Labor Arbiter would not only be impractical and futile - it would
be absurd.35
While we are not unmindful of the NLRC rules which state that service of
summons should be made personally, considering the circumstances in the
instant case, we find that service of summons at TSL, respondent Perez’s
place of business,36 amounts to substantial compliance with the Rules.37
In the fairly recent case of Scenarios v. Vinluan,38 service of summons by
registered mail at therein petitioners’ place of business was considered valid.
This Court declared in the said case that technical rules of procedure are not
strictly applied in quasi-judicial proceedings; only substantial compliance is
required. That the summons was served in the premises of therein petitioners’
office was enough to convince the court that the service of said processes was
completed and resultantly, the requirement of notice has been served.
In quasi-judicial proceedings before the NLRC and its arbitration branch,
procedural rules governing service of summons are not strictly construed.
Substantial compliance thereof is sufficient. The constitutional requirement
of due process with respect to service of summons only exacts that the service
of summons be such as may reasonably be expected to give the notice desired.
Once the service provided by the rules reasonably accomplishes that end, the
requirement of justice is answered, the traditional notion of fair play is
satisfied, due process is served.
To apply the technical rules on service of summons would be to overturn the
bias of the Constitution and the laws in favor of labor. In labor cases,
punctilious adherence to stringent technical rules may be relaxed in the
interest of the working man; it should not defeat the complete and equitable
resolution of the rights and obligations of the parties. This Court is ever
mindful of the underlying spirit and intention of the Labor Code to ascertain
the facts of each case speedily and objectively without resort to technical
rules.
Moreover, it is a legal presumption, based on wisdom and experience, that
official duty has been regularly performed; that the proceedings of a judicial
(and quasi- judicial) tribunal are regular and valid, and that judicial (quasi-
judicial) acts and duties have been and will be duly and properly
performed.44 The burden of proving the irregularity in official conduct, if
any, is on the part of respondents who, in this case, clearly failed to discharge
the same.
It has not escaped our attention the respondents’ denial of receipt of the
notices from the Labor Arbiter, yet they were able to receive a copy of the
Labor Arbiter’s decision and file a timely appeal with the NLRC.
Indeed, respondents were able to seek the reconsideration of the adverse
decision of the Labor Arbiter when they seasonably filed their appeal before
the NLRC. A party who has availed himself of the opportunity to present his
position cannot claim to have been denied due process. Despite such
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opportunity, respondents failed to convincingly establish that their defense is
meritorious.

We must emphasize that even though respondents did not participate in the
proceedings before the Labor Arbiter, they were eventually able to argue their
case on appeal before the NLRC. In their appeal, respondents had the
opportunity to substantiate with evidence their claim that they did not receive
the summons and notices from the Labor Arbiter, and that petitioner was not
illegally dismissed. Article 22346 of the Labor Code allows an appeal from a
decision of the Labor Arbiter “if serious errors in the findings of facts are
raised which would cause grave or irreparable injury to the appellant.” The
NLRC, in the exercise of its appellate powers, is authorized to correct, amend
or waive any error, defect or irregularity in substance or in form.

Respondents’ contention that they were denied due process because of

improper service of summons and notices is devoid of merit. The essence of
due process is simply an opportunity to be heard or as applied to
administrative proceedings, an opportunity to explain one’s side or an
opportunity to seek a reconsideration of the action or ruling complained of.
What the law prohibits is absolute absence of the opportunity to be heard;
hence, a party cannot feign denial of due process where he had been afforded
the opportunity to present his side. A formal or trial type hearing is not at all
times and in all instances essential to due process, the requirements of which
are satisfied where the parties are afforded fair and reasonable opportunity to
explain their side of the controversy.

WHEREFORE, premises considered, the instant Petition is GRANTED. The

Decision dated 17 December 2007 of the Court of Appeals in CA-G.R. SP
No. 94616 is REVERSED and SET ASIDE; and the NLRC Resolutions dated
30 November 2004 and 28 February 2006 in CA No. 040723-04, affirming
with modification the Decision dated 16 March 2004 of the Labor Arbiter in
NLRC-NCR Case No. 05-06071-03, are REINSTATED. Costs against
respondents.
SO ORDERED.

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2. Constantino Pascual v. Lourdes Pascual, G.R. No. 171916,
December 4, 2009
Facts:
Petitioner filed a complaint for Specific Performance with Prayer for
Issuance of Preliminary Mandatory Injunction with Damages before the RTC
of Malolos, Bulacan against respondent. The process server, in his Return
of Service, reported:
“At the time of the service of the said summons, the defendant was not at her
home and only her maid was there who refused to receive the said summons
[in spite] of the insistence of the undersigned.
The undersigned, upon his request with the Brgy. Clerk at the said place, was
given a certification that he really exerted effort to effect the service of the
said summons but failed due to the above reason. (Annex “A”).
The following day, May 21, 2002, the undersigned went back at defendant’s
residence to have her receive the subject summons but again the above
defendant was not at her house.
WHEREFORE, the original summons and copy of the complaint is hereby
returned to the Honorable Court NOT SERVED.”
Thereafter, an alias summons was issued by the RTC and the following
report was submitted:
“The undersigned, accompanied by the barangay officials of the said place,
proceeded at defendant’s residence but the undersigned was not permitted to
go inside her house and was given information by her maid that the defendant
was not there.
The defendant’s car was parked inside her house and inquiries/verification
made on her neighbors revealed that the defendant was inside her house at
the time of service of said summons and probably did not want to show-up
when her maid informed her of undersigned’s presence.
WHEREFORE, the undersigned court process server respectfully returned
the alias summons dated May 29, 2002 issued by the Hon. Court
“UNSERVED” for its information and guidance.”
Subsequently, on August 14, 2002, the process server returned with the
following report,7 stating that a substituted service was effected:
“Defendant Dr. Lourdes Pascual was out during the time of service of the said
summons and only her housemaid was present. The undersigned left a copy
of the same to the latter who is at the age of reason but refused to sign the
same.
WHEREFORE, the undersigned respectfully return the service of summons
duly served for information and guidance of the Honorable Court.”
For failure of the respondent to file a responsive pleading, petitioner filed a
Motion to Declare Defendant in Default8 to which the petitioner filed an
Opposition/Comment to Plaintiff’s Motion to Declare Defendant in Default9
dated October 1, 2002, claiming that she was not able to receive any summons
and copy of the complaint.
The RTC declared respondent in default and allowed petitioner to file his
evidence ex parte. MR denied.
RTC rendered a decision for petitioner ordering respondent to pay
damages and to cease and desist from intervening with the corporate and
internal affairs of Rosemoor Mining Corporation, consisting of acts and
omissions prejudicial and detrimental to the interest of the said corporation
resulting to irreparable injury to herein plaintiff.
Respondent filed a Motion to Set Aside Order of Default with the
argument of non-service of summons upon her.
RTC denied the motion, and on the same day, a Certificate of Finality and
Entry of Judgment was issued.
Eventually, respondent filed a Motion for Reconsideration16 of the Order
dated April 4, 2003, which was denied by the RTC in its Order17 dated June
23, 2003.
Finally, on June 26, 2003, a Writ of Execution was issued to enforce the
Decision dated December 3, 2002 of the RTC.
On a R65, CA reversed RTC.
Hence this petition.
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Petitioner insists that there was a valid substituted service of summons and
that there should be a presumption of regularity in the performance of official
functions. He also avers that certiorari, which was filed by the respondent
with the CA, does not lie when the remedy of appeal has been lost.
Respondent claims that there was no proper service of summons as the maid
who was purportedly served a copy thereof was illiterate and has denied being
served in a sworn statement executed before a notary public and, thus, the
RTC never acquired jurisdiction over her person.
Issue:
W/N there was a proper and valid substituted service of summons – No.
Held:
No. CA affirmed.
After a careful study of the records of this case, this Court finds the petition
bereft of any merit.
Clearly, the main, if not the only issue that needs to be resolved is whether or
not there was a proper and valid substituted service of summons, the
resolution of which, will determine whether jurisdiction was indeed acquired
by the trial court over the person of the petitioner.
In a case where the action is in personam and the defendant is in the
Philippines, the service of summons may be done by personal or substituted
service as laid out in Sections 6 and 7 of Rule 14 of the Revised Rules of
Court. The provisions state:
“Section 6. Service in person on defendant. — Whenever practicable, the
summons shall be served by handing a copy thereof to the defendant in
person, or, if he refuses to receive and sign for it, by tendering it to him.
Section 7. Substituted service. — If, for justifiable causes, the defendant
cannot be served within a reasonable time as provided in the preceding
section, service may be effected (a) by leaving copies of the summons at the
defendant’s residence with some person of suitable age and discretion then
residing therein, or (b) by leaving the copies at defendant’s office or regular
place of business with some competent person in charge thereof.”
A plain and simple reading of the above provisions indicates that personal
service of summons should and always be the first option, and it is only when
the said summons cannot be served within a reasonable time can the process
server resort to substituted service.
This Court gave an in-depth discussion as to the nature and requisites of
substituted service in Manotoc v. Court of Appeals, et al.:22
“We can break down this section into the following requirements to effect a
valid substituted service:
(1) Impossibility of Prompt Personal Service
The party relying on substituted service or the sheriff must show that
defendant cannot be served promptly or there is impossibility of prompt
service.23 Section 8, Rule 14 provides that the plaintiff or the sheriff is given
a “reasonable time” to serve the summons to the defendant in person, but no
specific time frame is mentioned. “Reasonable time” is defined as “so much
time as is necessary under the circum
stances for a reasonably prudent and diligent man to do, conveniently, what
the contract or duty requires that should be done, having a regard for the rights
and possibility of loss, if any, to the other party.
Under the Rules, the service of summons has no set period. However, when
the court, clerk of court, or the plaintiff asks the sheriff to make the return of
the summons and the latter submits the return of summons, then the validity
of the summons lapses. The plaintiff may then ask for an alias summons if
the service of summons has failed.25 What then is a reasonable time for the
sheriff to effect a personal service in order to demonstrate impossibility of
prompt service?
… Thus, one month from the issuance of summons can be considered
“reasonable time” with regard to personal service on the defendant.
For substituted service of summons to be available, there must be several
attempts by the sheriff to personally serve the summons within a
reasonable period [of one month] which eventually resulted in failure to prove
impossibility of prompt service. “Several attempts” means at least three
(3) tries, preferably on at least two different dates. In addition, the sheriff
must cite why such efforts were unsuccessful. It is only then that
impossibility of service can be confirmed or accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of Summons the facts and
circumstances surrounding the attempted personal service.26 The
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efforts made to find the defendant and the reasons behind the failure
must be clearly narrated in detail in the Return.
(3) A Person of Suitable Age and Discretion
If the substituted service will be effected at defendant’s house or
residence, it should be left with a person of “suitable age and discretion
then residing therein.”28
A person of suitable age and discretion is one who
1. has attained the age of full legal capacity (18 years old) and
2. is considered to have enough discernment to understand the importance of
a summons.
“Discretion” is defined as “the ability to make decisions which represent a
responsible choice and for which an understanding of what is lawful, right or
wise may be presupposed.”29 Thus, to be of sufficient discretion, such person
must know how to read and understand English to comprehend the import
of the summons, and fully realize the need to deliver the summons and
complaint to the defendant at the earliest possible time for the person to take
appropriate action.
Thus, the person must have the “relation of confidence” to the defendant,
ensuring that the latter would receive or at least be notified of the receipt of
the summons. The sheriff must therefore determine if the person found in the
alleged dwelling or residence of defendant is of legal age, what the recipient’s
relationship with the defendant is, and whether said person comprehends the
significance of the receipt of the summons and his duty to immediately
deliver it to the defendant or at least notify the defendant of said receipt of
summons. These matters must be clearly and specifically described in the
Return of Summons.
(4) A Competent Person in Charge
If the substituted service will be done at defendant’s office or regular place
of business, then it should be served on a competent person in charge of the
place. Thus, the person on whom the substituted service will be made
must be the one managing the office or business of defendant, such as the
president or manager; and such individual must have sufficient
knowledge to understand the obligation of the defendant in the
summons, its importance, and the prejudicial effects arising from inaction
on the summons. Again, these details must be contained in the Return.”
It is a well-established requisite that the officer must show that the defendant
cannot be served promptly, or that there was an impossibility of prompt
service. A cursory reading of the three Officer’s Returns does not show any
compliance with the said requisite.
The above Return of Summons does not show or indicate the actual
exertion or any positive steps taken by the officer or process server in
serving the summons personally to the defendant. As in Jose v. Boyon,30
this Court ruled that:
“The Return of Summons shows no effort was actually exerted and no
positive step taken by either the process server or petitioners to locate and
serve the summons personally on respondents. At best, the Return merely
states the alleged whereabouts of respondents without indicating that such
information was verified from a person who had knowledge thereof.
Certainly, without specifying the details of the attendant circumstances or of
the efforts exerted to serve the summons, a general statement that such efforts
were made will not suffice for purposes of complying with the rules of
substituted service of summons.
The pertinent facts and circumstances attendant to the service of
summons must be stated in the proof of service or Officer’s Return;
otherwise, any substituted service made in lieu of personal service cannot
be upheld. This is necessary because substituted service is in derogation
of the usual method of service. It is a method extraordinary in character and,
hence, may be used only as prescribed and in the circumstances authorized
by statute. Here, no such explanation was made. Failure to faithfully,
strictly, and fully comply with the requirements of substituted service renders
said service ineffective.”
Petitioner further states that the presumption of regularity in the
performance of official functions must be applied to the present case. He
expounds on the fact that as between the process server’s return of substituted
service, which carries with it the presumption of regularity and the
respondent’s self-serving assertion that she only came to know of the case
against her when she received a copy of the petitioner’s motion to declare her
in default, the process server’s return is undoubtedly more deserving of credit.
The said argument, however, is only meritorious, provided that there
was a strict compliance with the procedure for serving a summons. In the
absence of even the barest compliance with the procedure for a substituted
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service of summons outlined in the Rules of Court, the presumption of
regularity in the performance of public functions does not apply.

Applying the above disquisitions, the jurisdiction over the person of the
respondent was never vested with the RTC, because the manner of substituted
service by the process server was apparently invalid and ineffective. As such,
there was a violation of due process.

Jurisdiction over the defendant is acquired either upon a valid service of

summons or the defendant’s voluntary appearance in court. When the
defendant does not voluntarily submit to the court’s jurisdiction or when there
is no valid service of summons, “any judgment of the court which has no
jurisdiction over the person of the defendant is null and void.”34

WHEREFORE, the Petition dated May 3, 2006 is hereby DENIED and the
Decision dated June 29, 2005 of the Court of Appeals in CA-G.R. SP No.
77789 is hereby AFFIRMED in toto.
SO ORDERED.

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3. Manotoc v. Court of Appeals, G.R. No. 130974, August 16, 2006
Facts:
Petitioner is the defendant in Civil Case No. 63337 entitled Agapita
Trajano, pro se, and on behalf of the Estate of Archimedes Trajano v.
Imelda ‘Imee’ R. Marcos-Manotoc for Filing, Recognition and/or
Enforcement of Foreign Judgment.
Respondent Trajano seeks the enforcement of a foreign court’s judgment
rendered on May 1, 1991 by the United States District Court of Honolulu,
Hawaii, United States of America, in a case entitled Agapita Trajano, et al.
v. Imee Marcos-Manotoc a.k.a. Imee Marcos for the wrongful death of
deceased Archimedes Trajano committed by military intelligence
officials of the Philippines allegedly under the command, direction,
authority, supervision, tolerance, sufferance and/or influence of
defendant Manotoc, pursuant to the provisions of Rule 39 of the then
Revised Rules of Court.
Based on paragraph two of the Complaint, the trial court issued a
Summons3 on July 6, 1993 addressed to petitioner at Alexandra
Condominium Corporation or Alexandra Homes, E2 Room 104, at No.
29 Meralco Avenue, Pasig City.
On July 15, 1993, the Summons and a copy of the Complaint were
allegedly served upon (Mr.) Macky de la Cruz, an alleged caretaker of
petitioner at the condominium unit mentioned earlier.4
When petitioner failed to file her Answer, the trial court declared her in
default through an Order.
Petitioner, by special appearance of counsel, filed a Motion to Dismiss6 on
the ground of lack of jurisdiction of the trial court over her person due
to an invalid substituted service of summons. The grounds to support the
motion were:
(1) the address of defendant indicated in the Complaint (Alexandra Homes)
was not her dwelling, residence, or regular place of business as provided in
Section 8, Rule 14 of the Rules of Court;
(2) the party (de la Cruz), who was found in the unit, was neither a
representative, employee, nor a resident of the place;
(3) the procedure prescribed by the Rules on personal and substituted service
of summons was ignored;
(4) defendant was a resident of Singapore; and
(5) whatever judgment rendered in this case would be ineffective and futile.
During the hearing on the Motion to Dismiss, petitioner Manotoc presented
Carlos Gonzales, who testified that he saw defendant Manotoc as a visitor in
Alexandra Homes only two times. He also identified the Certification of
Renato A. de Leon, which stated that Unit E-2104 was owned by Queens Park
Realty, Inc.; and at the time the Certification was issued, the unit was not
being leased by anyone. Petitioner also presented her Philippine passport and
the Disembar- kation/Embarkation Card7 issued by the Immigration Service
of Sin-gapore to show that she was a resident of Singapore. She claimed that
the person referred to in plaintiff’s Exhibits “A” to “EEEE” as “Mrs.
Manotoc” may not even be her, but the mother of Tommy Manotoc, and
granting that she was the one referred to in said exhibits, only 27 out of 109
entries referred to Mrs. Manotoc. Hence, the infrequent number of times she
allegedly entered Alexandra Homes did not at all establish plaintiff’s position
that she was a resident of said place.
On the other hand, Agapita Trajano, for plaintiffs’ estate, presented Robert
Swift, lead counsel for plaintiffs in the Estate of Ferdi-nand Marcos Human
Rights Litigation, who testified that he participated in the deposition taking
of Ferdinand R. Marcos, Jr.; and he confirmed that Mr. Marcos, Jr. testified
that petitioner’s residence was at the Alexandra Apartment, Greenhills.8 In
addition, the en- tries9 in the logbook of Alexandra Homes from August 4,
1992 to Au-gust 2, 1993, listing the name of petitioner Manotoc and the
Sheriff’s Return,10 were adduced in evidence.
RTC denied the MTD on the strength of its findings that her residence, for
purposes of the Complaint, was Alexandra Homes, Unit E-2104, No. 29
Meralco Avenue, Pasig, Metro Manila, based on the documentary evidence
of respondent Trajano. The trial court relied on the presumption that the
sheriff’s substituted service was made in the regular performance of
official duty, and such presumption stood in the absence of proof to the
contrary. 1
MR denied.
On a R65, CA affirmed the RTC.
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Hence this petition.
Issue:
W/N summons was properly served – No.
Held:
No. CA reversed.
We GRANT the petition.
Acquisition of Jurisdiction
Jurisdiction over the defendant is acquired either upon a valid service of
summons or the defendant’s voluntary appearance in court. When the
defendant does not voluntarily submit to the court’s jurisdiction or when there
is no valid service of summons, “any judgment of the court which has no
jurisdiction over the person of the defendant is null and void.” In an action
strictly in personam, personal service on the defendant is the preferred mode
of service, that is, by handing a copy of the summons to the defendant in
person. If defendant, for excusable reasons, cannot be served with the
summons within a reasonable period, then substituted service can be resorted
to. While substituted service of summons is permitted, “it is extraordinary in
character and in derogation of the usual method of service.” Hence, it must
faithfully and strictly comply with the prescribed requirements and
circumstances authorized by the rules. Indeed, “compliance with the rules
regarding the service of summons is as much important as the issue of due
process as of jurisdiction.”
Requirements for Substituted Service
We can break down R14, §7 as follows:
1. Impossibility of prompt personal service
The party relying on substituted service or the sheriff must show that
defendant cannot be served promptly or there is impossibility of prompt
service. Section 8, Rule 14 provides that the plaintiff or the sheriff is given a
“reasonable time” to serve the summons to the defendant in person, but no
specific time frame is mentioned. “Reasonable time” is defined as “so much
time as is necessary under the circumstances for a reasonably prudent and
diligent man to do, conveniently, what the contract or duty requires that
should be done, having a regard for the rights and possibility of loss, if any[,]
to the other party.”
Under the Rules, the service of summons has no set period. However, when
the court, clerk of court, or the plaintiff asks the sheriff to make the return of
the summons and the latter submits the return of summons, then the validity
of the summons lapses. The plaintiff may then ask for an alias summons if
the service of summons has failed. What then is a reasonable time for the
sheriff to effect a personal service in order to demonstrate impossibility of
prompt service? …Thus, one month from the issuance of summons can be
considered “reasonable time” with regard to personal service on the
defendant.
Sheriffs are enjoined to try their best efforts to accomplish personal service
on defendant. On the other hand, since the defendant is expected to try to
avoid and evade service of summons, the sheriff must be resourceful, perse-
vering, canny, and diligent in serving the process on the defendant. For
substituted service of summons to be available, there must be several attempts
by the sheriff to personally serve the summons within a reasonable period [of
one month] which eventually resulted in failure to prove impossibility of
prompt service.
“Several attempts” means at least three (3) tries, preferably on at least two
different dates. In addition, the sheriff must cite why such efforts were
unsuccessful. It is only then that impossibility of service can be confirmed or
accepted.
2. Specific details in the Return
The sheriff must describe in the Return of Summons the facts and
circumstances surrounding the attempted personal service. The efforts made
to find the defendant and the reasons behind the failure must be clearly
narrated in detail in the Return. The date and time of the attempts on personal
service, the inquiries made to locate the defendant, the name/s of the
occupants of the alleged residence or house of defendant and all other acts
done, though futile, to serve the summons on defendant must be specified in
the Return to justify substituted service. The form on Sheriff’s Return of
Summons on Substituted Service prescribed in the Handbook for Sheriffs
published by the Philippine Judicial Academy requires a narration of the
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efforts made to find the defendant personally and the fact of failure. Supreme
Court Administrative Circular No. 5 dated November 9, 1989 requires that
“impossibility of prompt service should be shown by stating the efforts made
to find the defendant personally and the failure of such efforts,” which should
be made in the proof of service.
3. A Person of Suitable Age and Discretion
If the substituted service will be effected at defendant’s house or residence, it
should be left with a person of “suitable age and discretion then residing
therein.” A person of suitable age and discretion is one who has attained the
age of full legal capacity (18 years old) and is considered to have enough
discernment to understand the importance of a summons. “Discre-tion” is
defined as “the ability to make decisions which represent a responsible choice
and for which an understanding of what is lawful, right or wise may be
presupposed”. Thus, to be of sufficient discretion, such person must know
how to read and understand English to comprehend the import of the
summons, and fully realize the need to deliver the summons and complaint
to the defendant at the earliest possible time for the person to take appropriate
action. Thus, the person must have the “relation of confidence” to the
defendant, ensuring that the latter would receive or at least be notified of the
receipt of the summons. The sheriff must therefore determine if the person
found in the alleged dwelling or residence of defendant is of legal age, what
the recipient’s relationship with the defendant is, and whether said person
comprehends the significance of the receipt of the summons and his duty to
immediately deliver it to the defendant or at least notify the defendant of said
receipt of summons. These matters must be clearly and specifically described
in the Return of Summons.
4. A competent person in charge
If the substituted service will be done at defendant’s office or regular place
of business, then it should be served on a competent person in charge of the
place. Thus, the person on whom the substituted service will be made must
be the one managing the office or business of defendant, such as the president
or manager; and such individual must have sufficient knowledge to
understand the obligation of the defendant in the summons, its importance,
and the prejudicial effects arising from inaction on the summons. Again, these
details must be contained in the Return.
Invalid Substituted Service in the Case at Bar
Let us examine the full text of the Sheriff’s Return, which reads:
“THIS IS TO CERTIFY that on many occasions several attempts were made
to serve the summons with complaint and annexes issued by this Honorable
Court in the above entitled case, personally upon the defendant IMELDA
‘IMEE’ MARCOS- MANOTOC located at Alexandra Condominium
Corpration [sic] or Alexandra Homes E-2 Room 104 No. 29 Merlaco [sic]
Ave., Pasig, Metro-Manila at reasonable hours of the day but to no avail
for the reason that said defendant is usually out of her place and/or residence
or premises. That on the 15th day of July, 1993, substituted service of
summons was resorted to in accordance with the Rules of Court in the
Philippines leaving copy of said summons with complaint and annexes thru
[sic] (Mr) Macky de la Cruz, caretaker of the said defendant, according to
(Ms) Lyn Jacinto, Receptionist and Telephone Operator of the said building,
a person of suitable age and discretion, living with the said defendant at the
given address who acknowledged the receipt thereof of said processes but he
refused to sign (emphases supplied).”
A meticulous scrutiny of the aforementioned Return readily reveals the
absence of material data on the serious efforts to serve the Summons on
petitioner Manotoc in person.
There is no clear valid reason cited in the Return why those efforts proved
inadequate, to reach the conclusion that personal service has become
impossible or unattainable outside the generally couched phrases of “on many
occasions several attempts were made to serve the summons x x x
personally,” “at reasonable hours during the day,” and “to no avail for the
reason that the said defendant is usually out of her place and/or residence or
premises.”
Wanting in detailed information, the Return deviates from the ruling — in
Domagas v. Jensen, and other related cases — that the pertinent facts and
circumstances on the efforts exerted to serve the summons personally must
be narrated in the Return. It cannot be determined how many times, on what
specific dates, and at what hours of the day the attempts were made.
Given the fact that the substituted service of summons may be assailed, as in
the present case, by a Motion to Dismiss, it is imperative that the pertinent
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facts and circumstances surrounding the service of summons be described
with more particularity in the Return or Certificate of Service.
Besides, apart from the allegation of petitioner’s address in the Complaint, it
has not been shown that respondent Trajano or Sheriff Cañelas, who served
such summons, exerted extraordinary efforts to locate petitioner. Certainly,
the second paragraph of the Complaint only states that respondents were
“informed, and so [they] allege” about the address and whereabouts of
petitioner. Before resorting to substituted service, a plaintiff must
demonstrate an effort in good faith to locate the defendant through more
direct means. More so, in the case in hand, when the alleged petitioner’s
residence or house is doubtful or has not been clearly ascertained, it would
have been better for personal service to have been pursued persistently.
In the case Umandap v. Sabio, Jr., 339 SCRA 243 (2000), it may be true that
the Court held that a Sheriff’s Return, which states that “despite efforts
exerted to serve said process personally upon the defendant on several
occasions the same proved futile,” conforms to the requirements of valid
substituted service. However, in view of the numerous claims of irregularities
in substituted service which have spawned the filing of a great number of
unnecessary special civil actions of certiorari and ap-peals to higher courts,
resulting in prolonged litigation and wasteful legal expenses, the Court rules
in the case at bar that the narration of the efforts made to find the defendant
and the fact of failure written in broad and imprecise words will not suffice.
The facts and circumstances should be stated with more particularity and
detail on
1. the number of attempts made at personal service,
2. dates and times of the attempts,
3. inquiries to locate defendant,
4. names of occupants of the alleged residence, and
4. the reasons for failure should be included in the Return to satisfactorily
show the efforts under taken.
That such efforts were made to personally serve summons on defendant, and
those resulted in failure, would prove impossibility of prompt personal
service.
Moreover, to allow sheriffs to describe the facts and circumstances in inexact
terms would encourage routine performance of their precise duties relating to
substituted service — for it would be quite easy to shroud or conceal
carelessness or laxity in such broad terms. Lastly, considering that monies
and properties worth millions may be lost by a defendant because of an
irregular or void substituted service, it is but only fair that the Sheriff’s Return
should clearly and convincingly show the impracticability or hopelessness of
personal service.
Granting that such a general description be considered adequate, there is still
a serious nonconformity from the requirement that the summons must be left
with a “person of suitable age and discretion” residing in defen-dant’s house
or residence. Thus, there are two (2) requirements under the Rules:
(1) recipient must be a person of suitable age and discretion; and
(2) recipient must reside in the house or residence of defendant.
Both requirements were not met. In this case, the Sheriff’s Return lacks
information as to residence, age, and discretion of Mr. Macky de la Cruz,
aside from the sheriff’s general assertion that de la Cruz is the “resident
caretaker” of petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged
receptionist and telephone operator of Alexandra Homes.
It is doubtful if Mr. de la Cruz is residing with petitioner Manotoc in the
condominium unit considering that a married woman of her stature in
society would unlikely hire a male caretaker to reside in her dwelling.
With the petitioner’s allegation that Macky de la Cruz is not her employee,
servant, or representative, it is necessary to have additional information in the
Return of Summons. Besides, Mr. Macky de la Cruz’s refusal to sign the
Receipt for the summons is a strong indication that he did not have the
necessary “relation of confidence” with petitioner. To protect petitioner’s
right to due process by being accorded proper notice of a case against her, the
substituted service of summons must be shown to clearly comply with the
rules.
It has been stated and restated that substituted service of summons must
faithfully and strictly comply with the prescribed requirements and in the
circumstances authorized by the rules.
Based on the above principles, respondent Trajano failed to demonstrate that
there was strict compliance with the requirements of the then Section 8, Rule
14 (now Section 7, Rule 14 of the 1997 Rules of Civil Procedure).
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Due to non-compliance with the prerequisites for valid substituted service,
the proceedings held before the trial court perforce must be annulled.
The court a quo heavily relied on the presumption of regularity in the
performance of official duty. It reasons out that “[t]he certificate of service
by the proper officer is prima facie evidence of the facts set out herein, and
to overcome the presumption arising from said certificate, the evidence must
be clear and convincing.”
IN VIEW OF THE FOREGOING, this Petition for Review is hereby
GRANTED and the assailed March 17, 1997 Decision and October 8, 1997
Resolution of the Court of Appeals and the October 11, 1994 and December
21, 1994 Orders of the Regional Trial Court, National Capital Judicial
Region, Pasig City, Branch 163 are hereby REVERSED and SET ASIDE.
No costs.
SO ORDERED.

The Court acknowledges that this ruling is still a valid doctrine.

However, for the presumption to apply, the Sheriff’s Return must show
that serious efforts or attempts were exerted to personally serve the
summons and that said efforts failed. These facts must be specifically
narrated in the Return.

To reiterate, it must clearly show that the substituted service must be made
on a person of suitable age and discretion living in the dwelling or residence
of defendant. Otherwise, the Return is flawed and the presumption cannot be
availed of. As previously explained, the Return of Sheriff Cañelas did not
comply with the stringent requirements of Rule 14, Section 8 on substituted
service.

In the case of Venturanza v. Court of Appeals, 156 SCRA 305 (1987), it was
held that “x x x the presumption of regularity in the performance of official
functions by the sheriff is not applicable in this case where it is patent that the
sher-iff’s return is defective (emphasis supplied).” While the Sheriff’s Return
in the Venturanza case had no statement on the effort or attempt to personally
serve the summons, the Return of Sheriff Cañelas in the case at bar merely
described the efforts or attempts in general terms lacking in details as required
by the ruling in the case of Domagas v. Jensen and other cases. It is as if
Cañelas’ Return did not mention any effort to accomplish personal service.
Thus, the substituted service is void.

On the issue whether petitioner Manotoc is a resident of Alexandra Homes,

Unit E-2104, at No. 29 Meralco Avenue, Pasig City, our findings that the
substituted service is void has rendered the matter moot and academic. Even
assuming that Alexandra Homes Room 104 is her actual residence, such fact
would not make an irregular and void substituted service valid and effective.

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4. Sansio v. Mogol, G.R. No. 177007, July 14, 2009
Facts:
Petitioner Sansio Philippines, Inc. is a domestic corporation that is engaged
in the business of manufacturing and selling appliances and other related
products.
On 12 July 2000, petitioner filed a Complaint for Sum of Money and
Damages5 against respondent spouses Mogol before the MeTC of Manila.
Petitioner stated in the Complaint that respondent spouses Alicia and
Leodegario Mogol, Jr. were the owners and managers of MR Homes
Appliances, with residence at 1218 Daisy St., Employee Village, Lucena
City, where summons and other written legal processes of the court may be
served.
Petitioner further alleged that on 15 November 1993 and 27 January 1994,
respondent spouses Mogol purchased from petitioner air-conditioning
units and fans worth P217,250.00 and P5,521.20, respectively. Respondent
spouses Mogol apparently issued postdated checks as payment therefor, but
said checks were dishonored, as the account against which the checks were
drawn was closed. Respondents made partial payments, leaving a balance
of P87,953.12 unpaid.
On 3 October 2000, at the request of herein petitioner, the process server of
the MeTC of Manila served the summons6 and the copy of the complaint on
respondent spouses Mogol at the courtroom of the MeTC of Manila,
Branch 24. Respondent spouses were in the said premises, as they were
waiting for the scheduled hearing of the criminal cases filed by petitioner
against respondent Alicia Mogol for violations of Batas Pambansa Blg. 22.
Upon being so informed of the summons and the complaint, respondent
spouses Mogol referred the same to their counsel, who was also present in
the courtroom. The counsel of respondent spouses Mogol took hold of the
summons and the copy of the complaint and read the same.7 Thereafter, he
pointed out to the process server that the summons and the copy of the
complaint should be served only at the address that was stated in both
documents, i.e., at 1218 Daisy St., Employee Village, Lucena City, and not
anywhere else.
The counsel of respondent spouses Mogol apparently gave back the summons
and the copy of the complaint to the process server and advised his clients not
to obtain a copy and sign for the same. As the process server could not
convince the respondent spouses Mogol to sign for the aforementioned
documents, he proceeded to leave the premises of the courtroom.
On 4 October 2000, the process server of the MeTC of Manila issued a Return
on Service of Summons,8 declaring that:
“RETURN ON SERVICE OF SUMMONS
This is to certify that on October 3, 2000, the undersigned tried to serve a
copy of the Summons issued by the Court in the above-entitled case
together with a copy of Complaint upon defendant Leodegario Mogol[,]
Jr. and Alicia Mogol doing business under the name/style of “Mr. Homes
Appliance” (sic) at MTC (sic) Branch 24 Ongpin (sic) (courtroom) as
requested by plaintiff counsel, but failed for the reason that they refused
to received (sic) with no valid reason at all.
The original and duplicate copies of the Summons are hereby respectfully
returned, (sic) UNSERVED. Sgd. Valino”
On 6 December 2000, petitioner filed a Motion to Declare [Respondents]
in Default.9 Petitioner averred that the summons and the copy of the
complaint were already validly served upon the respondent spouses Mogol at
the courtroom of the MeTC, Branch 24, which they refused to accept for no
valid reason at all. From the date of said service up to the time of the filing of
the above-stated motion, respondent spouses Mogol had yet to file any
responsive pleading.
On 15 December 2000, through a special appearance of their counsel,
respondent spouses Mogol filed an Opposition10 to the Motion to Declare
[Respondents] in Default. They posited that Section 3, Rule 611 of the Rules
of Court requires that the complaint must contain the names and residences
of the plaintiff and defendant. Therefore, the process server should have taken
notice of the allegation of the complaint, which referred to the address of
respondent spouses Mogol wherein court processes may be served. If such
service, as alleged in the complaint, could not be complied with within a
reasonable time, then and only then may the process server resort to
substituted service. Respondent spouses Mogol further averred that there was
no quarrel as to the requirement that the respondents must be served summons
in person and, if they refused to receive and sign for it, by tendering it to
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them. They merely reiterated that the service should have been effected at the
respondent spouses’ residential address, as stated in the summons and the
copy of the complaint.
MeTC granted the motion to declare respondents in default. MeTC ruled
that Section 6, Rule 14 of the Rules of Court does not specify where service
is to be effected. For obvious reasons, because service of summons is made
by handing a copy thereof to the defendant in person, the same may be
undertaken wherever the defendant may be found. Although the Return on
the Service of Summons indicated that the original and the duplicate copies
thereof were returned “UNSERVED,” the same could not be taken to mean
that respondent spouses Mogol had not yet been served with summons. That
allegation in the return was clearly prompted by the statement in the first
paragraph thereof that respondents spouses Mogol “refused to received (sic)
[the summons and the copy of the complaint] with no valid reason at all.”
Respondent spouses Mogol were, thus, validly served with summons and a
copy of the complaint. For failing to file any responsive pleading before the
lapse of the reglementary period therefor, the Motion to Declare
[Respondents] in Default filed by petitioner was declared to be meritorious.
MR denied.
On a R65, the RTC affirmed the MTC holding that Section 6, Rule 14 of
the Rules of Court does not mandate that summons be served strictly at the
address provided by the plaintiff in the complaint. Contrarily, said provision
states that the service of summons may be made wherever such is possible
and practicable. Therefore, it did not matter much that the summons and the
copy of the complaint in this case were served inside the courtroom of the
MeTC of Manila, Branch 24, instead of the address at 1218 Daisy St.,
Employee Village, Lucena City. The primordial consideration was that the
service of summons was made in the person of the respondent spouses Mogol
in Civil Case No. 167879CV. Lastly, the RTC of Manila, Branch 33, did not
find any error in the interpretation of the MeTC of Manila, Branch 25, that
summons had indeed been served on respondent spouses Mogol. On the face
of the Return on Service of Summons, it was unmistakable that the summons
and the copy of the complaint were served on respondent spouses, and that
they refused to receive the same for no valid reason at all.
Respondent filed their Notice of Appeal with the CA which reversed the
RTC. CA ruled that:
“it is indubitable that the [respondent] Mogol spouses, as defendants in Civil
Case No. 167879, never received the summons against them, whether
personally or by substituted service. As stated earlier, the process server
failed to effect personal service of summons against the [respondent]
Mogol spouses at the courtroom of the MeTC of Manila, Branch 24,
because the latter refused to receive it, arguing that the same should be
served at their residence, and not anywhere else.
In this case, the process server’s Return of Service of Summons states, in
clear and unequivocal terms, that:
The original and duplicate copies of the Summons are hereby returned,
UNSERVED.
In the case of Spouses Madrigal v. Court of Appeals [G.R. No. 129955, 26
November 1999], it was held that the sheriff’s certificate of service of
summons is prima facie evidence of the facts therein set out. In the absence
of contrary evidence, a presumption exists that a sheriff has regularly
performed his official duties. To overcome the presumption arising from the
sheriff’s certificate, the evidence must be clear and convincing. In the instant
case, no proof of irregularity in the process server’s return was shown
by Sansio. A perusal of the said return readily shows that the summons
was unserved upon the Mogol spouses. From the foregoing, We hold that
the Mogol spouses were never in actual receipt of the summons in Civil
Case 167879. Perforce, the trial court did not acquire jurisdiction over
them.”
In the meantime, MeTC rendered a decision on the main case ruling for
petitioner. Respondents appealed to RTC who affirmed in toto. Thereafter,
respondent spouses Mogol no longer filed any appeal on the above Decision
of the RTC of Manila, Branch 50.
Hence this petition to review the CA decision.
Issue:
W/N the service of summons in the courtroom was valid - Yes
Held:
Yes.
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We find merit in the petition.
A summons is a writ by which the defendant is notified of the action brought
against him or her. In a civil action, jurisdiction over the defendant is acquired
either upon a valid service of summons or the defendant’s voluntary
appearance in court. When the defendant does not voluntarily submit to the
court’s jurisdiction, or when there is no valid service of summons, any
judgment of the court, which has no jurisdiction over the person of the
defendant, is null and void.27 Where the action is in personam, i.e., one that
seeks to impose some responsibility or liability directly upon the person of
the defendant through the judgment of a court,28 and the defendant is in the
Philippines, the service of summons may be made through personal or
substituted service in the manner provided for in Sections 6 and 7, Rule 14 of
the Rules of Court,
It is well-established that summons upon a respondent or a defendant must be
served by handing a copy thereof to him in person or, if he refuses to receive
it, by tendering it to him. Personal service of summons most effectively
ensures that the notice desired under the constitutional requirement of due
process is accomplished. The essence of personal service is the handing or
tendering of a copy of the summons to the defendant himself, wherever he
may be found; that is, wherever he may be, provided he is in the Philippines.
In the instant case, the Court finds that there was already a valid service of
summons in the persons of respondent spouses Mogol. To recapitulate, the
process server presented the summons and the copy of the complaint to
respondent spouses at the courtroom of the MeTC of Manila, Branch 24. The
latter immediately referred the matter to their counsel, who was present with
them in the aforesaid courtroom. At the express direction of his clients, the
counsel took the summons and the copy of the complaint, read the same, and
thereby informed himself of the contents of the said documents.
Ineluctably, at that point, the act of the counsel of respondent spouses Mogol
of receiving the summons and the copy of the complaint already constituted
receipt on the part of his clients, for the same was done with the latter’s behest
and consent. Already accomplished was the operative act of “handing” a copy
of the summons to respondent spouses in person.
Thus, jurisdiction over the persons of the respondent spouses Mogol was
already acquired by the MeTC of Manila, Branch 25. That being said, the
subsequent act of the counsel of respondent spouses of returning the
summons and the copy of the complaint to the process server was no longer
material.
Furthermore, the instruction of the counsel for respondent spouses not to
obtain a copy of the summons and the copy of the complaint, under the lame
excuse that the same must be served only in the address stated therein, was a
gross mistake.
Section 6, Rule 14 of the Rules of Court does not require that the service of
summons on the defendant in person must be effected only at the latter’s
residence as stated in the summons. On the contrary, said provision is crystal
clear that, whenever practicable, summons shall be served by handing a copy
thereof to the defendant; or if he refuses to receive and sign for it, by tendering
it to him. Nothing more is required.
As correctly held by the RTC of Manila, Branch 50, the service of the copy
of the summons and the complaint inside the courtroom of the MeTC of
Manila, Branch 24 was the most practicable act under the circumstances, and
the process server need not wait for respondent spouses Mogol to reach their
given address, i.e., at 1218 Daisy St., Employee Village, Lucena City, before
he could serve on the latter the summons and the copy of the complaint. Due
to the distance of the said address, service therein would have been more
costly and would have entailed a longer delay on the part of the process server
in effecting the service of the summons.
Much more important than considerations of practicality, however, is the fact
that respondent spouses Mogol based their case on a wrong appreciation of
the above-stated provisions of the Rules of Court. Respondent spouses Mogol
principally argue that Section 6 of Rule 14 cannot be singled out without
construing the same with Section 7. They posit that, in a civil case, summons
must be served upon the defendants personally at the designated place alleged
in the complaint. If the defendants refuse to receive and sign the summons,
then the process server must tender the same to them by leaving a copy at the
residence of the defendants. If the summons cannot be served in person
because of the absence of the defendants at the address stated, then the same
can be served by (1) leaving copies of the summons at the defendants’
residence with some person of suitable age and discretion residing therein, or
(2) leaving the copies at defendants’ office or regular place of business with
some competent person in charge thereof.
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Said arguments must fail, for they have no leg to stand on.
Axiomatically, Sections 6 and 7 of Rule 14 of the Rules of Court cannot be
construed to apply simultaneously. Said provisions do not provide for
alternative modes of service of summons, which can either be resorted to on
the mere basis of convenience to the parties. Under our procedural rules,
service of summons in the persons of the defendants is generally preferred
over substituted service. Substituted service derogates the regular method of
personal service. It is an extraordinary method, since it seeks to bind the
respondent or the defendant to the consequences of a suit, even though notice
of such action is served not upon him but upon another whom the law could
only presume would notify him of the pending proceedings.
For substituted service to be justified, the following circumstances must be
clearly established:
(a) personal service of summons within a reasonable time was impossible;
(b) efforts were exerted to locate the party; and
(c) the summons was served upon a person of sufficient age and discretion
residing at the party’s residence or upon a competent person in charge of the
party’s office or place of business.
Relevantly, in Lazaro v. Rural Bank of Francisco Balagtas (Bulacan), Inc.,35
very categorical was our statement that the service of summons to be done
personally does not mean that service is possible only at the defendant’s
actual residence. It is enough that the defendant is handed a copy of the
summons in person by anyone authorized by law. This is distinct from
substituted service under Section 7, Rule 14 of the Rules of Court. As already
discussed above, there was already a valid service of summons in the persons
of respondent spouses Mogol in the courtroom of the MeTC of Manila,
Branch 24, when their counsel, upon their explicit instructions, received and
read the same on their behalf. Contrary to the ruling of the Court of Appeals,
the fact that the summons was returned to the process server and respondent
spouses Mogul subsequently declined to sign for them did not mean that the
service of summons in the persons of respondent spouses was a failure, such
that a further effort was required to serve the summons anew. A tender of
summons, much less, a substituted service of summons, need no longer be
resorted to in this case.
As to the reliance of the Court of Appeals on the second paragraph of the
Return on Service of Summons stating that the original and duplicate copies
of the Summons were returned “UNSERVED,” the Court finds the same
utterly misplaced. A simple reading of the first paragraph of the Return on
Service of Summons, which contains the circumstances surrounding the
service of the summons on the persons of the respondent spouses Mogol,
manifestly reveals that the summons and the copy of the complaint were
already validly served on the said respondents. They merely refused to
receive or obtain a copy of the same. The certificate of service of the process
server is prima facie evidence of the facts as set out therein. This is fortified
by the presumption of the regularity of performance of official duty. To
overcome the presumption of regularity of official functions in favor of such
sheriff’s return, the evidence against it must be clear and convincing. Sans
the requisite quantum of proof to the contrary, the presumption stands
deserving of faith and credit.36 In the instant case, it is worthwhile to note
that the facts stated in the first paragraph of the Return on Service of
Summons were not at all disputed by the respondent spouses Mogol.
Although We find lamentable the apparently erroneous statement made by
the process server in the aforesaid second paragraph — an error that
undoubtedly added to the confusion of the parties to this case — the same
was, nonetheless, a mere conclusion of law, which does not bind the
independent judgment of the courts.
WHEREFORE, premises considered, the Petition for Review on Certiorari
under Rule 45 is GRANTED. The Decision dated 21 November 2006 and the
Resolution dated 12 March 2007 of the Court of Appeals in CA-G.R. SP No.
70029 are hereby REVERSED AND SET ASIDE.
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5. Republic v. Glasgow, G.R. No. 170281, January 18, 2008
Facts:
On July 18, 2003, the Republic (RP) filed a complaint in the RTC Manila
for civil forfeiture of assets (with urgent plea for issuance of temporary
restraining order [TRO] and/or writ of preliminary injunction) against the
bank deposits in account number CA-005-10-000121-5 maintained by
Glasgow in Citystate Savings Bank, Inc. (CSBI). The case, filed pursuant
to RA 9160 (the Anti-Money Laundering Act of 2001), as amended, was
docketed as Civil Case No. 03-107319.
RTC issued a writ of preliminary injunction.
Meanwhile, summons to Glasgow was returned “unserved” as it could no
longer be found at its last known address.
On October 8, 2003, the Republic filed a verified omnibus motion for
(a) issuance of alias summons and
(b) leave of court to serve summons by publication.
RTC directed the issuance of alias summons. However, no mention was made
of the motion for leave of court to serve summons by publication.
Later, RTC archived the case allegedly for failure of the RP to serve the alias
summons.
The Republic filed an ex parte omnibus motion to (a) reinstate the case and
(b) resolve its pending motion for leave of court to serve summons by
publication.
RTC ordered the reinstatement of the case and directed the Republic to serve
the alias summons on Glasgow and CSBI within 15 days. However, it did not
resolve the Republic’s motion for leave of court to serve summons by
publication declaring:
“Until and unless a return is made on the alias summons, any action on [the
Republic’s] motion for leave of court to serve summons by publication would
be untenable if not premature.”
On July 12, 2004, the Republic (through the Office of the Solicitor General
[OSG]) received a copy of the sheriff’s return dated June 30, 2004 stating that
the alias summons was returned “unserved” as Glasgow was no longer
holding office at the given address since July 2002 and left no forwarding
address.
Meanwhile, the Republic’s motion for leave of court to serve summons by
publication remained unresolved. Thus, on August 11, 2005, the Republic
filed a manifestation and ex parte motion to resolve its motion for leave of
court to serve summons by publication.
Glasgow filed a “Motion to Dismiss (By Way of Special Appearance)” dated
August 11, 2005. It alleged that
(1) the court had no jurisdiction over its person as summons had not yet been
served on it;
(2) the complaint was premature and stated no cause of action as there was
still no conviction for estafa or other criminal violations implicating Glasgow
and
(3) there was failure to prosecute on the part of the Republic.
The Republic opposed Glasgow’s motion to dismiss. It contended, among
others, that its suit was an action quasi in rem where jurisdiction over the
person of the defendant was not a prerequisite to confer jurisdiction on the
court.
RTC granted the MTD and dismissed the case on the following grounds:
(1) improper venue as it should have been filed in the RTC of Pasig where
CSBI, the depository bank of the account sought to be forfeited, was located;
(2) insufficiency of the complaint in form and substance and
(3) failure to prosecute.
Hence this petition directly with the SC.
Issues:
W/N RTC erred in dismissing the case for failure to prosecute on the ground
that summons has yet to be served – Yes, it erred.
Held:
I. Venue is proper.
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First, since Glasgow never questioned the venue of the complaint for civil
forfeiture against it, the RTC cannot motu proprio dismiss it on the ground of
improper venue.
At any rate, the trial court was a proper venue. We see no pattern or scheme on the part of the Republic to delay the
Under A.M. No. 05- 1104-SC, Section 3, the venue of civil forfeiture cases
is any RTC of the judicial region where the monetary instrument, property or
proceeds representing, involving, or relating to an unlawful activity or to a
money laundering offense are located. Pasig City, where the account sought
to be forfeited in this case is situated, is within the National Capital Judicial
Region (NCJR). Clearly, the complaint for civil forfeiture of the account may
be filed in any RTC of the NCJR. Since the RTC Manila is one of the RTCs
of the NCJR,10 it was a proper venue of the Republic’s complaint for civil
forfeiture of Glasgow’s account.
II. There was no failure to prosecute
The trial court faulted the Republic for its alleged failure to prosecute the
case. Nothing could be more erroneous.
xxx
Given these circumstances, how could the Republic be faulted for failure to
prosecute the complaint for civil forfeiture? While there was admittedly a
delay in the proceeding, it could not be entirely or primarily ascribed to the
Republic. That Glasgow’s whereabouts could not be ascertained was not only
beyond the Republic’s control, it was also attributable to Glasgow which left
its principal office address without informing the Securities and Exchange
Commission or any official regulatory body (like the Bureau of Internal
Revenue or the Department of Trade and Industry) of its new address.
Moreover, as early as October 8, 2003, the Republic was already seeking
leave of court to serve summons by publication.
In Marahay v. Melicor,18 this Court ruled:
“While a court can dismiss a case on the ground of non prosequitur, the real
test for the exercise of such power is whether, under the circumstances,
plaintiff is chargeable with want of due diligence in failing to proceed with
reasonable promptitude. In the absence of a pattern or scheme to delay the
disposition of the case or a wanton failure to observe the mandatory
requirement of the rules on the part of the plaintiff, as in the case at bar,
courts should decide to dispense with rather than wield their authority
to dismiss.” (emphasis supplied)
disposition of the case or a wanton failure to observe the mandatory
requirement of the rules. The trial court should not have so eagerly wielded
its power to dismiss the Republic’s complaint.
III. SERVICE OF SUMMONS MAY BE BY PUBLICATION
In Republic v. Sandiganbayan, 406 SCRA 190 (2003), this Court declared
that the rule is settled that forfeiture proceedings are actions in rem.
While that case involved forfeiture proceedings under RA 1379, the same
principle applies in cases for civil forfeiture under RA 9160, as amended,
since both cases do not terminate in the imposition of a penalty but merely in
the forfeiture of the properties either acquired illegally or related to unlawful
activities in favor of the State.
As an action in rem, it is a proceeding against the thing itself instead of against
the person. In actions in rem or quasi in rem, jurisdiction over the person
of the defendant is not a prerequisite to conferring jurisdiction on the
court, provided that the court acquires jurisdiction over the res.
Nonetheless, summons must be served upon the defendant in order to
satisfy the requirements of due process. For this purpose, service may be
made by publication as such mode of service is allowed in actions in rem and
quasi in rem.
In this connection, Section 8, Title II of the Rule of Procedure in Cases of
Civil Forfeiture provides:
“Sec. 8. Notice and manner of service. —
(b) Where the respondent is designated as an unknown owner or whenever
his whereabouts are unknown and cannot be ascertained by diligent
inquiry, service may, by leave of court, be effected upon him by
publication of the notice of the petition in a newspaper of general
circulation in such places and for such time as the court may order. In
the event that the cost of publication exceeds the value or amount of the
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property to be forfeited by ten percent, publication shall not be required.”
(emphasis supplied)

WHEREFORE, the petition is hereby GRANTED. The October 27, 2005

order of the Regional Trial Court of Manila, Branch 47, in Civil Case No. 03-
107319 is SET ASIDE. The August 11, 2005 motion to dismiss of Glasgow
Credit and Collection Services, Inc. is DENIED. And the complaint for
forfeiture of the Republic of the Philippines, represented by the Anti-Money
Laundering Council, is REINSTATED.

The case is hereby REMANDED to the Regional Trial Court of Manila,

Branch 47 which shall forthwith proceed with the case pursuant to the
provisions of A.M. No. 05-11- 04SC. Pending final determination of the case,
the November 23, 2005 temporary restraining order issued by this Court is
hereby MAINTAINED.
SO ORDERED.

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6. Palma v. Hon. Galvez and Agudo, G.R.No. 165273, March 10,
2010
Facts:
On July 28, 2003, petitioner Leah Palma filed with the RTC an action for
damages against the Philippine Heart Center (PHC), Dr. Danilo Giron
and Dr. Bernadette O. Cruz, alleging that the defendants committed
professional fault, negligence and omission for having removed her right
ovary against her will, and losing the same and the tissues extracted from
her during the surgery; and that although the specimens were subsequently
found, petitioner was doubtful and uncertain that the same was hers as the
label therein pertained that of somebody else.
Defendants filed their respective Answers. Petitioner subsequently filed a
Motion for Leave to Admit Amended Complaint, praying for the inclusion of
additional defendants who were all nurses at the PHC, namely, Karla Reyes,
Myra Mangaser and herein private respondent Agudo. Thus, summons
were subsequently issued to them.
Later, the RTC’s process server submitted his return of summons stating that
the alias summons, together with a copy of the amended complaint and its
annexes, were served upon private respondent thru her husband Alfredo
Agudo, who received and signed the same as private respondent was out
of the country.
Later, counsel of private respondent filed a Notice of Appearance and a
Motion for Extension of Time to File Answer4 stating that he was just
engaged by private respondent’s husband as she was out of the country and
the Answer was already due.
On March 15, 2004, private respondent’s counsel filed a Motion for Another
Extension of Time to File Answer,5 and stating that while the draft answer
was already finished, the same would be sent to private respondent for her
clarification/verification before the Philippine Consulate in Ireland; thus, the
counsel prayed for another 20 days to file the Answer.
On March 30, 2004, private respondent filed a Motion to Dismiss on the
ground that the RTC had not acquired jurisdiction over her as she was
not properly served with summons, since she was temporarily out of the
country; that service of summons on her should conform to Section 16,
Rule 14 of the Rules of Court.
Petitioner filed her Opposition7 to the motion to dismiss, arguing that a
substituted service of summons on private respondent’s husband was valid
and binding on her; that service of summons under Section 16, Rule 14
was not exclusive and may be effected by other modes of service, i.e., by
personal or substituted service.
RTC granted respondent’s MTD. It found that while the summons was
served at private respondent’s house and received by respondent’s husband,
such service did not qualify as a valid service of summons on her as she was
out of the country at the time the summons was served, thus, she was not
personally served a summons; and even granting that she knew that a
complaint was filed against her, nevertheless, the court did not acquire
jurisdiction over her person as she was not validly served with summons; that
substituted service could not be resorted to since it was established that
private respondent was out of the country, thus, Section 16, Rule 14 provides
for the service of summons on her by publication.
MR denied.
Hence this R65 petition directly with the SC.
Petitioner claims that the RTC committed a grave abuse of discretion in ruling
that Section 16, Rule 14, limits the service of summons upon the defendant-
resident who is temporarily out of the country exclusively by means of
extraterritorial service, i.e., by personal service or by publication, pursuant to
Section 15 of the same Rule. Petitioner further argues that in filing two
motions for extension of time to file answer, private respondent voluntarily
submitted to the jurisdiction of the court.
Issue:
W/N there was valid service of summons on respondent – Yes
Held:
Yes
I.
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Private respondent claims that petitioner’s certiorari under Rule 65 is not the
proper remedy but a petition for review under Rule 45, since the RTC ruling
cannot be considered as having been issued with grave abuse of discretion.
We shall first resolve the procedural issues raised by private respondent.
Private respondent’s claim that the petition for certiorari under Rule 65 is a
wrong remedy thus the petition should be dismissed, is not persuasive.
Section 1, Rule 41 of the 1997 Rules of Civil Procedure states that an appeal
may be taken only from a final order that completely disposes of the case;
that no appeal may be taken from:
Xxx
(g) a judgment or final order for or against one or more of several parties
or in separate claims, counterclaims, cross- claims and third-party
complaints, while the main case is pending, unless the court allows an
appeal therefrom…
In all the above instances where the judgment or final order is not appealable,
the aggrieved party may file an appropriate special civil action for certiorari
under Rule 65.
In this case, the RTC Order granting the motion to dismiss filed by private
respondent is a final order because it terminates the proceedings against her,
but it falls within exception (g) of the Rule since the case involves several
defendants, and the complaint for damages against these defendants is still
pending.1
II.
Now on the merits, the issue for resolution is whether there was a valid
service of summons on private respondent.
In civil cases, the trial court acquires jurisdiction over the person of the
defendant either by the service of summons or by the latter’s voluntary
appearance and submission to the authority of the former.16 Private
respondent was a Filipino resident who was temporarily out of the
Philippines at the time of the service of summons; thus, service of
summons on her is governed by Section 16, Rule 14 of the Rules of Court,
which provides:
“Sec. 16. Residents temporarily out of the Philippines. — When an action is
commenced against a defendant who ordinarily resides within the
Philippines, but who is temporarily out of it, service may, by leave of court,
be also effected out of the Philippines, as under the preceding section.”
(Emphasis supplied)
The preceding section referred to in the above provision is Section 15, which
speaks of extraterritorial service.
The RTC found that since private respondent was abroad at the time of the
service of summons, she was a resident who was temporarily out of the
country; thus, service of summons may be made only by publication.
We do not agree.
In Montefalcon v. Vasquez, 554 SCRA 513 (2008) we said that because
Section 16 of Rule 14 uses the words “may” and “also,” it is not mandatory.
Other methods of service of summons allowed under the Rules may also be
availed of by the serving officer on a defendant- resident who is temporarily
out of the Philippines. Thus, if a resident defendant is temporarily out of the
country, any of the following modes of service may be resorted to:
(1) substituted service set forth in section 7 (formerly Section 8), Rule 14;
(2) personal service outside the country, with leave of court;
(3) service by publication, also with leave of court; or
(4) in any other manner the court may deem sufficient.
In Montalban v. Maximo,19 we held that substituted service of summons
under the present Section 7, Rule 14 of the Rules of Court in a suit in
personam against residents of the Philippines temporarily absent therefrom
is the normal method of service of summons that will confer jurisdiction on
the court over such defendant. In the same case, we expounded on the
rationale in providing for substituted service as the normal mode of service
for residents temporarily out of the Philippines.
“x x x A man temporarily absent from this country leaves a definite place of
residence, a dwelling where he lives, a local base, so to speak, to which any
inquiry about him may be directed and where he is bound to return. Where
one temporarily absents himself, he leaves his affairs in the hands of one who
may be reasonably expected to act in his place and stead; to do all that is
necessary to protect his interests; and to communicate with him from time to
Avila 4B | 2016
time any incident of importance that may affect him or his business or his
affairs. It is usual for such a man to leave at his home or with his business
associates information as to where he may be contacted in the event a
question that affects him crops up. If he does not do what is expected of him,
and a case comes up in court against him, he cannot just raise his voice and
say that he is not subject to the processes of our courts. He cannot stop a suit
from being filed against him upon a claim that he cannot be summoned at his
dwelling house or residence or his office or regular place of business.
Not that he cannot be reached within a reasonable time to enable him to
contest a suit against him. There are now advanced facilities of
communication. Long distance telephone calls and cablegrams make it easy
for one he left behind to communicate with him.”
Considering that private respondent was temporarily out of the country, the
summons and complaint may be validly served on her through substituted
service.
We have held that a dwelling, house or residence refers to the place where
the person named in the summons is living at the time when the service is
made, even though he may be temporarily out of the country at the time. It is,
thus, the service of the summons intended for the defendant that must be left
with the person of suitable age and discretion residing in the house of the
defendant. Compliance with the rules regarding the service of summons is as
important as the issue of due process as that of jurisdiction.
Section 7 also designates the persons with whom copies of the process may
be left. The rule presupposes that such a relation of confidence exists between
the person with whom the copy is left and the defendant and, therefore,
assumes that such person will deliver the process to defendant or in some way
give him notice thereof.23
In this case, the Sheriff’s Return stated that private respondent was out of the
country; thus, the service of summons was made at her residence with her
husband, Alfredo P. Agudo, acknowledging receipt thereof. Alfredo was
presumably of suitable age and discretion, who was residing in that place and,
therefore, was competent to receive the summons on private respondent’s
behalf.
In addition, we agree with petitioner that the RTC had indeed acquired
jurisdiction over the person of private respondent when the latter’s counsel
entered his appearance on private respondent’s behalf, without qualification
and without questioning the propriety of the service of summons, and even
filed two Motions for Extension of Time to File Answer.
In effect, private respondent, through counsel, had already invoked the RTC’s
jurisdiction over her person by praying that the motions for extension of time
to file answer be granted.
We have held that the filing of motions seeking affirmative relief, such as,
1. to admit answer,
2. for additional time to file answer,
3. for reconsideration of a default judgment, and
4. to lift order of default with motion for reconsideration,
are considered voluntary submission to the jurisdiction of the court.
When private respondent earlier invoked the jurisdiction of the RTC to secure
affirmative relief in her motions for additional time to file answer, she
voluntarily submitted to the jurisdiction of the RTC and is thereby estopped
from asserting otherwise.
Considering the foregoing, we find that the RTC committed a grave abuse of
discretion amounting to excess of jurisdiction in issuing its assailed Orders.
WHEREFORE, the petition is GRANTED. The Orders dated May 7, 2004
and July 21, 2004 of the Regional Trial Court of Iloilo City, Branch 24, are
hereby SET ASIDE. Private respondent is DIRECTED to file her Answer
within the reglementary period from receipt of this decision.
SO ORDERED.
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7. Acance v. Court of Appeals, G.R. No. 159699, March 16, 2005
Facts:
On May 23, 2001, Spouses Yolanda Quijano and Ambrocio Tria, Spouses
Epifania Quijano and Raphael Villanueva, Spouses Napoleon and Pilar
Quijano (respondents herein Quijano siblings et al.), represented by their
attorney-in-fact Engr. Julius F. Villanueva, filed with the Regional Trial
Court (RTC) of Muntinlupa an amended complaint against Spouses Jesulito
and Vilma Acance, Spouses Nestor and Lynne Acance, and Spouses Manuel
and Guia Acance (petitioners herein Acance siblings et al.).
The amended complaint sought to annul the Extrajudicial Settlement of
the Estate of Deceased Jesus P. Acance and Waiver of Rights dated
February 10, 1997, executed by Jesulito, Manuel and Nestor, all surnamed
Acance, and their mother Angela. The estate covered by the said extrajudicial
settlement included two parcels of land in Muntinlupa. Following the
execution of the extrajudicial settlement, the TCTs over the lots were
transferred in the names of the Acance siblings.
The amended complaint alleged that the respondent Quijanos were the
children of Angela and Vernier who were later estranged. Later, Angela went
to the US to work. Later, Angela bought the lots subject of this suit.
Thereafter, she met and married Jesus Acance. Later, Jesus died in the US.
In seeking to nullify the extrajudicial settlement of estate executed by the
Acance siblings and their TCTs, the Quijano siblings alleged that the subject
real properties are conjugal properties of Angela and Vernier because these
were acquired by Angela during the subsistence of her first marriage with
Vernier. As such, they (the Quijano siblings) have a valid right to succeed
over the said properties as the lawful and compulsory heirs of Angela and
Vernier.
The Quijano siblings impugned the validity of the extra- judicial settlement
claiming that the signature of Angela thereon was a forgery or that she affixed
the same without her free volition because at the time of its execution, she
was already senile.
On April 26, 2002, upon motion of the respondents (the Quijano siblings and
their spouses), as plaintiffs therein, the court declared the petitioners (the
Acance siblings and their spouses), as defendants therein, in default for their
failure to file an answer to the amended complaint.
On May 13, 2002, petitioner Rosalino Acance, as attorney-in-fact and
administrator of the subject properties, filed with the court a quo a Motion to
Lift/Set Aside Order of Default. In his affidavit of merit, Petitioner Rosalino
further alleged that he had not received a copy of the complaint filed in Civil
Case No. 01- 122. The only pleading he received pertaining to the case was
that of the motion to declare the petitioners in default and setting the hearing
thereon on April 26, 2002.
RTC denied the motion to lift order of default. It explained that the
petitioners are all residing abroad but the real properties subject of the
complaint are situated in Muntinlupa City. Accordingly, upon motion, they
were deemed served with the summons and the amended complaint through
publication thereof in a newspaper of general circulation in Muntinlupa City,
where the properties are located, and nationwide on October 20, 2001. The
petitioners had sixty (60) days from the last publication or until December 2,
2001 within which to file their answer. However, they failed to do so.
More than a month later, or on January 25, 2002, petitioner Rosalino filed a
motion to represent the petitioners and asked for sixty (60) days to file an
answer. According to the court a quo, since the motion was not an adversarial
pleading it was no longer included in the court calendar. It stressed that at the
time said counsel entered his appearance, the period to file an answer had
long expired. Further, the 60 days extension prayed for was not denied.
However, the petitioners still failed to file their answer within the extension
period prayed for.
The court a quo faulted petitioner Rosalino, as counsel, for erroneously
assuming that since it failed to rule on his entry of appearance, the period to
file an answer was suspended. It pointed out that the fact that the counsel may
be allowed to represent a party-litigant or not does not toll the running of the
period to file the responsive pleading to the complaint.
Petitioners filed a R65 with CA assailing the RTC’s order denying their
motion to lift order of default.
CA dismissed outright the petition for certiorari for failure of the petitioners
to file a motion for reconsideration with the court a quo.
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Hence this petition.
Issue:
W/N RTC erred in declaring the petitioners in default – Yes.
Held:
Yes.
In this case, the court a quo acted with grave abuse of discretion in declaring
the petitioners in default without showing that there was full compliance with
the requirements for extraterritorial service of summons under Section 15,
Rule 14 of the Rules of Court.
The petitioners are citizens of the United States and residents thereof. Further,
the suit against them involves real property wherein the petitioners, as
defendants therein, have an interest. These facts clearly warranted
extraterritorial service of summons in accordance with Section 15, Rule 14
of the Rules of Court.
The rationale for service of summons on a nonresident defendant is
explained, thus:
“We repeat, service of summons on a nonresident defendant who is not found
in the country is required, not for purposes of physically acquiring
jurisdiction over his person but simply in pursuance of the requirements of
fair play, so that he may be informed of the pendency of the action against
him and the possibility that the property in the Philippines belonging to him
or in which he has an interest may be subjected to a judgment in favor of a
resident, and that he may thereby be accorded an opportunity to defend in the
action, if he be so minded. The only relief that may be granted in such an
action against such a nonresident defendant, who does not choose to submit
himself to the jurisdiction of the Philippine court, is limited to the res.”
In its Order dated April 26, 2002, the court a quo declared the petitioners in
default in this wise:
“Since the last publication of this case more than 60 days ago, no answer has
been filed by any of the Defendants, the MOTION TO DECLARE THE
DEFENDANTS IN DEFAULT is, therefore, granted.”
However, as will be shown shortly, the service of summons in this case is
defective. There was no showing that copies of the summons and the
amended complaint were duly served at the petitioners’ last known correct
address by registered mail, as a complement to the publication pursuant to
Section 15, Rule 14 of the Rules of Court8 and in compliance with the court
a quo’s Order dated July 1, 2001 granting the respondents’ motion for leave
to serve summons by publication.
The respondents alleged that they had “caused copies of the Amended
Complaint and Summons and the 1 July 2001 Order to be sent on November
13, 2001 by registered mail to the Acances’ known addresses in the United
States.” However, except for this bare allegation, the corresponding registry
receipts or copies thereof were not presented to show compliance with the
rules.
Further, there was likewise non-compliance with Section 19, Rule 15 of the
Rules of Court relating to the proof of service by publication. While the
respondents claimed that they had complied with the service of summons by
publication in a newspaper of general circulation, it does not appear that
they had presented to the court a quo the “affidavit of the printer, his
foreman, or principal clerk, or of the editor, business or advertising
manager” of the “Remate,” where the publication was allegedly made, to
prove such service by publication.
Neither did they present an affidavit showing the deposit of a copy of the
summons and order of publication in the post office, postage prepaid,
directed to the petitioners by registered mail to their last known addresses.
The failure to strictly comply correctly with the requirements of the rules
regarding the mailing of copies of the summons and the order for its
publication is a fatal defect in the service of summons. As held by this Court:
It is the duty of the court to require the fullest compliance with all the
requirements of the statute permitting service by publication. Where service
is obtained by publication, the entire proceeding should be closely scrutinized
by the courts and a strict compliance with every condition of law should be
exacted. Otherwise great abuses may occur, and the rights of persons and
property may be made to depend upon the elastic conscience of interested
parties rather than the enlightened judgment of the court or judge.
Even granting arguendo that the respondents had fully complied with the
requirements for extraterritorial service of summons and the court a quo
correctly declared them in default; still, it should not have been too rash in
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dismissing the petitioners’ motion to lift the default order. Well-settled is the
rule that courts should be liberal in setting aside orders of default for default
judgments are frowned upon, unless in cases where it clearly appears that the
reopening of the case is intended for delay. The issuance of the orders of
default should be the exception rather than the rule, to be allowed only in
clear cases of obstinate refusal by the defendant to comply with the orders of
the trial court.

In this case, there is no showing that the petitioners’ failure to file an answer
was due to an apparent scheme to delay the proceedings or to flagrantly
transgress the rules.

WHEREFORE, the petition is GRANTED. The assailed Resolutions dated

November 29, 2002 and August 27, 2003 of the Court of Appeals in CA-G.R.
SP No. 71658 are REVERSED AND SET ASIDE. The case is REMANDED
to the court a quo, which is DIRECTED to allow the petitioners to file their
answer to the amended complaint, and thereafter to conduct the proper
proceedings in Civil Case No. 01-122.
SO ORDERED.

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8. Cabigao v. Nery, 2013
Facts:
This resolves the administrative complaint filed by Atty. Vladimir Alarique
T. Cabigao (complainant) against Sheriff Neptali Angelo V. Nery (Nery),
Sheriff III of the Metropolitan Trial Court (MeTC) of Manila, Branch 30.
The complainant is the counsel of Vision Automotive Technology, Inc.
(Vision Automotive), the plaintiff in Vision Auto v. Sound and Beyond Auto
which was then pending before the MeTC of Manila, Branch 30.
On March 15, 2012, the complainant sent a letter-complaint1 to the Presiding
Judge of the MeTC of Manila, Branch 30, alleging that Nery called Vision
Automotive and asked for money to cover the transportation expenses in
serving the summons to the defendant in New Manila, Quezon City.
He claimed that, on February 20, 2012, Vision Automotive deposited the
amount of One Thousand Pesos (P1,000.00) in the account of Nery with the
Land Bank of the Philippines under account number 1987-1141-90.2
However, despite receipt of the money deposited by Vision Automotive,
Nery still failed to serve the summons to the defendant in Civil Case No.
01785-SC.
In his comment5 dated May 9, 2012, Nery denied that he asked for money
from Vision Automotive. He averred that Civil Case No. 01785-SC was
raffled to their branch on January 13, 2012; that a month after it was filed,
Vision Automotive has yet to coordinate with him as regards the service of
summons to the defendant.
He admitted having called a representative of Vision Automotive, but
clarified that he only did so to request Vision Automotive to defray the
transportation expenses for the service of summons as it was burdensome to
withdraw the amount of P1,000.00 from the Sheriff’s Trust Fund. He claimed
that it was the representative of Vision Automotive who insisted on
depositing the amount of P1,000.00 in his bank account to defray the
expenses in serving the summons on the defendant.
Nery further claimed that he never intended to tarnish the image of the
judiciary when he accepted the money from Vision Automotive; that there
were instances in the past when he used his own money in order to expedite
court processes. Nery likewise claimed that the complainant had already
manifested to the OCA that he is already withdrawing his complaint.6 He
further alleged that he had already served the summons to the defendant in
Civil Case No. 01785-SC on March 16, 2012. After which, Nery returned the
remaining balance of the P1,000.00 given by Vision Automotive to defray
the expenses in serving the summons.
On August 6, 2013, the OCA issued its evaluation and recommendation on
the case.7 In its evaluation, the OCA found that there is sufficient evidence
to hold Nery administratively liable, pointing out that the latter did not
categorically deny having asked and received money from Vision
Automotive. The OCA further opined that Nery should have served the
summons to the defendant in Civil Case No. 01785-SC within fifteen (15)
days from his receipt thereof pursuant to the 2002 Revised Manual for Clerks
of Court; that his failure to do so constituted simple neglect of duty.
As regards Nery’s demand and subsequent receipt of money from Vision
Automotive, the OCA found him liable for less serious dishonesty, pointing
out that only the payment of sheriff’s fees can be lawfully received by a
sheriff and the acceptance of any other amount is improper even if it were to
be applied for a lawful purpose. Accordingly, the OCA recommended that
Nery be FINED in an amount worth his 6 months salary.
Issue:
W/N Nery should be sanctioned – Yes.
Held:
Yes.
After a careful review of the records of this case, the Court adopts the findings
and recommendation of the OCA albeit with modification as regards the
sanction to be imposed.
Summons to the defendant in a case shall forthwith be issued by the clerk of
court upon the filing of the complaint and the payment of the requisite legal
fees. Once issued by the clerk of court, it is the duty of the sheriff, process
server or any other person serving court processes to serve the summons to
the defendant efficiently and expeditiously. Failure to do so constitutes
simple neglect of duty, which is the failure of an employee to give one’s
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attention to a task expected of him, and signifies a disregard of a duty
resulting from carelessness or indifference.
It took Nery more than two months to serve the summons to the defendant in
Civil Case No. 01785-SC from the time the same was raffled to their branch.
Civil Case No. 01785-SC was raffled to the MeTC of Manila, Branch 30, on
January 13, 2012; Nery was only able to serve the summons on the defendant
therein only on March 16, 2012.
Explaining the delay in the service of the summons, Nery claims that Vision
Automotive, from the time it deposited the P1,000.00 in his bank account, no
longer coordinated with him as regards the service of the summons. Nery’s
reasoning is flawed. The supposed lack of coordination on the part of Vision
Automotive would not hinder the service of the summons to the defendant in
Civil Case No. 01785-SC. To stress, once issued by the clerk of court, it
becomes the duty of the sheriff, process server or any other person serving
court processes to promptly serve the summons on the defendant in a case.
in serving the summons to the defendant. His failure to strictly comply with
the provisions of Section 10, Rule 141 of the Rules of Court warrants the
imposition of disciplinary measure. Considering that Nery demanded from
Vision Automotive only the amount needed to actually defray his actual
travel expenses, the Court agrees with the OCA that he should be held
administratively liable for less serious dishonesty.
WHEREFORE, respondent Neptali Angelo V. Nery, Sheriff III of the
Metropolitan Trial Court of Manila, Branch 30, is found GUlLTY of less
serious dishonesty, and is hereby ordered to pay a FINE in the amount of
Twenty Thousand Pesos (P20,000.00). Neptali Angelo V. Nery is
STERNLY WARNED that a repetition of the same or similar acts in the
future shall be dealt with more severely. Let a copy of this Resolution be
attached to his personal record.
SO ORDERED.

It is likewise improper for Nery to ask and actually receive money from
Vision Automotive, even if the money would be used to defray the expenses
in serving the summons to the defendant in Civil Case No. 01785 SC.
“Sheriffs are not allowed to receive any payments from the parties in the
course of the performance of their duties. They cannot just unilaterally
demand sums of money from the parties without observing the proper
procedural steps.”

Under Section 10, Rule 141 of the Rules of Court, as amended by A.M. No.
04-2-04-SC, the plaintiff in a case is required to deposit the amount of
P1,000.00 with the clerk of court, which would be used to defray the actual
travel expenses in serving the summons.

The sheriff, process server or any other person authorized to serve court
processes would then submit to the court a statement of estimated travel
expenses for the service of the summons. Once the court approves the
statement of estimated travel expenses, the clerk of court shall release the
money to the sheriff, process server or any other person authorized to serve
court processes.

Nery failed to follow the foregoing procedure and, instead, opted to ask
Vision Automotive to defray the actual travel expenses that would be incurred

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XIII. Motions (Rule 15)
1. Republic v. Peralta, G.R. No. 150327, June 18, 2003
Facts:
In 1994, respondents Peralta et al. filed a complaint for recovery of
possession and ownership of real property with the RTC Davao against the
Republic and the DENR.
The plaintiffs alleged therein, inter alia, that they are the heirs of Benedicto
B. Alonday who applied for and was granted Homestead Patent No. V-11244
by the then Secretary of Agriculture and Natural Resources (DENR) over Lot
3561 with an area of 237,898 square meters; on June 28, 1971, Benedicto’s
lawyer wrote a letter to the Bureau of Forest Development (BFD) demanding
that it vacate the said portion of his property on which the building was
constructed but said letter was ignored; on February 24, 1979, Forest
Conservation Officer Marion Abundio, Sr. asked permission from Benedicto
to allow the BFD to install on a portion of the subject property consisting of
twenty-five square meters a small generator to provide electricity to the
existing building and compound of the Philippine Eagles Acclimatization and
Breeding Center; Benedicto did not give his assent to these requests of the
aforenamed government officials despite which they still caused the
construction of the building and installation of the generator unit; the
plaintiffs demanded that the defendants vacate the property on July 14, 1994
but the latter refused.
After the pre-trial conference, the RTC constituted a panel of commissioners
to conduct a relocation survey and determine if the respondents’ property is
part of the Mt. Apo National Park. After the survey, the panel submitted its
report to the trial court, dated November 7, 1995, stating that: “the land in
case is 92,216 square meters within the certified Alienable and Disposable
(A & D) Lands while the remaining portion of 145,682 square meters is
within the Mt. Apo National Park Reservation.”4
RTC rendered judgment in favor of the plaintiffs and against the
defendants finding and declaring that the property occupied by the
defendants was part of the plaintiffs’ property. The RTC ordered the
defendants to vacate the property, restore possession thereof to the plaintiffs
and remove all the improvements thereon made by them.
On May 30, 1997, five days before the expiration of the period to file an
appeal, the defendants filed, through registered mail, a motion for the
reconsideration of the RTC decision.
On June 11, 1997, the RTC issued ex parte an order expunging the said
motion for reconsideration on the ground that it was a mere scrap of
paper for failure of the defendants to incorporate any notice of hearing
as required by Sections 4 and 5, Rule 15 of the Rules of Court.
Unaware of the June 11, 1997 Order of the RTC, the defendants filed on July
14, 1997 a Manifestation with Notice of Hearing on Motion for
Reconsideration dated July 7, 1997 appending thereto a notice of hearing of
their May 30, 1997 Motion for Reconsideration.
In the meantime, on July 18, 1997, the defendants received a copy of the June
11, 1997 Order of the trial court expunging their motion for reconsideration.
On July 22, 1997, the defendants filed their notice of appeal from the decision
of the court.
The plaintiffs, for their part, filed a motion to dismiss the appeal of the
defendants on the ground that their May 30, 1997 Motion for Reconsideration
was a mere scrap of paper; hence, the motion did not toll the running of the
reglementary period for appeal. Thus, the defendants allegedly failed to
perfect their appeal from the decision of the court within the reglementary
period.
On August 11, 1997, the RTC received the defendants’ notice of appeal.
Initially, RTC gave due course to the defendant’s appeal declaring that
they still had a period of 5 days from July 18, 1997 when they received a
copy of the order expunging their notice of appeal or until July 23, 1997
within which to perfect their appeal from the June 11, 1997 Order. Since
the defendants filed their notice of appeal on July 22, 1997, they had perfected
their appeal within the reglementary period. The RTC further declared that
although the defendants’ May 30, 1997 Motion for Reconsideration was
defective, the Rules of Court should be liberally construed. The RTC
forthwith directed the branch clerk of court to forward the records of the case
to the Court of Appeals.
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On February 5, 1999, however, the RTC issued an ex parte order
dismissing the defendants’ appeal on its finding that in light of
jurisprudence brought to its attention, they failed to perfect their appeal
within the reglementary period.
On February 18, 1999, the RTC issued an order granting the plaintiffs’
motion and ordered the issuance of a writ of execution.
On May 6, 1999, the RTC issued an order denying the defendants’ motion
for reconsideration and at the same time denying the plaintiffs’ motion for
execution on the ground that public policy prohibited the issuance of a writ
of execution against the government. The RTC recalled the writ of execution
it earlier issued.
Thereafter, the defendants, now the petitioners, filed with the Court of
Appeals a petition for certiorari under Rule 65 assailing the RTC’s orders
dismissing its appeal and denying its MR.
CA dismissed the petition holding that petitioners’ May 30, 1997 Motion for
Reconsideration of the RTC decision did not comply with Section 5, Rule 15
of the Rules of Court, as amended; hence, a mere scrap of paper which did
not toll the running of the reglementary period for appeal. Thus, the RTC
decision had already become final and executory.
Hence this petition.
Issue:
W/N the petitioners perfected their appeal – No. However, rules relaxed in
the interest of justice.
Held:
No. However, rules relaxed in the interest of justice.
The petition is meritorious.
The Court agrees with the CA that the OSG was negligent when it filed on
May 30, 1997 the defective motion for reconsideration.
Section 2, Rule 37 of the Rules of Court provides that a motion for
reconsideration or a motion for a new trial shall be made in writing stating
the ground or grounds therefor, a written notice of which shall be served by
the movant on the adverse party. Such written notice is that prescribed in
Sections 4 and 5, Rule 15 of the Rules of Court. Under Section 4, paragraph
2 of said rule, a notice of hearing on a motion shall be served by the movant
to all the parties concerned at least three days before the date of hearing.
Section 5 of the same rule requires that the notice of hearing shall be directed
to the parties concerned and shall state the time and place of the hearing of
the motion. The requirements, far from being merely technical and procedural
as claimed by the petitioners, are vital elements of procedural due process.
The requirements entombed in Sections 4 and 5 of Rule 15 of the Rules of
Court are mandatory and non-compliance therewith is fatal and renders the
motion pro forma; a worthless piece of paper which the clerk of court has no
right to receive and which the court has no authority to act upon. In cases of
motions for a new trial or for the reconsideration of a judgment, the running
of the period for appeal is not tolled by the mere filing or pendency of said
motion.
The need, therefore, to determine once and for all whether the lands subject
of petitioner’s reversion efforts are foreshore lands constitutes good and
sufficient cause for relaxing procedural rules and granting the third and fourth
motions for extension to file appellant’s brief. Petitioner’s appeal presents an
exceptional circumstance impressed with public interest and must then be
given due course.
In this case, the petitioners, through the OSG, received on May 20, 1997 the
decision of the RTC; hence, they had until June 4, 1997 within which to file
their motion for reconsideration or for a new trial or to perfect their appeal
from said adverse decision. Although the petitioners filed the motion for
reconsideration dated May 30, 1997 within the reglementary period, said
motion failed to comply with Sections 4 and 5 of Rule 15. The records show
that there is no proof that the respondents were actually served with a copy
of said motion, as required by Section 10, Rule 13 of the Rules of Court. The
OSG did not bother to file an amended motion for reconsideration containing
the requirements of Sections 4 and 5 of Rule 15 of the Rules of Court.
The OSG offered no valid justification for its failure to comply with Sections
4 and 5, Rule 15 of the Rules of Court except the self-serving claim of
Solicitor Evaristo M. Padilla that his omission was sheer inadvertence, caused
by heavy pressure of work in preparing numerous pleadings and in the almost
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daily attendance in court for naturalization cases and those for nullity of IN LIGHT OF ALL THE FOREGOING, the decision of the Court of
marriage, among others. Other than the barefaced allegations of Solicitor Appeals in CA-G.R. SP No. 53440 is REVERSED AND SET ASIDE. The
Padilla, he offered no specific details as to what pleadings he prepared and Orders of the Regional Trial Court of Davao City, Branch 13, dated February
the hearings he attended which prevented him from complying with Sections 5, 1999 and May 5, 1999 in Civil Case No. 23,168-94 are SET ASIDE. The
4 and 5 of Rule 15 of the Rules of Court. Moreover, if Solicitor Padilla was said Regional Trial Court is DIRECTED to reopen the trial to enable the
able to prepare within the reglementary period the May 30, 1997 Motion for parties to adduce their respective evidence. The Office of the Solicitor
Reconsideration, he offered no valid justification for his failure to incorporate General is hereby directed to represent the petitioners during the trial. No
in said motion or append thereto a simple one-paragraph notice of hearing costs.
which could have been accomplished in a few minutes. What is so nettlesome SO ORDERED.
is that the May 30, 1997 Motion for Reconsideration of petitioners was signed
not only by Solicitor Padilla but also by Assistant Solicitor General Aurora
P. Cortes. Even if Solicitor Padilla, through his negligence, failed to
incorporate in said motion for reconsideration the requisite notice of hearing,
the Assistant Solicitor General should have noticed the omission before she
affixed her signature thereon and sought the immediate rectification thereof
by Solicitor Padilla before said motion was filed. She did not. She offered no
valid explanation for her faux pas either. The general rule is that the clients
are bound by the mistakes and negligence of their counsel.1

However, prescinding from all the foregoing, this Court grants not only
petitioners’ plea that it suspend its own rule on the perfection of appeals but
also directs the reopening of the trial of the case for the parties to adduce their
respective evidence. The Court excepts this case from the said rule in the
interest of justice, to avert a grave miscarriage of justice to the State through
the negligence of the OSG. The State has the right to adduce its evidence,
testimonial and documentary. Courts should proceed with caution so as not
to deprive a party of this right but, instead, afford every party litigant the
amplest opportunity for the proper and just disposition of its cause, free from
the constraints of technicalities.1

What is involved in this case is a portion of land consisting of no less than

145,682 square meters or less than fifteen hectares which they claim is part
of the Mt. Apo National Park as shown by the relocation survey of the panel
of commissioners. The case is one of public interest.

If the aforesaid property is, indeed, part of the forest reserve as claimed by
the petitioners but their right to adduce their evidence is foreclosed by the
dismissal of the present petition, the said property would be forever lost to
the prejudice of the State.

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2. Preysler v. Manila Southcoast, G.R. No. 171872, June 28, 2010
Facts:
On 15 January 2002, petitioner Fausto R. Preysler, Jr. (petitioner) filed with
the Municipal Trial Court (MTC) of Batangas a complaint for forcible entry
against respondent Manila Southcoast Development Corporation
(respondent).
The subject matter of the complaint is a parcel of land with an area of 21,922
square meters located in Sitio Kutad, Barangay Papaya, Nasugbu, Batangas.
The disputed land, covered by Transfer Certificate of Title (TCT) No. TF-
12174 in the name of petitioner, is also within the property covered by TCT
No. T-720975 in the name of respondent.6 TCT No. T-72097 covers three
contiguous parcels of land with an aggregate area of 86,507,778 square
meters.
On 13 December 2002, the MTC ruled in favor of petitioner and ordered
respondent to vacate the disputed land covered by TCT No. TF-1217 in
the name of petitioner and to return the possession of the land to petitioner.7
Respondent appealed to the Regional Trial Court (RTC). In its Decision dated
22 January 2004, the RTC reversed the MTC decision and dismissed
petitioner’s complaint.
Petitioner received the RTC Decision on 9 February 2004 and thereafter filed
a Motion for Reconsideration, which was set for hearing on 26 February
2004. Petitioner sent a copy of the Motion for Reconsideration to
respondent’s counsel by registered mail on 23 February 2004. During the 26
February 2004 scheduled hearing of the motion, the RTC judge reset the
hearing to 2 April 2004 because the court’s calendar could not accommodate
the hearing of the motion. All the parties were notified of the schedule for the
next hearing.
Meanwhile, it was only on 3 March 2004, or 6 days after the scheduled
hearing on 26 February 2004, that respondent’s counsel received a copy of
petitioner’s Motion for Reconsideration.
The rescheduled hearing on 2 April 2004 was again reset on 7 May 2004
because the RTC judge was on official leave.
The 7 May 2004 hearing was further reset to 6 August 2004. After the
hearing, respondent filed its Motion to Dismiss dated 9 August 2004,8
claiming that non- compliance with the three-day notice rule did not toll the
running of the period of appeal, which rendered the decision final.
On 4 October 2004, the RTC issued an Order, denying petitioner’s Motion
for Reconsideration for failure to appeal within the 15 days reglementary
period and declaring the 22 January 2004 Decision as final and executory.
The RTC ruled that petitioner’s Motion for Reconsideration was fatally
flawed for failure to observe the three-day notice rule.
Petitioner filed an Omnibus Motion for Reconsideration of the Order dated 4
October 2004. In its Order dated 22 February 2005, the RTC dismissed the
Omnibus Motion.
Petitioner then filed a petition for certiorari with the Court of Appeals,
alleging that the RTC committed grave abuse of discretion in dismissing the
Motion for Reconsideration and Omnibus Motion for petitioner’s alleged
failure to observe the three-day notice rule.
On a R65, CA affirmed the RTC and held that the three-day notice rule
under Sections 4, 5, and 6 of Rule 15 of the Rules of Court is mandatory and
non- compliance therewith is fatal and renders the motion pro forma.
As found by the RTC, petitioner’s Motion for Reconsideration dated 12
February 2004 was received by respondent only on 3 March 2004, or six days
after the scheduled hearing on 26 February 2004. Furthermore, the Court of
Appeals held that all violations of Sections 4, 5, and 6 of Rule 15 which
render the purpose of the notice of hearing of the motion nugatory are deemed
fatal.
Hence, this petition for review.
Issue:
W/N the RTC’s decision is already final and executory by virtue of the MR’s
defect – No.
Held:
No.
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In upholding the RTC Order denying petitioner’s Motion for
Reconsideration, the Court of Appeals relied mainly on petitioner’s alleged
violation of the notice requirements under Sections 4, 5, and 6, Rule 15 of the
Rules of Court.
The three-day notice rule is not absolute. A liberal construction of the
procedural rules is proper where the lapse in the literal observance of a
rule of procedure has not prejudiced the adverse party and has not
deprived the court of its authority. Indeed, Section 6, Rule 1 of the Rules
of Court provides that the Rules should be liberally construed in order to
promote their objective of securing a just, speedy and inexpensive disposition
of every action and proceeding. Rules of procedure are tools designed to
facilitate the attainment of justice, and courts must avoid their strict and rigid
application which would result in technicalities that tend to frustrate rather
than promote substantial justice.
In Somera Vda. De Navarro v. Navarro,12 the Court held that there was
substantial compliance of the rule on notice of motions even if the first notice
was irregular because no prejudice was caused the adverse party since the
motion was not considered and resolved until after several postponements of
which the parties were duly notified.13
Likewise, in Jehan Shipping Corporation v. National Food Authority,14 the
Court held that despite the lack of notice of hearing in a Motion for
Reconsideration, there was substantial compliance with the requirements of
due process where the adverse party actually had the opportunity to be
heard and had filed pleadings in opposition to the motion, thus:
“As an integral component of the procedural due process, the three-day notice
required by the Rules is not intended for the benefit of the movant. Rather,
the requirement is for the purpose of avoiding surprises that may be sprung
upon the adverse party, who must be given time to study and meet the
arguments in the motion before a resolution of the court. Principles of natural
justice demand that the right of a party should not be affected without giving
it an opportunity to be heard.
The test is the presence of opportunity to be heard, as well as to have
time to study the motion and meaningfully oppose or controvert the
grounds upon which it is based.
In this case, the Court of Appeals ruled that petitioner failed to comply with
the three-day notice rule. However, the Court of Appeals overlooked the fact
that although respondent received petitioner’s Motion for Reconsideration six
days after the scheduled hearing on 26 February 2004, the said hearing was
reset three (3) times with due notice to the parties.
Thus, it was only on 6 August 2004, or more than five months after
respondent received a copy of petitioner’s Motion for Reconsideration, that
the motion was heard by the RTC.
Clearly, respondent had more than sufficient time to oppose petitioner’s
Motion for Reconsideration. In fact, respondent did oppose the motion when
it filed its Motion to Dismiss dated 9 August 2004.
In view of the circumstances of this case, we find that there was substantial
compliance with procedural due process. Instead of dismissing petitioner’s
Motion for Reconsideration based merely on the alleged procedural lapses,
the RTC should have resolved the motion based on the merits.
Furthermore, the RTC likewise erred in dismissing petitioner’s Omnibus
Motion for allegedly failing to comply with the three-day notice requirement.
The RTC found that the notice of hearing of petitioner’s Omnibus Motion
which was set to be heard on 12 November 2004 was received by respondent
on 9 November 2004. The RTC held that the service of the notice of hearing
was one day short of the prescribed minimum three days notice.
We disagree. Section 4 of Rule 15 provides that “[e]very written motion
required to be heard and the notice of the hearing thereof shall be served in
such a manner as to ensure its receipt by the other party at least three
(3) days before the date of the hearing, unless the court good cause sets the
hearing on shorter notice.”
Thus, the date of the hearing should be at least three days after receipt of the
notice of hearing by the other parties. In this case, the petitioner’s Omnibus
Motion was set for hearing on 12 November 2004. Thus, to comply with the
notice requirement, respondent should have received the notice of the hearing
at least three days before 12 November 2004, which is 9 November 2004.
Clearly, respondent’s receipt on 9 November 2004 (Tuesday) of the notice of
hearing of the Omnibus Motion which was set to be heard on 12 November
2004 (Friday), was within the required minimum three-days’ notice.
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As explained by Retired Justice Jose Y. Feria in his book, Civil Procedure
Annotated, when the notice of hearing should be given:

“The ordinary motion day is Friday. Hence, the notice should be served
by Tuesday at the latest, in order that the requirement of the three days
may be complied with.

If notice be given by ordinary mail, it should be actually received by Tuesday,

or if not claimed from the post office, the date of the first notice of the
postmaster should be at least five (5) days before Tuesday.”16 (Emphasis
supplied)

WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated

22 November 2005 and the Resolution dated 3 March 2006 of the Court of
Appeals in CA-G.R. SP No. 89621. We REMAND the case to the Regional
Trial Court.

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3. Bacelonia v. Court of Appeals, G.R. No. 143440, February 11,
143440
Facts:
The facts show that, on January 12, 1998, private respondents Victorino and
Olivia Bolos filed a complaint3 for damages against herein petitioners
including Simeon Roxas-Cu and Daniel Cariño before the RTC QC which
was docketed as Civil Case No. Q-98-33149.
The case stemmed from a vehicular accident, involving a tamaraw-type
school shuttle service vehicle and a 6 x 6 Isuzu cargo truck, that occurred
along Aurora Blvd. in Quezon City on February 3, 1993 resulting in the
untimely demise of private respondents’ daughter, Jemelee Bolos. Jemelee
was on board the school shuttle service vehicle that used to transport her from
Marikina City to St. Bridget School in Quezon City.
Petitioners-spouses Graciano, Sr. and Serena Bacelonia were named
defendants in the said complaint for damages as owners/operators of the
school shuttle service that figured in the accident. Graciano Bacelonia, Jr. was
the driver thereof. The other defendants therein, Simeon Roxas-Cu and
Daniel Cariño were the owner and the driver of the cargo truck,
respectively.
Meanwhile, it appears that, prior to the filing of the complaint for damages
by the private respondents, herein petitioners filed on March 1, 1995 a
complaint5 for damages arising from the said accident against their co-
defendants with the Regional Trial Court of Quezon City which was
docketed as Civil Case No. Q-95-23169.
On April 27, 1995, herein petitioners and their co-defendants entered into a
compromise agreement6 that led to the dismissal7 of the complaint in
Civil Case No. Q-95-23169 on April 28, 1995 by the trial court.
On September 24, 1999, and upon termination of the testimony of the second
witness for the complainants (herein private respondents) in Civil Case No.Q-
98-33149, petitioners filed a motion to be dropped as defendants therefrom
on the ground that a compromise agreement had already been entered into by
the parties in Civil Case No. 95-23169. The petitioners opined in essence that
their co- defendants, Simeon Roxas-Cu and Daniel Cariño, had explicitly
admitted sole responsibility for the vehicular accident by entering into the
compromise agreement. Thus, they (the Bacelonias) should be excluded as
defendants in Civil Case No. 98-33149.
However, their co-defendants, Simeon Roxas-Cu and Daniel Cariño, filed an
opposition9 thereto substantially contending that res judicata does not obtain
insofar as the present case is concerned, and that, on the contrary, they never
admitted any responsibility for the accident on February 3, 1993.
RTC denied the motion of petitioners to be dropped as defendants from
Civil Case No. Q-98-33149 on January 10, 2000 for lack of merit and
scheduled the reception of evidence of the defense on February 3, 2000.
On January 31, 2000, the petitioners filed an MR of the trial court’s order
denying their motion to be dropped as defendants from Civil Case No. Q- 98-
33149 and set the date of hearing thereof on February 15, 2000 at 8:30
o’clock in the morning.
On the same day, January 31, 2000, the petitioners also filed a separate
motion to cancel the hearing for the presentation of evidence for the
defense earlier scheduled on February 3, 2000 so that their motion for
reconsideration, scheduled for hearing on February 15, 2000, may not be
rendered moot and academic. The motion to cancel hearing was itself
scheduled to be heard on February 3, 2000.
Private respondents opposed the twin motions of the petitioners for lack of
merit and argued that the scheduled hearing on February 3, 2000 for the initial
presentation of evidence of the defense may be availed of by said petitioners
for oral argument in support of their motion for reconsideration.
During the scheduled hearing for the initial presentation of evidence of the
defense on February 3, 2000, the trial court denied the motion for
reconsideration of the petitioners for lack of merit.1
The petitioners elevated the matter to the Court of Appeals through a petition
for certiorari (R65) maintaining that they were not accorded their right to due
process when their motion for reconsideration was denied by the trial court
prior to its scheduled hearing on February 15, 2000.
However, the CA dismissed the petition for being premature and for lack of
merit. The appellate court explained that the questioned order of the trial court
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was interlocutory and could not be assailed in a petition for certiorari and that,
moreover, res judicata did not apply insofar as the claim in Civil Case No.
Q-98-33149 was concerned. MR denied.
Hence this petition.
Issue:
W/N petitioners were denied due process when the RTC denied their MR
prior to its scheduled hearing on February 15, 2000? No
Held:
No.
It should be noted that the motion for reconsideration of the trial court’s
resolution on January 10, 2000 was filed by the petitioners on January 31,
2000.
The date and time of hearing thereof was set by the petitioners on February
15, 2000 at 8:30 o’clock in the morning.
In this connection, Rule 15, Section 5 of the Revised Rules of Court on
motions provides: Section 5. Notice of hearing. — The notice of hearing shall
be addressed to all parties concerned, and shall specify the time and date of
the hearing which must not be later than ten (10) days after the filing of the
motion. (Emphasis ours)
It is clear then that the scheduled hearing of the said motion for
reconsideration was beyond the period specified by the Revised Rules of
Court which was not later than ten (10) days after the filing of the motion, or
no later than February 10, 2000.
Significantly, the above provision of Rule 15, Section 5 uses the mandatory
term “must” in fixing the period within which the motion shall be scheduled
for hearing. A motion that fails to religiously comply with the mandatory
provision of Rule 15, Section 5 is pro forma and presents no question which
merits the attention and consideration of the court.
The mandatory character of Rule 15, Section 5 of the Revised Rules of Court
becomes especially significant in this case, considering the claim of the
private respondents that the petitioners have been engaging in dilatory tactics,
an imputation not without factual basis.
As borne by the records, herein petitioners and their co-defendants, Simeon
Roxas-Cu and Daniel Cariño, entered into a compromise agreement on April
27, 1995 that led to the dismissal by the trial court of the complaint in Civil
Case No. Q-95- 23169 on April 28, 1995.
This compromise agreement was already interposed by the petitioners as one
of the special and affirmative defenses in their answer to the complaint for
damages in Civil Case No. Q-98-33149. Thus it was no longer legally
possible for the petitioners to file the Motion to Exclude on September 24,
1999 in Civil Case No. Q-98-33149 (actually a motion to dismiss the case
against them), based on a compromise agreement that did not even bind the
complainants (herein private respondents) who were not parties thereto.23 At
such stage, the private respondents were already winding up the presentation
of their evidence in Civil Case No. Q-98-33149.
Upon the denial of their Motion to Exclude on January 10, 2000, the
petitioners filed the subject motion for reconsideration on January 31, 2000.
In addition, they moved to cancel the scheduled hearing for the initial
presentation of their evidence already scheduled on February 3, 2000
ostensibly to give way to oral arguments in support of their motion for
reconsideration which, as above discussed, was pro forma. By their
actuations, it can be conclusively presumed that the petitioners had no other
intention but to delay the proceedings in Civil Case No. Q- 98-33149.
Besides, the petitioners cannot validly invoke violation of due process to
question the trial court’s denial of their motion for reconsideration. It should
be pointed out that the motion to cancel the scheduled hearing on February 3,
2000 filed on January 31, 2000 by the petitioners was itself scheduled to be
heard on February 3, 2000 which latter date, incidentally, was previously set
by the trial court for reception of defendants’ evidence. Admittedly, the
petitioners were present during the hearing on said date to argue on the merits
of their motion to cancel.25 On the same occasion, the private respondents
objected to the motion to cancel the hearing on February 3, 2000, arguing that
no compelling reason existed to grant the said pending motion; they proposed
instead that petitioners avail of the said setting to argue their motion for
reconsideration.26
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Despite the denial by the trial court of their motion to cancel, and a
subsequent directive for them to argue their motion for reconsideration on
February 3, 2000, the petitioners chose to ignore the same. The petitioners
thus had only themselves to blame for not having been heard on their motion
for reconsideration. Under the Constitution, what is violative of due process
is the denial of the opportunity to be heard. In the case at bar, no grave abuse
of discretion can be ascribed to the trial court inasmuch as it afforded the
petitioners more than ample opportunity to explain their side.27

WHEREFORE, the instant petition for review on certiorari is hereby

DENIED.
SO ORDERED.

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XIV. Motion to Dismiss (Rule 16)
1. Heirs of Loreto Maramag v.Maramag, G.R. No. 181132, June 5,
2009
Facts:
The case stems from a petition3 filed against respondents with the Regional
Trial Court, Branch 29, for revocation and/or reduction of insurance
proceeds for being void and/or inofficious, with prayer for a temporary
restraining order (TRO) and a writ of preliminary injunction.
The petition alleged that: (1) petitioners were the legitimate wife and children
of Loreto Maramag (Loreto), while respondents were Loreto’s illegitimate
family; (2) Eva de Guzman Maramag (Eva) was a concubine of Loreto and a
suspect in the killing of the latter, thus, she is disqualified to receive any
proceeds from his insurance policies from Insular Life Assurance Company,
Ltd. (Insular)4 and Great Pacific Life Assurance Corporation (Grepalife);5
(3) the illegitimate children of Loreto — Odessa, Karl Brian, and Trisha
Angelie — were entitled only to one-half of the legitime of the legitimate
children, thus, the proceeds released to Odessa and those to be released to
Karl Brian and Trisha Angelie were inofficious and should be reduced; and
(4) petitioners could not be deprived of their legitimes, which should be
satisfied first.
In answer,6 Insular admitted that Loreto misrepresented Eva as his legitimate
wife and Odessa, Karl Brian, and Trisha Angelie as his legitimate children,
and that they filed their claims for the insurance proceeds of the insurance
policies; that when it ascertained that Eva was not the legal wife of Loreto, it
disqualified her as a beneficiary and divided the proceeds among Odessa,
Karl Brian, and Trisha Angelie, as the remaining designated beneficiaries;
and that it released Odessa’s share as she was of age, but withheld the release
of the shares of minors Karl Brian and Trisha Angelie pending submission of
letters of guardianship.
Insular alleged that the complaint or petition failed to state a cause of
action insofar as it sought to declare as void the designation of Eva as
beneficiary, because Loreto revoked her designation as such in Policy No.
A001544070 and it disqualified her in Policy No. A001693029; and insofar
as it sought to declare as inofficious the shares of Odessa, Karl Brian,
and Trisha Angelie, considering that no settlement of Loreto’s estate had
been filed nor had the respective shares of the heirs been determined. Insular
further claimed that it was bound to honor the insurance policies designating
the children of Loreto with Eva as beneficiaries pursuant to Section 53 of the
Insurance Code.
RTC dismissed the case holding that:
“WHEREFORE, the motion to dismiss incorporated in the answer of
defendants Insular Life and Grepalife is granted with respect to defendants
Odessa, Karl Brian and Trisha Maramag. The action shall proceed with
respect to the other defendants Eva Verna de Guzman, Insular Life and
Grepalife. SO ORDERED.”
Insular12 and Grepalife13 filed their respective motions for reconsideration,
arguing, in the main, that the petition failed to state a cause of action. Insular
further averred that the proceeds were divided among the three children as
the remaining named beneficiaries. Grepalife, for its part, also alleged that
the premiums paid had already been refunded.
Petitioners, in their comment, reiterated their earlier arguments and posited
that whether the complaint may be dismissed for failure to state a cause of
action must be determined solely on the basis of the allegations in the
complaint, such that the defenses of Insular and Grepalife would be better
threshed out during trial.
RTC granted the MRs of Insular and Grepalife and also dismissed the
case as to them. In granting the motions for reconsideration of Insular and
Grepalife, the trial court considered the allegations of Insular that Loreto
revoked the designation of Eva in one policy and that Insular disqualified her
as a beneficiary in the other policy such that the entire proceeds would be
paid to the illegitimate children of Loreto with Eva pursuant to Section 53 of
the Insurance Code. It ruled that it is only in cases where there are no
beneficiaries designated, or when the only designated beneficiary is
disqualified, that the proceeds should be paid to the estate of the insured.
On appeal, CA dismissed the petition on the ground that the decision of the
trial court dismissing the complaint for failure to state a cause of action
involved a pure question of law.
Hence this petition.
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Issue:
W/N the RTC erred in dismissing the complaint for failure to state a cause of
action – No.
Held:
No.
The grant of the motion to dismiss was based on the trial court’s finding that
the petition failed to state a cause of action, as provided in Rule 16, Section
1(g), of the Rules of Court.
A cause of action is the act or omission by which a party violates a right of
another. A complaint states a cause of action when it contains the three (3)
elements of a cause of action:
(1) the legal right of the plaintiff;
(2) the correlative obligation of the defendant; and
(3) the act or omission of the defendant in violation of the legal right.
If any of these elements is absent, the complaint becomes vulnerable to a
motion to dismiss on the ground of failure to state a cause of action.
When a motion to dismiss is premised on this ground, the ruling thereon
should be based only on the facts alleged in the complaint. The court must
resolve the issue on the strength of such allegations, assuming them to be
true. The test of sufficiency of a cause of action rests on whether,
hypothetically admitting the facts alleged in the complaint to be true, the
court can render a valid judgment upon the same, in accordance with
the prayer in the complaint.
This is the general rule. However, this rule is subject to well-recognized
exceptions, such that there is no hypothetical admission of the veracity of the
allegations if:
1. the falsity of the allegations is subject to judicial notice;
2. such allegations are legally impossible;
3. the allegations refer to facts which are inadmissible in evidence;
4. by the record or document in the pleading, the allegations appear
unfounded; or
5. there is evidence which has been presented to the court by stipulation of
the parties or in the course of the hearings related to the case.
In this case, it is clear from the petition filed before the trial court that,
although petitioners are the legitimate heirs of Loreto, they were not named
as beneficiaries in the insurance policies issued by Insular and Grepalife. The
basis of petitioners’ claim is that Eva, being a concubine of Loreto and a
suspect in his murder, is disqualified from being designated as beneficiary of
the insurance policies, and that Eva’s children with Loreto, being illegitimate
children, are entitled to a lesser share of the proceeds of the policies. They
also argued that pursuant to Section 12 of the Insurance Code,19 Eva’s share
in the proceeds should be forfeited in their favor, the former having brought
about the death of Loreto. Thus, they prayed that the share of Eva and portions
of the shares of Loreto’s illegitimate children should be awarded to them,
being the legitimate heirs of Loreto entitled to their respective legitimes.
It is evident from the face of the complaint that petitioners are not entitled to
a favorable judgment in light of Article 2011 of the Civil Code which
expressly provides that insurance contracts shall be governed by special laws,
i.e., the Insurance Code.
Section 53 provides:
“SECTION 53. The insurance proceeds shall be applied exclusively to the
proper interest of the person in whose name or for whose benefit it is made
unless otherwise specified in the policy.”
Pursuant thereto, it is obvious that the only persons entitled to claim the
insurance proceeds are either the insured, if still alive; or the beneficiary, if
the insured is already deceased, upon the maturation of the policy.20 The
exception to this rule is a situation where the insurance contract was intended
to benefit third persons who are not parties to the same in the form of
favorable stipulations or indemnity. In such a case, third parties may directly
sue and claim from the insurer.21
Petitioners are third parties to the insurance contracts with Insular and
Grepalife and, thus, are not entitled to the proceeds thereof. Accordingly,
respondents Insular and Grepalife have no legal obligation to turn over the
insurance proceeds to petitioners. The revocation of Eva as a beneficiary in
one policy and her disqualification as such in another are of no moment
considering that the designation of the illegitimate children as beneficiaries
in Loreto’s insurance policies remains valid. Because no legal proscription
exists in naming as beneficiaries the children of illicit relationships by the
insured,22 the shares of Eva in the insurance proceeds, whether forfeited by
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the court in view of the prohibition on donations under Article 739 of the
Civil Code or by the insurers themselves for reasons based on the insurance
contracts, must be awarded to the said illegitimate children, the designated
beneficiaries, to the exclusion of petitioners. It is only in cases where the
insured has not designated any beneficiary,23 or when the designated
beneficiary is disqualified by law to receive the proceeds,24 that the
insurance policy proceeds shall redound to the benefit of the estate of the
insured.

In this regard, the assailed June 16, 2005 Resolution of the trial court should
be upheld. In the same light, the Decision of the CA dated January 8, 2008
should be sustained. Indeed, the appellate court had no jurisdiction to take
cognizance of the appeal; the issue of failure to state a cause of action is a
question of law and not of fact, there being no findings of fact in the first
place.25

WHEREFORE, the petition is DENIED for lack of merit. Costs against

petitioners.
SO ORDERED.

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2. UCPB v. Beluso, G.R. No. 159912, August 17, 2007
Facts:
On 16 April 1996, UCPB granted the spouses Beluso a Promissory Notes
Line under a Credit Agreement whereby the latter could avail from the former
credit of up to a maximum amount of P1.2 Million pesos for a term ending
on 30 April 1997. The spouses Beluso constituted, other than their promissory
notes, a real estate mortgage over parcels of land in Roxas City, covered by
Transfer Certificates of Title No. T-31539 and T-27828, as additional
security for the obligation. The Credit Agreement was subsequently amended
to increase the amount of the Promissory Notes Line to a maximum of P2.35
Million pesos and to extend the term thereof to 28 February 1998.
The Spouses Beluso availed themselves of the credit line.
The spouses Beluso, however, failed to make any payment of the foregoing
amounts.
On 2 September 1998, UCPB demanded that the spouses Beluso pay their
total obligation of P2,932,543.00 plus 25% attorney’s fees, but the spouses
Beluso failed to comply therewith. On 28 December 1998, UCPB foreclosed
the properties mortgaged by the spouses Beluso to secure their credit line,
which, by that time, already ballooned to P3,784,603.00.
On 9 February 1999, the spouses Beluso filed a Petition for Annulment,
Accounting and Damages against UCPB with the RTC of Makati City.
RTC ruled for respondent spouses and declared that the interest rates used by
UCPB (36%) was void and the foreclosure was void.
On appeal, CA affirmed RTC.
Hence this petition.
Argument:
UCPB had earlier moved to dismiss the petition (originally Case No. 99-314
in RTC, Makati City) on the ground that the spouses Beluso instituted another
case (Civil Case No. V-7227) before the RTC of Roxas City, involving the
same parties and issues. UCPB claims that while Civil Case No. V-7227
initially appears to be a different action, as it prayed for the issuance of a
temporary restraining order and/or injunction to stop foreclosure of spouses
Beluso’s properties, it poses issues which are similar to those of the present
case.43 To prove its point, UCPB cited the spouses Beluso’s Amended
Petition in Civil Case No. V-7227, which contains similar allegations as those
in the present case.
The RTC of Makati denied UCPB’s Motion to Dismiss Case No. 99-314 for
lack of merit. Petitioner UCPB raised the same issue with the Court of
Appeals, and is raising the same issue with us now.
Issue:
W/N respondent was guilty of forum shopping – No.
Held:
No.
Even if we assume for the sake of argument, however, that only one cause of
action is involved in the two civil actions, namely, the violation of the right
of the spouses Beluso not to have their property foreclosed for an amount
they do not owe, the Rules of Court nevertheless allows the filing of the
second action. Civil Case No. V-7227 was dismissed by the RTC of Roxas
City before the filing of Case No. 99-314 with the RTC of Makati City, since
the venue of litigation as provided for in the Credit Agreement is in Makati
City.
Rule 16, Section 5 bars the refiling of an action previously dismissed only in
the following instances:
“SEC. 5. Effect of dismissal. — Subject to the right of appeal, an order
granting a motion to dismiss based on paragraphs (f), (h) and (i) of section 1
hereof shall bar the refiling of the same action or claim. (n)”
Improper venue as a ground for the dismissal of an action is found in
paragraph (c) of Section 1, not in paragraphs (f), (h) and (i)
When an action is dismissed on the motion of the other party, it is only when
the ground for the dismissal of an action is found in paragraphs (f), (h) and
(i) that the action cannot be refiled.
As regards all the other grounds, the complainant is allowed to file the same
action, but should take care that, this time, it is filed with the proper court or
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after the accomplishment of the erstwhile absent condition precedent, as the
case may be.
UCPB, however, brings to the attention of this Court a Motion for
Reconsideration filed by the spouses Beluso on 15 January 1999 with the
RTC of Roxas City, which Motion had not yet been ruled upon when the
spouses Beluso filed Civil Case No. 99- 314 with the RTC of Makati.
Hence, there were allegedly two pending actions between the same parties on
the same issue at the time of the filing of Civil Case No. 99-314 on 9 February
1999 with the RTC of Makati.
This will still not change our findings. It is indeed the general rule that in
cases where there are two pending actions between the same parties on
the same issue, it should be the later case that should be dismissed.
In the case at bar, Civil Case No. V-7227 before the RTC of Roxas City was
an action for injunction against a foreclosure sale that has already been held,
while Civil Case No. 99-314 before the RTC of Makati City includes an
action for the an-nulment of said foreclosure, an action certainly more proper
in view of the execution of the foreclosure sale.
The former case was improperly filed in Roxas City, while the latter was filed
in Makati City, the proper venue of the action as mandated by the Credit
Agreement. It is evident, therefore, that Civil Case No. 99- 314 is the more
appropriate vehicle for litigating the issues between the parties, as compared
to Civil Case No. V-7227. Thus, we rule that the RTC of Makati City was not
in error in not dismissing Civil Case No. 99-314.
WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED
with the following MODIFICATIONS

However, this rule is not absolute. According to this Court in Allied Banking
Corporation v. Court of Appeals, 259 SCRA 371 (1996): In these cases, it is
evident that the first action was filed in anticipation of the filing of the later
action and the purpose is to preempt the later suit or provide a basis for
seeking the dismissal of the second action. Even if this is not the purpose for
the filing of the first action, it may nevertheless be dismissed if the later
action is the more appropriate vehicle for the ventilation of the issues
between the parties.

Thus, in Ramos v. Peralta, it was held:

[T]he rule on litis pendentia does not require that the later case should yield
to the earlier case. What is required merely is that there be another pending
action, not a prior pending action. Considering the broader scope of inquiry
involved in Civil Case No. 4102 and the location of the property involved, no
error was committed by the lower court in deferring to the Bataan court’s
jurisdiction.

Given, therefore, the pendency of two actions, the following are the relevant
considerations in determining which action should be dismissed: (1) the date
of filing, with preference generally given to the first action filed to be
retained; (2) whether the action sought to be dismissed was filed merely to
preempt the later action or to anticipate its filing and lay the basis for its
dismissal; and (3) whether the action is the appropriate vehicle for litigating
the issues between the parties.”

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3. Manila Banking v. University of Baguio, G.R. No. 159189,
February 21, 2007
Facts:
On November 26, 1981, petitioner Manila Banking Corporation granted a
P14 million credit line3 to respondent University of Baguio, Inc. for the
construction of additional buildings and purchase of new equipment.4 On
behalf of the university, then Vice-Chairman Fernando C. Bautista, Jr.5
signed Promissory Note (PN) Nos. 10660, 10672, 10687, and 10708 and
executed a continuing suretyship agreement.7
However, Bautista, Jr. diverted the net proceeds of the loan. He endorsed and
delivered the four checks representing the net proceeds to respondent Group
Developers, Inc. (GDI).8 The loan was not paid.
On February 12, 1990, the bank filed a complaint for a sum of money with
application for preliminary attachment9 against the university, Bautista,
Jr. and his wife Milagros, before the RTC of Makati City. Five years later, on
March 31, 1995, the Bank amended the complaint and impleaded GDI as
additional defendant.
In the amended complaint, the bank alleged that it was unaware and did not
approve the diversion of the loan to GDI; that it granted the loan without
collateral upon the university’s undertaking that it would construct new
buildings; and that GDI connived with the university and Bautista, Jr. in
fraudulently contracting the debt.
In its Answer, the university claimed that the bank and GDI approved the
diversion. Allegedly, Victor G. Puyat, then GDI’s President, and Vicente G.
Puyat, then the bank’s President, decided to use the proceeds of the loan. The
university stated that Vicente G. Puyat and Victor G. Puyat even assured the
university, in separate letters11 both dated October 22, 1981, that it would be
relieved of any liability from the loan. Consequently, even if the loan was
overdue, the bank did not demand payment until February 8, 1989.
By way of cross-claim, the university prayed that GDI be ordered to pay the
university the amount it would have to pay the bank. In addition, the
university filed a third-party complaint against Victor G. Puyat and the heirs
of Vicente G. Puyat.
On December 14, 1995, the bank and GDI executed a deed of dacion en
pago.12 As attorney-in-fact of Batulao Bio-Loop Farms, Inc., GDI ceded and
transferred to the bank a parcel of land consisting of 210,000 square meters
located in Nasugbu, Batangas and covered by Transfer Certificate of Title
No. T-70784. The dacion en pago was for a consideration of P78 million and
in full settlement of the loan under PN Nos. 10660, 10672, 10687, and 10708,
subject of Civil Case No. 90-389.
In an Omnibus Order14 dated April 21, 1997, the trial court dismissed the
third-party complaint against the heirs of Vicente G. Puyat for being
premature since the bank’s cause of action was against the university as a
“dummy” of GDI. The trial court also dismissed the case as to Fernando
Bautista, Jr. and his wife upon Fernando’s death. The trial court further ruled
that the university’s motion to implead GDI as third-party defendant, and
GDI’s motions to dismiss the amended complaint and cross-claim, had been
mooted by the dacion en pago.
The University filed an MTD on the ground that:
(1) there was “no more cause of action” against it since the loan had been
settled by GDI, and
(2) the bank “failed to prosecute the action for an unreasonable length of
time.”
RTC denied the MTD since the “matters relied upon by the university were
evidentiary in nature.”
On October 14, 1999, the university moved to set the case for pre-trial on
December 2, 1999.17
On August 3, 2000, the trial court:
1. resolved GDI’s motion to resolve the motions to dismiss and defer pre-
trial;
2. expunged from the record the deed of dacion en pago; and
3. reinstated GDI’s motions to dismiss the amended complaint and crossclaim
on the ground that no compromise agreement was submitted for its
approval.18
The university filed an MR of the RTC denial of its MTD, arguing that the
grounds for its MTD were not evidentiary as the deed of dacion en pago and
the bank’s judicial admission thereof were on record.
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The bank opposed the motion on the ground that the motion for
reconsideration of the August 17, 1999 Order was filed after more than two
years. The bank also argued that the MTD lacked basis since the deed of
dacion en pago had already been expunged.
RTC granted the MTD and ruled that the bank had no cause of action against
the defendants because its claim for a sum of money had been paid through
the dacion en pago. The trial court noted that the bank even admitted the
settlement.
Hence this petition directly with the SC.
Issue:
W/N the RTC erred in granting the MTD – Yes.
Held:
Yes.
Petitioner argues that the university’s motion to dismiss on alleged lack of
cause of action because of the deed of dacion en pago, an evidence aliunde,
was improper since petitioner has yet to present its evidence. Petitioner also
argues that the April 11, 2002 appealed Order was flawed because it was
based on evidence expunged from the record.
Respondent university counters that the amended complaint deserved
dismissal because petitioner admitted the dacion en pago and stated its lack
of interest to pursue the case against respondent university. The university
contends that petitioner’s acceptance of the Batangas property, as equivalent
of performance, extinguished the obligation under the four promissory notes.
Thus, the university concludes that no more cause of action lies against it.
For its part, respondent GDI maintains that the dacion en pago has no “legal
effect” but also avers that the dacion en pago effectively paid the loan
warranting dismissal of the complaint, cross-claim and counterclaim against
it.
In Domondon v. Lopez, we distinguished a motion to dismiss for failure of
the complaint to state a cause of action from a motion to dismiss based on
lack of cause of action. The first is governed by Section 1 (g),26 Rule 16,
while the second by Rule 33,27 of the Rules of Court, to wit:
“. . . The first [situation where the complaint does not allege a sufficient
cause of action] is raised in a motion to dismiss under Rule 16 before a
responsive pleading is filed and can be determined only from the allegations
in the initiatory pleading and not from evidentiary or other matters aliunde.
The second [situation where the evidence does not sustain the cause of
action alleged] is raised in a demurrer to evidence under Rule 33 after the
plaintiff has rested his case and can be resolved only on the basis of the
evidence he has presented in support of his claim. The first does not concern
itself with the truth and falsity of the allegations while the second arises
precisely because the judge has determined the truth and falsity of the
allegations and has found the evidence wanting.
Hence, a motion to dismiss based on lack of cause of action is filed by the
defendant after the plaintiff has presented his evidence on the ground that the
latter has shown no right to the relief sought. While a motion to dismiss
under Rule 16 is based on preliminary objections which can be ventilated
before the beginning of the trial, a motion to dismiss under Rule 33 is in the
nature of a demurrer to evidence on the ground of insufficiency of evidence
and is presented only after the plaintiff has rested his case.”28 (Emphasis
supplied.)
In this case, the university’s March 19, 1998 motion to dismiss the amended
complaint was improper under Rule 16 because it was filed after respondent
university filed its responsive pleading, its Answer. Also, the motion’s merit
could not be determined based solely on the allegations of the initiatory
pleading, the amended complaint, since the motion was based on the deed of
dacion en pago, which was not even alleged in the complaint. And since the
deed of dacion en pago had been expunged from the record, the trial court
erred in its finding of payment and lack of cause of action based on the deed.
In fact, on January 11, 2002 or just three months before it dismissed the
amended complaint, the trial court had even noted petitioner counsel’s
manifestation regarding the parties’ initial efforts to enter into a “dacion en
pago but not based on the previous offer made but on a new proposal
involving new properties” and urged them to pursue further settlement
discussions.
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In addition, the motion alleged that petitioner had “no more cause of action”
or lacked a cause of action against the university. Following Domondon, that
motion was a motion to dismiss under Rule 33 in the nature of demurrer to
evidence and would be proper only after petitioner had presented its evidence
and rested its case. In the case at bar, there had been no presentation of
evidence yet and petitioner had not rested its case. Therefore, the August 17,
1999 Order properly denied the motion to dismiss for being improper under
either Rule 16 or 33.

WHEREFORE, we GRANT the petition and SET ASIDE the trial court’s
April 11, 2002 and June 27, 2003 Orders. The trial court is ORDERED to
proceed with the pre-trial and hear this case with dispatch. No pronouncement
as to costs.
SO ORDERED.

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4. Corales v. Republic, 2013
Facts:
Petitioner Corales was the duly elected Municipal Mayor of Nagcarlan,
Laguna for three (3) consecutive terms, i.e., the 1998, 2001 and 2004
elections.
In his first term as local chief executive, petitioner Corales appointed
petitioner Dr. Angeles to the position of Municipal Administrator, whose
appointment was unanimously approved by the Sangguniang Bayan of
Nagcarlan, Laguna (Sangguniang Bayan) per Resolution No. 98-646 dated
22 July 1998. During his second and third terms as municipal mayor,
petitioner Corales renewed the appointment of petitioner Dr. Angeles. But,
on these times, the Sangguniang Bayan per Resolution No. 2001-0787 dated
12 July 2001 and 26 subsequent Resolutions, disapproved petitioner Dr.
Angeles’ appointment on the ground of nepotism, as well as the latter’s
purported unfitness and unsatisfactory performance. Even so, petitioner Dr.
Angeles continued to discharge the functions and duties of a Municipal
Administrator for which he received an annual salary of P210,012.00.8
Following an audit on various local disbursements, Maximo Andal (Andal),
the Provincial State Auditor of Laguna, issued an Audit Observation
Memorandum (AOM) No. 2006-007-1009 dated 6 October 2006 addressed
to petitioner Corales who was asked to comment/reply. The aforesaid AOM,
in sum, states that:
1) petitioner Dr. Angeles’ appointment as Municipal Administrator (during
the second and third terms of petitioner Corales) was without legal basis for
having been repeatedly denied confirmation by the Sangguniang Bayan;
2) petitioner Dr. Angeles can be considered, however, as a de facto officer
entitled to the emoluments of the office for the actual services rendered;
3) nonetheless, it is not the Municipality of Nagcarlan that should be made
liable to pay for petitioner Dr. Angeles’ salary; instead, it is petitioner
Corales, being the appointing authority, as explicitly provided for in Article
169(I) of the Rules and Regulations Implementing the Local Government
Code of 1991,10 as well as Section 5, Rule IV of the Omnibus Rules of
Appointments and Other Personnel Actions;11 xxx
and 5) in view thereof, it is recommended that an appropriate Notice of
Disallowance be issued for the payment of salary expenses incurred without
legal basis by the Municipality of Nagcarlan in the aforestated amount.
Instead of submitting his comment/reply thereon, petitioner Corales, together
with petitioner Dr. Angeles, opted to file a Petition for Prohibition and
Mandamus against Andal and the then members of the Sangguniang Bayan
before the RTC of San Pablo City.
Petitioners sought, by way of prohibition, to require the Office of the
Provincial Auditor, through Andal, to recall its AOM and to eventually desist
from collecting reimbursement from petitioner Corales for the salaries paid
to and received by petitioner Dr. Angeles for the latter’s services as Municipal
Administrator. Petitioners similarly sought, by way of mandamus, to compel
the then members of the Sangguniang Bayan, as a collegial body, to recall its
Resolutions denying confirmation to petitioner Dr. Angeles’ appointment as
Municipal Administrator and in their stead to confirm the validity and
legitimacy of such appointment.
The OSG, on Andal’s behalf, who was impleaded in an official capacity, filed
an MTD on the ground of lack of cause of action, prematurity and non-
exhaustion of administrative remedies.
RTC denied the MTD on the ground that Andal was merely a nominal party.
Respondent Republic, as represented by COA, as represented by Andal,
consequently filed a Petition for Certiorari with the Court of Appeals
against the RTC’s denial of its MTD.
CA reversed the RTC.
Hence this petition, claiming, among others, that the Republic should have
taken a R45 from the RTC to SC instead of taking a R65 from the RTC to the
CA.
Issue:
W/N a R65 to the CA was proper – Yes.
Held:
Yes.
In their futile attempt to convince this Court to rule in their favor, petitioners
aver that by filing a Motion to Dismiss on the ground of lack of cause of
action, respondent Republic, in essence, admitted all the material averments
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and narration of facts stated in the Petition for Prohibition and Mandamus.
As such, there is no longer any question of fact to speak of and what remains
is a pure question of law. The judgment, therefore, of the trial court denying
the Motion to Dismiss is no longer subject to any appeal or review by the
Court of Appeals. Instead, it is already appealable and reviewable by this
Court under Rule 45 of the Rules of Court, where only pure questions of law
may be raised and dealt with. This is in line with the pronouncement in China
Road and Bridge Corporation v. Court of Appeals34 (China Road Case). The
Court of Appeals should have dismissed respondent Republic’s Petition for
Certiorari under Rule 65 of the Rules of Court for being an improper and
inappropriate mode of review.

Petitioners’ above argument is misplaced.

China Road Case is not at all applicable in the case at bench. Therein, the
Motion to Dismiss the Complaint was granted. As the order granting the
motion to dismiss was a final, as distinguished from an interlocutory order,
the proper remedy was an appeal in due course.

In the case at bench, however, the Motion to Dismiss was denied. It is well-
entrenched that an order denying a motion to dismiss is an interlocutory order
which neither terminates nor finally disposes of a case as it leaves something
to be done by the court before the case is finally decided on the merits.37
Therefore, contrary to the claim of petitioners, the denial of a Motion to
Dismiss is not appealable, not even via Rule 45 of the Rules of Court. The
only remedy for the denial of the Motion to Dismiss is a special civil action
for certiorari showing that such denial was made with grave abuse of
discretion.38

Taking into consideration all the foregoing, this Court finds no reversible
error on the part of the Court of Appeals in reversing the Orders of the court
a quo and consequently dismissing petitioners’ Petition for Prohibition filed
thereat.

WHEREFORE, premises considered, the Decision and Resolution dated 15

September 2008 and 20 February 2009, respectively, of the Court of Appeals
in CA-G.R. SP No. 101296 are hereby AFFIRMED. Costs against
petitioners.
SO ORDERED.

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5. National Housing Authority v. Baello, 2013
Facts:
On 21 September 1951, Pedro Baello (Pedro) and Nicanora Baello
(Nicanora) filed an application for registration of a parcel of land with the
Court of First Instance (CFI) of Rizal, covering the land they inherited from
their mother, Esperanza Baello. The case was docketed as LRC Case No. 520.
CFI rendered its decision in confirming the title of the applicants to the land
in question. CFI awarded the land to Pedro and Nicanora, pro indiviso. Pedro
was awarded 2/3 of the land while Nicanora was awarded 1/3. The Republic
of the Philippines, through the Director of the Bureau of Lands, did not
appeal. The decision became final and executory.
On 27 October 1954, acting on the orders of the CFI of Rizal, the Land
Registration Commission issued Decree No. 13400 in favor of “Pedro T.
Baello, married to Josefa Caiña” covering the 2/3 portion of the property and
in favor of “Nicanora T. Baello, married to Manuel J. Rodriguez” covering
the remaining 1/3 portion. The Register of Deeds issued Original Certificate
of Title (OCT) No. (804) 53839 in favor of Pedro and Nicanora. The property
was later subdivided into two parcels of land: Pedro’s lot was Lot A (Baello
property), with an area of 98,648 square meters, and covered by TCT No.
181493, while Nicanora’s lot was Lot B (Rodriguez property), with an area
of 49,324 square meters.
On 3 December 1971, Pedro died intestate, leaving 32 surviving heirs
including respondents Corazon B. Baello (Corazon), Wilhelmina Baello-
Sotto (Wilhelmina), and Ernesto B. Baello, Jr.4 (Ernesto), collectively
referred to in this case as respondents. On 22 August 1975, Nicanora died
intestate. Nicanora’s husband died a few days later, on 30 August 1975.
On 30 October 1974, during the martial law regime, President Ferdinand E.
Marcos issued Presidential Decree No. 569 creating a committee to
expropriate the Dagat- Dagatan Lagoon and its adjacent areas, including the
Baello and Rodriguez properties.
Thereafter, a truckload of fully-armed military personnel entered the Baello
property and ejected the family caretaker at gunpoint. The soldiers
demolished the two- storey residential structure and destroyed the fishpond
improvements on the Baello property. The NHA then took possession of the
Baello and Rodriguez properties. The Baello and Rodriguez heirs, for fear of
losing their lives and those of their families, decided to remain silent and did
not complain. The NHA executed separate conditional contracts to sell
subdivision lots in favor of chosen beneficiaries who were awarded 620 lots
from the Baello property and 275 lots from the Rodriguez property.
On 13 April 1983, Proclamation No. 2284 was issued declaring the
Metropolitan Manila, including the Dagat- Dagatan area, as area for priority
development and Urban Land Reform Zones. Again, the Baello and
Rodriguez properties were included in the areas covered by the proclamation.
On 23 February 1987, after the EDSA People Power Revolution, the heirs of
Baello executed an extrajudicial partition of Pedro’s estate, which included
the Baello property. Respondents were issued TCT No. 280647 over an
undivided portion, comprising 8,404 square meters, of the Baello property.
Corazon and Wilhelmina later sold their shares to Ernesto who was issued
TCT No. C-362547 in his name.
On 18 August 1987, the NHA filed an action for eminent domain against
the heirs of Baello and Rodriguez before the RTC Caloocan.
RTC dismissed the complaint on the ground of res judicata and lack of cause
of action. CA affirmed. SC affirmed with finality.
On 5 November 1993, the NHA filed a complaint for nullity of OCT No.
(804) 53839 issued in the names of Pedro and Nicanora, docketed as Civil
Case No. C-16399.
RTC dismissed the complaint of the grounds of estoppel and res judicata and
because the issue on the legal nature and ownership of the property covered
by OCT No. (804) 53839 was already barred by a final judgment in LRC
Case No. 520.
CA affirmed RTC. SC affirmed CA with finality. The SC ruled that NHA’s
action was barred by the decision of the CFI of Rizal in LRC Case No. 520.
This Court held that the NHA was already barred from assailing the validity
of OCT No. (804) 53839 and its derivative titles based on judicial estoppel.
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Meanwhile, on 30 June 1994, during the pendency of Civil Case No. C-
16399, respondents filed an action for Recovery of Possession and
Damages against the NHA and other respondents.
In its Answer, the NHA argued that respondents’ OCT No. (804) 53839 is
null and void.
RTC ruled for respondents holding that the dismissal of NHA’s complaint for
expropriation and for declaration of nullity of OCT No. (804) 53839 in the
names of Pedro and Nicanora left NHA with no right to hold possession of
respondents’ property which was admittedly a part of Pedro’s land. The trial
court ruled that this Court already declared respondents as the bona fide
owners of the land and as such, their right to possession and enjoyment of the
property becomes indisputable.
CA affirmed. The Court of Appeals ruled that the main issue raised by the
NHA, that is, the alleged nullity of OCT No. (804) 53839 from which
respondents derived their title, was already resolved by this Court in G.R. No.
143230. This Court already declared in G.R. No. 143230 that the NHA was
judicially estopped from assailing OCT No. (804) 53839.
Hence this petition.
Issue:
W/N the issue of ownership over the property has already been settled by the
principle of conclusiveness of judgment - Yes
Held:
Yes.
The doctrine of res judicata has been explained as follows:
The rule is that when material facts or questions, which were in issue in a
former action and were admitted or judicially determined are conclusively
settled by a judgment rendered therein, such facts or questions become res
judicata and may not again be litigated in a subsequent action between the
same parties or their privies regardless of the form of the latter.
Jurisprudence expounds that the concept of res judicata embraces two
aspects. The first, known as “bar by prior judgment,” or “estoppel by verdict,”
is the effect of a judgment as a bar to the prosecution of a second action upon
the same claim, demand or cause of action. The second, known as
“conclusiveness of judgment,” otherwise known as the rule of auter action
pendent, ordains that issues actually and directly resolved in a former suit
cannot again be raised in any future case between the same parties involving
a different cause of action.
Conclusiveness of judgment does not require identity of the causes of action
for it to work. If a particular point or question is in issue in the second action,
and the judgment will depend on the determination of that particular point or
question, a former judgment between the same parties will be final and
conclusive in the second if that same point or question was in issue and
adjudicated in the first suit; but the adjudication of an issue in the first case is
not conclusive of an entirely different and distinct issue arising in the second.
Hence, facts and issues actually and directly resolved in a former suit cannot
again be raised in any future case between the same parties, even if the latter
suit may involve a different claim or cause of action.
In this case, the NHA’s petition is barred by conclusiveness of judgment
which states that —
x x x any right, fact, or matter in issue directly adjudicated or necessarily
involved in the determination of an action before a competent court in which
judgment is rendered on the merits is conclusively settled by the judgment
therein and cannot again be litigated between the parties and their privies
whether or not the claim, demand, purpose, or subject matter of the two
actions is the same.13
We sustain the Court of Appeals in ruling that the main issue raised by the
NHA, which it alleged in its Answer before the trial court, is the validity of
OCT No. (804) 53839. The validity of OCT No. (804) 53839 had long been
settled by this Court in G.R. No. 143230.
In that case, the Court ruled that the action to annul OCT No. (804) 53839
was barred by the decision in LRC Case No. 520. The Court noted that the
Republic did not oppose Pedro and Nicanora’s application for registration in
LRC Case No. 520, and neither did it appeal the decision. OCT No. (804)
53839 was issued by the Register of Deeds in 1959 and the Republic did not
file any action to nullify the CFI’s decision until the NHA filed a complaint
for nullity of OCT No. (804) 53839 on 5 November 1993, the case which was
the origin of G.R. No. 143230. As pointed out by this Court in G.R. No.
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143230, the NHA was already barred from assailing OCT No. (804) 53839
and its derivative titles.

WHEREFORE, we DENY the petition. We AFFIRM the 28 November

2011 Decision and the 27 February 2012 Resolution of the Court of Appeals
in CA-G.R. CV No. 93512.
SO ORDERED.

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6. Unicapital v. Consing, 2013
Facts:
In 1997, Consing, Jr., an investment banker, and his mother, Cecilia Dela
Cruz (Dela Cruz), obtained an P18,000,000.00 loan from Unicapital. The said
loan was secured by Promissory Notes10 and a Real Estate Mortgage11 over
a 42,443 square meter-parcel of land located at Imus, Cavite, registered in the
name of Dela Cruz as per Transfer Certificate of Title (TCT) No. T- 687599
(subject property).12
Prior to these transactions, Plus Builders, Inc. (PBI), a real estate company,
was already interested to develop the subject property into a residential
subdivision.13 In this regard, PBI entered into a joint venture agreement with
Unicapital, through its real estate development arm, URI. In view of the
foregoing, the loan and mortgage over the subject property was later on
modified into an Option to Buy Real Property14 and, after further
negotiations, Dela Cruz decided to sell the same to Unicapital and PBI.
For this purpose, Dela Cruz appointed Consing, Jr. as her attorney-in-fact.15
Eventually, Unicapital, through URI, purchased one- half of the subject
property for a consideration of P21,221,500.00 (against which Dela Cruz’s
outstanding loan obligations were first offset), while PBI bought the
remaining half for the price of P21,047,000.00.16 In this relation, Dela Cruz
caused TCT No. T-687599 to be divided into three separate titles as follows:
(a) TCT No. T-851861 for URI;17 (b) TCT No. T-851862 for PBI;18 and (c)
TCT No. T-851863 which was designated as a road lot.19
However, even before URI and PBI were able to have the titles transferred to
their names, Juanito Tan Teng (Teng) and Po Willie Yu (Yu) informed
Unicapital that they are the lawful owners of the subject property as
evidenced by TCT No. T-114708;20 that they did not sell the subject
property; and that Dela Cruz’s title, i.e., TCT No. T-687599, thereto was a
mere forgery.21 Prompted by Teng and Yu’s assertions, PBI conducted
further investigations on the subject property which later revealed that Dela
Cruz’s title was actually of dubious origin. Based on this finding, PBI and
Unicapital sent separate demand letters22 to Dela Cruz and Consing, Jr.,
seeking the return of the purchase price they had paid for the subject property.
I. Pasig Case
On May 3, 1999, Consing, Jr. filed a complaint, denominated as a Complex
Action for Declaratory Relief23 and later amended to Complex Action for
Injunctive Relief24 (Consing, Jr.’s complaint) before the RTC-Pasig City
against Unicapital, URI, PBI, Martirez, PBI General Manager Mariano
Martinez (Martinez), Dela Cruz and Does 1-20, docketed as SCA No. 1759.
In his complaint, Consing, Jr. claimed that the incessant demands/recovery
efforts made upon him by Unicapital and PBI to return to them the purchase
price they had paid for the subject property 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 Unicapital and PBI, over threats of filing a case against him, kept
on forcing him to issue a post-dated check in the amount sought to be
recovered, notwithstanding their knowledge that he had no funds for the
same.27 He further alleged that Unicapital and URI required him to sign
blank deeds of sale and transfers without cancelling the old ones in violation
of the laws on land registration and real estate development.28 Likewise,
Consing, Jr. added that Unicapital and PBI’s representatives were “speaking
of him in a manner that [was] inappropriate and libelous,”29 and that some
John Does “deliberately engaged in a fraudulent scheme to compromise
[Consing, Jr.’s] honor, integrity and fortune x x x [consisting of] falsifying or
causing to be falsified, or attempting to present as falsified certain transfers
of Land Titles and Deeds for profit,”30 classifying the foregoing as ultra vires
acts which should warrant sanctions under the corporation law, Revised
Securities Act and related laws.
Accordingly, Consing, Jr. prayed that: (a) he be declared as a mere agent of
Dela Cruz, and as such, devoid of any obligation to Unicapital, URI, and PBI
for the transactions entered into concerning the subject property; (b)
Unicapital, URI, and PBI be enjoined from harassing or coercing him, and
from speaking about him in a derogatory fashion; and (c) Unicapital, URI,
and PBI pay him actual and consequential damages in the amount of
P2,000,000.00, moral damages of at least P1,000,000.00, exemplary damages
of P1,000,000.00, all per month, reckoned from May 1, 1999 and until the
controversy is resolved, and attorney’s fees and costs of suit.32
For their part, Unicapital, URI, and Martirez (Unicapital, et al.) filed separate
Motions to Dismiss33 Consing, Jr.’s complaint (Unicapital, et al.’s motion
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to dismiss) on the ground of failure to state a cause of action, considering
that:
(a) no document was attached against which Consing, Jr. supposedly derived
his right and against which his rights may be ascertained;
(b) the demands to pay against Consing, Jr. and for him to tender post-dated
checks to cover the amount due were well within the rights of Unicapital as
an unpaid creditor, as Consing, Jr. had already admitted his dealings with
them;
(c) the utterances purportedly constituting libel were not set out in the
complaint; and
(d) the laws supposedly violated were not properly identified.
Moreover, Unicapital, et al. posited that the RTC-Pasig City did not acquire
jurisdiction over the case given that Consing, Jr. failed to pay the proper
amount of docket fees. In the same vein, they maintained that the RTC-Pasig
City had no jurisdiction over their supposed violations of the Corporation
Code and Revised Securities Act, which, discounting its merits, should have
been supposedly lodged with the Securities and Exchange Commission.
Finally, they pointed out that Consing, Jr.’s complaint suffers from a
defective verification and, thus, dismissible.34
RTC denied the the abovementioned motions to dismiss, holding that
Consing, Jr.’s complaint sufficiently stated a cause of action for tort and
damages pursuant to Article 19 of the Civil Code. It ruled that where there
is abusive behavior, a complainant, like Consing, Jr., has the right to seek
refuge from the courts.
It equally refused to dismiss the action on the ground of non-payment of
docket fees, despite Consing, Jr.’s escalated claims for damages therein, as
jurisdiction was already vested in it upon the filing of the original complaint.
On a R65 against the denial of the MTD, CA affirmed. Anent the substantive
issues of the case, the CA concurred with the RTC-Pasig City that Consing
Jr.’s complaint states a cause of action. It found that Unicapital and PBI, et
al.’s purportedly abusive manner in enforcing their claims against Consing,
Jr. was properly constitutive of a cause of action as the same, if sufficiently
proven, would have subjected him to “defamation of his name in business
circles, the threats and coercion against him to reimburse the purchase price,
fraud and falsification and breach of fiduciary obligation.”It also found that
the fact that Consing Jr.’s complaint contains “nebulous”allegations will not
warrant its dismissal as any vagueness therein can be clarified through a
motion for a bill of particulars.”44 Furthermore, it noted that Consing, Jr.
does not seek to recover his claims against any particular provision of the
corporation code or the securities act but against the actions of Unicapital and
PBI, et al.; hence, Consing, Jr.’s complaint was principally one for damages
over which the RTC has jurisdiction, and, in turn, there lies no misjoinder of
causes of action.
Hence this petition before the SC claiming that the RTC erred in denying the
MTD.
--- skippable
II. Makati Case
Issue:
W/N CA erred in affirming the RTC’s denial of petitioner’s MTD for failure
to state a cause of action – No, it did not err.
Held:
No, it did not err.
A. Propriety of the denial of Unicapital, et al.’s motion to dismiss and
ancillary issues.
A cause of action is defined as the act or omission by which a party violates
a right of another.61 It is well-settled that the existence of a cause of action
is determined by the allegations in the complaint.62 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.63 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.64
As edified in the case of Pioneer Concrete Philippines, Inc. v. Todaro,65
citing Hongkong and Shanghai Banking Corporation, Limited v. Catalan66
(HSBC):
“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
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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.67” (Emphasis supplied)
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 1668 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 therein sufficiently 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[,] [s]uch that he is
unable to attend to his work as an investment banker.”69
In the same pleading, he also alleged that Unicapital and PBI, et al.’s act of
“demand[ing] 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.”70
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 “[e]very person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.”
Likewise, Consing, Jr.’s complaint states a cause of action for damages under
Article 26 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] [t]hey 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 he is an
investment banker.”76 In similar regard, the hypothetical admission of these
allegations may result into the recovery of damages pursuant to Article 26,
and even Article 2219(10), of the Civil Code.
Corollary thereto, Unicapital, et al.’s contention77 that the case should be
dismissed on the ground that it failed to set out the actual libelous statements
complained about cannot be given credence. These incidents, as well as the
specific circumstances surrounding the manner in which Unicapital and PBI,
et al. pursued their claims against Consing, Jr. may be better ventilated during
trial. It is a standing rule that issues that require the contravention of the
allegations of the complaint, as well as the full ventilation, in effect, of the
main merits of the case, should not be within the province of a mere motion
to dismiss,78 as in this case. Hence, as what is only required is that the
allegations furnish adequate basis by which the complaint can be maintained,
the Court — in view of the above-stated reasons — finds that the RTC-
Pasig City’s denial of Unicapital, et al.’s motion to dismiss on the ground of
failure to state a cause of action was not tainted with grave abuse of discretion
which would necessitate the reversal of the CA’s ruling
WHEREFORE the petitions in G.R. Nos. 175277, 175285 and 192073 are
DENIED. Accordingly, the Court of Appeals’ Joint Decision dated October
20, 2005 and Resolution dated October 25, 2006 in CA-G.R. SP Nos. 64019
and 64451 and the Decision dated September 30, 2009 and Resolution dated
April 28, 2010 in CA-G.R. SP No. 101355 are hereby AFFIRMED.
SO ORDERED.
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7. Brown –Araneta v. Araneta, 2013
Facts:
On April 14, 2000, Juan Ignacio and Michelle were married in Las Vegas,
Nevada, USA. The union produced two (2) children, namely: Arabella
Margarita (Ara) and Avangelina Mykaela (Ava), born on February 22, 2003
and April 15, 2005, respectively. After a little over seven years of
disharmonious relationship, husband and wife separated. Since the couple’s
estrangement and de facto separation, Ara and Ava have remained in
Michelle’s custody.
In November 2007, Juan Ignacio filed before the RTC Makati, pursuant to
A.M. No. 03-04-04-SC3 or The Rule on Custody of Minors and Writ of
Habeas Corpus in Relation to Custody of Minors (Rule on Custody of
Minors), a Petition for the Custody of the Minors Arabella Margarita
Araneta and Avangelina Mykaela Araneta (Petition for Custody), with
prayer for visitation rights against Michelle and her mother, Glenda B. Santos
(Santos). Docketed as SP PROC. Case No. M-6543.
Juan Ignacio invoked, as main basis for his petition, his right as father of Ava
and Ara to have custody of and to exercise parental authority over them, albeit
both were below seven (7) years of age. In this regard, he claimed that, apart
from refusing to communicate with him, both Michelle and Santos have
completely barred him from seeing or getting in touch with his daughters
despite repeated requests.
In her Officer’s Return dated December 10, 2007,5 process server Linda
Fallorin stated the following: (1) she initially attempted to serve the summons
upon Michelle and Santos on December 7, 2007 at the Anonas residence, only
to be told by one Roberto Anonas, who refused to receive the summons, that
both were out at that time; and (2) on December 10, 2007, she was finally
able to serve the summons upon Michelle and Santos by substituted service
through the driver of Santos’ husband.
In her Answer,6 Santos disclaimed knowledge of Michelle’s present address,
or her whereabouts, adding in this regard that the adverted Molave Drive
residence was being rented out.
On December 18, 2007, Juan Ignacio moved for the issuance of provisional
visitorial order. After a hearing on this motion, the Makati RTC issued on
December 21, 2007 an Order7 allowing Juan Ignacio to visit her daughters
on Christmas Day and New Year’s Day.
Christmas and New Year’s Day 2008 came and went, but Juan Ignacio was
unable to see his little girls in those days for reasons of little materiality to
this narration.
On January 2, 2008, Michelle filed in SP PROC. Case No. M-6543 a Motion
to Admit Answer and an Answer (with Affirmative Defenses and With
Very Urgent Ex- Parte Motion for Issuance of Protection Order).8
In her Answer, on the other hand, Michelle owned up sole responsibility for
the decision not to allow her husband to see their daughters. In support of her
plea for the dismissal of his petition for custody, the denial of visitation rights
pendente lite, and in the meanwhile the ex parte issuance in her favor of a
temporary protection order (TPO),10 she recounted in lurid details incidents
characterizing the painful life she and her children allegedly had to endure
from her husband whom she tagged as a drug user, sexual pervert,
emotionally unstable and temperamental, among other names. In her words,
Juan Ignacio’s “wild, decadent, irresponsible lifestyle makes him unfit to
exercise parental authority and even enjoy visitation rights.”
During the January 4, 2008 hearing on Michelle’s prayer for a TPO, Judge
Macaraig-Guillen expressed her bent to maintain her jurisdiction over SP
PROC. Case No. M-6543 and her disinclination to issue the desired TPO.
The Makati RTC granted Juan Ignacio visitation rights on one (1) Saturday
and Sunday in January 2008 considering that he was unable to see his children
on the days granted under the December 21, 2007 Order.
Subsequently, by its Order of January 21, 2008, as would later be effectively
reiterated by another Order13 of March 7, 2008, the Makati RTC resolved to
deny admission of Michelle’s answer to the petition for custody and declared
her in default.
On January 21, 2008 also, Michelle interposed a Motion to Withdraw
Urgent Ex-Parte Motion for Protective Order, there pointing out that no
right of Juan Ignacio, if any, will be affected if the said urgent motion is
withdrawn or expunged from her answer. And obviously to sway the Makati
RTC’s mind of the resulting insignificance of such withdrawal, if approved,
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Michelle cited the ensuing observation thus made by the court during the
hearing on January 4, 2008:
COURT: Well, I agree, she should really appear but whether or not she
should really appear here and substantiate her allegations for the issuance of
a protective order as far as I am concerned is irrelevant insofar as the
enforcement of petitioner’s visitation rights are concerned, this case is for
custody, this is not a case for the issuance of protective orders that is only a
counter manifestation that she is seeking.1
It is upon the foregoing set of events and proceedings that Michelle, on March
25, 2008, instituted, pursuant to RA 9262, a Petition For Temporary and
Permanent Protection Order16 (Petition for Protection Order) before
the RTC in Muntinlupa City, docketed as Civil Case No. 08-023.
Thereat, Michelle claimed, among other things, that in the course of their
marriage, Juan Ignacio made her and their children engage in sexual acts
inimical to their emotional, physical and psychological development and
well-being; that he engaged in perverted sexual acts with friends, victimizing
her and the children; that he has consistently failed and refused to support
their family; and that he has a violent temper and was consistently harassing
and threatening her to get sole custody of the children. Michelle volunteered
the information that, per her therapist, she is suffering from Battered
Woman’s Syndrome.
In the verification portion of her petition for protection order, Michelle stated
that “[t]here is x x x a pending petition for the custody of our children in the
[RTC] Br. 60, Makati City, x x x Civil Case No. M-6543.”
The following events and proceedings then transpired:
1. RTC Muntinlupa granted Michelle’s prayer for a TPO.
2. Ignacio filed a “Motion to Dismiss [Petition] with Prayer to Lift [TPO]”1
on the ground of (a) litis pendencia, claiming that Makati RTC is competent
to grant the very same reliefs sought by Michelle in Muntinlupa RTC; (b)
Makati RTC first assumed jurisdiction over identical subject matters, issues
and parties, does so to the exclusion of the Muntinlupa RTC; and (c)
Michelle’s act of filing her petition for protection order before the Muntinlupa
RTC constitutes, under the premises, forum shopping.
3. the Muntinlupa RTC, conceding the exclusionary effect of the assumption
at the first instance by the Makati RTC of jurisdiction on the issue of custody
on Ava and Ara and the likelihood of the issuance by either court of clashing
decisions, partially granted Juan Ignacio’s motion to dismiss and accordingly
modified the TPO issued on March 31, 2008. As thus modified, the protection
order, or to be precise, the reliefs provided in favor of Michelle in said TPO
shall exclude from its coverage the orders issued by the Makati RTC in the
exercise of its jurisdiction on the pending custody case.
4. Later, Michelle filed a R65 with the CA assailing the Makati RTC’s denial
of her motion to admit answer. CA rendered a judgment that Michelle
voluntarily submitted herself to the jurisdiction of the Makati RTC when she
filed her Answer. CA found, as having been tainted with of grave abuse of
discretion, only that part of the Makati RTC’s disposition denying Michelle’s
motion to admit answer for belated filing and the consequent default order.
Along this line, the CA merely nullified the Makati RTC’s Orders dated
January 21, 2008 and March 7, 2008 which declared Michelle in default and
denied her motion for reconsideration, respectively.
This CA decision attained finality.
5. Ignacio filed a R65 with the CA assailing the Muntinlupa RTC’s order
which modified the TPO.
CA issued the assailed Decision which, on one hand, found Michelle guilty
of forum shopping, a sufficient cause for summary dismissal of a case, but
viewed, on the other, Juan Ignacio’s petition for certiorari as a prohibited
pleading which, ordinarily, would then render it dismissible. In the veritable
clash under the premises of the effects of forum shopping and the rule on
prohibited pleading, the CA nonetheless ruled for Juan Ignacio, as petitioner.
Aggrieved, Michelle, for herself and for her minor daughters, filed the instant
recourse, her submissions revolving on the twin issues of forum shopping and
the prohibition under Sec. 22 of the Rule on Violence Against Women and
Children27 against the filing of petitions for certiorari to defeat TPOs issued
to promote the protection of victims of violence against women and their
children.
Arguments:
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Michelle presently argues that the assailed Decision of the CA is based on an
erroneous appreciation of the facts of the case. To her, there was no forum
shopping when she filed her Petition for Protection Order in the Muntinlupa
RTC while the custody case was pending in the Makati RTC. Her stated
reason: the absence in both cases of identity of parties and rights asserted, on
top of which the reliefs sought and prayed for are different and not founded
on the same set of facts.
To downplay the application of the litis pendentia principle, she argues that
it was impossible for her to apply for and secure a protective order under RA
9262 in the custody case before the Makati RTC being, first, a respondent,
not a petitioner in the Makati case; and second, the venue for an application
for protection order is, under RA 9262, the place where the woman or the
offended party resides, which in her case is Muntinlupa.
Issue:
W/N petitioner, in filing her Petition for Protection Order before the
Muntinlupa RTC, violated the rule on forum shopping, given the pendency
of the respondent’s Petition for Custody before the Makati RTC and
considering incidentally that she filed said petition for protection order after
the Makati RTC had denied her application for protection order in the
custody case – Yes.
Held:
Yes.
First, as correctly stated in this petition, Michelle withdrew her Ex Parte
Motion for Issuance of Protective Order in the custody case prior to her filing
of her Petition for Protection Order with the Muntinlupa RTC. It should be
made clear, however, that she filed said motion to withdraw on January 21,
2008, or after the Makati RTC, in its Order dated January 4, 2008, had, for
all intents and purposes, denied the said ex parte motion. To recapitulate, the
Makati RTC judge made it of record that she was not inclined to issue a
protective order in favor of a person, i.e., petitioner Michelle, who has not
bothered to appear in court, even assuming, she adds, that the person against
whom the protection order is directed, i.e., Juan Ignacio, is prone to violence,
a drug user and a womanizer.
For perspective, the 2008 CA Decision did not rule that the Makati RTC did
not acquire jurisdiction over Michelle. Quite the contrary. As a matter of
record, the CA in that disposition found and thus declared Michelle to have
voluntarily submitted herself to the jurisdiction of the Makati RTC when she
filed her Answer in SP. PROC. Case No. 6543
Withal, the Court finds it downright offensive and utterly distasteful that
petitioner raised the following as one of the issues in this appellate
proceeding:
Whether or not the petitioners are guilty of forum- shopping when the Petition
for Custody of private respondent Araneta was dismissed by the Court of
Appeals on the ground that the RTC of Makati City Branch 60 did not acquire
jurisdiction because the summons was not served personally upon herein
Petitioner Michelle Lana Brown Araneta.32 (Emphasis supplied.)
Petitioner’s above posture smacks of bad faith, taken doubtless to deceive and
mislead the Court.
II.
A circumstance of forum shopping occurs when, as a result or in anticipation
of an adverse decision in one forum, a party seeks a favorable opinion in
another forum through means other than appeal or certiorari by raising
identical causes of action, subject matter and issues. Stated a bit differently,
forum shopping is the institution of two or more actions involving the same
parties for the same cause of action, either simultaneously or successively, on
the supposition that one or the other court would come out with a favorable
disposition.33 An indicium of the presence of, or the test for determining
whether a litigant violated the rule against, forum shopping is where the
elements of litis pendentia are present or where a final judgment in one case
will amount to res judicata in the other case.
Litis pendentia, as a ground for the dismissal of a civil suit, refers to that
situation wherein another action is pending between the same parties for the
same cause of action, such that the second action becomes vexatious and
unnecessary. For the bar of litis pendentia to be invoked, the concurring
requisites must be present:
(1) identity of parties, or at least such parties as represent the same interests
in both actions;
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(2) identity of rights asserted and relief prayed for, the relief being founded
on the same facts; and
(3) the identity of the two preceding particulars is such that any judgment
rendered in the pending case, regardless of which party is successful would
amount to res judicata in the other.
It has been held that there is forum shopping
(1) whenever as a result of an adverse decision in one forum, a party seeks a
favorable decision (other than by appeal or certiorari) in another; or
(2) if, after he has filed a petition before the Supreme Court, a party files
another before the CA since in such case said party deliberately splits appeals
“in the hope that even as one case in which a particular remedy is sought is
dismissed, another case (offering a similar remedy) would still be open”; or
(3) where a party attempts to obtain a preliminary injunction in another court
after failing to obtain it from the original court.
The evil sought to be avoided by the rule against forum shopping is the
rendition by two competent tribunals of two separate and contradictory
decisions. Unscrupulous party litigants, taking advantage of a variety of
competent tribunals, may repeatedly try their luck in several different fora
until a favorable result is reached. To avoid the resultant confusion, the Court
adheres to the rules against forum shopping, and a breach of these rules results
in the dismissal of the case.
Considering the above doctrinal pronouncements on forum shopping, We
find all the badges of this deplorable, docket-clogging practice present in this
case.
As a result or in anticipation of an ad- verse ruling of the Makati RTC,
peti- tioner sought the favorable opinion of the Muntinlupa RTC
As discussed above, the presiding judge of the Makati RTC, in the custody
case, made of record that she was not inclined to issue a protection order in
favor of Michelle because she did not bother to appear in Court and that the
allegations against Juan Ignacio cannot, per se, prevent him from exercising
visitation rights over his children. After this adverse ruling, Michelle sought
the favorable opinion of the Muntinlupa RTC by filing an independent
Petition for Protection Order.
The cases have identical parties
Clearly, the Petition for Custody and the Petition for Protection Order have
the same parties who represent the same interests. The fact that Ava and Ara,
who are parties in the Petition for Protection Order, are not impleaded in the
Petition for Custody is of no moment because they are precisely the very
subjects of the Petition for Custody and their respective rights are represented
by their mother, Michelle. In a long line of cases on forum shopping, the
Court has held that absolute identity of the parties is not required, it being
enough that there is substantial identity of the parties40 or at least such parties
represent the same interests in both actions. It does not matter, as here, that
in the Petition for Custody, Juan Ignacio is the petitioner and Michelle is the
respondent while in the Petition for Protection Order, their roles are reversed.
That a party is the petitioner in one case and at the same time, the respondent
in the other case does not, without more, remove the said cases from the ambit
of the rules on forum shopping. So did the Court hold, for example in First
Philippine International Bank v. Court of Appeals, 252 SCRA 259 (1996),
that forum shopping exists even in cases like this where petitioners or
plaintiffs in one case were impleaded as respondents or defendants in another.
Moreover, this Court has constantly held that the fact that the positions of the
parties are reversed, i.e., the plaintiffs in the first case are the defendants in
the second case or vice versa, does not negate the identity of parties for
purposes of determining whether the case is dismissible on the ground of litis
pendentia.
The rights asserted and reliefs prayed for are based on the same facts
Further, the rights asserted and reliefs prayed for in Civil Case No. 08-023
are practically based on the same facts and are so intertwined with that in SP.
PROC. Case No. 6543, such that any judgment rendered in the pending cases,
regardless of which party is successful, will amount to res judicata.
In the custody case, Juan Ignacio mainly asserted his right, as father, to visit
his children and enjoy joint custody over them. He prayed for a judgment
granting him joint custody, or alternatively, permanent visitation rights over
Ava and Ara.
Michelle’s answer and motion for issuance of protection order in the custody
case contained allegations of psychological, sexual, emotional and economic
abuse she and her children suffered at the hands of Juan Ignacio to defeat his
asserted right to have joint custody over Ava and Ara and as argument that
the grant of visitation rights in his favor will not be in the best interest of the
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children. These allegations of abuse were in substance the very same ones she
made in her Petition for Protection Order.
Juan Ignacio’s rights and reliefs prayed for are dependent on and, to be sure,
would be predicated on the question of whether or not granting him the
desired custody or at least visitations rights over the children are in their best
interest. In deciding this issue, the Makati RTC will definitely have to reckon
with and make a finding on Michelle’s allegations of psychological, sexual,
emotional and economic abuse.
Similarly, the Muntinlupa RTC must necessarily consider and make a
determination based on the very same facts and allegations on whether or not
Michelle shall be entitled to the relief she prayed for in her own petition, in
particular, a permanent protection order against Juan Ignacio.
Elements of litis pendentia are present and any judgment in the pending
cases would amount to res judicata
Any judgment rendered in the pending cases, regardless of which party is
successful, would amount to res judicata. Consider: If the Makati RTC were
to grant Juan Ignacio’s petition for custody, this would necessarily mean that
it would be in the best interest of the children if he were allowed to visit and
spend time with them and that granting Juan Ignacio visitation rights would
not pose any danger or threat to the children.
contradictory decisions, is well-nigh palpable in this case. If the Muntinlupa
RTC were to rule that Michelle was entitled to a Protection Order, this would
necessarily conflict with any order or decision from the Makati RTC granting
Juan Ignacio visitation rights over Ava and Ara. As aptly pointed out by Juan
Ignacio in his Comment such a conflict had already occurred, as the TPO
issued by the Muntinlupa RTC actually conflicted with the Orders issued by
the Makati RTC granting Juan Ignacio temporary visitation rights over his
children. There now exists an Order from the Muntinlupa RTC which, among
others, directed Juan Ignacio to stay at least one (1) kilometer away from Ava
and Ara, even as the Makati RTC recognized, in two (2) separate Orders, that
he had the right, albeit temporarily to see his children.49
WHEREFORE, premises considered, the appealed May 11, 2009 Decision
and the December 28, 2009 Resolution of the Court of Appeals in CA-G.R.
SP. No. 105442, particularly insofar as these ordered the dismissal of subject
Civil Case No. 08-023 and the nullification of the orders made in that case,
are hereby AFFIRMED.
No costs. SO ORDERED.

On the other hand, a grant by the Muntinlupa RTC of Michelle’s prayer for a
permanent protection order would presuppose at the minimum that it would
be to the children’s best interest if Juan Ignacio is directed to keep away from
them, necessary implying that he is unfit even to visit Ara and Ava.
Conversely, if Juan Ignacio’s Petition for Custody were denied, then it would
mean that the Makati RTC gave weight and credence to Michelle’s
allegations of abuse and found them to be in the best interest of the children
to bar Juan Ignacio from visiting them. Thus, the Muntinlupa RTC should
have no ground to deny Michelle’s Petition for Protection Order pending
before it.

The evil sought to be avoided by the rule against forum shopping is

present in this case

The grave mischief sought to be avoided by the rule against forum shopping,
i.e., the rendition by two competent tribunals of two separate and

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XV. Dismissals by the Plaintiff (Rule 17)
1. Limaco v. Gakuen, G.R.No. 158245, June 30, 2005
Facts:
Petitioners Miguelito, Rogelio, Jr., and Isidro, all surnamed Limaco, are the
registered owners of three (3) parcels of agricultural land situated in Bay,
Laguna, covered by Transfer Certificates of Title Nos. 22709 and 22710 of
the land records of Laguna, with a total area of 313,293 square meters.
On May 19, 1988, petitioners, as vendors, entered into a Contract of Sale with
respondent Shonan Gakuen Children’s House Philippines, Inc., a domestic
corporation represented by its Chairman Tsutomu Masamura and General
Manager and Treasurer Jose P. Catindig, as vendee, over the subject lots, for
the consideration of P12,531,720.00.
The parties agreed that respondent corporation shall pay P1,200,000.00 upon
the signing of the contract and the balance of P11,331,720.00 in seven (7)
equal installments. They further stipulated, “in the event that the parties
herein are unable to effect the transfer and sale of the said properties in whole
or in part in favor of the VENDEES, all the paid-in amounts shall be applied
to another similar property also owned by the VENDORS in substitution of
the above-described properties.”
Pursuant to the contract, respondent corporation paid the down payment of
P1,200,000.00. However, it refused to remit any monthly installment due to
petitioners’ failure to obtain a clearance and/or approval of the sale of the
subject land from the Department of Agrarian Reform (DAR). Respondent
demanded that petitioners either solve the problem with the land tenants or
substitute the lots with another acceptable, suitable and untenanted land,
pursuant to their agreement.1
Petitioners responded by informing respondent that they were ready to
finalize the transaction in accordance with the legal opinion of the DAR2
which stated that the subject properties should first be donated by the tenant
farmers to the municipality of Bay, Laguna, which, in turn, would donate
them to respondent. Thereafter, the DAR will order the Registry of Deeds of
Laguna to register the subject land in the name of respondent corporation. 3
In a letter dated December 21, 1988, respondent informed petitioners that the
scheme proposed in the DAR Opinion was “far from acceptable.” Respondent
offered to purchase the property for the agreed price of P13,000,000.00 on a
direct sale basis. Respondent expressed its concern that in a donation, the
present and future administrations of the municipality might feel that the
foundation would always be “beholden to it.”
Moreover, the supporters of the project in Japan might question what
happened to the P13,000,000.00 allotted for the acquisition of the property.
Hence, respondent proposed that “[s]ince it is now clear that the property
cannot be conveyed to the foundation (respondent) in the manner specified .
. . due to a possible violation of existing law, we (respondent) now request
you (petitioners) to substitute the same with another [land] which is
untenanted and the size, location and type of terrain of which [are] acceptable
and suitable for the purpose of the foundation.”
Petitioners did not respondent to respondent’s reply. Hence respondent
requested the return of its P1,2000,000.00 downpayment. Petitioners refused.
Hence, respondent filed a complaint for rescission with damages with the
RTC of Makati, docket as civil case no. 89-2939.
As a countermove, on February 1, 1989, petitioners and the tenant farmers of
the property, as plaintiffs, filed the instant case for specific performance
with the RTC of Laguna, docket as civil case No. 25.
Respondent filed a motion to dismiss6 Civil Case No. 25 on the ground of
litis pendentia. Petitioners opposed,7 contending that the instant complaint
for specific performance was served on respondent ahead of the service of
the complaint for rescission on petitioners. Later, however, respondent
withdrew its motion to dismiss in view of the order of the RTC of Makati
dismissing the complaint for rescission.8
In its Answer with Counterclaim,9 respondent alleged by way of
affirmative defense that “[s]pecific performance is not possible because the
defendant (respondent) had already bought another property which is
untenanted, devoid of any legal complications and now converted from
agricultural to non-agricultural purpose in accordance with DAR
Administrative Order No. 15.” By way of counterclaim, respondent alleged
as follows:
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1. That in view of the failure of the plaintiff- landowners to comply with the
Contract of Sale, the same should be rescinded, and they should be ordered
to refund the sum of P1,200,000.00 paid by the defendant under the Contract
of Sale with bank rate of interest per annum from date of receipt until fully
repaid;
2. That also by reason thereof, the project of the defendant has been delayed
for seven months for which reason said plaintiff-landowners should be liable
for damages amounting to P500,000.00 to the defendant, with the same rate
of interest;
3. That because of the plaintiffs’ refusal to comply with the demand to refund
the amount paid by the defendant, it was constrained to engage the services
of the undersigned counsel not only to recover the amount paid but to defend
itself against the vexatious, malicious, unfounded, and unjustified complaint
of the plaintiff, for which it agreed to pay attorney’s fees in the sum of
P75,000.00 of which P30,000.00 had already been paid, plus P1,000.00
appearance fee for each day he is in attendance in this case.10
It appears that sometime during trial on the merits, the parties were able to
agree on a compromise in which petitioners were to return only fifty percent
(50%) of the down payment amounting to P600,000.00. Unfortunately,
petitioners only remitted P487,000.00 to respondent, leaving a balance of
P113,000.00 which petitioners failed to settle. Thus, the trial of the case
proceeded.
On July 9, 1996, petitioners filed a Motion to Withdraw Complaint11
considering respondent’s special defense that specific performance was no
longer possible. They prayed that their complaint and respondent’s
counterclaim be ordered withdrawn or dismissed, arguing that respondent’s
counter-claim would have no leg to stand on as it was compulsory in nature.
Respondent objected. It argued that under the Rules of Court, “[i]f a
counterclaim has been pleaded by a defendant prior to the service upon him
of the plaintiff’s motion to dismiss, the action shall not be dismissed against
the defendant’s objection unless the counterclaim can remain pending for
independent adjudication by the court.”
In its Order dated July 30, 1996, the trial court denied petitioners’ motion.12
On January 23, 1997, petitioners’ counsel, Atty. Santos V. Pampolina, Jr.,
prayed that he be allowed to withdraw as counsel for the tenant farmers.13 In
response, respondent suggested that the names of the tenant farmers be
removed from the list of plaintiffs, considering that they were not privy to the
contract between petitioners and respondent.
On February 25, 1997, the trial court dismissed “the complaint of said
plaintiffs-tenants farmers and the counterclaim of defendant (respondent)
against them.” Trial proceeded with respect to petitioners.
RTC rendered judgment ordering the plaintiffs-landowners to pay defendant
P113,000.00. The trial court ruled that the conveyance of private agricultural
land is null and void pursuant to Section 21, Article II of the 1987
Constitution declaring as a state policy the promotion of a comprehensive
agrarian reform program. It also held that the provision of the contract for an
alternative recourse was not legally demandable under Article 1479 of the
Civil Code as the substitute property was not ascertained by the parties. Since
the contract of sale was void, the trial court found both parties in pari delicto.
Be that as it may, the trial court recognized that the parties have made an
“equitable arrangement” under which petitioners are to return to respondent
the amount of P600,000.00. Hence, the trial court ruled that both are “in
estoppel to assert contrary stances.” Petitioners were therefore obliged to
remit to respondent the balance of P113,000.00 from the P600,000.00
demanded by respondent but cannot demand more than said balance.
On appeal, CA found the appeal partially meritorious.
Petitioners filed an MR claiming, among others, that respondent’s
compulsory counterclaim should have been dismissed in view of the
dismissal of their complaint.
Hence this petition.
Issue:
W/N RTC erred in not dismissing the compulsory counterclaim – No.
Held:
No.
Petitioners submit that the CA erred in not dismissing respondent’s
compulsory counterclaim. They point out that on July 9, 1996, they filed a
Motion to Withdraw Complaint. They contend that with the withdrawal of
their complaint, respondent’s compulsory counterclaim for the return of
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P1,200,000.00 had no leg to stand on pursuant to Section 2, Rule 17, of the
Rules of Court. They maintain that respondent’s counterclaim is “inextricably
linked and utterly dependent upon petitioners’ complaint and from its very
nature, it cannot ‘remain pending for independent adjudication by the court.’
Petitioners’ arguments fail to impress. therefore, inexplicable how petitioners could argue that their complaint was
The applicable provisions are Sections 1 and 2, Rule 17, of the old Rules of
Court, viz.:
“Sec. 1. Dismissal by the plaintiff. — An action may be dismissed by the
plaintiff without order of court by filing a notice of dismissal at any time
before service of the answer or of a motion for summary judgment. x x x
Sec. 2. Dismissal by order of the court. — Except as provided in the
preceding section, an action shall not be dismissed at the plaintiff’s instance
save upon order of the court and upon such terms and conditions as the court
deems proper. If a counterclaim has been pleaded by a defendant prior to the
service upon him of the plaintiff’s motion to dismiss, the action shall not be
dismissed against the defendant’s objection unless the counterclaim can
remain pending for independent adjudication by the court. Unless otherwise
specified in the order, a dismissal under this paragraph shall be without
prejudice.”
Thus, there are two ways by which an action may be dismissed upon the
instance of the plaintiff.
In the case at bar, it is undisputed that petitioners filed a Motion to Withdraw
Complaint after respondent already filed its answer with counterclaim. In
fact, the reason for their motion for withdrawal was the special defense of
respondent in its answer that substitution was no longer possible as it already
bought another property in lieu of the subject lots under the contract. It is,
successfully withdrawn upon the mere filing of a Motion to Withdraw
Complaint when they themselves alleged in this petition that “[p]rivate
respondent objected to [the] withdrawal and the Trial Court sustained the
objection.”3
More importantly, the old Rules of Court provided that “[i]f a counterclaim
has been pleaded by a defendant prior to the service upon him of the
plaintiff’s motion to dismiss, the action shall not be dismissed against the
defendant’s objection unless the counterclaim can remain pending for
independent adjudication by the court” (emphasis supplied).
What may invariably remain for independent adjudication are permissive
counterclaims as compared to compulsory counterclaims which generally
necessitate a simultaneous adjudication with the complaint itself. In the case
at bar, respondent’s counterclaim is compulsory in nature, hence, cannot
remain for independent adjudication.

First, dismissal is a matter of right when a notice of dismissal is filed by the

plaintiff before an answer or a motion for summary judgment has been served
on him by the defendant.

Second, dismissal is discretionary on the court when the motion for the
dismissal of the action is filed by the plaintiff at any stage of the proceedings
other than before service of an answer or a motion for summary judgment.

While the dismissal in the first mode takes effect upon the mere notice of
plaintiff without need of a judicial order, the second mode requires the
authority of the court before dismissal of the case may be effected. This is so
because in the dismissal of an action, the effect of the dismissal upon the
rights of the defendant should always be taken into consideration.

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2. Pinga v. Heirs of Santiago, G.R. No. 170354, June 30, 2006
Facts:
Petitioner Eduardo Pinga was named as one of two defendants in a complaint
for injunction4 filed with Branch 29 of the Regional Trial Court (RTC)5 of
San Miguel, Zamboanga del Sur, by respondent Heirs of German Santiago,
represented by Fernando Santiago.
The Complaint6 dated 28 May 1998 alleged in essence that petitioner and co-
defendant Vicente Saavedra had been unlawfully entering the coco lands of
the respondent, cutting wood and bamboos and harvesting the fruits of the
coconut trees therein. Respondents prayed that petitioner and Saavedra be
enjoined from committing “acts of depredation” on their properties, and
ordered to pay damages. 7
In their Amended Answer with Counterclaim, petitioner and his co-
defendant disputed respondents’ ownership of the properties in question,
asserting that petitioner’s father, Edmundo Pinga, from whom defendants
derived their interest in the properties, had been in possession thereof since
the 1930s.8 They alleged that as far back as 1968, respondents had already
been ordered ejected from the properties after a complaint for forcible entry
was filed by the heirs of Edmundo Pinga. It was further claimed that
respondents’ application for free patent over the properties was rejected by
the Office of the President in 1971. Defendants in turn prayed that owing to
respondents’ forcible re-entry in the properties and the irresponsible and
reckless filing of the case, they be awarded various types of damages instead
in amounts totaling P2,100,000 plus costs of suit.9
By July of 2005, the trial of the case had not yet been completed. Moreover,
respondents, as plaintiffs, had failed to present their evidence.
At the hearing of 27 July 2005, plaintiffs’ counsel on record failed to appear,
sending in his stead a representative who sought the postponement of the
hearing. Counsel for defendants (who include herein petitioner) opposed the
move for postponement and moved instead for the dismissal of the case.
The RTC noted that it was obvious that respondents had failed to prosecute
the case for an unreasonable length of time, in fact not having presented their
evidence yet. On that ground, the complaint was dismissed. At the same
time, the RTC allowed defendants “to present their evidence ex parte.”12
Respondents filed a Motion for Reconsideration13 of the order issued in open
court on 27 July 2005, opting however not to seek that their complaint be
reinstated, but praying instead that the entire action be dismissed and
petitioner be disallowed from presenting evidence ex parte. Respondents
claimed that the order of the RTC allowing petitioner to present evidence ex
parte was not in accord with established jurisprudence. They cited cases,
particularly City of Manila v. Ruymann14 and Domingo v. Santos,15 which
noted those instances in which a counterclaim could not remain pending for
independent adjudication.
RTC granted the MR and dismissed the counterclaim, citing as the only
ground therefor that “there is no opposition to the Motion for Reconsideration
of the [respondents].” Petitioners’ MR was denied.
Notably, respondents filed an Opposition to Defendants’ Urgent Motion for
Reconsideration, wherein they argued that the prevailing jurisprudential
rule18 is that “compulsory counterclaims cannot be adjudicated
independently of plaintiff’s cause of action,” and “a conversu, the dismissal
of the complaint carries with it the dismissal of the compulsory
counterclaims.”
The matter was elevated to this Court directly by way of a Petition for Review
under Rule 45 on a pure question of law, the most relevant being whether the
dismissal of the complaint necessarily carries the dismissal of the compulsory
counterclaim.
Issue:
W/N the RTC erred in dismissing the counterclaim - Yes
Held:
Yes, it erred.
We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure,
the dismissal of the complaint due to the fault of plaintiff does not necessarily
carry with it the dismissal of the counterclaim, compulsory or otherwise. In
fact, the dismissal of the complaint is without prejudice to the right of
defendants to prosecute the counterclaim.
Avila 4B | 2016
Our core discussion begins with Section 3, Rule 17 of the 1997 Rules of Civil
Procedure, which states:
“SEC. 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the
plaintiff fails to appear on the date of the presentation of his evidence in chief
on the complaint, or to prosecute his action for an unreasonable length of
time, or to comply with these Rules or any order of the court, the complaint
may be dismissed upon motion of defendant or upon the court's own motion,
without prejudice to the right of the defendant to prosecute his counterclaim
in the same or in a separate action. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise declared by the court.”
The express qualification in the provision that the dismissal of the complaint
due to the plaintiff’s fault, as in the case for failure to prosecute, is without
prejudice to the right of the defendant to prosecute his counterclaim in the
same or separate action. This stands in marked contrast to the provisions
under Rule 17 of the 1964 Rules of Court which were superseded by the 1997
amendments. In the 1964 Rules, dismissals due to failure to prosecute were
governed by Section 3, Rule 17, to wit:
“SEC. 3. Failure to prosecute. — If plaintiff fails to appear at the time of the
trial, or to prosecute his action for an unreasonable length of time, or to
comply with these rules or any order of the court, the action may be dismissed
upon motion of the defendant or upon the court’s own motion. This dismissal
shall have the effect of an adjudication upon the merits, unless otherwise
provided by court.”
Evidently, the old rule was silent on the effect of such dismissal due to failure
to prosecute on the pending counterclaims. As a result, there arose what one
authority on remedial law characterized as “the nagging question of whether
or not the dismissal of the complaint carries with it the dismissal of the
counterclaim.”22 Jurisprudence construing the previous Rules was hardly
silent on the matter.
The distinction is relevant, for under the previous and current incarnations of
the Rules of Civil Procedure, it is Section 3, Rule 17 that governs the
dismissals due to the failure of the plaintiff to prosecute the complaint, as had
happened in the case at bar. Otherwise, it is Section 2, Rule 17, which then,
and still is now, covered dismissals ordered by the trial court upon the
instance of the plaintiff.28 Yet, as will be seen in the oregoing discussion, a
discussion of Section 2 cannot be avoided as the postulate behind that
provision was eventually extended as well in cases that should have properly
been governed by Section 3.
On the general effect of the dismissal of a complaint, regardless of cause, on
the pending counterclaims, previous jurisprudence laid emphasis on whether
the counterclaim was compulsory or permissive in character. The necessity
of such distinction was provided in the 1964 Rules itself, particularly Section
2, Rule 17, which stated that in instances wherein the plaintiff seeks the
dismissal of the complaint, “if a counterclaim has been pleaded by a
defendant prior to the service upon him of the plaintiff’s motion to dismiss,
the action shall not be dismissed against the defendant’s objection unless the
counterclaim can remain pending for independent adjudication by the
court.”30 The vaunted commentaries of Chief Justice Moran, remarking on
Section 2, Rule 17, noted that “[t]here are instances in which a counterclaim
cannot remain pending for independent adjudication, as, where it arises out
of, or is necessarily connected with, the transaction or occurrence which is
the subject matter of the opposing party’s claim.”
Notably, the qualification concerning compulsory counterclaims was
provided in Section 2, Rule 17 of the 1964 Rules, the provision governing
dismissals by order of the court, and not Section 3, Rule 17. As stated earlier,
Section 3, which covered dismissals for failure to prosecute upon motion of
the defendant or upon motu proprio action of the trial court, was silent on the
effect on the counterclaim of dismissals of such nature.
Xxx.
It is apparent from these minutes that the survival of the counterclaim despite
the dismissal of the complaint under Section 3 stood irrespective of whether
the counterclaim was permissive or compulsory. Moreover, when the Court
itself approved the revisions now contained in the 1997 Rules of Civil
Procedure, not only did Justice Regalado’s amendment to Section 3, Rule 17
remain intact, but the final version likewise eliminated the qualification
formerly offered under Section 2 on “counterclaims that can remain pending
for independent adjudication by the court.”53 At present, even Section 2,
concerning dismissals on motion of the plaintiff, now recognizes the right of
the defendant to prosecute the counterclaim either in the same or separate
action notwithstanding the dismissal of the complaint, and without regard as
to the permissive or compulsory nature of the counterclaim.
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To be certain, when the Court promulgated the 1997 Rules of Civil
Procedure, including the amended Rule 17, those previous jural doctrines that
were inconsistent with the new rules incorporated in the 1997 Rules of Civil
Procedure were implicitly abandoned insofar as incidents arising after the
effectivity of the new procedural rules on 1 July 1997. BA Finance, or even
the doctrine that a counterclaim may be necessarily dismissed along with the
complaint, clearly conflicts with the 1997 Rules of Civil Procedure. The
abandonment of BA Finance as doctrine extends as far back as 1997, when
the Court adopted the new Rules of Civil Procedure. If, since then, such
abandonment has not been affirmed in jurisprudence, it is only because no
proper case has arisen that would warrant express confirmation of the new
rule. That opportunity is here and now, and we thus rule that the dismissal of
a complaint due to fault of the plaintiff is without prejudice to the right of the
defendant to prosecute any pending counterclaims of whatever nature in the
same or separate action. We confirm that BA Finance and all previous rulings
of the Court that are inconsistent with this present holding are now
abandoned.
Accordingly, the RTC clearly erred when it ordered the dismissal of the
counterclaim, since Section 3, Rule 17 mandates that the dismissal of the
complaint is without prejudice to the right of the defendant to prosecute the
counterclaim in the same or separate action. If the RTC were to dismiss the
counterclaim, it should be on the merits of such counterclaim. Reversal of the
RTC is in order, and a remand is necessary for trial on the merits of the
counterclaim.
It would be perfectly satisfactory for the Court to leave this matter at that.
Still, an explanation of the reason behind the new rule is called for,
considering that the rationale behind the previous rule was frequently
elaborated upon.
---
We should not ignore the theoretical bases of the rule distinguishing
compulsory counterclaims from permissive counterclaims insofar as the
dismissal of the action is concerned. There is a particular school of thought
that informs the broad proposition in Dalman that “if the civil case is
dismissed, so also is the counterclaim filed therein,” or the more nuanced
discussions offered in Metals, International Container, and BA Finance. The
most potent statement of the theory may be found in Metals, which proceeds
from the following fundamental premises — a compulsory counterclaim must
be set up in the same proceeding or would otherwise be abated or barred in a
separate or subsequent litigation on the ground of auter action pendant, litis
pendentia or res judicata; a compulsory counterclaim is auxiliary to the main
suit and derives its jurisdictional support therefrom as it arises out of or is
necessarily connected with the transaction or occurrence that is the subject
matter of the complaint; and that if the court dismisses the complaint on the
ground of lack of jurisdiction, the compulsory counterclaim must also be
dismissed as it is merely ancilliary to the main action and no jurisdiction
remained for any grant of relief under the counterclaim.
Whatever the nature of the counterclaim, it bears the same integral
characteristics as a complaint; namely a cause (or causes) of action
constituting an act or omission by which a party violates the right of another.
The main difference lies in that the cause of action in the counterclaim is
maintained by the defendant against the plaintiff, while the converse holds
true with the complaint. Yet, as with a complaint, a counterclaim without a
cause of action cannot survive.
It would then seemingly follow that if the dismissal of the complaint
somehow eliminates the cause(s) of the counterclaim, then the counterclaim
cannot survive. Yet that hardly is the case, especially as a general rule. More
often than not, the allegations that form the counterclaim are rooted in an act
or omission of the plaintiff other than the plaintiff’s very act of filing the
complaint. Moreover, such acts or omissions imputed to the plaintiff are often
claimed to have occurred prior to the filing of the complaint itself. The only
apparent exception to this circumstance is if it is alleged in the
counterclaim that the very act of the plaintiff in filing the complaint
precisely causes the violation of the defendant’s rights. Yet even in such
an instance, it remains debatable whether the dismissal or withdrawal of the
complaint is sufficient to obviate the pending cause of action maintained by
the defendant against the plaintiff.
A compulsory counterclaim arises out of or is connected with the transaction
or occurrence constituting the subject matter of the opposing party’s claim,
does not require for its adjudication the presence of third parties, and stands
within the jurisdiction of the court both as to the amount involved and the
nature of the claim. The fact that the culpable acts on which the counterclaim
is based are founded within the same transaction or occurrence as the
complaint, is insufficient causation to negate the counterclaim together with
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the complaint. The dismissal or withdrawal of the complaint does not traverse
the boundaries of time to undo the act or omission of the plaintiff against the
defendant, or vice versa. While such dismissal or withdrawal precludes the
pursuit of litigation by the plaintiff, either through his/her own initiative or
fault, it would be iniquitous to similarly encumber the defendant who
maintained no such initiative or fault. If the defendant similarly moves for the
dismissal of the counterclaim or neglects to timely pursue such action, let the
dismissal of the counterclaim be premised on those grounds imputable to the
defendant, and not on the actuations of the plaintiff.
The other considerations supplied in Metals are anchored on the premise that
the jurisdictional foundation of the counterclaim is the complaint itself. The
theory is correct, but there are other facets to this subject that should be taken
into account as well. On the established premise that a counterclaim involves
separate causes of action than the complaint even if derived from the same
transaction or series of transactions, the counterclaim could have very well
been lodged as a complaint had the defendant filed the action ahead of the
complainant. The terms “ancillary” or “auxiliary” may mislead in signifying
that a complaint innately possesses more credence than a counterclaim, yet
there are many instances wherein the complaint is trivial but the counterclaim
is meritorious. In truth, the notion that a counterclaim is, or better still,
appears to be merely “ancillary” or “auxiliary” is chiefly the offshoot of an
accident of chronology, more than anything else.
merit or suffers jurisdictional flaws which stand independent of the
complaint, the trial court is not precluded from dismissing it under the
amended rules, provided that the judgment or order dismissing the
counterclaim is premised on those defects. At the same time, if the
counterclaim is justified, the amended rules now unequivocally protect such
counterclaim from peremptory dismissal by reason of the dismissal of the
complaint.
WHEREFORE, the petition is GRANTED. The Orders dated 9 August 2005
and 10 October 2005 of Branch 29, Regional Trial Court of San Miguel,
Zamboanga del Sur in Civil Case No. 98-012 are SET ASIDE. Petitioner’s
counterclaim as defendant in Civil Case. No. 98-012 is REINSTATED. The
Regional Trial Court is ORDERED to hear and decide the counterclaim with
deliberate dispatch.
SO ORDERED.

The formalistic distinction between a complaint and a counterclaim does not

detract from the fact that both of them embody causes of action that have in
their end the vindication of rights. While the distinction is necessary as a
means to facilitate order and clarity in the rules of procedure, it should be
remembered that the primordial purpose of procedural rules is to provide the
means for the vindication of rights. A party with a valid cause of action
against another party cannot be denied the right to relief simply because the
opposing side had the good fortune of filing the case first. Yet this in effect
was what had happened under the previous procedural rule and correspondent
doctrine, which under their final permutation, prescribed the automatic
dismissal of the compulsory counterclaim upon the dismissal of the
complaint, whether upon the initiative of the plaintiff or of the defendant.
The present rule embodied in Sections 2 and 3 of Rule 17 ordains a more
equitable disposition of the counterclaims by ensuring that any judgment
thereon is based on the merit of the counterclaim itself and not on the survival
of the main complaint. Certainly, if the counterclaim is palpably without

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XVI. Pre-Trial (Rule 18)
1. Diaz v. Court of Appeals, G.R. No. 149749, July 25, 2006
Facts:
Petitioner Agapita Diaz operated a common carrier, a Tamaraw FX taxi
plying the route of Cagayan de Oro City to any point in Region 10. On July
20, 1996, petitioner’s taxi, driven by one Arman Retes, was moving at an
excessive speed when it rammed into the rear portion of a Hino cargo truck
owned by private respondent Teodoro Lantoria and driven by private
respondent Rogelio Francisco. As a result, nine passengers of the taxi died
including Sherly Mone O.
On August 13, 1996, the heirs of Sherly Mone O filed with the Regional
Trial Court of Malaybalay City, Branch 10, an action for breach of contract
of carriage and damages against petitioner and her driver, Arman Retes.
On motion, petitioner filed a third-party complaint against private
respondents Teodorio Lantoria and Rogelio Francisco. counsel to appear at the pre-trial. The non-appearance of the party may be
The pre-trial conference was initially set on July 11, 1998 but was reset to
July 30, 1998 for petitioner and her counsel’s failure to appear despite due
notice. Registry receipt number 04364 showed that notice had been sent to
petitioner’s counsel, Atty. Cipriano Lupeba. On scheduled date, petitioner
and her counsel again failed to appear, prompting the court to allow private
respondents to present evidence ex parte.
More than seven months after the conclusion respondents’ ex parte
presentation of evidence, petitioner filed a motion for leave to present
evidence on her defense and third-party complaint.
RTC denied the petitioner’s motion.
RTC ruled for respondents and ordered petitioner to pay damages.
On appeal, CA affirmed RTC.
Hence this R65 petition.
Issue:
W/N RTC erred in denying the motion for leave to present evidence on her
defense and third-party complaint – No.
Held:
No.
First, Section 3, Rule 18 of the Rules of Court states that:
“The notice of pre-trial shall be served on counsel, or on the party who has
no counsel. The counsel served with such notice is charged with the duty of
notifying the party represented by him.”
Petitioner was represented by Atty. Cipriano Lupeba to whom the notice was
sent. It was incumbent on the latter to advise petitioner accordingly. His
failure to do so constituted negligence which bound petitioner.
Further, Sections 4 and 5 of Rule 18 read:
“Sec. 4. Appearance of Parties. — It shall be the duty of the parties and their
excused only if a valid cause is shown therefore or if a representative shall
appear in his behalf fully authorized in writing to enter into an amicable
settlement, to submit to alternative modes of dispute resolution, and to enter
into stipulations or admissions of facts and of documents.
Sec. 5. Effect of failure to appear. — The failure of the plaintiff to appear
when so required pursuant to the next preceding section shall be cause for the
dismissal of the action. The dismissal shall be with prejudice, unless
otherwise ordered by the court. A similar failure on the defendant shall be
cause to allow the plaintiff to present his evidence ex parte and the court to
render judgment on the basis thereof.”
Consequently, it was no error for the trial court to allow private respondents
to present their evidence ex parte when petitioner and her counsel failed to
appear for the scheduled pre-trial conference.
WHEREFORE, this petition is hereby DISMISSED. Costs against petitioner.
SO ORDERED.
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2. Alcaraz v. Court of Appeals, G.R. No. 152202, G.R. No. 152202,
July 28, 2006
Facts:
In May 1995, private respondent Equitable issued a credit card, Equitable
Visa Gold International Card with card number 4921-0100-0743-2013 and
account base number 4921-0100-0743-2005 with peso and dollar
accounts/facilities, to petitioner Crisostomo Alcaraz. The petitioner through
the use of the said credit card secured cash advances and purchased
goods and services on credit with private respondent Equitable’s affiliated
merchant establishments.2 Thus, the petitioner accumulated unpaid credit
with private respondent and despite the receipt of several demand letters,
failed to pay his outstanding obligations.3
In its complaint before the lower court, private respondent Equitable sought
the payment of the accumulated outstanding balance including interest.
The petitioner admitted he had made use of the credit card issued in his name
by private respondent Equitable, but contested the amount of his liability.
After several postponements of the pretrial conference, the trial court
declared petitioner Alcaraz “as in default” upon motion of private
respondent Equitable and allowed the latter to present its evidence ex parte.6
After the private respondent’s presentation of evidence which included the
testimony of its sole witness, one of its collection officers, and the submission
of documents, the court ruled in favor of private respondent Equitable. It,
however, rejected private respondent Equitable’s claim for liquidated and
exemplary damages.7
Petitioner Alcaraz filed a Motion for New Trial which was denied.8 The
petitioner elevated the case to the appellate court.
CA affirmed RTC but modified the amount of damages.
Hence this petition.
Issue:
W/N RTC violated petitioner’s right to due process when respondent was
allowed to present its evidence ex parte - No
Held:
No.
Petitioner Alcaraz laments that the trial court did not postpone and reschedule
the pre-trial conference on February 23, 1999 despite the manifestation of
petitioner’s wife that petitioner Alcaraz suffered a stroke which rendered him
paralyzed while Atty. Ben Ibuyan, the petitioner’s counsel, suffered from a
“lingering gall bladder ailment.”
Instead, upon motion of private respondent Equitable, the trial court declared
the petitioner as in default and allowed the private respondent to present its
evidence ex parte.10 Petitioner Alcaraz also charges the trial court with
arbitrariness and of depriving him of the right to have the case against him
heard before an impartial judge or tribunal. In support of his allegations, he
maintains that, aside from brushing aside the clearly meritorious reasons for
his and his counsel’s absence on the February 23, 1999 pretrial conference,
the trial court judge and its personnel have shown their bias against him in
several occasions such as the alleged difficulty his counsel encountered in
filing a Motion for New Trial.11
With regard to the first issue, it is well-settled that this Court is not a trier of
facts. This Court accords due respect to the findings of the trial court and the
appellate court save in clearly exceptional cases. This case, however, does
not fall within those exceptions. The trial court clearly has the discretion
on whether to grant or deny a motion to postpone and/or reschedule the
pretrial conference in accordance with the circumstances then obtaining
in the case. This must be so as it is the trial court which was able to witness
firsthand the events as they unfolded in the trial of a case. Postponements,
while permissible, must not be countenanced except for clearly meritorious
grounds and in light of the attendant circumstances. The trial court’s
discretion on this matter, however, is not unbridled. The trial courts are well
advised to reasonably and wisely exercise such discretion. This Court will not
hesitate to strike down clearly arbitrary acts or orders of the lower court. This,
however, is not the situation in this case.
While it is true that private respondent Equitable and inclement weather have
on occasion caused the postponement of the pretrial conference, the repeated
resetting of the pretrial conference was primarily due to the petitioner.
Avila 4B | 2016
As to the reasons proffered by the petitioner’s wife at the February 23, 1999
pretrial conference, we agree with the findings of the trial court and the Court
of Appeals. Under the Rules of Court, both the parties and their counsels
are mandated to appear in the pretrial conference. If the parties opt not
to be present, their counsel must be armed with a special power of
attorney specifically for the purpose.

This must be so as the pretrial conference is primarily for the purpose of

exploring the possibility of a compromise, or on the failure thereof, for the
parties to make certain admissions and stipulations in order to facilitate a
more efficient proceeding at the trial proper.

In the case at bar, both petitioner Alcaraz and his counsel did not appear at
the scheduled pretrial. Instead, it was the petitioner’s wife alone who made
the verbal manifestation on behalf of her husband and his counsel while
presenting an unverified medical certificate on the latter’s behalf. As
correctly observed by the Court of Appeals, the records are bereft of any
medical certificate, verified or unverified, in the name of petitioner
Alcaraz to establish the cause of his absence at the pretrial conference.

Even assuming arguendo that petitioner Alcaraz and Atty. Ibuyan’s absence
on the February 23, 1999 pre-trial conference is due to justifiable causes, the
petitioner is represented by a law firm and not by Atty. Ibuyan alone. As
such, any of the latter’s partners or associates could have appeared before the
court and participate in the pretrial or at least make the proper motion for
postponement if necessary.

IN VIEW WHEREOF, the petition is DISMISSED and the February 11, 2002
decision of the Court of Appeals is AFFIRMED with MODIFICATIONS and
the petitioner is ordered to pay the following: xxx.

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3. Macasaet v.Macasaet, G.R. No. 154391, September 30, 2004
Facts:
Petitioners Ismael and Teresita Macasaet and Respondents Vicente and
Rosario Macasaet are first-degree relatives. Ismael is the son of respondents,
and Teresita is his wife. this provision, petitioners claim that the MTCC should have dismissed the
The parents-respondents filed with the MTC an ejectment suit against the
children-petitioners. Respondents alleged that they were the owners of two
(2) parcels of land covered by Transfer Certificate of Title (TCT) Nos. T-
78521 and T- 103141, situated at Banay-banay, Lipa City; that by way of a
verbal lease agreement, Ismael and Teresita occupied these lots in March
1992 and used them as their residence and the situs of their construction
business; and that despite repeated demands, petitioners failed to pay the
agreed rental of P500 per week. nonappearance of a party may be excused by the showing of a valid cause; or
Ismael and Teresita denied the existence of any verbal lease agreement. They
claimed that respondents had invited them to construct their residence and
business on the subject lots in order that they could all live near one other,
employ Marivic (the sister of Ismael), and help in resolving the problems of
the family.
Respondents failed to attend the preliminary conference but their attorney-in-
fact appeared with a written authorization from respondents.
MTC ruled for respondents and ordered petitioners to vacate.
RTC affirmed.
CA affirmed.
Hence this petition, claiming, among others, that the rule on appearance of
parties during the Pretrial should apply on appearance of parties during
Preliminary Conference in an unlawful detainer suit.
Issue:
W/N the rules on on ejectment allow a representative to substitute for a
party’s personal appearance – Yes because Rules of Court apply suppletorily.
Held:
Yes because Rules of Court apply suppletorily.
Section 8 of Rule 70 of the Rules of Court requires the appearance of the
plaintiff and the defendant during the preliminary conference. On the basis of
case upon the failure of respondents to attend the conference. However,
petitioners do not dispute that an attorney-in-fact with a written authorization
from respondents appeared during the preliminary conference. The issue then
is whether the rules on ejectment allow a representative to substitute for a
party’s personal appearance.
Unless inconsistent with Rule 70, the provisions of Rule 18 on pretrial applies
to the preliminary conference. Under Section 4 of this Rule, the
by the appearance of a representative, who has been fully authorized in
writing:
1. to enter into an amicable settlement,
2. to submit to alternative modes of dispute resolution, and
3. to enter into stipulations or admissions of facts and of documents.
Section 4 of Rule 18 may supplement Section 8 of Rule 70. Thus, the spirit
behind the exception to personal appearance under the rules on pretrial is
applicable to the preliminary conference. If there are valid reasons or if a
representative has a “special authority,” a party’s appearance may be waived.
As petitioners are challenging only the applicability of the rules on pretrial to
the rule on preliminary conference, the written authorization from
respondents can indeed be readily considered as a “special authorization.”
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals
are AFFIRMED with the following MODIFICATIONS:
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4. Chingkoe v. Republic, 2013
Facts:
This petition stemmed from two collection cases filed by the Republic of
the Philippines (Republic), by the Bureau of Customs (BOC) before the
Regional Trial Court (RTC) of Manila.
In the first Complaint for collection of money and damages, entitled
Republic of the Philippines, represented by the Bureau of Customs v. Chiat
Sing Cardboard Inc. (defendant and third party plaintiff) v. Filstar Textile
Industrial Corporation, Faustino T. Chingkoe (third party defendants) and
docketed as Civil Case No. 02-102612, the Republic alleged that Chiat
Sing Cardboard Inc. (Chiat Sing), a corporation that imports goods to the
Philippines, secured in 1997 fake and spurious tax credit certificates from
Filstar Textile Industrial Corporation (Filstar), amounting to six million
seventy-six thousand two hundred forty-six pesos (PhP 6,076,246).
Along with its Answer,5 Chiat Sing, with leave of court,6 filed a Third-
Party Complaint against Filstar. It claimed that it acquired the tax credit
certificates from Filstar for valuable consideration, and that Filstar
represented to it that the subject tax credit certificates are good, valid, and
genuine.
Meanwhile, in the second Complaint, entitled Republic of the Philippines,
represented by the Bureau of Customs v. Filstar Textile Industrial
Corporation and docketed as Civil Case No. 02-102634, the Republic
alleged that in the years 1992-1998, defendant Filstar fraudulently
secured 20 tax credit certificates amounting to fifty-three million six
hundred fifty-four thousand six hundred seventy-seven pesos (PhP
53,654,677). Thereafter, Filstar made various importations, using the tax
credit certificates to pay the corresponding customs duties and taxes. Later,
BOC discovered the fact that they were fraudulently secured; thus, the
Republic claimed, the customs duties and tax liability of Filstar remained
unpaid.7
The two cases were consolidated.
Pursuant to a Notice of Mediation Hearing sent to the parties on October 17,
2005,11 the cases were referred to the Philippine Mediation Center (PMC)
for mandatory mediation.12 The pre-trial for the consolidated cases was
initially set on January 9, 2006, but come said date, the report of the mediation
has yet to be submitted; hence, on the motion of the counsel of defendant
Chiat Sing, the pre- trial was canceled and rescheduled to February 15,
2006.13
On February 15, 2006, the PMC reported that the proceedings are still
continuing; thus, the trial court, on motion of the same counsel for Chiat Sing,
moved for the re-setting of the pre-trial to March 17, 2006.14 Unfortunately,
the mediation proceedings proved to be uneventful, as no settlement or
compromise was agreed upon by the parties.
During the March 17, 2006 pre-trial setting, the Office of the Solicitor
General (OSG), representing the Republic, failed to appear. The counsel
for defendant Filstar prayed for a period of 10 days within which to submit
his motion or manifestation regarding the plaintiff’s pre-trial brief. The trial
court granted the motion, and again ordered a postponement of the pre-trial
to April 19, 2006.15
Come the April 19, 2006 hearing, despite having received a copy of the
March 17, 2006 Order, the OSG again failed to appear. It also failed to
submit its comment. Thus, counsels for the defendants Filstar, Chiat Sing,
and Chingkoe moved that plaintiff be declared non-suited. Meanwhile, the
counsel for BOC requested for an update of their case. In its Order16 on the
same date, the trial court warned the plaintiffs Republic and BOC that if
no comment is submitted and if they fail to appear during the pre-trial
set on May 25, 2006, the court will be constrained to go along with the
motion for the dismissal of the case.
The scheduled May 25, 2006 hearing, however, did not push through, since
the trial court judge went on official leave. The pre-trial was again reset to
June 30, 2006.
During the June 30, 2006 pre-trial conference, the OSG again failed to
attend. A certain Atty. Bautista Corpin, Jr. (Atty. Corpin Jr.), appearing on
behalf of BOC, was present, but was not prepared for pre-trial. He merely
manifested that the BOC failed to receive the notice on time, and moved for
another re-setting of the pre-trial, on the condition that if either or both
lawyers from the BOC and OSG fail to appear, the court may be constrained
to dismiss the abovementioned cases of the BOC for failure to prosecute.17
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Meanwhile, counsels for defendants Chiat Sing, Filstar, and third-party
defendants Faustino T. Chingkoe and Gloria C. Chingkoe, who were all
present during the pre-trial, moved for the dismissal of the case on the
ground of respondent’s failure to prosecute. The trial court judge issued
an Order18 resetting the pre-trial to July 14, 2006.
At the hearing conducted on July 14, 2006, the respective counsels of the
defendants were present. Notwithstanding the warning of the judge given
during the previous hearing, that their failure to appear will result in the
dismissal of the cases, neither the OSG nor the BOC attended the hearing.
Thus, as moved anew by the respective counsels of the three defendants, the
trial court issued an Order19 dismissing the case, which reads:
“As prayed for, the charge of the Republic of the Philippines against Chiat
Sing Cardboard Incorporation and the Third Party complaint of Chiat Sing
Cardboard Inc., against Textile Industrial Corporation, Faustino Chingkoe
and Gloria Chingkoe in Civil Case No. 02-102612 and the charge of the
Republic of the Philippines against Filstar Industrial Corporation, Faustino
Chingkoe and Gloria Chingkoe in Civil Case No. 02-102634 are hereby
dismissed.20”
Respondents filed an MR which was denied.
As recourse, respondents filed a Petition for Certiorari under Rule 65
before the CA, alleging that the trial court judge acted with grave abuse of
discretion in dismissing the two cases.
CA granted the petition and remanded the case to RTC for further
proceedings.
Hence this R45 petition claiming, among others, that the CA erred in taking
cognizance of the R65 petition because the proper remedy of the respondents
should have been an appeal, not a R65.
Petitioners argue that the CA committed reversible error in granting the
Petition for Certiorari, because such extraordinary writ is unavailing in this
case. They posit that contrary to the position of respondent, an ordinary
appeal from the order of dismissal is the proper remedy that it should have
taken. Since the dismissal is due to the failure of respondent to appear at the
pre-trial hearing, petitioners add, the dismissal should be deemed an
adjudication on the merits, unless otherwise stated in the order.25
Second, petitioner argues that the trial court properly dismissed the cases for
the failure of the plaintiff a quo, respondent herein, to attend the pre-trial.
Issue:
W/N respondents should have appealed to CA instead of taking a R65 – Yes,
appeal. SC reinstated RTC decision dismissing the case but modified it to be
without prejudice b/c the case involved taxes.
Held:
Yes, appeal. SC reinstated RTC decision dismissing the case but modified it
to be without prejudice b/c the case involved taxes.
The petition is meritorious.
The remedy of certiorari does not lie to question the RTC Order of dismissal
Respondent’s Petition for Certiorari filed before the CA was not the proper
remedy against the assailed Order of the RTC. Pursuant to Rule 65 of the
Rules of Court, a special civil action for certiorari could only be availed of
when a tribunal “acts in a capricious, whimsical, arbitrary or despotic manner
in the exercise of [its] judgment as to be said to be equivalent to lack of
jurisdiction”26 or when it acted without or in excess of its or his jurisdiction,
or with grave abuse of discretion amounting to lack or excess of jurisdiction;
and if there is no appeal or other plain, speedy, and adequate remedy in the
ordinary course of law.27
It is settled that the Rules precludes recourse to the special civil action of
certiorari if appeal by way of a Petition for Review is available, as the
remedies of appeal and certiorari are mutually exclusive and not alternative
or successive.28
Here, respondent cannot plausibly claim that there is no plain, speedy, and
adequate remedy available to it to question the dismissal Order of the trial
court. The RTC Order does not fall into any of the exceptions under Section
1, Rule 41, where appeal is not available as a remedy. It is clear from the
tenor of the RTC’s July 14, 2006 Order that it partakes of the nature of a final
adjudication, as it fully disposed of the cases by dismissing them. In fine,
there remains no other issue for the trial court to decide anent the said cases.
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The proper remedy, therefore, would have been the filing of a Notice of
Appeal under Rule 41 of the Rules of Court. Such remedy is the plain, speedy,
and adequate recourse under the law, and not a Petition for Certiorari under
Rule 65, as respondent here filed before the CA.
A petition for certiorari is not and cannot be a substitute for an appeal,
especially if one’s own negligence or error in one’s choice of remedy
occasioned such loss or lapse. When an appeal is available, certiorari will not
prosper, even if the basis is grave abuse of discretion.29 The RTC Order
subject of the petition was a final judgment which disposed of the case on the
merits; hence, an ordinary appeal was the proper remedy.
Respondent laments that the questioned RTC Order did not specify whether
the dismissal is with prejudice or not, putting it in a precarious situation of
what legal actions to take upon its receipt. This misgiving, however, stems
from a misreading of the Rules. Rule 18, Sec. 5 of the Rules of Court clearly
states:
Sec. 5. Effect of failure to appear. — The failure of the plaintiff to appear
when so required pursuant to the next preceding section shall be cause for
dismissal of the action. The dismissal shall be with prejudice, unless
otherwise ordered by the court. x x x (Emphasis supplied.)
The rule is clear enough that an order of dismissal based on failure to appear
at pre-trial is with prejudice, unless the order itself states otherwise. The
questioned Order of the trial court did not specify that the dismissal is without
prejudice. There should be no cause for confusion, and the trial court is not
required to explicitly state that the dismissal is with prejudice. The respondent
is not then left without a remedy, since the Rules itself construes the dismissal
to be with prejudice. It should be considered as adjudication on the merits of
the case, where the proper remedy is an appeal under Rule 41. Regrettably,
the respondent chose the wrong mode of judicial review. In not dismissing
the petition for certiorari outright, and in not ruling that such remedy is the
wrong mode of judicial review, the CA committed grave and reversible error.
Neither is this issue a novel one. In Corpuz v. Citibank, N.A.,31 this Court
had already ruled that the proper remedy for an order of dismissal under the
aforequoted Sec. 5, Rule 18 of the Rules of Court is to file an appeal. As in
the case at bar, the plaintiffs in that case filed a petition for certiorari assailing
the order of dismissal. Ruling that it is not the proper remedy, this Court said:
“Section 5, of Rule 18 provides that the dismissal of an action due to the
plaintiff’s failure to appear at the pre-trial shall be with prejudice, unless
otherwise ordered by the court. In this case, the trial court deemed the
plaintiffs-herein spouses as non-suited and ordered the dismissal of their
Complaint. As the dismissal was a final order, the proper remedy was to file
an ordinary appeal and not a petition for certiorari. The spouses’ petition for
certiorari was thus properly dismissed by the appellate court.”
The OSG should have known better, and filed a Notice of Appeal under Rule
41, instead of a petition for certiorari under Rule 65. Its failure to file the
proper recourse renders its petition dismissible, as it fails to allege sufficient
grounds for the granting of a writ of certiorari. The fact that the CA
overlooked this constitutes a reversible error on its part.
II.
Dismissal due to the fault of respondent
Even going into the merits of the case, however, We find the trial court’s
dismissal of the case to be in order. As it were, the trial court amply gave
respondent sufficient notice and opportunity to attend the pre-trial
conference, but despite this, it neglected its duty to prosecute its case and
attend the scheduled pre-trial hearings. Hence, the trial court cannot be
faulted for dismissing the case.
This Court finds that the dismissal of the case by the trial court was due to
the fault and negligence of respondent. There is clear negligence and laxity
on the part of both the BOC and OSG in handling this case on behalf of the
Republic. Despite several re-settings of the hearing, either or both counsels
failed to attend the pre-trial conference, without giving a justifiably
acceptable explanation of their absence. This utter neglect of its duty to attend
the scheduled hearings is what led the trial court to ultimately dismiss the
cases. In finding that the dismissal by the trial court is tainted with grave
abuse of discretion, the CA committed reversible error.
It was due to this repeated absence on the part of the BOC and the OSG that
the trial court issued the Order dated July 14, 2006 dismissing the cases filed
by the Republic.
It is fairly obvious that the trial court gave the Republic, through the OSG
and the BOC, every opportunity to be present during the pre-trial conference.
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The hearings had to be reset six times due to various reasons, but not once
was the OSG and BOC properly represented. Too, not once did the OSG and
BOC offer a reasonable explanation for their absence during the hearings.
Despite the express warning by the trial court during the penultimate setting
on June 30, 2006, the OSG and BOC still failed to attend the next scheduled
setting.
in Civil Case Nos. 02-102612 and 02-102634, is hereby REINSTATED with
the MODIFICATION that the dismissal of the two civil cases shall be
WITHOUT PREJUDICE.
SO ORDERED.

Despite the leeway and opportunity given by the trial court, it seemed that the
OSG and BOC did not accord proper importance to the pre-trial conference.
Pre-trial, to stress, is way more than simple marking of evidence. Hence, it
should not be ignored or neglected, as the counsels for respondent had.

In The Philippine American Life & General Insurance Company v. Enario,

the Court held that pre-trial cannot be taken for granted. It is not a mere
technicality in court proceedings for it serves a vital objective: the
simplification, abbreviation and expedition of the trial, if not indeed its
dispensation. The importance of pre-trial in civil actions cannot be
overemphasized.

Pre-trial is an answer to the clarion call for the speedy disposition of cases.
Although it was discretionary under the 1940 Rules of Court, it was made
mandatory under the 1964 Rules and the subsequent amendments in 1997.
Hailed as “the most important procedural innovation in Anglo-Saxon justice
in the nineteenth century,” pre-trial seeks to achieve the following: [codal]

The inevitable conclusion in this case is that the trial court was merely
following the letter of Sec. 5, Rule 18 of the Rules of Court in dismissing the
case. Thus, the CA committed grave and reversible error in nullifying the
Order of dismissal. The trial court had every reason to dismiss the case, not
only due to the Motion to Dismiss filed by the defendants, but because the
Rules of Court itself says so.

In view, however, of the huge amount of tax collectibles involved, and

considering that taxes are the “lifeblood of the government,” the dismissal
of the case should be without prejudice.

WHEREFORE, premises considered, the instant petition is hereby

GRANTED. The April 30, 2008 Decision and June 27, 2008 Resolution of
the Court of Appeals in CA-G.R. SP No. 101394 are hereby REVERSED
and SET ASIDE. The July 14, 2006 Order of the RTC, Branch 34 in Manila,

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5. LBL Industries v. City of Lapu-Lapu, 2013
Facts:
In 2006, respondent City of Lapu-Lapu filed a complaint for expropriation
before the RTC against petitioner LBL Industries.
Upon deposit of an amount equivalent to 15% of the fair market value of the
property based on the current tax declaration, respondent took possession of
and utilized the property.
Meanwhile, petitioner interposed a Motion to Conduct Joint Survey and
Set Case for Pre-trial.
Later, or on March 3, 2006, petitioner filed its Answer to the Amended and
Second Amended Complaint.
Meantime, the RTC issued two Orders, dated July 10, 2006 and March 28,
2007, directing the issuance of a writ of possession. The branch clerk of court,
however, failed to comply with any of the orders.3
A year later, or on January 25, 2008, petitioner moved for the dismissal of the
case on the ground that respondent failed to prosecute the case for an
unreasonable length of time as provided for under Section 3, Rule 17 of the
Rules of Court. According to petitioner, respondent has yet to move for the
setting of the case for pre-trial and it had done nothing to ensure
compliance with the Orders for the issuance of the writ of execution.
Respondent opposed the motion, explaining that the reason for the delay was
that it is awaiting the RTC’s resolution on the motion filed by petitioner for
the conduct of a joint survey and for the setting of the case for pre-trial.
Petitioner filed a Reply to respondent’s Opposition and Comment on the
Motion to Dismiss on February 14, 2008.
RTC denied the MTD holding that respondent cannot be faulted for the
alleged delay in prosecuting the case as, indeed, petitioner’s motion for the
conduct of a joint survey and for the setting of the case for trial had not yet
been resolved. And as an additional reason for its action, the RTC cited the
non-observance of the three (3)-day notice rule noting that the motion to
dismiss was received by the plaintiff on January 31, 2008, but the motion was
set for hearing on the following day, or on February 1, 2008.
Petitioner’s MR was denied by the RTC in an Order dated January 26,
2011. The RTC attributed the fault to its branch clerk of court for failing to
comply with its twin orders directing the issuance of a writ of possession.
Petitioner filed a R65 with the CA assailing the denial of the MTD and the
denial of the MR.
CA dismissed the petition on the ground that, among others, absence of a
board resolution evincing the authority of Roberto Sison, petitioner’s
Chief Operating Officer, to represent it in the case.
Hence this petition.
Issue:
W/N RTC erred in not granting the MTD for failure to prosecute – No, it did
not err.
Held:
No, it did not err.
Petitioner contends that the trial court erred in not dismissing the case for
respondent’s failure to prosecute the case for an unreasonable length of time
in violation of Sec. 1, Rule 18 and Sec. 3, Rule 17 of the Rules of Court.
Sec. 1, Rule 18 on Pre-Trial, reads:
Sec. 1. When conducted. — After the last pleading has been served and filed,
it shall be the duty of the plaintiff to promptly move ex parte that the case be
set for pre-trial.
Related to the above section is Sec. 3 of Rule 17, which states:
Sec. 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the
plaintiff fails x x x to prosecute his action for an unreasonable length of time,
x x x the complaint may be dismissed upon motion of the defendant or upon
the court’s own motion x x x.
Sec. 1, Rule 18 of the Rules of Court imposes upon the plaintiff the duty to
set the case for pre- trial after the last pleading is served and filed. With this
in mind, We have, in several cases, ruled that the plaintiffs omission to
promptly move that the case be set for pre-trial is a ground for the dismissal
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of the complaint due to his fault, particularly for failing to prosecute his action
for an unreasonable length of time, pursuant to Sec. 3, Rule 17.
The parties, as well as the courts below, however, failed to consider that the
afore-quoted Sec. 1 of Rule 18 had already been superseded by A.M. No.
03-1-09-SC, which took effect on August 16, 2004, Item 1.2 of which states:
“I. PRE-TRIAL
A. Civil Cases
1. Within one day from receipt of the complaint:
1.1. Summons shall be prepared and shall contain a reminder to defendant to
observe restraint in filing a motion to dismiss and instead allege the grounds
thereof as defences in the Answer, in conformity with IBP-OCA
Memorandum on Policy Guidelines dated March 12, 2002. x x x.
1.2 x x x Within five (5) days from date of filing of the reply, the plaintiff
must promptly move ex parte that the case be set for pre-trial conference. If
the plaintiff fails to file said motion within the given period, the Branch
[Clerk of Court] shall issue a notice of pre-trial.”
Thus, the present rule is that if the plaintiff fails to file a motion to set the
case for pre-trial within five (5) days from the filing of a reply, the duty to set
the case for pre-trial falls upon the branch clerk of court. However, this does
not relieve the plaintiff of his own duty to prosecute the case diligently.
For a plaintiff, as herein respondent, to be excused from its burden to
promptly prosecute its case, it must convince the court that its failure to do
so was due to justifiable reasons. If the neglect is justified, then a dismissal
of the case on said ground is not warranted.
In an attempt to convince Us that it was not remiss in its duty to diligently
prosecute its case, respondent proffered the following reasons, to wit:
1. Respondent was constrained to await the trial court’s resolution of
petitioner’s Motion to Conduct Joint Survey and Set the Case for Pre-Trial,
which the RTC has not yet resolved to this date;18
2. Respondent’s right to due process — i.e., the right to be given a reasonable
or ample opportunity to be heard — is violated since the RTC has not yet
resolved said Motion to Conduct Joint Survey;19
3. Petitioner’s Motion to Dismiss is a mere scrap of paper, petitioner having
violated the three-day notice rule under Sec. 4, Rule 15 of the Rules of
Court;20 and
4. Respondent cannot be faulted for the alleged delay not only because of the
pendency of the resolution of said Motion and because of petitioner’s failure
to strictly comply with the three-day notice rule, but also because the branch
clerk of court failed to comply with the July 10, 2006 and March 28, 2007
directives of the RTC that a writ of possession be issued.21
A consideration of the events that transpired in the said expropriation case
readily shows that the delay cannot solely be attributed to respondent City of
Lapu-Lapu but is in fact due to the failure of the branch clerk of court to set
the case for pre-trial pursuant to A.M. No. 03-1-09-SC, as well as the trial
court’s delay in resolving petitioner’s Motion to Conduct Joint Survey and
Set the Case for Pre- Trial. We find good reason to believe respondent’s
assertion that it acted in good faith when it did not move to set the case for
pre-trial, since petitioner already moved for the pre-trial setting. Another
motion from respondent can be simply repetitive of petitioner’s earlier
motion.
The Court, however, is mindful of petitioner’s predicament that the delay in
the resolution of the expropriation case and respondent’s continued
occupation and enjoyment of the subject property for more than half a decade
is extremely disadvantageous and prejudicial to said corporation without any
payment of just compensation. To prevent further damage to petitioner, the
trial court is directed to immediately resolve petitioner’s Motion to Conduct
Joint Survey, set the case for pre-trial, and take all appropriate measures to
expedite the resolution of said case.
WHEREFORE, in view of the foregoing pronouncements, the petition is
hereby PARTIALLY GRANTED.
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XVII. Intervention (Rule 19)
1. Looyuko v. Court of Appeals, G.R. No. 102696, July 12, 2001
Facts:
Disputed in these consolidated cases is a house and lot located in
Mandaluyong, Rizal (now Mandaluyong City), formerly covered by Transfer
Certificate of Title (TCT) No. 1702, and previously owned by the Spouses
Tomas and Linda Mendoza. Bitterly contesting the property are the
spouses’ various creditors as well as the creditors’ alleged assignee.
One set of creditors includes Albert Looyuko and Jose Uy. Their lawyer,
Atty. Victoria Cuyos, has also annotated her attorney’s lien over the property.
Antonia Gutang and her children David and Elizabeth, who have substituted
their father, comprise another set. Both sets of creditors rest their claim upon
separate levies on execution and their supposed purchase of the property at
public auction.
Civil Case No. 82-5792, RTC Manila (Looyuko and Uy vs. Spouses Mendoza)
On April 22, 1977, Albert Looyuko and Jose Uy, through their counsel, Atty.
Victoria Cuyos, filed a complaint against the Spouses Mendoza before the
Regional Trial Court (RTC) of Manila. The Manila RTC issued a writ of
preliminary attachment over the property and a notice of levy on attachment
bearing the date April 22, 1977 was annotated at the back of the TCT No.
1702.
Evidently, Looyuko and Uy prevailed in that action. On February 12, 1986,
the Manila RTC issued a writ of execution and the property was sold at public
auction with Looyuko and Uy as the highest bidders.
Civil Case No. 13122, RTC Iloilo (Antonio Gutang vs. Tomas Mendoza)
LRC Case No. R-3613, RTC Rizal
Antonia Gutang filed a complaint for a sum of money with damages against
Tomas Mendoza with the RTC of Iloilo (Civil Case No. 13122). Judgment
was rendered in favor of Antonia Gutang and the decision later became final
and executory. On July 1, 1981, Antonia Gutang caused to be annotated on
the same TCT No. 1702 a notice of levy on execution. On June 8, 1984, the
property was sold at public auction to Antonia Gutang. The Deputy Sheriff
executed a final deed of sale on November 5, 1985.
Antonia Gutang, by virtue of the certificate of sale, filed with the RTC of
Rizal a petition for the cancellation of TCT No. 1702 and the issuance of a
new title in her name. The case was docketed as LRC Case No. R-3613. On
June 15, 1987, the Rizal RTC issued an order granting the petition.
Consequently, TCT No. 1702 was cancelled and TCT No. 242 in the name of
Antonia Gutang, married to Jose Gutang, was issued on December 23, 1987.
The issuance of TCT No. 242, as will be seen later, spawned other cases.
I.
Civil Case No. 82-9760, RTC Manila (FGU vs. Spouses Mendoza)
CA-G.R. No. 23849, 7th Division, Court of Appeals (FGU vs. Judge Bayhon
and Spouses Gutang)
G.R. No. 102696, Supreme Court (Looyuko, et al. vs. Court of Appeals,
FGU, et al.)
G.R. No. 102716, Supreme Court (FGU vs. Court of Appeals, Spouses
Gutang, et al.)
On December 2, 1976, spouses Tomas and Linda Mendoza executed a
mortgage over the subject property in favor of FGU Insurance Corporation.
The mortgage was registered with the Register of Deeds of Pasig, Rizal on
December 3, 1976.
As the spouses failed to satisfy the obligation secured by the mortgage, FGU
on June 1, 1982 filed an action for foreclosure of mortgage (Civil Case No.
82-9760) with the RTC of Manila against said spouses. The latter filed an
Answer but failed to appear during the pre-trial. Consequently, the Spouses
Mendoza were declared as in default and evidence were received ex- parte.
Manila RTC ruled for FGU and ordered the spouses to pay, and if they
default, their mortgage shall be foreclosed.
No appeal was taken from the above Order and the same subsequently
became final and executory.
On September 14, 1988, the Manila RTC issued a writ of execution.
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On November 24, 1988, the deputy sheriff in a public bidding sold the parcel
of land covered by TCT 1702 to FGU, the highest bidder. A certificate of sale
was thereafter issued in FGU’s favor, which was confirmed by the RTC on
March 2, 1989.
On August 23, 1989, the RTC issued an order for the cancellation of TCT
No. 242 and the issuance of a new TCT in FGU’s name.
Before the new TCT could be issued, however, the Spouses Gutang filed a
motion for intervention and to set aside the judgment of the RTC, alleging
that they are the new registered owners of the property.
In an Order dated February 9, 1990, the RTC allowed the motion for
intervention, holding that the failure of FGU to implead the Spouses in the
action for foreclosure deprived the latter of due process. The RTC thus set
aside its Decision and all orders issued subsequent and related thereto.
“WHEREFORE, the motion to intervene filed by the Spouses Gutang is
granted and the decision on May 19, 1988 is reconsidered set aside together
with all orders subsequent and related thereto.”
On October 11, 1990, Looyuko, et al. filed a motion for intervention, which
the RTC granted in its Order dated October 18, 1990.
In an Order dated November 16, 1990, the RTC denied FGU’s motion for the
reconsideration of the order setting aside its decision.
FGU filed a R65 with the CA arguing that the trial court committed grave
abuse of discretion in granting the Spouses Gutang’s motion for intervention
since the RTC decision, as amended, was already final and executory.
Juan Uy, Alberto Looyuko and their counsel, Atty. Cuyos, filed a motion
for intervention with the CA alleging that they were attachment creditors of
the spouses Tomas and Linda Mendoza whose property covered by TCT No.
1702 was attached as per entry No. 11728 duly inscribed on April 22, 1977
and subsequently carried over to TCT No. 242 in the name of the Spouses
Gutang.
CA allowed the intervention.
CA affirmed the RTC allowance of the intervention.
On August 16, 1991, the Court of Appeals noted a motion for leave to
intervene by Schubert Tanunliong.
Looyuko, et al. thus filed a petition for certiorari, prohibition and mandamus
before this Court, contending in the main that the failure of FGU to implead
them as defendants in Civil Case No. 82-9760 deprived them of due process.
FGU, for its part, filed a petition for review on certiorari with this Court,
which was docketed as G.R. No. 102716. FGU contends that the Court of
Appeals erred in characterizing Civil Case No. 82-9760 as an action for a sum
of money, and not one for foreclosure of mortgage, and in allowing the
intervention of the Spouses Gutang and Looyuko, et al. in the proceedings
before the trial court.
Issue:
W/N the motion for intervention of Spouses Gutang and Looyuko were
properly granted – No.
Held:
No.
Then Section 2, Rule 12 of the Rules of Court, the law prevailing at the time,
reads as follows:
Intervention. — A person may, before or during a trial be permitted by the
court, in its discretion, to intervene in an action, if he has legal interest in the
matter in litigation, or in the success of either of the parties, or an interest
against both, or when he is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court or of
an officer thereof. [Italics supplied.]
None of the grounds underscored above are present to warrant their
intervention. Accordingly, we assume for purposes of discussion that the
action was indeed for the foreclosure of the mortgage over the subject
property.
The rule stated above also requires that a motion for intervention should be
made “before or during a trial.” Because of varying interpretations of the
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phrase, the present Rules have clarified that the motion should be filed “any
time before rendition of judgment.”
The former rule as to when intervention may be allowed was expressed in
Sec. 2, Rule 12 as “before or during a trial,” and this ambiguity also gave rise
to indecisive doctrines. Thus, inceptively it was held that a motion for leave
to intervene may be filed “before or during a trial” even on the day when the
case is submitted for decision (Falcasantos vs. Falcasantos, L-4627, May 13,
1952) as long as it will not unduly delay the disposition of the case. The term
“trial” was used in its restricted sense, i.e., the period for the introduction for
intervention was filed after the case had already been submitted for decision,
the denial thereof is proper (Vigan Electric Light Co., Inc. vs. Arciaga, L-
29207 and L- 29222, July 31, 1974). However, it has also been held that
intervention may be allowed at any time before the rendition of final
judgment.
The uncertainty in these rulings has been eliminated by the present Sec. 2 of
this amended Rule which permits the filing of the motion to intervene at any
time before the rendition of the judgment in the case, in line with the doctrine
in Lichauco above cited. The justification advanced for this is that before
judgment is rendered, the court, for good cause shown, may still allow the
introduction of additional evidence and that is still within a liberal
interpretation of the period for trial.
In the present case, the motions for intervention were filed after judgment had
already been rendered, indeed when the case was already final and executory.
Certainly, intervention can no longer be allowed in a case already terminated
by final judgment.
Intervention is merely collateral or accessory or ancillary to the principal
action, and not an independent proceeding; it is an interlocutory proceeding
dependent on or subsidiary to the case between the original parties. Where
the main action ceases to exist, there is no pending proceeding wherein the
intervention may be based. Here, there is no more pending principal action
wherein the Spouses Gutang and Looyuko, et al. may intervene.
In exceptional cases, the Court has allowed intervention notwithstanding the
rendition of judgment by the trial court. In Director of Lands vs. Court of
Appeals, intervention was allowed even when the petition for review of the
assailed judgment was already submitted for decision in the Supreme Court.
Recently in Mago vs. Court of Appeals, the Court granted intervention despite
the case having become final and executory.
It must be noted, however, that in both these cases, the intervenors were
indispensable parties. This is not so in the case at bar.
Section 1, Rule 68 of the Rules of Court requires all persons having or
claiming an interest in the premises subordinate in right to that of the holder
of the mortgage be made defendants in the action for foreclosure.
The requirement for joinder of the person claiming an interest subordinate to
the mortgage sought to be foreclosed, however, is not mandatory in character
but merely directory, in the sense that failure to comply therewith will not
invalidate the foreclosure proceedings. A subordinate lien holder is a proper,
even a necessary, but not an indispensable, party to a foreclosure proceeding.
Appropriate relief could be granted by the court to the mortgagee in the
foreclosure proceeding, without affecting the rights of the subordinate lien
holders. The effect of the failure on the part of the mortgagee to make the
subordinate lien holder a defendant is that the decree entered in the
foreclosure proceeding would not deprive the subordinate lien holder of his
right of redemption. A decree of foreclosure in a suit to which the holders of
a second lien are not parties leaves the equity of redemption in favor of such
lien holders unforeclosed and unaffected.
In view of the foregoing ruling, the resolution of G.R. Nos. 108257 and
120954 is no longer necessary. G.R. No. 108257 stems from a complaint by
Tanunliong for, among others, the cancellation of TCT No. 242 in the name
of the Spouses Gutang. G.R. No. 120954 involves the propriety of
Tanunliong’s intervention in the land registration cases instituted by Antonia
Gutang for the cancellation of TCT No. 242 and certain annotations in said
TCT. The above ruling has rendered moot the proceedings from which these
cases (G.R. Nos. 108257 and 120954) arose.
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2. Limpo v. Court of Appeals, G.R. No. 124582, July 16, 2000
Facts:
Petitioner Reggie Christi S. Limpo (Regina Christi Schaetzchen Limpo) and
Bong Diaz (Maria Lourdes Gamir Diaz) were acquitted of nine counts of
violation of Batas Pambansa Blg. 22, in Criminal Case Nos. 9638-M to
9646- M. She and her co-accused, Bong Diaz, and Leonarda Mariano y
Bernardo, were likewise acquitted of seven counts of estafa, in Criminal Case
Nos. 9647-M to 9653-M.
But petitioner and Diaz jointly were held severally liable to private
respondent Veronica Gonzales, complainant in the two criminal cases, in
the total amount of P275,000.00, plus interests at the legal rate computed
from the date of the first demand, or on November 19, 1985, until the amount
was fully paid, in the decision rendered October 28, 1991 by the Regional
Trial Court, Branch 12, Malolos, Bulacan.
The decision became final and executory on December 1, 1991.
On December 29, 1992, private respondent filed a motion for the enforcement
of the civil liability, whereupon the trial court issued a writ of execution.
Consequently, the sheriff levied upon two (2) parcels of land registered in
the name of petitioner under TCT Nos. T-30395 and T-30396 of the
Register of Deeds of Bulacan. At the auction sale subsequently held, the
properties were sold to private respondent as the highest bidder and a
certificate of sale dated June 8, 1993 was duly issued in her favor. As
petitioner failed to redeem the properties, a final deed of sale was executed in
favor of private respondent on June 20, 1994.
To consolidate her ownership over the two (2) parcels of land, private
respondent demanded from petitioner the surrender of her owner’s copy
of TCT Nos. T-30395 and T- 30396. Petitioner, however, failed to do so,
whereupon private respondent filed a petition under §107 of P.D. No. 1529
(Property Registration Decree), to compel petitioner to surrender her
owner’s duplicate certificates of title. The petition was docketed as LRC
Case No. P-292-M and assigned to Branch 21 of the court. RTC ruled for
private respondent and petitioner Limpo to surrender the owner’s duplicate
copy of the TCTs, and if she fails to do so, the Register of Deeds is ordered
to cancel the same and issue new ones to respondent Gonzales.
No motion for reconsideration nor appeal having been filed by petitioner
within the reglementary period, the decision became final and executory.
The Register of Deeds (RD) issued new TCTs in favor of respondent.
However, since petitioner refused to vacate, private respondent filed a
petition for issuance of a writ of possession.
RTC granted and issued a writ of possession.
Petitioner filed a R65 with the CA arguing that the RTC had no jurisdiction
to issue a writ of possession ex parte under Rule 39, §35 of the Rules of Court.
She argued that such writ could be issued ex parte only in connection with an
extrajudicial foreclosure of mortgage under Act No. 3135, §7, as amended.
CA affirmed the RTC.
Hence this petition with the SC.
On April 25, 2000, while this case was pending deliberation in the SC, the
spouses Anselmo and Precilla Bulaong filed a motion for leave to
intervene.
It appears that, in a decision rendered on July 30, 1999, in Civil Case No.
170-M-95, the RTC Branch 12 ordered
1. the cancellation of TCT Nos. T-62002 and T-62003 in the name of private
respondent Veronica Gonzales and
2. the execution of a deed of sale covering the lands in question in favor of
the spouses Bulaong; and
3. the issuance to the latter of new titles upon payment by them of
P275,000.00 to private respondent Veronica Gonzales representing the
judgment debt of petitioner in Criminal Case Nos. 9638-M to 9653-M.
It appears further that from the decision, both the spouses Bulaong and private
respondent appealed to the Court of Appeals where the case is now pending
as C.A. G.R. SP No. 55423.
In their motion for intervention, the spouses Bulaong allege
1. that on January 13, 1993, the Limpos (presumably the family of herein
petitioner Reggie Christi Limpo) mortgaged the lands in question to them
for P4.3 million, delivering to them for this purpose the owner’s duplicates
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of TCT Nos. T-249639 and T-249641 registered in the name of the persons
from whom petitioner bought the properties on November 5, 1991;
2. that as the originals of the titles in the Register of Deeds of Malolos,
Bulacan had been destroyed by fire in 1987, they filed a petition for
reconstitution of the same, resulting in the issuance on February 4, 1993 of
TCT Nos. RT-29488 and RT-29489 which were later cancelled when, in their
place, TCT Nos. T-30395 and T-30396 in the name of petitioner were, issued;
that the spouses found out “to their consternation . . . several entries with
various erasures and superimpositions appearing] in the pages of the
encumbrance of TCT Nos. T-30395 and T-30396”;
3. that “the position, placing, and the number of entries favored spouses
Bulaong, while the dates of entries . . . indicate advantage on the part of
Gonzales”;
4. that the mortgage lien of the spouses Bulaong was annotated on the
reconstituted titles on March 1, 1993;
5. that on August 22, 1993, the mortgage was foreclosed and the properties
covered by it were sold for P4.3 million to the spouses Bulaong as highest
bidders; and that on August 23, 1994, a certificate of sale was issued to them
and inscribed on TCT Nos. T- 30395 and T-30396 as Entry No. 46239.
The spouses Bulaong pray that “the conflict between the rights of spouses
Bulaong as mortgagees for P4.3 million . . . as against the entry in the primary
book for the P275,000.00 judgment claim of [private respondent] Gonzales .
. . be resolved.”
Issue:
W/N the intervention of spouses Bulaong is proper – No.
Held:
No.
Intervention cannot be allowed at this late stage of this case.
Rule 19 of the 1997 Rules of Civil Procedure provides in pertinent parts:
Section 1. Who may intervene. — A person who has a legal interest in the
matter in litigation, or in the success of either of the parties, or in interest
against both, or is so situated as to be adversely affected by a distribution or
other disposition of property in the custody of the court or of an officer thereof
may, with leave of court, be allowed to intervene in the action. The court shall
consider whether or not the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties, and whether or not the
intervenor’s rights may be fully protected in a separate proceeding.
Sec. 2. Time to intervene. — The motion to intervene may be filed at any time
before rendition of judgment by the trial court. A copy of the pleading-in-
intervention shall be attached to the motion and served on the original
parties.”
Thus, intervention may be granted only where its allowance will not unduly
delay or prejudice the rights of the original parties to a case. Generally, it will
be allowed “before rendition of judgment by the trial court,” as Rule 19, §2
expressly provides. After trial and decision in a case, intervention can no
longer be permitted. Certainly it cannot be allowed on appeal without unduly
delaying the disposition of the case and prejudicing the interest of the parties.
Indeed, there is no justification for granting the motion for the intervention
of the spouses Bulaong which they filed only on April 25, 2000, after the
appeal in this case had already been submitted for resolution, when they could
have done so earlier.
On January 4, 1993, notice of the levy on execution in Criminal Case Nos.
9638-M to 9653-M was entered in the primary entry book of the Register of
Deeds of Malolos, Bula-can, per Entry No. 7808 and were later annotated on
the owner’s duplicate copies of TCT Nos. T- 249639 and T-249641.
Although the spouses Bulaong claim that said owner’s duplicate copies of the
titles were “clean” when the Limpos mortgaged the properties to them on
January 13, 1993, they nonetheless admit that when the titles in the name of
petitioner Reggie Christi Limpo were issued shortly after February 4, 1993
(TCT Nos. T-30395 and T-30396), they contained the notice of levy on
execution in Criminal Case Nos. 9638-M to 9653-M. They, therefore, had
notice of private respondent’s claims over the properties in question.
On December 16, 1994, private respondent filed a petition to compel
petitioner, as registered owner, to surrender her owner’s copy of TCT Nos.
T-30395 and T- 30396. Assuming that the spouses Bulaong were until then
without knowledge of the sale of the properties to private respondent, they
could not have remained unaware of the claim of private respondent. After
all, they admit they were then in possession of the owner’s copy of TCT Nos.
T-30395 and T-30396.
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The result of all this is that the spouses Bulaong, knowing private
respondent’s interest in the properties in conflict with theirs, could have
sought to intervene much earlier and not only now on appeal. It took them
nearly five years from March 29, 1995, when private respondent filed a
petition for issuance of a writ of possession, before filing their motion for
leave to intervene in this case. Such delay amounts to laches and justifies the
denial of their motion.

Allowance of intervention at this late stage would unduly delay the resolution
of the appeal as trial would be conducted anew to allow the spouses Bulaong
to present evidence in support of their claim of ownership.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED. The

motion for leave to intervene, filed by the spouses Anselmo and Precilla
Bulaong, is hereby DENIED.
SO ORDERED.

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3. Asian Terminals v. Ricafort, G.R. No. 166901, October 27, 2006
Facts:
Section 1, Republic Act (RA) No. 8506, which took effect on February 22,
1998, provides that “it shall be unlawful for any person to import, cause the
importation of, register, cause the registration of, use or operate any vehicle
with its steering wheel right hand side thereof in any highway, street or road,
whether private or public, or at the national or local x x x.”
Noel Tabuelog, Ernesto de Jesus, Norma Pondevida, Renato Claros, Ernesto
M. Chua, Cecilia T. Saulog, Jenelita S. Napárate, Rodolfo F. Mago, and
Amalia C. Edamura are duly-licensed importers of vehicles. Sometime in
April and May 1998, they imported 72 secondhand right-hand drive buses
from Japan. When the shipment arrived at the South Harbor, Port of Manila,
the District Collector of Customs impounded the vehicles and ordered them
stored at the warehouse of the Asian Terminals, Inc. (ATI), a customs-
bonded warehouse under the custody of the Aviation and Cargo Regional
Division. Conformably with Section 2607 of the Tariff and Customs Code,
the District Collector of Customs issued Warrants of Distraint against the
shipment and set the sale at public auction on September 10, 1998. Bureau of Customs which had custody of the vehicles through ATI “had
In the meantime, on October 28, 1998, the Secretary of Justice rendered
Opinion No. 127, Series of 1998, stating that shipments of right hand wheel
vehicles loaded and exported at the port of origin before February 22, 1998
were not covered by RA No. 8506 unless the same were loaded and imported
after said date.
On November 11, 1998, the importers, through their Attorney-in-Fact Samuel
N. Rosete, filed a complaint with the RTC of Parañaque City, against the
Secretary of Finance, Customs Commissioner, and the Chief Executive of the
Societe Generale de Surillee, for replevin with prayer for the issuance of a
writ of preliminary and mandatory injunction and damages.
Plaintiffs averred that the importation of right-hand drive vehicles are not
prohibited under RA No. 8506 provided that conversion kits are included in
the imported vehicles.
RTC granted the application for a writ of replevin on a bond of
P12,000,000.00. However, George Jeroes, the Chief of Customs Police and
four (4) customs policemen prevented the Sheriff and the policemen assisting
him from taking custody of the vehicles. He claimed that the District
Collector of Customs had jurisdiction over the vehicles. On motion of the
plaintiffs, the court issued an Order on November 23, 1998, directing the PNP
Director to assist the Sheriff in implementing the writ it issued and to arrest
anyone who would obstruct the implementation of its order. The Sheriff
served a copy of the Order on ATI and succeeded in taking custody of the
vehicles and signed a receipt therefor. The District Collector of Customs
agreed to transfer the custody of the vehicles to the RTC, on the condition
that the required taxes, dues, and other charges be paid. The Customs
Commissioner approved the decision of the District Collector. Plaintiffs paid
the requisite taxes, dues, and other charges amounting to P7,528,635.00.
They were able to take possession of the vehicles over the objections of ATI.
On November 27, 1998, the defendants, through the Office of the Solicitor
General, filed an Omnibus Motion, seeking the reconsideration of the
RTC Order granting plaintiffs’ plea for a writ of replevin. It likewise
prayed that the writ of replevin issued by the court be quashed on the ground
that the RTC has no jurisdiction over the vehicles subject of seizure and
detention before the Bureau of Customs. The OSG declared that the
exclusive jurisdiction over said vehicles and on the issues of the seizure and
detention thereof.” The ATI filed a motion for the court to allow the vehicles
to remain in its warehouse.
On December 1, 1998, the ATI filed a Third-Party Claim over the
shipment, alleging that it had a lien over the vehicles for accumulated
and unpaid storage and arrastre charges, and wharfage dues amounting
to P13,036,480.94. It prayed that the vehicles be returned and remain with it
until payment of said dues. On December 9, 1998, ATI filed a Motion seeking
to require plaintiffs (third-party defendants) to post a bond to insure payment
of its claims against the plaintiffs, or to order the Sheriff to return possession
of the vehicles to it.
Before the court could resolve the motions, plaintiffs filed a “Motion/Notice
to Dismiss/Withdraw Complaint” against the officials of the Bureau of
Customs and Department of Finance, on the ground that said defendants had
agreed to the implementation of the writ of replevin issued by the court on
condition that plaintiffs pay the taxes, dues, and other charges on the
importation amounting to P7,528,635.00 to the government and that plaintiffs
had paid the said amount.
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On January 13, 1999, ATI filed a Motion for Intervention and for
Admission of its Complaint-in-Intervention, alleging that it had a lien on
the vehicles to the extent of P13,820,150.93, representing accumulated
storage and arrastre charges and wharfage dues. ATI prayed that its
Complaint-in-Intervention be admitted, and that after due proceedings
judgment be rendered in its favor.
Plaintiffs opposed the motion of ATI on the following grounds: (1) ATI failed
to allege and present any contract covering the deposit/storage of the vehicles
in its warehouse; (2) ATI has no legal interest over the matter in litigation;
and (3) the adjudication of the rights of the parties may be delayed or
prejudiced while those of ATI may be protected in a separate proceeding.
RTC dismissed the complaint holding that it had no jurisdiction over the
case. It held that the CTA exercises exclusive appellate jurisdiction to review
the ruling of the Commissioner in seizure and confiscation cases and that
power is to the exclusion of the Court of First Instance which may not
interfere with the Commissioner’s decisions.
For its part, ATI filed a motion for clarification of the order, alleging that
the court failed to resolve its motion. It also pleaded for the court to admit its
Complaint-in-Intervention and its motion seeking to require plaintiffs to post
a bond to insure payment of its claims for wharfage/arrastre charges. W/N the lower courts erred in dismissing the complaint-in-intervention of
RTC dismissed the complaint-in-intervention holding that it should also
be dismissed because it was only an accessory to the principal case.
ATI filed a motion for reconsideration, which the court denied on July 31,
2000. While it recognized the arguments of ATI, the court held that its rights
could be fully protected in a separate proceeding. It declared that the subject
buses were under custodia legis by virtue of the writ of replevin it had issued.
However, due to the dismissal of the plaintiffs’ complaint, the subject buses
have to be returned to the person who was in custody prior to the
implementation of the writ. The motion for reconsideration filed by ATI and
the opposition filed by plaintiffs were likewise denied. asserts that, even if the original complaint was properly dismissed, its
Petitioner ATI filed a R65 with the CA arguing that it filed its Complaint-
in-Intervention before the RTC dismissed the complaint of private
respondents. It pointed out that the dismissal of the main case does not
necessarily result in the dismissal of its ancillary action because it has a legal
interest in the matter in litigation, that is, it is so situated as to be adversely
affected by the distribution or other disposition of the property in ques tion.
It thus behooved the court to have ordered respondents to post a bond
following its third-party claim over the property for the collection of the
wharfage and arrastre fees/charges.
CA affirmed RTC holding that the it was the CTA, not the RTC, that had
jurisdiction. Since the RTC had no jurisdiction over the main case, it was also
bereft of authority to hear the third- party claim or the complaint-in-
intervention filed by ATI.
Citing Saw v. Court of Appeals, the appellate court ruled that intervention
was not an independent proceeding but merely an ancillary and supplemental
one, which, in the nature of things, is subordinate to the main proceeding
unless otherwise provided for by statute or by the Rules of Court. The general
rule is that an intervention is limited to the field of litigation open to the
original parties. The RTC had dismissed the main action; thus, there was no
more principal proceeding in which petitioner ATI may intervene.
Hence this petition.
Issue:
petitioner – No.
Held:
No.
Citing Metropolitan Bank and Trust Company v. The Presiding Judge, RTC,
Manila Branch 39, petitioner maintains that the dismissal of the original
complaint filed by respondents cannot, in any way, result in the denial of its
complaint-in-intervention. It posits that its consent as intervenor is necessary
for the dismissal of the main action, and that the original parties cannot
“isolate” it and agree, among themselves, to dismiss the complaint. Petitioner
complaint-in-intervention survives the original complaint and may proceed
as long as the existence of an actual controversy had been established by the
pleadings. It insists that the intervention has to be heard regardless of the
disposition of the principal action.
Avila 4B | 2016
Petitioner submits that even on the assumption that the lower court has no
jurisdiction over the principal action, the third-party complaint may still be
maintained.

We are thus tasked to resolve the issue of whether the CA erred in dismissing
the petition for certiorari of the petitioner.

The petition is denied for lack of merit.

We rule that the trial court acted in accordance with the Tariff and Customs
Code (TCC) and the rulings of this Court when it issued the assailed Orders.

The RTC cannot be faulted for dismissing petitioner’s complaint-in-

intervention. Considering that it had no jurisdiction over respondents’ action
and over the shipment subject of the complaint, all proceedings before it
would be void. The RTC had no jurisdiction to take cognizance of the
complaint-in- intervention and act thereon except to dismiss the same.
Moreover, considering that intervention is merely ancillary and supplemental
to the existing litigation and never an independent action, the dismissal of the
principal action necessarily results in the dismissal of the complaint-in-
intervention. Likewise, a court which has no jurisdiction over the principal
action has no jurisdiction over a complaint-in-intervention. Intervention
presupposes the pendency of a suit in a court of competent jurisdiction.
Jurisdiction of intervention is governed by jurisdiction of the main action.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Court

of Appeals Decision in CA-G.R. SP No. 61562 is AFFIRMED.
SO ORDERED.

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4. Salas Jr. v. Aguila, 2013
Facts:
On 7 September 1985, petitioner Juan Sevilla Salas, Jr. (Salas) and
respondent Eden Villena Aguila (Aguila) were married. On 7 June 1986,
Aguila gave birth to their daughter, Joan Jiselle. Five months later, Salas left
their conjugal dwelling. Since then, he no longer communicated with Aguila
or their daughter.
On 7 October 2003, Aguila filed a Petition for Declaration of Nullity of
Marriage (petition) citing psychological incapacity under Article 36 of
the Family Code. The petition states that they “have no conjugal properties
whatsoever.”5 In the Return of Summons dated 13 October 2003, the sheriff
narrated that Salas instructed his mother Luisa Salas to receive the copy of
summons and the petition.6
On 7 May 2007, the RTC rendered a Decision7 declaring the nullity of the
marriage of Salas and Aguila (RTC Decision). The RTC Decision further
provides for the “dissolution of their conjugal partnership of gains, if any.”8
On 10 September 2007, Aguila filed a Manifestation and Motion9 stating
that she discovered:
(a) two 200-square-meter parcels of land with improvements located in San
Bartolome, Quezon City, covered by Transfer Certificate of Title (TCT) No.
N-259299-A and TCT No. N-255497; and
(b) a 108-square-meter parcel of land with improvement located in Tondo,
Manila, covered by TCT No. 243373 (collectively, “Discovered
Properties”).
The registered owner of the Discovered Properties is “Juan S. Salas,
married to Rubina C. Salas.” The manifestation was set for hearing on 21
September 2007. However, Salas’ notice of hearing was returned unserved
with the remark, “RTS Refused To Receive.”
On 19 September 2007, Salas filed a Manifestation with Entry of
Appearance10 requesting for an Entry of Judgment of the RTC Decision
since no motion for reconsideration or appeal was filed and no conjugal
property was involved.
On 21 September 2007, the hearing for Aguila’s manifestation ensued, with
Aguila, her counsel and the state prosecutor present. During the hearing,
Aguila testified that on 17 April 2007 someone informed her of the existence
of the Discovered Properties. Thereafter, she verified the information and
secured copies of TCTs of the Discovered Properties. When asked to clarify,
Aguila testified that Rubina C. Salas (Rubina) is Salas’ common-law wife.11
On 8 February 2008, Salas filed an Opposition to the Manifestation12
alleging that there is no conjugal property to be partitioned based on Aguila’s
petition. According to Salas, Aguila’s statement was a judicial admission and
was not made through palpable mistake. Salas claimed that Aguila waived
her right to the Discovered Properties. Salas likewise enumerated properties
he allegedly waived in favor of Aguila, to wit: (1) parcels of land with
improvements located in Sugar Landing Subdivision, Alangilan, Batangas
City; No. 176 Brias Street, Nasugbu, Batangas; P. Samaniego Street,
Silangan, Nasugbu, Batangas; and Batangas City, financed by Filinvest; (2)
cash amounting to P200,000.00; and (3) motor vehicles, specifically Honda
City and Toyota Tamaraw FX (collectively, “Waived Properties”). Thus,
Salas contended that the conjugal properties were deemed partitioned.
RTC ruled for Aguila and ordered both parties to partition among themselves
the properties.
On 11 November 2008, Rubina filed a Complaint-in-Intervention,
claiming that:
(1) she is Rubina Cortez, a widow and unmarried to Salas;
(2) the Discovered Properties are her paraphernal properties;
(3) Salas did not contribute money to purchase the Discovered Properties as
he had no permanent job in Japan;
(4) the RTC did not acquire jurisdiction over her as she was not a party in the
case; and
(5) she authorized her brother to purchase the Discovered Properties but
because he was not well- versed with legal documentation, he registered the
properties in the name of “Juan S. Salas, married to Rubina C. Salas.”
RTC denied the intervention.
On appeal, CA affirmed RTC and rules that Rubina cannot collaterally attack
a certificate of title.
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Hence this petition.

Issue:
W/N lower courts erred in not allowing Rubina Cortez to intervene – No, they
did not err.

Held:
No, they did not err.

The petition lacks merit.

On both Salas and Rubina’s contention that Rubina owns the Discovered
Properties, we likewise find the contention unmeritorious. The TCTs state
that “Juan S. Salas, married to Rubina C. Salas” is the registered owner of the
Discovered Properties. A Torrens title is generally a conclusive evidence of
the ownership of the land referred to, because there is a strong presumption
that it is valid and regularly issued.25 The phrase “married to” is merely
descriptive of the civil status of the registered owner.26 Furthermore, Salas
did not initially dispute the ownership of the Discovered Properties in his
opposition to the manifestation. It was only when Rubina intervened that
Salas supported Rubina’s statement that she owns the Discovered Properties.

Considering that Rubina failed to prove her title or her legal interest in the
Discovered Properties, she has no right to intervene in this case. The Rules
of Court provide that only “a person who has a legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both,
or is so situated as to be adversely affected by a distribution or other
disposition of property in the custody of the court or of an officer thereof may,
with leave of court, be allowed to intervene in the action.”

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated

16 March 2012 and the Resolution dated 28 June 2012 of the Court of
Appeals in CA-G.R. CV No. 95322.
SO ORDERED.

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5. Smart Communications v. Aldecoa
Facts:
Petitioner is a domestic corporation engaged in the telecommunications
business. On March 9, 2000, petitioner entered into a contract of lease4 with
Florentino Sebastian in which the latter agreed to lease to the former a piece
of vacant lot, measuring around 300 square meters, located in Barangay Vira,
Roxas, Isabela (leased property). Petitioner, through its contractor, Allarilla
Construction, immediately constructed and installed a cellular base
station on the leased property. Inside the cellular base station is a
communications tower, rising as high as 150 feet, with antennas and
transmitters; as well as a power house open on three sides containing a
25KVA diesel power generator. Around and close to the cellular base station
are houses, hospitals, clinics, and establishments, including the properties of
respondents Arsenio Aldecoa, Jose B. Torre, Conrado U. Pua, Gregorio V.
Mansano, Jerry Corpuz, and Estelita Acosta.
Respondents filed before the RTC on May 23, 2000 a Complaint against
petitioner for abatement of nuisance and injunction with prayer for
temporary restraining order and writ of preliminary injunction, docketed as
Civil Case No. Br. 23-632-2000. Respondents alleged in their Complaint that:
“7. With its structural design, SMART’s tower being constructed at Vira,
Roxas, Isabela, is weak, unstable, and infirm, susceptible to collapse like the
Mobiline tower which fell during a typhoon as earlier alleged, and its
structural integrity being doubtful, and not earthquake proof, this tower poses
great danger to life and limb of persons as well as their property, particularly,
the [respondents] whose houses abut, or are near or within the periphery of
the communications tower;
8. This tower is powered by a standby generator that emits noxious and
deleterious fumes, not to mention the constant noise it produces, hence, a
hazard to the health, not only of the [respondents], but the residents in the
area as well;
9. When in operation, the tower would also pose danger to the life and health
of [respondents] and residents of the barangay, especially children, because
of the ultra high frequency (UHF) radio wave emissions it radiates.
10. Worse, and in violation of law, [petitioner] constructed the tower without
the necessary public hearing, permit of the barangay, as well as that of the
municipality, the Environmental Compliance Certificate of the [Department
of Environment and Natural Resources (DENR)], construction permit, and
other requirements of the National Telecommunications Commission (NTC),
xxx.”
After filing their Answer, petitioner filed a Motion for Summary
Judgment.
RTC granted the Motion for Summary Judgment and dismissed
respondents’ Complaint.
On appeal, CA reversed and declared the cellular base station of petitioner a
nuisance that endangered the health and safety of the residents of Barangay
Vira, Roxas, Isabela because:
(1) the locational clearance granted to petitioner was a nullity due to the
lack of approval by majority of the actual residents of the barangay and
a barangay resolution endorsing the construction of the cellular base
station; and
(2) the sound emission of the generator at the cellular base station exceeded
the Department of Environment and Natural Resources (DENR) standards.
Hence this petition claiming, among others, that the CA erred when it
encroached upon an executive function of determining the validity of a
locational clearance when it declared, contrary to the administrative findings
of the Housing Land Use and Regulatory Board (“HLURB”), that the
locational clearance of Petitioner was void.
Issue:
W/N the CA erred in taking cognizance of the issue of whether the locational
clearance for petitioner’s cell site is valid – Yes, it erred.
Held:
Yes, it erred.
The Petition is partly meritorious. While the Court agrees that the Court of
Appeals should not have taken cognizance of the issue of whether the
locational clearance for petitioner’s cellular base station is valid, the Court
will still not reinstate the RTC Order dated January 16, 2001 granting
petitioner’s Motion for Summary Judgment and entirely dismissing Civil
Case No. Br. 23-632-2000. The issues of (1) whether petitioner’s cellular
base station is a nuisance, and (2) whether the generator at petitioner’s
Avila 4B | 2016
cellular base station is, by itself, also a nuisance, ultimately involve disputed
or contested factual matters that call for the presentation of evidence at a
full-blown trial.
I.
Based on the principle of exhaustion of administrative remedies and its
corollary doctrine of primary jurisdiction, it was premature for the Court of
Appeals to take cognizance of and rule upon the issue of the validity or nullity
of petitioner’s locational clearance for its cellular base station.
The principle of exhaustion of administrative remedies and the doctrine of
primary jurisdiction were explained at length by the Court in Province of
Zamboanga del Norte v. Court of Appeals, 342 SCRA 549 (2000) as follows:
“The Court in a long line of cases has held that before a party is allowed to
seek the intervention of the courts, it is a pre-condition that he avail himself
of all administrative processes afforded him. Hence, if a remedy within the
administrative machinery can be resorted to by giving the administrative
officer every opportunity to decide on a matter that comes within his
jurisdiction, then such remedy must be exhausted first before the court’s
power of judicial review can be sought. The premature resort to the court is
fatal to one’s cause of action. Accordingly, absent any finding of waiver or
estoppel, the case may be dismissed for lack of cause of action.
The doctrine of exhaustion of administrative remedies is not without its
practical and legal reasons. Indeed, resort to administrative remedies entails
lesser expenses and provides for speedier disposition of controversies. Our
courts of justice for reason of comity and convenience will shy away from a
dispute until the system of administrative redress has been completed and
complied with so as to give the administrative agency every opportunity to
correct its error and to dispose of the case.
The doctrine of primary jurisdiction does not warrant a court to arrogate unto
itself the authority to resolve a controversy the jurisdiction over which is
initially lodged with an administrative body of special competence.
We have held that while the administration grapples with the complex and
multifarious problems caused by unbridled exploitation of our resources, the
judiciary will stand clear. A long line of cases establishes the basic rule that
the court will not interfere in matters which are addressed to the sound
discretion of government agencies entrusted with the regulation of activities
coming under the special technical knowledge and training of such agencies.
In fact, a party with an administrative remedy must not merely initiate the
prescribed administrative procedure to obtain relief, but also pursue it to its
appropriate conclusion before seeking judicial intervention. The underlying
principle of the rule on exhaustion of administrative remedies rests on the
presumption that when the administrative body, or grievance machinery, is
afforded a chance to pass upon the matter, it will decide the same correctly.”
“Corollary to the doctrine of exhaustion of administrative remedies is the
doctrine of primary jurisdiction; that is, courts cannot or will not determine a
controversy involving a question which is within the jurisdiction of the
administrative tribunal prior to the resolution of that question by the
administrative tribunal, where the question demands the exercise of sound
administrative discretion requiring the special knowledge, experience and
services of the administrative tribunal to determine technical and intricate
matters of fact.”
The Housing and Land Use Regulatory Board (HLURB) is the planning,
regulatory, and quasi-judicial instrumentality of government for land use
development. In the exercise of its mandate to ensure rational land use by
regulating land development, it issued HLURB Resolution No. R-626, series
of 1998, Approving the Locational Guidelines for Base Stations of Cellular
Mobile Telephone Service, Paging Service, Trunking Service, Wireless Loop
Service and Other Wireless Communication Services (HLURB Guidelines).
Said HLURB Guidelines aim to protect “providers and users, as well as the
public in general while ensuring efficient and responsive communication
services.”
Under the 1996 HLURB Rules of Procedure, as amended, an opposition to
an application for a locational clearance for a cellular base station or a
complaint for the revocation of a locational clearance for a cellular base
station already issued, is within the original jurisdiction of the HLURB
Executive Committee. To wit:
“SECTION 2. Opposition to Application for Permit/License/Clearance.—
When an opposition is filed to an application for a license, permit or clearance
with the Board or any of its Regional Field Office, the Regional Officer shall
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make a preliminary evaluation and determination whether the case is
impressed with significant economic, social, environmental or national policy
implications. If he/she determines that the case is so impressed with
significant economic, social, environmental or national policy implications…
the Regional Officer shall cause the records of the case to be transmitted to
the Executive Committee which shall assume original jurisdiction over the
case, otherwise, the Regional Officer shall act on and resolve the
Opposition.”
After the HLURB Executive Committee had rendered its Decision, the
aggrieved party could still avail itself of a system of administrative appeal,
also provided in the 1996 HLURB Rules of Procedure.
There is no showing that respondents availed themselves of the
aforementioned administrative remedies prior to instituting Civil Case No.
Br. 23-632-2000 before the RTC. While there are accepted exceptions to the
principle of exhaustion of administrative remedies and the doctrine of
primary jurisdiction,30 respondents never asserted nor argued any of them.
Thus, there is no cogent reason for the Court to apply the exceptions instead
of the general rule to this case.
In Republic v. Lacap (supra note 27 at pp. 97-98), the Court enumerated the
exceptions:
(a) where there is estoppel on the part of the party invoking the doctrine;
(b) where the challenged administrative act is patently illegal, amounting to
lack of jurisdiction;
(c) where there is unreasonable delay or official inaction that will
irretrievably prejudice the complainant;
(d) where the amount involved is relatively small so as to make the rule
impractical and oppressive;
(e) where the question involved is purely legal and will ultimately have to be
decided by the courts of justice;
(f) where judicial intervention is urgent;
(g) when its application may cause great and irreparable damage;
(h) where the controverted acts violate due process;
(i) when the issue of non-exhaustion of administrative remedies has been
rendered moot;
(j) when there is no other plain, speedy and adequate remedy;
(k) when strong public interest is involved; and,
(l) in quo warranto proceedings.
Ordinarily, failure to comply with the principle of exhaustion of
administrative remedies and the doctrine of primary jurisdiction will result in
the dismissal of the case for lack of cause of action. However, the Court
herein will not go to the extent of entirely dismissing Civil Case No. Br.
23-632-2000.
The Court does not lose sight of the fact that respondents’ Complaint in Civil
Case No. Br. 23-632-2000 is primarily for abatement of nuisance; and
respondents alleged the lack of HLURB requirements for the cellular base
station, not to seek nullification of petitioner’s locational clearance, but to
support their chief argument that said cellular base station is a nuisance which
needs to be abated. The issue of whether or not the locational clearance for
said cellular base station is valid is actually separate and distinct from the
issue of whether or not the cellular base station is a nuisance; one is not
necessarily determinative of the other. While the first is within the primary
jurisdiction of the HLURB and, therefore, premature for the courts to rule
upon in the present case, the latter is within the jurisdiction of the courts to
determine but only after trial proper.
II.
The Court, in AC Enterprises, Inc. v. Frabelle Properties Corporation, 506
SCRA 625 (2006), settled that a simple suit for abatement of nuisance, being
incapable of pecuniary estimation, is within the exclusive jurisdiction of the
RTC. Although respondents also prayed for judgment for moral and
exemplary damages, attorney’s fees, and litigation expenses, such claims are
merely incidental to or as a consequence of, their principal relief.
Nonetheless, while jurisdiction over respondents’ Complaint for abatement
of nuisance lies with the courts, the respective judgments of the RTC and the
Court of Appeals cannot be upheld.
Judging by the aforequoted standards, summary judgment cannot be rendered
in this case as there are clearly factual issues disputed or contested by the
parties.
At the outset, the RTC erred in granting petitioner’s Motion for Summary
Judgment and ordering the dismissal of respondents’ Complaint in Civil Case
No. Br. 23-632- 2000.
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WHEREFORE, premises considered, the instant Petition is PARTIALLY
GRANTED. The Decision dated July 16, 2004 and Resolution dated
December 9, 2004 of the Court of Appeals in CA-G.R. CV No. 71337 are
REVERSED and SET ASIDE. Let the records of the case be REMANDED
to the Regional Trial Court, Branch 23, of Roxas, Isabela, which is
DIRECTED to reinstate Civil Case No. Br. 23-632-2000 to its docket and
proceed with the trial and adjudication thereof with appropriate dispatch in
accordance with this Decision.
SO ORDERED.

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XVIII. Subpoena (Rule 21)
1. Collado v. Bravo, A.M.-P-99-1377, April 10, 2011
Facts:
In a complaint-affidavit dated July 14, 1997, complainant Lorena O.
Collado charged respondent Teresita G. Bravo, Clerk of Court of the
Municipal Trial Court (MTC) of Naguilian, La Union, with Grave
Misconduct and/or Conduct Prejudicial to the Best Interest of the Service.
In her affidavit, complainant alleged that on July 11, 1997, she received
through priority mail, a subpoena from the MTC of Naguilian, La Union,
directing her to appear before the said court at 2:00 P.M., July 14, 1997. The
subpoena was duly signed by respondent in her capacity as Clerk of Court.
Before proceeding to said court, complainant sought assistance from the
Office of the Governor of La Union and Mr. Arthur T. Madayag, Legal
Assistant II of the Provincial Legal Office, who was detailed to accompany
her to court.
Upon arriving at the MTC of Naguilian, complainant talked to respondent.
When complainant asked for copies of the complaint and other details of the
case, respondent replied that no complaint had been filed and her intention in
issuing the subpoena was to allow a certain Perla Baterina, the labor recruiter
of complainant’s son, Emmanuel Collado, to talk to complainant.
Complainant claimed that she felt humiliated, harassed, and experienced
extreme nervousness as a result of respondent’s issuance of the subpoena.
In her answer dated October 6, 1997, respondent admitted issuing the
subpoena. She claimed, however, that it was done with good intentions since
she only acceded to the urgent request of the spouses Rogelio and Perla
Baterina who came to her office on July 7, 1997, airing their grievances
against complainant. Respondent averred that her only purpose in issuing the
subpoena was to enable complainant and the Baterinas to settle their
differences.
In its Memorandum of February 8, 1999, the Office of the Court
Administrator (OCA) recommended that the complaint be docketed as an
administrative matter and respondent be fined Five Thousand Pesos
(P5,000.00) for Grave Misconduct with a Warning that the commission of a
similar act would merit a more serious penalty.
Issue:
W/N clerk Bravo should be sanctioned – Yes.
Held:
Yes.
Respondent’s act of issuing the subpoena to complainant was evidently not
directly or remotely connected with respondent’s judicial or administrative
duties. It appears that she merely wanted to act as a mediator or conciliator in
the dispute between complainant and the Baterinas, upon the request of the
latter.
Respondent as Clerk of Court is primarily tasked with making out and issuing
all writs and processes issuing from the court. She should have known or
ought to know what a subpoena is.
“A subpoena is a process directed to a person requiring him to attend and to
testify at the hearing or the trial of an action, or at any investigation conducted
by competent authority, or for the taking of his deposition.”
She should have known that a process is “the means whereby a court compels
the appearance of the defendant before it, or a compliance with its demands.”
Hence, absent any proceedings, suit, or action commenced or pending before
a court, a subpoena may not issue.
In this case, respondent knew there was no case filed against complainant.
Neither had complainant commenced any proceeding against the Baterinas
for whose benefit the subpoena was issued. Respondent, then, had absolutely
neither the power nor the authority nor the duty to issue a subpoena to the
complainant.
Perusal of the subpoena she issued to complainant shows that the form used
was the one used in criminal cases, giving complainant the impression that
her failure to appear would subject her to “the penalty of law,” and that the
subpoena was issued with the trial court’s sanction. We find, therefore, that
respondent was using without authority some element of state coercion
against complainant who was understandably compelled to heed the contents
of the subpoena resulting in her humiliation. Such naked abuse of authority
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by complainant could not be allowed to pass without appropriate sanction.
Accordingly, this Court has no recourse but to agree with the
recommendation of the OCA that respondent be disciplined and fined.

WHEREFORE, respondent Teresita G. Bravo is hereby found GUILTY of

Grave Misconduct and Conduct Prejudicial to the Best Interest of the Service
for which she is fined Five Thousand Pesos (P5,000.00) with a WARNING
that a repetition of the same or similar act would be treated more severely.
SO ORDERED.

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2. Roco v. Contreras, G.R. No. 158275, June 28, 2005
Facts:
Petitioner Domingo Roco was engaged in the business of buying and selling
dressed chicken. Sometime in 1993, he purchased his supply of dressed
chicken from private respondent Cal’s Poultry Supply Corporation (Cal’s
Corporation, for short), a domestic corporation controlled and managed by
one Danilo Yap. As payment for his purchases, petitioner drew five (5)
checks payable to Cal’s Corporation against his account with the Philippine
Commercial and Industrial Bank (PCIB).
Cal’s Corporation deposited the above checks in its account with PCIB but
the bank dishonored them for having been drawn against a closed account.
Thereafter, Cal’s Corporation filed criminal complaints against petitioner for
violation of Batas Pambansa Blg. 22 (BP 22), otherwise known as the
Bouncing Checks Law.
After preliminary investigation, five (5) informations for violation of BP 22
were filed against petitioner before the Municipal Trial Court in Cities
(MTCC), Roxas City.
Meanwhile, and even before trial could commence, petitioner filed with the
Bureau of Internal Revenue (BIR) at Iloilo City a denunciation letter against
Cal’s Corporation for the latter’s alleged violation of Section 258 in relation
to Section 263 of the National Internal Revenue Code in that it failed to issue
commercial invoices on its sales of merchandise.
Upon BIR’s investigation, it was found that Cal’s Corporation’s sales on
account were unavoidable, hence, the corporation had to defer the issuance
of “Sales Invoices” until the purchases of its customers were paid in full. With
respect to the sales invoices of petitioner, the investigation disclosed that the
same could not, as yet, be issued by the corporation precisely because the
checks drawn and issued by him in payment of his purchases were dishonored
by PCIB for the reason that the checks were drawn against a closed account.
Accordingly, the BIR found no prima facie evidence of tax evasion against
Cal’s Corporation.
Thereupon, trial of the criminal cases proceeded. After the prosecution rested,
the MTCC declared the cases submitted for decision on account of
petitioner’s failure to adduce evidence in his behalf. Later, the same court
rendered a judgment of conviction against petitioner.
Petitioner went on appeal to the Regional Trial Court, contending that he was
unlawfully deprived of his right to due process when the MTCC rendered
judgment against him without affording him of the right to present his
evidence. Agreeing with the petitioner, the RTC vacated the MTCC decision
and remanded the cases to it for the reception of petitioner’s evidence.
During the pendency of the remanded cases, petitioner filed with the MTCC
a “Request for Issuance of Subpoena Ad Testificandum and Subpoena Duces
Tecum,” requiring Vivian Deocampo or Danilo Yap, both of Cal’s
Corporation or their duly authorized representatives, to appear and testify in
court on 19 May 1999 and to bring with them certain documents, records and
books of accounts for the years 1993-1999, to wit:
1. a) Sales Journal for the year 1993;
2. b) Accounts Receivable Journal for the year 1993;
3. c) Sales Ledger for the year 1993;
4. d) Accounts Receivable Ledger for the year 1993 (in its absence,
Accounts Receivable Ledger for the years 1994, 1995, 1996, 1997,
1998 or 1999);
5. e) Audited Income Statement for the years 1993, 1994, 1995, 1996,
1997, 1998 and Income Statements as of February 1999;
6. f) Audited Balance Sheet for the years 1993, 1994, 1995, 1996,
1997, 1998 and Balance Sheet as of February 1999; and
7. g) Income Tax Returns for the years 1993, 1994, 1995, 1996 and
1997.
The prosecution did not object to this request. When the cases were called
on 19 May 1999, the MTCC, then presided by Acting Judge Geomer C.
Delfin, issued an order granting petitioner’s aforementioned request and
accordingly directed the issuance of the desired subpoenas.
During the trial of 14 July 1999, the private prosecutor manifested that it was
improper for the trial court to have directed the issuance of the requested
subpoenas, to which the petitioner countered by saying that Judge Delfin’s
order of 19 May 1999 had become final and hence, immutable. Nonetheless,
the trial court issued an order allowing the prosecution to file its comment or
opposition to petitioner’s request for the issuance of subpoenas.
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For its part, the corporation itself maintained that the production of the above-
mentioned documents was inappropriate because they are immaterial and
irrelevant to the crimes for which the petitioner was being prosecuted.
MTCC denied petitioner’s request on the following grounds:
(a) the requested documents, book ledgers and other records were immaterial
in resolving the issues posed before the court; and
(b) the issuance of the subpoenas will only unduly delay the hearing of the
criminal cases.
On a R65, RTC affirmed the MTC.
On appeal, CA affirmed the RTC.
Hence this petition.
Issue:
W/N the lower courts erred in denying his request for the issuance of
subpoenas – No.
Held:
No.
As we see it, the pivotal issue is whether or not the three (3) courts below
committed reversible error in denying petitioner’s request for the issuance of
subpoena ad testificandum and subpoena duces tecum in connection with the
five (5) criminal cases for violation of BP 22 filed against him and now
pending trial before the MTCC.
We rule in the negative.
A subpoena is a process directed to a person requiring him to attend and to
testify at the hearing or trial of an action or at any investigation conducted
under the laws of the Philippines, or for the taking of his deposition. In this
jurisdiction, there are two (2) kinds of subpoena, to wit: subpoena ad
testificandum and subpoena duces tecum. The first is used to compel a person
to testify, while the second is used to compel the production of books, records,
things or documents therein specified.
As characterized in H.C. Liebenow vs. The Philippine Vegetable Oil
Company: The subpoena duces tecum is, in all respects, like the ordinary
subpoena ad testificandum with the exception that it concludes with an
injunction that the witness shall bring with him and produce at the
examination the books, documents, or things described in the subpoena.
Well-settled is the rule that before a subpoena duces tecum may issue, the
court must first be satisfied that the following requisites are present:
(1) the books, documents or other things requested must appear prima facie
relevant to the issue subject of the controversy (test of relevancy); and
(2) such books must be reasonably described by the parties to be readily
identified (test of definiteness).
Again, to quote from H.C. Liebenow: In determining whether the production
of the documents described in a subpoena duces tecum should be enforced by
the court, it is proper to consider,
1. first, whether the subpoena calls for the production of specific
documents, or rather for specific proof, and
2. secondly, whether that proof is prima facie sufficiently relevant to
justify enforcing its production.
A general inquisitorial examination of all the books, papers, and documents
of an adversary, conducted with a view to ascertain whether something of
value may not show up, will not be enforced.
Further, in Universal Rubber Products, Inc. vs. CA, et al., we held:
Well-settled is Our jurisprudence that, in order to entitle a party to the
issuance of a ‘subpoena duces tecum,’ it must appear, by clear and
unequivocal proof, that the book or document sought to be produced contains
evidence relevant and material to the issue before the court, and that the
precise book, paper or document containing such evidence has been so
designated or described that it may be identified. (Emphasis supplied)
Going by established precedents, it thus behooves the petitioner to first prove,
to the satisfaction of the court, the relevancy and the definiteness of the books
and documents he seeks to be brought before it.
Admittedly, the books and documents that petitioner requested to be
subpoenaed are designated and described in his request with definiteness and
readily identifiable. The test of definiteness, therefore, is satisfied in this case.
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It is, however, in the matter of relevancy of those books and documents to the
pending criminal cases that petitioner miserably failed to discharge his
burden.
In the recent case of Aguirre vs. People of the Philippines, the Court reiterated
that BP 22 punishes the issuance of a bouncing check not the purpose for
which it was issued nor the terms and conditions relating to its issuance. The
mere act of issuing a worthless check is malum prohibitum.
We stress that the gravamen of the offense under BP 22 is the act of making
or issuing a worthless check or a check that is dishonored upon its
presentment for payment. The offense is already consummated from the very
moment a person issues a worthless check, albeit payment of the value of the
check, either by the drawer or by the drawee bank, within five (5) banking
days from notice of dishonor given to the drawer is a complete defense
because the prima facie presumption that the drawer had knowledge of the
insufficiency of his funds or credit at the time of the issuance of the check
and on its presentment for payment is thereby rebutted by such payment.
to 1999 which could not have reflected petitioner’s alleged payment because
the subject transaction happened in 1993.
We are inclined to believe, along with that court, that petitioner was just
embarking on a “fishing expedition” to derail “the placid flow of trial.”
With the above, it becomes evident to this Court that petitioner’s request for
the production of books and documents referred to in his request are nakedly
calculated to merely lengthen the proceedings in the subject criminal cases,
if not to fish for evidence. The Court deeply deplores petitioner’s tactics and
will never allow the same.
WHEREFORE, the instant petition is DENIED and the challenged decision
and resolution of the Court of Appeals AFFIRMED.
Costs against petitioner. SO ORDERED.

Here, petitioner would want it appear that the books and documents subject
of his request for subpoena duces tecum are indispensable, or, at least,
relevant to prove his innocence. The Court disagrees.

Based on the records below and as correctly pointed out by the Court of
Appeals, petitioner had been issued by Cal’s Corporation with temporary
receipts in the form of yellow pad slips of paper evidencing his payments,
which pad slips had been validated by the corporation itself. Clear it is, then,
that the production of the books and documents requested by petitioner are
not indispensable to prove his defense of payment.

In short, the issuance of a subpoena duces tecum or ad testificandum to

compel the attendance of Vivian Deocampo or Danilo Yap of Cal’s
Corporation or their duly authorized representatives, to testify and bring with
them the records and documents desired by the petitioner, would serve no
purpose but to further delay the proceedings in the pending criminal cases.

Besides, the irrelevancy of such books and documents would appear on their
very face thereof; the fact that the requested Audited Income Statements,
Audited Balance Sheets, Income Tax Returns, etc. pertained to the years 1994

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XIX. Deposition (Rules 23 to 29)
a. Deposition taken in another proceeding
Republic v. Sandiganbayan, Jose Africa, Imelda Marcos, et al. G.R. No.
152375, December 13, 2011
Facts:
On July 22, 1987, the petitioner Republic of the Philippines, through the
Presidential Commission on Good Government (PCGG), filed a complaint
(docketed as Civil Case No. 0009) against Jose L. Africa, Manuel H. Nieto,
Jr., Ferdinand E. Marcos, Imelda R. Marcos, Ferdinand R. Marcos, Jr., Juan
Ponce Enrile, and Potenciano Ilusorio (collectively, the respondents) for
reconveyance, reversion, accounting, restitution, and damages before the
Sandiganbayan.
The petitioner alleged, inter alia, that the respondents illegally manipulated
the purchase of the major shareholdings of Cable and Wireless Limited in
Eastern Telecommunications Philippines, Inc. (ETPI), which shareholdings
respondents Jose Africa and Manuel Nieto, Jr. held for themselves and,
through their holdings and the corporations they organized, beneficially for
respondents Ferdinand E. Marcos and Imelda R. Marcos.4
Civil Case No. 0009 is the main case subject of the present petition. Victor
Africa (Africa), son of the late Jose L. Africa, was not impleaded in and
so is plainly not a party to Civil Case No. 0009.5
Civil Case No. 0009 spawned numerous incidental cases,6 among them, Civil
Case No. 0130.7 The present respondents were not made parties either in
Civil Case No. 0130. During the pendency of PCGG’s petition (G.R. No. 107789), the PCGG filed
Civil Case No. 0130
In the August 7, 1991 PCGG-conducted ETPI stockholders meeting, a
PCGG-controlled board of directors was elected. Later, the registered ETPI
stockholders convened a special stockholders meeting wherein another set of
board of directors was elected. As a result, two sets of ETPI board and officers
were elected.8
Thereafter, Africa, as an ETPI stockholder, filed a petition for certiorari, with
prayer for a temporary restraining order/preliminary injunction with the
Sandiganbayan (docketed as Civil Case No. 0130), seeking to nullify the
August 5, 1991 and August 9, 1991 Orders of the PCGG. These Orders
directed Africa:
“[T]o account for his sequestered shares in ETPI and to cease and desist from
exercising voting rights on the sequestered shares in the special stockholders’
meeting to be held on August 12, 1991, from representing himself as a
director, officer, employee or agent of ETPI, and from participating, directly
or indirectly[,] in the management of ETPI.”9
During the pendency of Africa’s petition, Civil Case No. 0130, Africa filed a
motion with the Sandiganbayan, alleging that since January 29, 1988 the
PCGG had been “illegally ‘exercising’ the rights of stockholders of ETPI,”10
especially in the election of the members of the board of directors. Africa
prayed for the issuance of an order for the “calling and holding of [ETPI]
annual stockholders meeting for 1992 under the [c]ourt’s control and
supervision and prescribed guidelines.”
SB granted the motion. The PCGG assailed this resolution before this Court
via a petition for certiorari docketed as G.R. No. 107789 (PCGG’s petition),
imputing grave abuse of discretion on the Sandiganbayan for holding, inter
alia, that the registered stockholders of ETPI had the right to vote.14 In our
November 26, 1992 Resolution, we enjoined the Sandiganbayan from
implementing its assailed resolution.
In the meantime, in an April 12, 1993 resolution, the Sandiganbayan ordered
the consolidation of Civil Case No. 0130, among others, with Civil Case
No. 0009, with the latter as the main case and the former merely an
incident.15
with this Court a “Very Urgent Petition for Authority to Hold Special
Stockholders’ Meeting for [the] Sole Purpose of Increasing [ETPI’s]
Authorized Capital Stock” (Urgent Petition). In our May 7, 1996
Resolution, we referred this Urgent Petition to the Sandiganbayan for
reception of evidence and immediate resolution.16 The Sandiganbayan
included the Urgent Petition in Civil Case No. 0130.17
In the proceedings to resolve the Urgent Petition, the testimony of Mr.
Maurice V. Bane (former director and treasurer-in-trust of ETPI) was
taken—at the petitioner’s instance and after serving notice of the deposition-
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taking on the respondents18—on October 23 and 24, 1996 by way of
deposition upon oral examination (Bane deposition) before Consul General
Ernesto Castro of the Philippine Embassy in London, England.
Invoking Section 1, Rule 24 (of the old Rules of Court), purportedly allowing
the petitioner to depose Bane without leave of court, i.e., as a matter of
right after the defendants have filed their answer, the notice stated that
“[t]he purpose of the deposition is for [Bane] to identify and testify on the
facts set forth in his affidavit19 x x x so as to prove the ownership issue in
favor of [the petitioner] and/or establish the prima facie factual foundation
for sequestration of [ETPI’s] Class A stock in support of the [Urgent
Petition].”20 The notice also states that the petitioner shall use the Bane
deposition “in evidence... in the main case of Civil Case No. 0009.”21 On the
scheduled deposition date, only Africa was present and he cross-examined
Bane.
Civil Case No. 0009
Although Civil Case No. 0009 was filed on July 22, 1987, it was only on
November 29, 1996 and March 17, 1997 that the first pre- trial conference
was scheduled and concluded.25
In its Pre-Trial Brief26 dated August 30, 1996, the petitioner offered to
present the following witnesses:
“WITNESSES TO BE PRESENTED AND A BRIEF DESCRIPTION OF
THEIR TESTIMONIES
(1) Maurice V. Bane – representative of Cable and Wireless Limited (C &
W) at the time ETPI was organized…”
IIa. Motion to Admit the Bane Deposition
At the trial of Civil Case No. 0009, the petitioner filed a Motion27 (1st
motion), stating that [the petitioner] wishes to adopt in [Civil Case No. 0009]
Mr. Bane’s deposition.
SB denied the motion for the reason that said deponents according to the
[petitioner] are not available for cross-examination in this Court by the
[respondents]. (emphasis added)
IIb. Urgent Motion and/or Request for Judicial Notice
The petitioner did not in any way question the 1998 resolution, and
instead made its Formal Offer of Evidence on December 14, 1999.33
Significantly, the Bane deposition was not included as part of its offered
exhibits. Rectifying the omission, the petitioner filed an Urgent Motion
and/or Request for Judicial Notice34 (2nd motion) dated February 21, 2000
SB denied this 2nd motion holding that “on the matter of the [Bane
deposition], [its] admission is done through the ordinary formal offer of
exhibits wherein the defendant is given ample opportunity to raise
objection on grounds provided by law. Definitely, it is not under Article
(sic) 129 on judicial notice.”
IIc. Motion to Admit Supplemental Offer of Evidence (Re: Deposition of
Maurice Bane)
On November 16, 2001, the petitioner filed its 3rd Motion, seeking once more
the admission of the Bane deposition.38 On February 7, 2002 (pending
resolution of the respondents’ demurrers to evidence),39 the Sandiganbayan
promulgated the assailed 2002 resolution,40 denying the petitioner’s 3rd
motion.
Hence this petition.
Issue:
W/N SB erred in denying the three motions of petitioner to admit the Bane
Deposition – No.
Held:
No.
IV (b). Use of deposition under Section 4, Rule 23 and as a former
testimony un- der Section 47, Rule 130 Since the present consolidation did
not affect Civil Case No. 0130 as an original, albeit incidental, case, the
admissibility of the Bane deposition cannot avoid being measured against the
requirements of Section 47, Rule 130 of the Rules of Court—the rule on the
admissibility of testimonies or deposition taken in a different proceeding. In
this regard, the petitioner argues that Section 4, Rule 23 of the Rules of Court
(then Rule 24)110 must, at any rate, prevail over Section 47, Rule 130 of the
same Rules.
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At the outset, we note that when the petitioner’s motion to adopt the
testimonies taken in the incident cases drew individual oppositions from the
respondents, the petitioner represented to the Sandiganbayan its willingness
to comply with the provisions of Section 47, Rule 130 of the Rules of
Court,112 and, in fact, again presented some of the witnesses. The
petitioner’s about-face two years thereafter even contributed to the
Sandiganbayan’s own inconsistency on how to treat the Bane deposition, in
particular, as evidence.
Section 4, Rule 23 of the Rules of Court on “Deposition Pending Action”
(deposition de bene esse) provides for the circumstances when depositions
may be used in the trial, or at the hearing of a motion or an interlocutory
proceeding.
SEC. 4. Use of depositions.—At the trial or upon the hearing of a motion or
an interlocutory proceeding, any part or all of a deposition, so far as
admissible under the rules of evidence, may be used against any party who
was present or represented at the taking of the deposition or who had due
notice thereof, in accordance with any one of the following provisions:
xxxx
(c) The deposition of a witness, whether or not a party, may be used by any
party for any purpose if the court finds:
(1) that the witness is dead; or
(2) that the witness resides at a distance more than one hundred (100)
kilometers from the place of trial or hearing, or is out of the Philippines,
unless it appears that his absence was procured by the party offering the
deposition; or
(3) that the witness is unable to attend or testify because of age, sickness,
infirmity, or imprisonment; or
(4) that the party offering the deposition has been unable to procure the
attendance of the witness by subpoena; or
(5) upon application and notice, that such exceptional circumstances exist as
to make it desirable, in the interest of justice and with due regard to the
importance of presenting the testimony of witnesses orally in open court, to
allow the deposition to be used[.]
On the other hand, Section 47, Rule 130 of the Rules of Court provides:
“SEC. 47. Testimony or deposition at a former proceeding.—The testimony
or deposition of a witness deceased or unable to testify, given in a former case
or proceeding, judicial or administrative, involving the same parties and
subject matter, may be given in evidence against the adverse party who had
the opportunity to cross-examine him.”
A plain reading of Rule 23 of the Rules of Court readily rejects the
petitioner’s position that the Bane deposition can be admitted into evidence
without observing the requirements of Section 47, Rule 130 of the Rules of
Court.
Before a party can make use of the deposition taken at the trial of a pending
action, Section 4, Rule 23 of the Rules of Court does not only require due
observance of its sub-paragraphs (a) to (d); it also requires, as a condition for
admissibility, compliance with “the rules on evidence.” Thus, even Section 4,
Rule 23 of the Rules of Court makes an implied reference to Section 47, Rule
130 of the Rules of Court before the deposition may be used in evidence.
By reading Rule 23 in isolation, the petitioner failed to recognize that the
principle conceding admissibility to a deposition under Rule 23 should be
consistent with the rules on evidence under Section 47, Rule 130. In
determining the admissibility of the Bane deposition, therefore, reliance
cannot be given on one provision to the exclusion of the other; both
provisions must be considered. This is particularly true in this case where
the evidence in the prior proceeding does not simply refer to a witness’
testimony in open court but to a deposition taken under another and farther
jurisdiction.
A common thread that runs from Section 4, Rule 23 of the Rules of Court and
Section 47, Rule 130 of the same Rules is their mutual reference to
depositions.
A deposition is chiefly a mode of discovery whose primary function is to
supplement the pleadings for the purpose of disclosing the real points of
dispute between the parties and affording an adequate factual basis during the
preparation for trial. Since depositions are principally made available to the
parties as a means of informing themselves of all the relevant facts,
depositions are not meant as substitute for the actual testimony in open
court of a party or witness. Generally, the deponent must be presented for
oral examination in open court at the trial or hearing. This is a requirement of
the rules on evidence under Section 1, Rule 132 of the Rules of Court.
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That opportunity for cross-examination was afforded during the taking
of the deposition alone is no argument, as the opportunity for cross-
examination must normally be accorded a party at the time that the
testimonial evidence is actually presented against him during the trial or
hearing of a case. However, under certain conditions and for certain limited
purposes laid down in Section 4, Rule 23 of the Rules of Court, the deposition
may be used without the deponent being actually called to the witness stand.
Section 47, Rule 130 of the Rules of Court is an entirely different
provision. While a former testimony or deposition appears under the
Exceptions to the Hearsay Rule, the classification of former testimony or
deposition as an admissible hearsay is not universally conceded. A
fundamental characteristic of hearsay evidence is the adverse party’s lack of
opportunity to cross-examine the out-of-court declarant. However, Section
47, Rule 130 explicitly requires, inter alia, for the admissibility of a former
testimony or deposition that the adverse party must have had an opportunity
to cross-examine the witness or the deponent in the prior proceeding.
This opportunity to cross-examine though is not the ordinary cross-
examination119 afforded an adverse party in usual trials regarding “matters
stated in the direct examination or connected therewith.” Section 47, Rule
130 of the Rules of Court contemplates a different kind of cross-examination,
whether actual or a mere opportunity, whose adequacy depends on the
requisite identity of issues in the former case or proceeding and in the present
case where the former testimony or deposition is sought to be introduced.
Section 47, Rule 130 requires that the issues involved in both cases must, at
least, be substantially the same; otherwise, there is no basis in saying that the
former statement was—or would have been —sufficiently tested by cross-
examination or by an opportunity to do so.120 (The requirement of similarity
though does not mean that all the issues in the two proceedings should be the
same.121 Although some issues may not be the same in the two actions, the
admissibility of a former testimony on an issue which is similar in both
actions cannot be questioned.122)
These considerations, among others, make Section 47, Rule 130 a distinct
rule on evidence and therefore should not be confused with the general
provisions on deposition under Rule 23 of the Rules of Court. In other words,
even if the petitioner complies with Rule 23 of the Rules of Court on the use
of depositions, the observance of Section 47, Rule 130 of the Rules of Court
cannot simply be avoided or disregarded.
Undisputably, the Sandiganbayan relied on the Bane deposition, taken in
Civil Case No. 0130, for purposes of this very same case. Thus, what the
petitioner established and what the Sandiganbayan found, for purposes of
using the Bane deposition, refer only to the circumstances laid down under
Section 4(c), Rule 23 of the Rules of Court, not necessarily to those of Section
47, Rule 130 of the Rules of Court, as a distinct rule on evidence that imposes
further requirements in the use of depositions in a different case or
proceeding. In other words, the prior use of the deposition under Section 4(c),
Rule 23 cannot be taken as compliance with Section 47, Rule 130 which
considers the same deposition as hearsay, unless the requisites for its
admission under this rule are observed. The aching question is whether the
petitioner complied with the latter rule.
Section 47, Rule 130 of the Rules of Court lays down the following requisites
for the admission of a testimony or deposition given at a former case or
proceeding.
1. The testimony or deposition of a witness deceased or otherwise unable to
testify;
2. The testimony was given in a former case or proceeding, judicial or
administrative;
3. Involving the same parties;
4. Relating to the same matter;
5. The adverse party having had the opportunity to cross-examine him.
The reasons for the admissibility of testimony or deposition taken at a former
trial or proceeding are the necessity for the testimony and its
trustworthiness.124 However, before the former testimony or deposition can
be introduced in evidence, the proponent must first lay the proper predicate
therefor, i.e., the party must establish the basis for the admission of the Bane
deposition in the realm of admissible evidence. This basis is the prior issue
that we must now examine and resolve.
IV (c). Unavailability of witness
For the admission of a former testimony or deposition, Section 47, Rule 130
of the Rules of Court simply requires, inter alia, that the witness or deponent
be “deceased or unable to testify.” On the other hand, in using a deposition
that was taken during the pendency of an action, Section 4, Rule 23 of the
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Rules of Court provides several grounds that will justify dispensing with the
actual testimony of the deponent in open court and specifies, inter alia, the
circumstances of the deponent’s inability to attend or testify, as follows:
“(3) that the witness is unable to attend or testify because of age, sickness,
infirmity, or imprisonment[.] [emphases ours]”
The phrase “unable to testify” appearing in both Rule 23 and Rule 130 of the
Rules of Court refers to a physical inability to appear at the witness stand and
to give a testimony. Hence notwithstanding the deletion of the phrase “out of
the Philippines,” which previously appeared in Section 47, Rule 130 of the
Rules of Court, absence from jurisdiction—the petitioner’s excuse for the
non-presentation of Bane in open court—may still constitute inability to
testify under the same rule. This is not to say, however, that resort to
deposition on this instance of unavailability will always be upheld. Where
the deposition is taken not for discovery purposes, but to accommodate
the deponent, then the deposition should be rejected in evidence.
Although the testimony of a witness has been given in the course of a former
proceeding between the parties to a case on trial, this testimony alone is not
a ground for its admission in evidence. The witness himself, if available, must
be produced in court as if he were testifying de novo since his testimony given
at the former trial is mere hearsay. The deposition of a witness, otherwise
available, is also inadmissible for the same reason.
Indeed, the Sandiganbayan’s reliance on the Bane deposition in the other case
(Civil Case No. 0130) is an argument in favor of the requisite unavailability
of the witness. For purposes of the present case (Civil Case No. 0009),
however, the Sandiganbayan would have no basis to presume, and neither can
or should we, that the previous condition, which previously allowed the use
of the deposition, remains and would thereby justify the use of the same
deposition in another case or proceeding, even if the other case or proceeding
is before the same court. Since the basis for the admission of the Bane
deposition, in principle, being necessity,131 the burden of establishing its
existence rests on the party who seeks the admission of the evidence. This
burden cannot be supplanted by assuming the continuity of the previous
condition or conditions in light of the general rule against the non-
presentation of the deponent in court.132
IV (d). The requirement of opportunity of the adverse party to cross-
examine; identity of parties; and identity of subject matter
In resolving the question of whether the requirement of opportunity to cross-
examine has been satisfied, we have to consider first the required identity of
parties as the present opponent to the admission of the Bane deposition to
whom the opportunity to cross- examine the deponent is imputed may not
after all be the same “adverse party” who actually had such opportunity.
In the present case, the petitioner failed to impute, much less establish, the
identity of interest or privity between the then opponent, Africa, and the
present opponents, the respondents. While Africa is the son of the late
respondent Jose Africa, at most, the deposition should be admissible only
against him as an ETPI stockholder who filed the certiorari petition docketed
as Civil Case No. 0130 (and, unavoidably, as successor-in-interest of the late
respondent Jose Africa). While Africa and the respondents are all ETPI
stockholders, this commonality does not establish at all any privity between
them for purposes of binding the latter to the acts or omissions of the former
respecting the cross-examination of the deponent. The sequestration of their
shares does not result in the integration of their rights and obligations as
stockholders which remain distinct and personal to them, vis-a-vis other
stockholders.
IV (d1). The respondents’ notice of taking of Bane deposition is insuffi-
cient evidence of waiver
The petitioner staunchly asserts that the respondents have waived their right
to cross-examine the deponent for their failure to appear at the deposition-
taking despite individual notices previously sent to them.140
In its first Notice to Take Oral Deposition of Mr. Maurice V. Bane dated
August 30, 1996,141 the petitioner originally intended to depose Mr. Bane
on September 25-26 1996. Because it failed to specify in the notice the
purpose for taking Mr. Bane’s deposition, the petitioner sent a Second
Amended Notice to Take Deposition of Mr. Maurice V. Bane Upon Oral
Examination where it likewise moved the scheduled deposition-taking to
October 23-26, 1996.
It must be emphasized that even under Rule 23, the admission of the
deposition upon oral examination is not simply based on the fact of prior
notice on the individual sought to be bound thereby.
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The provision explicitly vesting in the court the power to order that the
deposition shall not be taken connotes the authority to exercise discretion on
the matter. However, the discretion conferred by law is not unlimited. It must
be exercised, not arbitrarily or oppressively, but in a reasonable manner and
in consonance with the spirit of he law. The courts should always see to it
that the safeguards for the protection of the parties and deponents are
firmly maintained.
In conjunction with the order of consolidation, the petitioner’s reliance on the
prior notice on the respondents, as adequate opportunity for cross-
examination, cannot override the non-party status of the respondents in Civil
Case No. 0130—the effect of consolidation being merely for trial. As non-
parties, they cannot be bound by proceedings in that case. Specifically, they
cannot be bound by the taking of the Bane deposition without the consequent
impairment of their right of cross-examination.148 Opportunity for cross-
examination, too, even assuming its presence, cannot be singled out as basis
for the admissibility of a former testimony or deposition since such
admissibility is also anchored on the requisite identity of parties. To reiterate,
although the Sandiganbayan considered the Bane deposition in resolving
Civil Case No. 0130, its action was premised on Africa’s status as a party in
that case where the Bane deposition was taken.
Corollarily, the idea of privity also permeates Rule 23 of the Rules of Court
through its Section 5 which provides:
“Effect of substitution of parties.—Substitution of parties does not affect the
right to use depositions previously taken; and, when an action has been
dismissed and another action involving the same subject is afterward brought
between the same parties or their representatives or successors in interest,
all depositions lawfully taken and duly filed in the former action may be used
in the latter as if originally taken therefor.” [italics and underscoring ours]
In light of these considerations, we reject the petitioner’s claim that the
respondents waived their right to cross-examination when they failed to
attend the taking of the Bane deposition. Incidentally, the respondents’
vigorous insistence on their right to cross-examine the deponent speaks
loudly that they never intended any waiver of this right.
Interestingly, the petitioner’s notice of the deposition-taking relied on Rule
23 of the Rules of Court. Section 15 of this rule reads:
“Deposition upon oral examination; notice; time and place.—A party
desiring to take the deposition of any person upon oral examination shall give
reasonable notice in writing to every other party to the action. The notice
shall state the time and place for taking the deposition and the name and
address of each person to be examined, if known, and if the name is not
known, a general description sufficient to identify him or the particular class
or group to which he belongs. On motion of any party upon whom the notice
is served, the court may for cause shown enlarge or shorten the time.”
Under this provision, we do not believe that the petitioner could reasonably
expect that the individual notices it sent to the respondents would be
sufficient to bind them to the conduct of the then opponent’s (Africa’s) cross-
examination since, to begin with, they were not even parties to the action.
Additionally, we observe that in the notice of the deposition taking,
conspicuously absent was any indication sufficient to forewarn the notified
persons that their inexcusable failure to appear at the deposition taking would
amount to a waiver of their right of cross-examination, without prejudice to
the right of the respondents to raise their objections at the appropriate
time.149
We would be treading on dangerous grounds indeed were we to hold that one
not a party to an action, and neither in privity nor in substantial identity
of interest with any of the parties in the same action, can be bound by the
action or omission of the latter, by the mere expedient of a notice. Thus,
we cannot simply deduce a resultant waiver from the respondents’ mere
failure to attend the deposition-taking despite notice sent by the petitioner.
WHEREFORE, premises considered, we DISMISS the petition for lack of
merit. No costs.
SO ORDERED.
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b. Deposition may be taken anytime after institution of any action; Uses
of Deposition
Jonathan Land Oil v. Mangudadatu, G.R. No. 155010, August 16, 2004
Facts:
Respondent-Spouses Suharto and Miriam Sangki Mangudadatu filed with
the Regional Trial Court (RTC) of the 12th Judicial Region in Tacurong City,
Sultan Kudarat, a Complaint for damages against Petitioner Jonathan
Landoil International Co., Inc. (“JLI”). The Complaint was docketed as
Civil Case No. 537 and raffled to Branch 20.
Initially, petitioner had countered with a Motion to Dismiss; but when this
was denied, it filed its Answer dated November 23, 1999.
Thereafter, the parties submitted their respective Pretrial Briefs. Trial
proceeded without the participation of petitioner, whose absence during the
pretrial on August 8, 2000, had led the trial court to declare it in default.
On July 3, 2001, petitioner9 received a copy of the RTC’s Decision dated
June 19, 2001.
On July 18, 2001, it filed an Omnibus Motion for New Trial and Change
of Venue. This Motion was deemed submitted for resolution on August 7,
2001, but was eventually denied by the trial court in an Order dated
September 12, 2001. Peligro.24 The Deposition was intended to prove that petitioner had not
On December 12, 2001, petitioner received a copy of a Writ of Execution
dated December 4, 2001. Alleging that it had yet to receive a copy of an Order
resolving the Omnibus Motion for New Trial, petitioner filed a Motion to
Quash/Recall Writ of Execution on December 14, 2001.
On January 7, 2002, its counsels — Attys. Jaime L. Mario, Jr. and Dioscoro
G. Peligro — submitted separate withdrawals of appearance. On the same
date, the law firm Ong Abad Santos & Meneses filed an Entry of Appearance
with Supplement to Motion to Quash/Recall Writ of Execution. To its
Supplement, petitioner attached the Affidavits of Attys. Mario and Peligro
attesting that they had not yet received a copy of the Order resolving the
Omnibus Motion for New Trial. On January 29, 2002, separate Notices were sent by Atty. Nazareno to Attys.
On the same day, January 7, 2002, petitioner received a Sheriff’s Notice dated
December 26, 2001, regarding the public auction sale of its properties.
By reason of the immediate threat to implement the Writ of Execution, it filed
with the CA on January 14, 2002, a Petition for Prohibition seeking to
enjoin the enforcement of the Writ until the resolution of the Motion to
Quash. The Petition was docketed as CA-G.R. SP No. 68483. On January 9,
2002, the RTC issued an Order directing respondents to file their written
comment on the Motion to Quash and scheduled the hearing thereon for
February 1, 2002.
On January 23, 2002, petitioner received a copy of respondents’ Vigorous
Opposition (Re: Motion to Quash/Recall Writ of Execution, and its
Supplement) dated January 16, 2001. Attached to this pleading were two
separate Certifications supposedly issued by the postmaster of Tacurong City,
affirming that the Order denying the Motion for New Trial had been received
by petitioner’s two previous counsels of record. The Certification pertaining
to Atty. Peligro alleged that a certain Michelle Viquira had received on
October 19, 2001, 22 a copy of the Order intended for him. The Certification
as regards Atty. Mario stated that he had personally received his copy on
December 21, 2001.
On January 24, 2002, petitioner personally served counsel for respondents a
Notice to Take Deposition Upon Oral Examination of Attys. Mario and
received a copy of the Order denying the Omnibus Motion for New Trial. 25
At 9:30 a.m. on January 28, 2002, the deposition-taking proceeded as
scheduled -- at the Business Center Conference Room of the Mandarin
Oriental Hotel in Makati City -- before Atty. Ana Peralta-Nazareno, a notary
public acting as deposition officer.26 At 12:00 noon of the same day,
respondents sent petitioner a fax message via JRS Express, advising it that
they had filed a Motion to Strike Off from the records the Notice to Take
Deposition; and asking it not to proceed until the RTC would have resolved
the Motion,27 a copy of which it eventually received later in the day, at 3:10
p.m.
Mario and Peligro, as witnesses, for them to examine the transcript of their
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testimonies.28 On the same date, Atty. Nazareno filed via registered mail a
Submission to the RTC attaching:
(1) a Certification that the witnesses had been present and duly sworn to by
her;
(2) a transcript bearing their signatures, attesting that it was a true record of
their testimonies;
(3) a copy of the Notice to Take Deposition delivered to her; and
(4) a copy of the Notice signed by respondents’ counsel.29
During the February 1, 2002 hearing on the Motion to Quash, petitioner
submitted its (1) Formal Offer of Exhibits, together with the documentary
exhibits marked during the deposition-taking; (2) Reply to respondents’
Vigorous Opposition to the Motion to Quash; and (3) Opposition ad Cautelam
to respondents’ Motion to Strike Off the Notice to Take Deposition.30
Meanwhile, on February 26, 2002, the CA issued a Resolution denying the
Petition for Prohibition in CA-GR SP No. 68483.
On March 6, 2002, petitioner received a copy of the RTC’s Resolution dated
February 21, 2002, denying the Motion to Quash.31 On March 8, 2002, it
received a copy of respondents’ Motion to Set Auction Sale of Defendant’s
Levied Properties.
On March 11, 2002, petitioner filed with the CA a Petition for Certiorari and
Prohibition,32 seeking to hold in abeyance the February 21, 2002 RTC
Resolution and the December 4, 2001 Writ of Execution. Petitioner alleged
that since it had not received the Order denying its Motion for New Trial, the
period to appeal had not yet lapsed.33 It thus concluded that the judgment, not
being final, could not be the subject of a writ of execution.
CA denied petitioner’s petition holding that petitioner could no longer avail
itself of a deposition under Rule 23 of Rules of Court, since trial had already
been terminated.34 The appellate court also opined that the alleged error
committed by the trial court -- when the latter disregarded two witnesses’ oral
depositions -- was an error of judgment not reviewable by certiorari or
prohibition.35 Finally, it ruled that between the denial of a lawyer and the
certification of a postmaster, the latter would prevail.
Hence this petition.
Issue:
W/N the taking of oral depositions was proper in this case – Yes.
Held:
Yes.
A deposition may be taken with leave of court after jurisdiction has been
obtained over any defendant or over property that is the subject of the action;
or, without such leave, after an answer has been served. Deposition is chiefly
a mode of discovery, the primary function of which is to supplement the
pleadings for the purpose of disclosing the real points of dispute between the
parties and affording an adequate factual basis during the preparation for trial.
The liberty of a party to avail itself of this procedure, as an attribute of
discovery, is “well-nigh unrestricted if the matters inquired into are otherwise
relevant and not privileged, and the inquiry is made in good faith and within
the bounds of the law.”
Limitations would arise, though, if the examination is conducted
1. in bad faith; or
2. in such a manner as to annoy, embarrass, or oppress the person who is the
subject of the inquiry; or
3. when the inquiry touches upon the irrelevant or encroaches upon the
recognized domains of privilege.
The Rules of Court and jurisprudence, however, do not restrict a deposition
to the sole function of being a mode of discovery before trial. Under certain
conditions and for certain limited purposes, it may be taken even after trial
has commenced and may be used without the deponent being actually called
to the witness stand. In Dasmariñas Garments v. Reyes, we allowed the taking
of the witnesses’ testimonies through deposition, in lieu of their actual
presence at the trial.
Thus, “[d]epositions may be taken at any time after the institution of any
action, whenever necessary or convenient. There is no rule that limits
deposition-taking only to the period of pre-trial or before it; no prohibition
against the taking of depositions after pre-trial.” There can be no valid
objection to allowing them during the process of executing final and
executory judgments, when the material issues of fact have become numerous
or complicated.
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In keeping with the principle of promoting the just, speedy and inexpensive
disposition of every action and proceeding, depositions are allowed as a
“departure from the accepted and usual judicial proceedings of examining
witnesses in open court where their demeanor could be observed by the trial
judge.” Depositions are allowed, provided they are taken in accordance with
the provisions of the Rules of Court (that is, with leave of court if the
summons have been served, without leave of court if an answer has been
submitted); and provided, further, that a circumstance for their admissibility
exists (Section 4, Rule 23, Rules of Court).
The Rules of Court vests in the trial court the discretion to order whether a
deposition may be taken or not under specified circumstances that may even
differ from those the proponents have intended.71 However, it is well-settled
that this discretion is not unlimited. It must be exercised -- not arbitrarily,
capriciously or oppressively -- but in a reasonable manner and in consonance
with the spirit of the law, to the end that its purpose may be attained.72
was not yet final. As previously explained, despite the fact that trial has
already been terminated, a deposition can still be properly taken.
We note, however, that the RTC did not totally disregard petitioner’s
depositions. In its February 21, 2001 Resolution, the trial court considered
and weighed -- against all other evidence -- that its Order denying the Motion
for New Trial filed by petitioner had not been received by the latter’s
counsels. Despite their depositions, petitioner failed to prove convincingly its
denial of receipt.
WHEREFORE, the Petition is DENIED, and the assailed Decision and
Resolution AFFIRMED. Costs against petitioner.

When a deposition does not conform to the essential requirements of law and
may reasonably cause material injury to the adverse party, its taking should
not be allowed. This was the primary concern in Northwest Airlines v.
Cruz.73In that case, the ends of justice would be better served if the witness
was to be brought to the trial court to testify. The locus of the oral deposition
therein was not within the reach of ordinary citizens, as there were time
constraints; and the trip required a travel visa, bookings, and a substantial
travel fare.74 In People v. Webb,75 the taking of depositions was unnecessary,
since the trial court had already admitted the Exhibits on which the witnesses
would have testified.76

The Rules of Court provides adequate safeguards to ensure the reliability of

depositions. The right to object to their admissibility is retained by the parties,
for the same reasons as those for excluding evidence if the witness were
present and had testified in court; and for errors and irregularities in the
deposition. As a rule, depositions should be allowed, absent any showing that
taking them would prejudice any party.

The present case involved a circumstance that fell under the above-cited
Section 4(c)(2) of Rule 23 -- the witnesses of petitioner in Metro Manila
resided beyond 100 kilometers from Sultan Kudarat, the place of hearing.
Petitioner offered the depositions in support of its Motion to Quash (the Writ
of Execution) and for the purpose of proving that the trial court’s Decision

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c. Deposition not a substitute for actual testimony
Sales v. Sabino, G.R. No. 133154, December 9, 2005
Facts:
On February 20, 1995, in the Regional Trial Court (RTC) at Pasig City, Metro
Manila, herein respondent Cyril A. Sabino filed an amended
complaint[3] for damages against, among others, herein petitioner Jowel
Sales, driver of the vehicle involved in the accident which ultimately caused
the death of respondents son, Elbert.
Before any responsive pleading could be filed, respondent, as plaintiff a quo,
notified the defendants that he will take the deposition of one Buaneres Corral
before the Clerk of Court, RTC- Pasig City.
On December 27, 1995 and resumed on January 3, 1996, the deposition on
oral examination of Buaneres Corral was taken before the Clerk of Court of
Pasig, in the presence and with the active participation of petitioners counsel,
Atty. Roldan Villacorta, who even lengthily cross-examined the deponent. In
the course of trial, respondent had the deposition of Buaneres Corral marked
as her Exhibits DD[4] and EE[5], with submarkings.
Upon conclusion of her evidentiary presentation, respondent made a Formal
Offer of Exhibits,[6] among which are Exhibits DD and EE. Likewise offered
in evidence as Exhibit BB[7] is a certification from the Bureau of Immigration
attesting to the May 28, 1996 departure for abroad of Buaneres
Corral via Flight No. PR 658.
Petitioner opposed the admission of Exhs. DD and EE and even asked that
they be expunged from the records on the ground that the jurisdictional
requirements for their admission under Section 4, Rule 23 of the Rules of
Court, infra, were not complied with. He also downplayed the evidentiary
value of Exhibit BB for reasons he would repeat in this petition.
RTC admitted, among other evidence, respondents Exhibits DD, EE and BB.
On a R65, CA affirmed.
As stated at the threshold hereof, the appellate court, in the herein assailed
decision dated January 20, 1998,[11] upheld the trial court and effectively
denied due course to and dismissed petitioners recourse, explaining, inter
alia, that petitioners active participation, through counsel, during the taking
of subject deposition and adopting it as his own exhibits, has thereby estopped
him from assailing the admissibility thereof as part of respondents evidence.
Hence this petition.
Issue:
W/N the lower courts erred in admitting the deposition of Corral – No.
Held:
No.
It is petitioners posture that none of the conditions in Section 4, Rule 23 exists
in this case to justify the admission in evidence of respondents Exhibits DD
and EE. Hence, it was error for the appellate court to have upheld the
admission thereof by the trial court. Discounting the probative value of the
certification from the Bureau of Immigration (Exh. BB) that deponent
Buaneres Corral departed for abroad on May 28, 1996, petitioner argues that
said certification merely proves the fact of Corral having left the country on
the date therein mentioned. It does not, however, establish that he has not
returned since then and is unavailable to be present in court to personally
testify.
While depositions may be used as evidence in court proceedings, they are
generally not meant to be a substitute for the actual testimony in open court
of a party or witness. Stated a bit differently, a deposition is not to be used
when the deponent is at hand. Indeed, any deposition offered during a trial to
prove the facts therein set out, in lieu of the actual oral testimony of the
deponent in open court, may be opposed and excluded on the ground of
hearsay.
However, depositions may be used without the deponent being called to the
witness stand by the proponent, provided the existence of certain conditions
is first satisfactorily established. Five (5) exceptions for the admissibility of
a deposition are listed in Section 4, Rule 23, supra, of the Rules of Court.
Among these is when the witness is out of the Philippines.
The trial court had determined that deponent Bueneres Corral was abroad
when the offer of his deposition was made. This factual finding of absence or
unavailability of witness to testify deserves respect, having been adequately
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substantiated. As it were, the certification by the Bureau of Immigration Exh.
BB- provides that evidentiary support. Accordingly, the attribution of grave
abuse of discretion on the part of the trial court must be struck down. It has
been said to be customary for courts to accept statements of parties as to the
unavailability of a witness as a predicate to the use of depositions.[15]
waived if not objected to before or during the taking of the deposition,
objections to the competency of a witness or the competency, relevancy, or
materiality of testimony may be made for the first time at the trial and need
not be made at the time of the taking of the deposition, unless they could be
obviated at that point.

Had deponent Buaneres Corral indeed returned to the Philippine ssubsequent
to his departure via Flight No. PR 658, petitioner could have presented
evidence to show that such was the case. As it is, however, the petitioner does
not even assert the return as a fact, only offering it as a possibility since no
contrary proof had been adduced.
While perhaps a bit anti-climactic to state at this point, certiorari will not lie
against an order admitting or rejecting a deposition in evidence, the remedy
being an appeal from the final judgment.[18] For this singular reason alone,
the appellate court could have had already dismissed herein petitioners
invocation of its certiorari jurisdiction.

Given the foregoing perspective, the second issue of whether or not petitioner WHEREFORE, the instant petition is hereby DENIED.
is estopped from objecting to the use of Corrals deposition as part of
respondents evidence is really no longer determinative of the outcome of this Costs against petitioner.
case, and need not detain us long.
SO ORDERED.
Suffice it to say that, as a rule, the inadmissibility of testimony taken by
deposition is anchored on the ground that such testimony is hearsay, i.e., the
party against whom it is offered has no opportunity to cross- examine the
deponent at the time his testimony is offered.

But as jurisprudence teaches, it matters not that opportunity for cross-

examination was afforded during the taking of the deposition; for normally,
the opportunity for cross-examination must be accorded a party at the time
the testimonial evidence is actually presented against him during the trial or
hearing.

In fine, the act of cross- examining the deponent during the taking of the
deposition cannot, without more, be considered a waiver of the right to object
to its admissibility as evidence in the trial proper. In participating, therefore,
in the taking of the deposition, but objecting to its admissibility in court as
evidence, petitioner did not assume inconsistent positions. He is not, thus,
estopped from challenging the admissibility of the deposition just because he
participated in the taking thereof.

Lest it be overlooked, Section 29, Rule 23 of the Rules of Court, no less, lends
support to the conclusion just made. In gist, it provides that, while errors and
irregularities in depositions as to notice, qualifications of the officer
conducting the deposition, and manner of taking the deposition are deemed

Avila 4B | 2016
d. Period to apply for Deposition
1. Rosete v. Lim, June 8, 2006, G.R. No. 136051
Facts:
On 5 December 1995, respondents Juliano Lim and Lilia Lim filed before
Branch 77 of the RTC of Quezon City a Complaint for Annulment, Specific
Performance with Damages against AFP Retirement and Separation
Benefits System (AFP-RSBS), Espreme Realty and Development
Corporation (Espreme Realty), Alfredo P. Rosete, Maj. Oscar Mapalo, Chito
P. Rosete, Bank of the Philippine Islands (BPI), and Register of Deeds of the
Province of Mindoro Occidental, docketed as Civil Case No. Q-95-25803.
It asked, among other things, that the Deed of Sale executed by AFP-RSBS
covering certain parcels of lands in favor of Espreme Realty and the titles
thereof under the name of the latter be annulled; and that the AFP-RSBS and
Espreme Realty be ordered to execute the necessary documents to restore
ownership and title of said lands to respondents, and that the Register of
Deeds be ordered to cancel the titles of said land under the name of Espreme
Realty and to transfer the same in the names of respondents.
On 18 January 1996, petitioners filed a Motion to Dismiss on the grounds that
the court has no jurisdiction over the subject matter of the action or suit and
that venue has been improperly laid. A Supplemental Motion to Dismiss was
filed by petitioner Alfredo P. Rosete on 23 January 1996. Respondents
opposed the Motion to Dismiss filed by petitioners to which petitioners filed
their Reply. Respondents filed a Comment on the Reply. AFP-RSBS,
Espreme Realty, and BPI filed their respective Motions to Dismiss which
respondents opposed.
In an Order dated 12 March 1996, the Motions to Dismiss filed by all the
defendants were denied. The Motions for Reconsideration filed by petitioners
and BPI, which respondents opposed, were also denied in an Order dated 24
May 1996.
On June 6, 1996, BPI filed its Answer with Compulsory Counterclaim and
Cross-claim.
On 7 June 1996, petitioners manifested that on 5 June 1996, they filed a
Petition for Certiorari and Prohibition in the Court of Appeals, docketed as
CA-G.R. SP No. 40837, challenging the trial court’s Orders dated 12 March
1996 and 24 May 1996 that denied their Motions to Dismiss and
Reconsideration, respectively. They likewise informed the RTC that they
filed an Ex Parte Motion to Admit Answers Ex Abudanti Cautela.
On 28 May 1997, respondents filed a Notice to Take Deposition Upon Oral
Examination giving notice that on June 18 and 20, 1997 at 9:00 a.m., they
will cause the deposition of petitioners Oscar Mapalo and Chito Rosete.
On 13 June 1997, petitioners filed an Urgent Ex Parte Motion and Objection
to Take Deposition Upon Oral Examination. They argued that the deposition
may not be taken without leave of court as no answer has yet been served and
the issues have not yet been joined since their Answer was filed ex abudanti
cautela, pending resolution of the Petition for Certiorari challenging the
orders dated 12 March 1996 and 24 May 1996 that denied their Motions to
Dismiss and for Reconsideration, respectively.
This is in addition to the fact that they challenged via a Petition for Certiorari
before the Court of Appeals the lower court’s Orders dated 23 July 1996 and
12 August 1996 which, respectively, granted respondents’ Motion to Serve
Supplemental Allegation Against Defendants BPI and Chito Rosete, and for
the latter to plead thereto, and denied Chito Rosete’s Motion for
Reconsideration of the order dated 23 July 1996.
Moreover, they contend that since there are two criminal cases pending
before the City Prosecutors of Mandaluyong City and Pasig City involving
the same set of facts as in the present case wherein respondent Juliano Lim is
the private complainant and petitioners are the respondents, to permit the
taking of the deposition would be violative of their right against self-
incrimination because by means of the oral deposition, respondents would
seek to establish the allegations of fact in the complaint which are also the
allegations of fact in the complaint-affidavits in the said criminal cases.
Respondents filed their Comment on the Objection to Deposition Taking to
which petitioners filed their Reply.
RTC denied petitioner’s motion and objection to take deposition upon oral
examination, and scheduled the taking thereof.
On 13 August 1997, petitioners filed an Urgent Ex Parte Motion to Cancel or
Suspend the Taking of the Deposition Upon Oral Examination.
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RTC scheduled the taking of the Deposition Upon Oral Examination.
On 29 September 1997, petitioners filed with the Court of Appeals a Petition
for Certiorari and Prohibition (CA- G.R. SP No. 45400) assailing the Orders
of the lower court dated 22 July 1997 and 27 August 1997. may be taken only by leave of court on such terms as the court prescribes.”
RTC: (1) ordered the striking out from the record of the Answer ex abudanti
cautela filed by petitioners Mapalo and Chito Rosete for their continued
unjustified refusal to be sworn pursuant to Rule 29 of the 1997 Rules of Civil
Procedure; (2) declared defendants Mapalo and Chito Rosete in default; and
I allowed plaintiffs to present their evidence ex 43 parte as regards the latter.
On 25 November 1997, petitioners filed an Urgent Exparte Omnibus Motion
(1) For Reconsideration; (2) To Lift Order of Default; and (3) To Hold In
Abeyance Presentation of Plaintiffs’ Evidence Ex 44 Parte. The day after,
petitioners filed an Amended Omnibus Motion.
CA dismissed the R65.
Hence this petition.
Petitioners contend that the taking of their oral depositions should not be
allowed without leave of court as no answer has yet been served and the issues
have not yet been joined because their answers were filed ex abudanti cautela
pending final resolution of the petition for certiorari challenging the trial
court’s Orders dated 12 March 1996 and 24 May 1996 that denied their
motions to dismiss and for reconsideration, respectively.
Issue:
W/N lower courts erred in allowing the taking of depositions without leave
of court – No.
Held:
No.
Section 1 of Rule 24 of the Revised Rules of Court reads:
“Section 1. Depositions pending action, when may be taken. — By leave of
court after jurisdiction has been obtained over any defendant or over property
which is the subject of the action, or without such leave after an answer has
been served, the testimony of any person, whether a party or not, may be
taken, at the instance of any party, by deposition upon oral examination or
written interrogatories. The attendance of witnesses may be compelled by the
use of a subpoena as provided in Rule 23. Depositions shall be taken only in
accordance with these rules. The deposition of a person confined in prison
From the quoted section, it is evident that once an answer has been served,
the testimony of a person, whether a party or not, may be taken by deposition
upon oral examination or written interrogatories. In the case before us,
petitioners contend they have not yet served an answer to respondents
because the answers that they have filed with the trial court were made ex
abudanti cautela. In other words, they do not consider the answers they filed
in court and served on respondents as answers contemplated by the Rules of
Court on the ground that same were filed ex abudanti cautela.
We find petitioners’ contention to be untenable. Ex abudanti cautela means
“out of abundant caution” or “to be on the safe side.” An answer ex abudanti
cautela does not make their answer less of an answer. A cursory look at the
answers filed by petitioners shows that they contain their respective defenses.
An answer is a pleading in which a defending party sets forth his defenses
and the failure to file one within the time allowed herefore may cause a
defending party to be declared in default. Thus, petitioners, knowing fully
well the effect of the non-filing of an answer, filed their answers despite the
pendency of their appeal with the Court of Appeals on the denial of their
motion to dismiss.
Petitioners’ argument that the issues of the case have not yet been joined must
necessarily fail in light of our ruling that petitioners have filed their answers
although the same were made ex abudanti cautela. Issues are joined when all
the parties have pleaded their respective theories and the terms of the dispute
are plain before the court. In the present case, the issues have, indeed, been
joined when petitioners, as well as the other defendants, filed their answers.
The respective claims and defenses of the parties have been defined and the
issues to be decided by the trial court have been laid down.
We cannot also sustain petitioners’ contention that the lower court erred when
it said that the joinder of issues is not required in order that Section 1, Rule
23 of the 1997 Rules of Civil Procedure may be availed of. Under said
section, a deposition pending action may be availed of: (1) with leave of court
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when an answer has not yet been filed but after jurisdiction has been obtained
over any defendant or property subject of the action, or (2) without leave of
court after an answer to the complaint has been served. In the instant case,
the taking of the deposition may be availed of even without leave of court
because petitioners have already served their answers to the complaint.

WHEREFORE, all the foregoing considered, the instant petition is dismissed

for lack of merit.
SO ORDERED.

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2. International v. Ley Construction, G.R. NO. 147143, March 10,
2006
Facts:
On April 8, 1994, respondent Ley Construction and Development
Corporation (LCDC) filed a complaint for specific performance and
damages with the Regional Trial Court of Makati, Branch 62 (RTC),
docketed as Civil Case No. 94-1429, against petitioner Hyatt Industrial
Manufacturing Corporation (Hyatt) claiming that Hyatt reneged in its
obligation to transfer 40% of the pro indiviso share of a real property in
Makati in favor of LCDC despite LCDC’s full payment of the purchase price
of P2,634,000.00; and that Hyatt failed to develop the said property in a joint
venture, despite LCDC’s payment of 40% of the pre-construction cost.
On April 12, 1994, LCDC filed an amended complaint impleading Princeton
Development Corporation (Princeton) as additional defendant claiming that
Hyatt sold the subject property to Princeton on March 30, 1994 in fraud of
LCDC. On September 21, 1994, LCDC filed a second amended complaint
adding as defendant, Yu He Ching (Yu), President of Hyatt, alleging that
LCDC paid the purchase price of P2,634,000.00 to Hyatt through Yu.
Responsive pleadings were filed and LCDC filed notices to take the
depositions of Yu; Pacita Tan Go, Account Officer of Rizal Commercial
Banking Corporation (RCBC); and Elena Sy, Finance Officer of Hyatt. Hyatt
also filed notice to take deposition of Manuel Ley, President of LCDC, while
Princeton filed notice to take the depositions of Manuel and Janet Ley.
On July 17, 1996, the RTC ordered the deposition-taking to proceed. No. 57119.
At the scheduled deposition of Elena Sy on September 17, 1996, Hyatt and
Yu prayed that all settings for depositions be disregarded and pre-trial be set
instead, contending that the taking of depositions only delay the resolution of
the case. The RTC agreed and on the same day ordered all depositions
cancelled and pre-trial to take place on November 14, 1996. LCDC moved
for reconsideration which the RTC denied in its October 14, 1996 Order for
the following reasons:
“because:
1) as already pointed out by this Court in the questioned Order said
depositions will only delay the early termination of this case;
2) had this Court set this case for pre-trial conference and trial thereafter, this
case would have been terminated by this time;
3) after all, what the parties would like to elicit from their deponents would
probably be elicited at the pre-trial conference;
4) no substantial rights of the parties would be prejudiced, if pre-trial
conference is held, instead of deposition.”
On November 14, 1996, the scheduled date of the pre-trial, LCDC filed an
Urgent Motion to Suspend Proceedings Due to Pendency of Petition for
Certiorari in the Court of Appeals. The petition, which sought to annul the
Orders of the RTC dated September 17, 1996 and October 14, 1996, was
docketed as CA-G.R. SP No. 42512 and assigned to the then Twelfth Division
of the CA.
Meanwhile, pre-trial proceeded at the RTC as scheduled and with the refusal
of LCDC to enter into pre-trial, Hyatt, Yu and Princeton moved to declare
LCDC non-suited which the RTC granted in its Order dated December 3,
1996.
LCDC went to the CA on appeal which was docketed as CA-G.R. CV No.
57119 and assigned to the then Seventh Division of the CA.
On July 24, 1997, the CA’s then Twelfth Division, in CA-G.R. SP No. 42512
denied LCDC’s petition for certiorari declaring that the granting of the
petition and setting aside of the September 17, 1996 and October 14, 1996
Orders are manifestly pointless considering that the complaint itself had
already been dismissed and subject of the appeal docketed as CA-G.R. CV
LCDC then filed a R65 with the SC.
On May 4, 2000, CA’s then Seventh Division granted the appeal and
remanded the case back to RTC to allow the deposition taking. CA ruled that
LCDC complied with Section 1, Rule 23 of the 1997 Rules of Civil Procedure
which expressly sanctions depositions as a mode of discovery without leave
of court after the answer has been served; to unduly restrict the modes of
discovery during trial would defeat the very purpose for which it is intended
which is a pre- trial device, and at the time of the trial, the issues would
already be confined to matters defined during pre-trial; the alleged intention
of expediting the resolution of the case is not sufficient justification to recall
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the order to take deposition as records show that the delay was brought about
by postponement interposed by both parties and other legal antecedents that
are in no way imputable to LCDC alone; deposition-taking, together with the
other modes of discovery are devised by the rules as a means to attain the
objective of having all the facts presented to the court; the trial court also
erred in dismissing the complaint as LCDC appeared during the pre-trial
conference and notified it of the filing of a petition before the CA; such is a
legitimate justification to stall the pre-trial conference, as the filing of the
petition was made in good faith in their belief that the court a quo erred in
canceling the deposition scheduled for no apparent purpose.
Hence this petition.
Issue:
W/N RTC erred in cancelling the deposition takings – Yes.
Held:
Yes.
On the second issue, the Court finds that the CA was correct in remanding
the case to the RTC and ordering the deposition-taking to proceed.
A deposition should be allowed, absent any showing that taking it would
prejudice any party. It is accorded a broad and liberal treatment and the liberty
of a party to make discovery is well-nigh unrestricted if the matters inquired
into are otherwise relevant and not privileged, and the inquiry is made in good
faith and within the bounds of law. It is allowed as a departure from the
accepted and usual judicial proceedings of examining witnesses in open court
where their demeanor could be observed by the trial judge, consistent with
the principle of promoting just, speedy and inexpensive disposition of every
action and proceeding; and provided it is taken in accordance with the
provisions of the Rules of Court, i.e., with leave of court if summons have
been served, and without such leave if an answer has been submitted; and
provided further that a circumstance for its admissibility exists (Section 4,
Rule 23, Rules of Court).
The rules on discovery should not be unduly restricted, otherwise, the
advantage of a liberal discovery procedure in ascertaining the truth and
expediting the disposal of litigation would be defeated.
Indeed, the importance of discovery procedures is well recognized by the
Court. It approved A.M. No. 03-1-09-SC on July 13, 2004 which provided
for the guidelines to be observed by trial court judges and clerks of court in
the conduct of pre-trial and use of deposition-discovery measures.
Under A.M. No. 03-1-09-SC, trial courts are directed to issue orders requiring
parties to avail of
1. interrogatories to parties under Rule 45 and
2. request for admission of adverse party under Rule 26 or
3. at their discretion make use of depositions under Rule 23 or other measures
under Rule 27 and 28 within 5 days from the filing of the answer.
The parties are likewise required to submit, at least 3 days before the pre-trial,
pre-trial briefs, containing among others a manifestation of the parties of their
having availed or their intention to avail themselves of discovery procedures
or referral to commissioners.
Since the pertinent incidents of the case took place prior to the effectivity of
said issuance, however, the depositions sought by LCDC shall be evaluated
based on the jurisprudence and rules then prevailing, particularly Sec. 1, Rule
23 of the 1997 Rules of Court which provides as follows:
SECTION 1. Depositions pending action, when may be taken. — By leave
of court after jurisdiction has been obtained over any defendant or over
property which is the subject of the action, or without such leave after
an answer has been served, the testimony of any person, whether a party
or not, may be taken, at the instance of any party, by deposition upon
oral examination or written interrogatories. The attendance of witnesses
may be compelled by the use of a subpoena as provided in Rule 21.
Depositions shall be taken only in accordance with these Rules. The
deposition of a person confined in prison may be taken only by leave of court
on such terms as the court prescribes. (Emphasis supplied)
As correctly observed by the CA, LCDC complied with the above quoted
provision as it made its notice to take depositions after the answers of the
defendants have been served. LCDC having complied with the rules then
prevailing, the trial court erred in canceling the previously scheduled
depositions.
While it is true that depositions may be disallowed by trial courts if the
examination is conducted in bad faith; or in such a manner as to annoy,
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embarrass, or oppress the person who is the subject of the inquiry, or when
the inquiry touches upon the irrelevant or encroaches upon the recognized
domains of privilege, such circumstances, however are absent in the case at
bar.
The RTC cites the delay in the case as reason for canceling the scheduled
depositions. While speedy disposition of cases is important, such
consideration however should not outweigh a thorough and comprehensive
evaluation of cases, for the ends of justice are reached not only through the
speedy disposal of cases but more importantly, through a meticulous and
comprehensive evaluation of the merits of the case. Records also show that
the delay of the case is not attributable to the depositions sought by LCDC
but was caused by the many pleadings filed by all the parties including
petitioners herein.
The argument that the taking of depositions would cause unnecessary
duplicity as the intended deponents shall also be called as witnesses during
trial, is also without merit.
The case of Fortune Corp. v. Court of Appeals, 229 SCRA 335 (1994), which
already settled the matter, explained that: x x x “The right to take statements
and the right to use them in court have been kept entirely distinct. The utmost
freedom is allowed in taking depositions; restrictions are imposed upon their
use. As a result, there is accorded the widest possible opportunity for
knowledge by both parties of all the facts before the trial. Such of this
testimony as may be appropriate for use as a substitute for viva voce
examination may be introduced at the trial; the remainder of the testimony,
having served its purpose in revealing the facts to the parties before trial,
drops out of the judicial picture.”
Petitioner also argues that LCDC has no evidence to support its claims and
that it was only after the filing of its Complaint that it started looking for
evidence through the modes of discovery.
On this point, it is well to reiterate the Court’s pronouncement in Republic v.
Sandiganbayan:
“What is chiefly contemplated is the discovery of every bit of information
which may be useful in the preparation for trial, such as the identity and
location of persons having knowledge of relevant facts; those relevant facts
themselves; and the existence, description, nature, custody, condition, and
location of any books, documents, or other tangible things. Hence, “the
deposition- discovery rules are to be accorded a broad and liberal treatment.
No longer can the time-honored cry of ‘fishing expedition’ serve to preclude
a party from inquiring into the facts underlying his opponent’s case. Mutual
knowledge of all the relevant facts gathered by both parties is essential to
proper litigation. To that end, either party may compel the other to disgorge
whatever facts he has in his possession. The deposition-discovery procedure
simply advances the stage at which the disclosure can be compelled from the
time of trial to the period preceding it, thus reducing the possibility of
surprise.”
It also does not escape this Court’s attention that the trial court, before
dismissing LCDC’s complaint, gave LCDC two options: (a) enter into a pre-
trial conference, advising LCDC that what it would like to obtain at the
deposition may be obtained at the pre-trial conference, thus expediting early
termination of the case; and (b) terminate the pre-trial conference and apply
for deposition later on. The trial court erred in forcing LCDC to choose only
from these options and in dismissing its complaint upon LCDC’s refusal to
choose either of the two.
The information LCDC seeks to obtain through the depositions of Elena Sy,
the Finance Officer of Hyatt and Pacita Tan Go, an Account Officer of
RCBC, may not be obtained at the pre-trial conference, as the said deponents
are not parties to the pre-trial conference.
As also pointed out by the CA:
“x x x To unduly restrict the modes of discovery during trial, would defeat
the very purpose for which it is intended, as a pre-trial device. By then, the
issues would have been confined only on matters defined during pre-trial. The
importance of the modes of discovery cannot be gainsaid in this case in view
of the nature of the controversy involved and the conflicting interest claimed
by the parties.”
Deposition is chiefly a mode of discovery, the primary function of which is
to supplement the pleadings for the purpose of disclosing the real matters of
dispute between the parties and affording an adequate factual basis during the
preparation for trial.
Further, in Republic v. Sandiganbayan the Court explained that:
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“The truth is that “evidentiary matters” may be inquired into and learned by
the parties before the trial. Indeed, it is the purpose and policy of the law
that the parties — before the trial if not indeed even before the pre-trial
— should discover or inform themselves of all the facts relevant to the
action, not only those known to them individually, but also those known
to their adversaries; in other words, the desideratum is that civil trials
should not be carried on in the dark;”

In this case, the information sought to be obtained through the depositions of

Elena and Pacita are necessary to fully equip LCDC in determining what
issues will be defined at the pre-trial. Without such information before pre-
trial, LCDC will be forced to prosecute its case in the dark — the very
situation which the rules of discovery seek to prevent. Indeed, the rules on
discovery seek to make trial less a game of blind man’s bluff and more a fair
contest with the basic issues and facts disclosed to the fullest practicable
extent.

Considering the foregoing, the Court finds that the CA was correct in
remanding the case to the trial court and ordering the depositions to proceed.

WHEREFORE, the petition is denied for lack of merit. Costs against

petitioner. SO ORDERED.

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e. Non-resident foreign corporation to testify through deposition
1. San Luis v. Rojas, G.R. 159127, March 3, 2008
Facts:
On July 12, 2001, Berdex International, Inc. (private respondent) filed with
the Regional Trial Court of Pasig City (RTC) a complaint[3] for a sum of
money against petitioner, docketed as Civil Case No. 68530 alleging that: it
is a foreign corporation organized and existing under the laws of the United
States of America with principal office in San Francisco, California,
U.S.A.; it is maintaining the present action only to enforce its rights by virtue
of an isolated transaction with petitioner; in June 1997, petitioner received
from it certain amounts of money which were meant partly as advances
or loan and partly for the purchase of 40% shares in
both Seanet and Seabest Corporations, however, not a single share in those
corporations was transferred to private respondent by petitioner and the
shares were retained by the latter; the parties then agreed to treat all the
payments/advances made by private respondent to petitioner as the latter's
loan; petitioner proposed the payment of the loan within a period of three
years, which proposal was accepted by private respondent with the agreement
that in case of non-payment of any installment on their due dates, the entire
amount shall become due and demandable; petitioner later refused to sign a
formal contract of loan; petitioner confirmed such loan to private respondent's
auditors on August 8, 2000; and he had only paid US$20,000.00 and no
further payment was made despite repeated demands. Private respondent
prayed that petitioner be ordered to pay the amount of US$150,335.75plus
interest until fully paid and attorney's fees.
Petitioner filed his Answer.
The pre-trial conference was terminated on January 11, 2002 and the case
was subsequently set for trial.
On April 4, 2002, private respondent filed a MOTION (To Authorize
Deposition-Taking Through Written Interrogatories)[5] alleging that
initial presentation of its evidence is set on May 3, 2002; that however, all of
its witnesses are Americans who reside or hold office in the USA; that one of
the witnesses is already of advanced age and travel to the Philippines may be
extremely difficult if not dangerous; and there is a perceived danger to them
in the aftermath of the terrorist attacks on September 11, 2002;[6] that written
interrogatories are ideal in this case since the factual issues are already very
few; that such mode of deposition-taking will save precious judicial and
government time and will prevent needless delays in the case.
In his Opposition and Comment,[7] petitioner contends:
1. If indeed there was an oral contract and petitioner was liable to private
respondent for the amount he received from the latter, the documents attached
to private respondent's complaint did not support its claim, but rather
supported his position. There is a very strict standard in proving an oral
contract.
2. Taking the deposition through written interrogatories would deprive the
court of the opportunity to observe the general bearing and demeanor of
witnesses.
3. Petitioner's right to cross-examine the witnesses will be prejudiced, since
he will be limited to cross-interrogatories which will severely limit not only
the scope but the spontaneity of his cross-examination.
4. It is doubtful whether the witnesses will give their deposition under
sanction of the penalties prescribed by Philippine law for perjury.
5. It will not necessarily save precious judicial and government time but may
in fact lengthen the trial, as both parties will have the right to review and to
object to interrogatories submitted by the other party.
6. The claim that travel to the Philippines would be dangerous for the
witnesses who are all Americans is frivolous, since respondent has not
presented evidence that the US government has prohibited its citizens from
traveling to the Philippines; and if ever there was such prohibition, it was not
binding on our own legal system. Old age was not a valid reason.
RTC granted respondent’s motion, as it found the same appropriate and
sanctioned by the rules on deposition-taking.
On a R65, CA dismissed the petition outright because the petition and its
annexes indicates that:
1. no affidavit of service is attached;
2. the following Annexes are blurred:
- Annex H
- Annex J
3. the pleadings filed before the respondent court are not attached.
Hence this petition.
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Issue:
W/N RTC erred in granting the motion to take deposition – No.
Held:
No.
Section 1, Rule 23 of the Rules of Court, which substantially reproduced
Section 1, Rule 24 of the old Rules, provides as follows:
SECTION 1. Depositions pending action, when may be taken. - By leave of
court after jurisdiction has been obtained over any defendant or over property
which is the subject of the action, or without such leave after an answer has
been served, the testimony of any person, whether a party or not, may be
taken, at the instance of any party, by depositions upon oral examination or
written interrogatories.
Unequivocally, the rule does not make any distinction or restriction as to who
can avail of deposition. The fact that private respondent is a non-resident
foreign corporation is immaterial. The rule clearly provides that the testimony
of any person may be taken by deposition upon oral examination or written
interrogatories, at the instance of any party. Depositions serve as a device for
ascertaining the facts relative to the issues of the case. The evident purpose is
to enable the parties, consistent with recognized privileges, to obtain the
fullest possible knowledge of the issues and facts before civil trials and thus
prevent the said trials from being carried out in the dark.
In Dasmariñas Garments, Inc. v. Reyes, 225 SCRA 622 (1993), where we
upheld the right of plaintiff during the trial stage of the case to present its
evidence by deposition of its witnesses in a foreign jurisdiction in lieu of their
oral examination in court, we said:
“Depositions are chiefly a mode of discovery. They are intended as a means to compel
disclosure of facts resting in the knowledge of a party or other person which are
relevant in some suit or proceeding in court. Depositions, and the other modes of
discovery (interrogatories to parties; requests for admission by adverse party;
production or inspection of documents or things; physical and mental examination of
persons) are meant to enable a party to learn all the material and relevant facts, not
only known to him and his witnesses but also those known to the adverse party and
the latter’s own witnesses. In fine, the object of discovery is to make it possible for all
the parties to a case to learn all the material and relevant facts, from whoever may
have knowledge thereof, to the end that their pleadings or motions may not suffer from
inadequacy of factual foundation, and all the relevant facts may be clearly and
completely laid before the Court, without omission or suppression.
Indeed, any deposition offered to prove the facts therein set out during a trial or
hearing, in lieu of the actual oral testimony of the deponent in open court, may be
opposed and excluded on the ground that it is hearsay: the party against whom it is
offered has no opportunity to cross-examine the deponent at the time that his
testimony is offered. It matters not thatopportunity for cross-examination was
afforded during the taking of the deposition; for normally, the opportunity for cross-
examination must be accorded a party at the time that the testimonial evidence is
actually presented against him during the trial or hearing.
However, depositions may be used without the deponent being actually called to
the witness stand by the proponent, under certain conditions and for certain
limited purposes. These exceptional situations are governed by Section 4, Rule
24[24] of the Rules of Court.
SEC 4. Use of depositions. At the trial or upon the hearing of a motion of an
interlocutory proceeding, any part or all of a deposition, so far as admissible under the
rules of evidence, may be used against any party who was present or represented at
the taking of the deposition or who had due notice thereof, in accordance with any of
the following provisions:
Xxx
(c) The deposition of a witness, whether or not a party, may be used by any party
for any purpose if the court finds: (1) that the witness is dead; or (2) that the witness
if out of the province and at a greater distance than fifty[25] (50) kilometers from
the place of trial or hearing, or is out of the Philippines, unless it appears that his
absence was procured by the party offering the deposition;
The principle conceding admissibility to a deposition when the deponent is dead, out
of the Philippines, or otherwise unable to come to court to testify, is consistent with
another rule of evidence, found in Section 47, Rule 132 of the Rules of Court.
It is apparent then that the deposition of any person may be taken wherever he may
be, in thePhilippines or abroad. If the party or witness is in the Philippines, his
deposition "shall be taken before any judge, municipal or notary public" (Sec. 10, Rule
24, Rules of Court). If in a foreign state or country, the deposition "shall be taken: (a)
on notice before a secretary or embassy or legation, consul general, consul, vice-
consul, or consular agent of the Republic of the Philippines, or (b) before such person
or officer as may be appointed by commission or under letters rogatory" (Sec. 11,
Rule 24).
Leave of court is not necessary where the deposition is to be taken before "a secretary
or embassy or legation, consul general, consul, vice-consul, or consular agent of the
Republic of the Philippines," and the defendant's answer has already been served (Sec.
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1, Rule 24). After answer, whether the deposition-taking is to be accomplished within
the Philippines or outside, the law does not authorize or contemplate any intervention
by the court in the process, all that is required being that "reasonable notice" be given
"in writing to every other party to the action . . (stating) the time and place for taking
the deposition and the name and address of each person to be examined, if known,
and if the name is not known, a general description sufficient to identify him or the
particular class or group to which he belongs . . . "(Sec. 15, Rule 24).
The court intervenes in the process only if a party moves
(1) to "enlarge or shorten the time" stated in the notice (id.), or
(2) "upon notice and for good cause shown," to prevent the deposition-taking, or
impose conditions therefor, e.g., that "certain matters shall not be inquired into" or
that the taking be "held with no one present except the parties to the action and their
officers or counsel," etc. (Sec. 16, Rule 24), or
(3) to terminate the process on motion and upon a showing that "it is being conducted
in bad faith or in such manner as unreasonably to annoy, embarrass, or oppress the
deponent or party" (Sec 18, Rule 24).[26] (Emphasis supplied)”
Thus, we find no grave abuse of discretion committed by the RTC in granting
private respondent's MOTION (To Allow Deposition-Taking Through
Written Interrogatories) considering private respondent's allegation in its
MOTION that its witnesses are all Americans residing in the U.S. This
situation is one of the exceptions for its admissibility under Section 4(c)(2),
Rule 23 of the Rules of Court, i.e., that the witness resides at a distance of
more than one hundred (100) kilometers from the place of trial or hearing, or
is out of the Philippines, unless it appears that his absence was procured by
the party offering the deposition.
The situation in Dasmarias is the same as in the instant case since in both
cases, it was already during the trial stage that the deposition through written
interrogatories was sought to be taken. It does not matter whether one witness
for the plaintiff had already testified since the Dasmariasruling did not make
such testimony in court a condition to grant the deposition of the two other
witnesses. Also, in Dasmarias, the plaintiff sued defendant to recover a
certain sum of money which was the same as in the instant case as private
respondent was suing petitioner for collection of sum of money.
II.
Petitioner claims that the right to take depositions upon written
interrogatories in lieu of oral testimony in open court would result in grave
injustice to him, as private respondent is seeking to establish the existence of
an oral contract which requires stricter standard in proving the same.
We find such argument untenable.
While there are limitations to the rules of discovery, even when permitted to
be undertaken without leave and without judicial intervention, such
limitations inevitably arise when it can be shown that the examination is
being conducted
1. in bad faith; or
2. in such a manner as to annoy, embarrass, or oppress the person subject to
the inquiry; or
3. when the inquiry touches upon the irrelevant or encroaches upon the
recognized domains of privilege.
It has been repeatedly held that deposition discovery rules are to be accorded
a broad and liberal treatment and should not be unduly restricted if the matters
inquired into are otherwise relevant and not privileged, and the inquiry is
made in good faith and within the bounds of law. Otherwise, the advantage
of a liberal discovery procedure in ascertaining the truth and expediting the
disposal of litigation would be defeated. In fact, we find nothing in the rules
on deposition that limits their use in case of oral contract as alleged by
petitioner.
In any event, the admissibility of the deposition does not preclude the
determination of its probative value at the appropriate time. The admissibility
of evidence should not be equated with weight of evidence. The admissibility
of evidence depends on its relevance and competence while the weight of
evidence pertains to evidence already admitted and its tendency to convince
and persuade.[33]
III.
Petitioner argues that to allow such deposition-taking will prevent the RTC
from observing the witnesses' demeanor and credibility; and that petitioner's
right to cross-examine the witnesses would be curtailed if not denied as he is
limited to cross-interrogatories and re-cross interrogatories based on written
interrogatories.
We are not persuaded.
Depositions are allowed as a departure from the accepted and usual judicial
proceedings of examining witnesses in open court, where their demeanor
could be observed by the trial judge; and the procedure is not on that account
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rendered illegal nor is the deposition, thereby taken, inadmissible. It precisely
falls within one of the exceptions where the law permits such a situation, i.e.,
the use of a deposition in lieu of the actual appearance and testimony of the
deponent in open court and without being subject to the prying eyes and
probing questions of the Judge. Depositions are consistent with the principle
of promoting just, speedy and inexpensive disposition of every action or
proceeding. Depositions are allowed provided the deposition is taken in
accordance with the applicable provisions of the Rules of Court; that is, with
leave of court if the summons have been served, without leave of court if an
answer has been submitted; and provided, further, that a circumstance for
their admissibility exists.

We also find no merit in petitioner's claim that his right to cross-examine

private respondent's witnesses will be curtailed since petitioner is fully
accorded the opportunity for cross-examination under Section 25, Rule 23 of
the Rules of Court.

Thus, petitioner may submit cross-interrogatories upon private respondent

with sufficient fullness and freedom.

Finally, petitioner contends that since private respondent will have the
testimonies of its witnesses in another jurisdiction, the sanction of penalty for
perjury under our laws would not apply to them; and petitioner may not be
able to enforce its own claim against private respondent, since it is domiciled
in a foreign country and does not appear to have any assets in the Philippines.
We will not venture to make any determination on this matter, as it would be
premature, conjectural or anticipatory. We must only deal with an existing
case or controversy that is appropriate or ripe for judicial determination, not
one that is conjectural or merely anticipatory. [38]

WHEREFORE, the petition is GRANTED. The Resolutions

dated September 11, 2002and May 20, 2003 of the Court of Appeals in CA-
G.R. SP No. 72596 are REVERSED andSET ASIDE. However, the Orders
dated May 9, 2002 and July 3, 2002 issued by
theRegional Trial Court of Pasig City in Civil Case No. 68530 stand.
SO ORDERED.

Avila 4B | 2016
2. Philippine Computer Solutions v. Jose Hernandez, G.R. NO.
168776, July 17, 2007
Facts:
Petitioner was incorporated on 17 October 1994 for the purpose of providing
general computer services in the Philippines. Its incorporators, who are also
its stockholders, are Ralph Bergen (Bergen), Rizalito Condol (Condol),
Josephine Fugoso (Fugoso), Norma Potot (Potot), and Adorina Lisama
(Lisama).
Alleging that its corporate name was being unlawfully used in unauthorized
business transactions both here in the Philippines and overseas, petitioner
filed on 7 June 1999 before the Securities and Exchange Commission (SEC)
a Complaint[4] against Condol and Lisama, together with Winefrida Manzo
(Manzo), private respondent in this petition, and Condol International
Incorporated (Condol International), a corporation organized under
Philippine Laws on 29 August 1996 and is engaged in similar business as that
of the petitioner.
Of the four defendants named in the SEC complaint, only Manzo filed an
Answer as well as a Motion to Dismiss the Complaint. It appears that the SEC
failed to serve summons on the rest of the defendants since they can no longer
be found in their respective last known addresses.
The SEC heard Manzos Motion to Dismiss on 26 August 1999 and directed
the service of summons by publication upon the remaining defendants on 1
April 2000.
Before petitioner could serve summons by publication, Republic Act No.
8799, which transferred jurisdiction over intra-corporate controversies to the
regular courts, took effect. Consequently, the pending dispute was
transferred, initially to the RTC of Cebu City, Branch 11, and later to the RTC
of Pasig City, Branch 158, where it was docketed as SEC Case No. 68524.
In compliance with the trial courts 3 April 2002 Order, petitioner caused the
service of the summons and the complaint, along with the copy of the court
order dated 3 April 2002, upon Condol, Lisama and Condol International by
publication in the 3 May 2002 issue of theMalaya. Petitioner also sent a letter
to said defendants informing them of the fact of publication and furnishing
them copies of the summons and the order dated 3 April 2002, of the trial
court. None of these defendants filed an Answer.
Meanwhile, petitioner served written interrogatories upon Manzo. After
initially objecting thereto, the latter filed her answer and, likewise, moved for
the resolution of her pending Motion to Dismiss.
For their failure to file an Answer notwithstanding valid service of summons
by publication, petitioner filed a Motion to Declare the non-participating
defendants in default.
It also filed a Motion dated 16 September 2003[6] for the Issuance of a
Commission to take the deposition in Australia of a corporate officer of
PeopleSoft Australia regarding the details of the foreign corporations
transactions with defendants; as well as that of Bergen, one of petitioners
incorporators and stockholders, who was then in the United States.
Manzo filed an Opposition to the motion to which petitioner countered with
a Rejoinder.
In an Order dated 8 December 2003, the trial court denied Manzos Motion to
Dismiss and granted petitioners Motion to Declare in Default Condol, Lisama
and Condol International. The trial court, however, denied petitioners Motion
for the Issuance of a Commission.
RTC denied the Motion for Issuance of Commission holding that:
“it is clearly a circumvention of Section 1, Rule 3 of the Interim Rules
of Procedure for Intra-Corporate Controversies which provides that a party
can only avail of any of the modes of discovery not later than fifteen days
from the joinder of issues. From the very beginning, [petitioner] has already
alleged that defendant [Manzo] usurped its corporate powers and rights when
they transacted business with PeopleSoft Australia (see pars. 2.17 and 4.4 of
Complaint). The fact that defendant Manzo made admissions in her Answers
to Written Interrogatories with respect to the allegation of usurpation of
corporate powers did not change anything. Regardless of whether or not
Manzo made such admissions, [petitioner] should have availed of the modes
of discovery to ascertain the factual bases of its Complaint and gather
evidence during such period when the same is allowed by the rules. Likewise,
the personal circumstances of Bergen which would prevent him from
personally testifying before this Court has been evident from the beginning.”
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Further in its Order[8] dated 7 March 2003, the trial court clarified that for
purposes, therefore, of reckoning the limited period to avail of any of the
modes of discovery under Section 1, Rule 3 of the Interim Rules of Procedure
governing intra-corporate controversies, there is deemed to have been a
joinder of issues as of 3 July 2002 or immediately after the period for the
respondents to file their Answer has lapsed. Petitioner, therefore, had until 18
July 2002 or fifteen days from the joinder of issues to avail of any of the
modes of discovery. Having filed the motion to take deposition on 16
September 2003, the same was clearly beyond the 15-day period allowed by
Rule 3, Section 1 of the Interim Rules on Intra-Corporate Controversies.
On a R65, CA affirmed RTC holding that the issues in the case had been
joined as early as 3 July 2002, immediately after the lapse of the reglementary
period for the other defendants to file their respective answers. Though no
responsive pleading was filed, petitioner had 15 days therefrom or until 18
July 2003 within which to serve written interrogatories on its witnesses
abroad. Its failure to take full advantage of its right to secure the testimonies
of its witnesses by deposition when it had the opportunity to do so negates
the allegation of denial of due process.
Hence this petition.
Issue:
W/N the lower courts erred in denying petitioner’s motion for issuance of
commission on the ground that it was not timely filed – No, courts did not
err.
Held:
No.
It is petitioners stand that the Court of Appeals committed a gross
misapprehension of the 15-day reglementary period under Rule 3, Section 1
of the Interim Rules on Intra-Corporate Controversies, which reads:
RULE 3
MODES OF DISCOVERY
SECTION 1. In general. A party can only avail of any of the modes of
discovery not later than fifteen (15) day from the joinder of issues.
According to the petitioner, the 15-day reglementary period mandated under
Rule 3 of the Interim Rules pertains to a deposition resorted to as a mode of
discovery. It does not apply when the deposition is resorted to by a party as a
means of presenting the testimony of its witnesses, as in the instant
petition.[12] Petitioner submits that since the deposition sought by it is resorted
to as a means of presenting the testimony of its witness, the 15-day period
under Rule 3, Interim Rules, does not apply. Instead, the general rule under
the Rules of Court should be applied.[13]
Specifically, petitioner sought to take (1) the deposition testimony of
Peoplesoft Australia, which does not have an office in the Philippines and
maintains its office in Australia, through any of its responsible officers, and
(2) the deposition testimony of Ralph A. Bergen.[15]
The testimony of the responsible officers of Peoplesoft Australia is, as
claimed by petitioner, indispensable in proving its claims against Manzo and
her other co-defendants especially as to the income and the other corporate
opportunities they derived from Peoplesoft Australia, which rightfully
belonged to the petitioner, but were transferred to Condol International.
On the other hand, the testimony of Ralph Bergen, one of the incorporators
and stockholders of the petitioner and who is already based in the United
States, is necessary because he has personal knowledge of the facts as alleged
by the petitioner in its Complaint. Petitioner cites the exorbitant cost and the
impracticability of requiring the personal testimonies of its witnesses before
the trial court here in the Philippines to justify its prayer to take the said
witnesses deposition.[16]
This Court notes that during the pendency of the instant Petition, specifically
on 27 December 2006, the trial court already rendered a Decision in the main
case, SEC Case No. 68524.[17]Taking her bearings from this incident, Manzo
prays in her memorandum before this Court that the instant petition should
now be dismissed.[18]
Petitioner, however, informs this Court that from the Decision of the trial
court in Civil Case No. 68524, it filed a Notice of Appeal which the trial court
denied in its Order dated 7 February 2007 on the ground that under A.M. No.
04-9-07 SC,[19] all decisions in cases falling under the Interim Rules shall be
appealable by Petition for Review under Rule 43 of the Rules of Court and
Avila 4B | 2016
not by ordinary appeal. Petitioner alleges that it had filed a Petition for
Review with the Court of Appeals which is still pending before said court at
this time.[20]
It is not disputed that a Decision in the main case, SEC Case No. 68524, has
already been rendered. While the Court of Appeals has yet to act on
petitioners Petition for Review, it is this Courts view that the issue has
become moot and academic.
It must be emphasized that the underlying reason for the instant Petition is to
allow the petitioner to take the depositions of its witnesses, Mr. Ralph Bergen
and any of the responsible officers of Peoplesoft Australia.
From a quick reference to the Decision of the trial court in SEC Case No.
68524, it is readily apparent that the trial court had already granted the prayer
of petitioner in its Complaint. In other words, petitioner prevailed in the
court a quo. As can be seen from the complaint of the petitioner and the RTC
decision, the underlying prayer of the petitioner in its Complaint had been
granted in the decision of the trial court. In a very real sense, therefore, the
RTC has already granted what the petitioner had asked for in its Complaint.
Even more, during the hearings before the trial court, Mr. Ralph Bergen had
already personally testified, hence, foregoing any need for taking his
deposition.[23]
Considering the trial courts Decision dated 27 December 2006 in SEC Case
No. 68524 and the personal testimony of Bergen before the trial court, this
Court finds that the issue of whether a commission should be issued for
the taking of depositions of petitioners witnesses has indeed become
moot.
Furthermore, the Order dated 8 December 2003 of the trial court denying
petitioners motion to take deposition is an interlocutory order. An order that
does not finally dispose of the case, and does not end the courts task of
adjudicating the parties contentions and determining their rights and
liabilities as regards each other, but obviously indicates that other things
remain to be done by the court, is interlocutory.[24] Interlocutory refers to
something between the commencement and the end of the suit which decides
some point or matter, but it is not a final decision on the whole controversy.[25]
Since a Decision has already been rendered by the trial court in SEC Case
No. 68524 on 27 December 2006, then the Order of the same court dated 8
December 2003 denying petitioners motion to take deposition, being an
interlocutory order, should have been included and raised in the petition for
review filed by the petitioner before the Court of Appeals.
In Go v. Court of Appeals,[27] the Court adverted to the hazards of
interlocutory appeals:
“It is axiomatic that an interlocutory order cannot be challenged by an
appeal. Thus, it has been held that the proper remedy in such cases is an
ordinary appeal from an adverse judgment on the merits, incorporating in said
appeal the grounds for assailing the interlocutory order.Allowing appeals
from interlocutory orders would result in the `sorry spectacle of a case being
subject of a counterproductive ping-pong to and from the appellate court as
often as a trial court is perceived to have made an error in any of its
interlocutory rulings. x x x.”
The rule is founded on considerations of orderly procedure, to forestall
useless appeals and avoid undue inconvenience to the appealing party by
having to assail orders as they are promulgated by the court, when all such
orders may be contested in a single appeal.[28]
WHEREFORE, the instant petition is DENIED. The Decision of the Court
of Appeals dated30 September 2004 and its Resolution dated 17 May
2007 are AFFIRMED.
SO ORDERED.
Avila 4B | 2016
f. Application of Rule 23 in criminal cases
Manguerra v. Risos, G.R. No. 152643, August 28, 2008
Facts:
On November 4, 1999, respondents were charged with Estafa Through
Falsification of Public Document before the RTC of Cebu City, Branch 19,
through a criminal information dated October 27, 1999, which was
subsequently amended on November 18, 1999. The case, docketed as
Criminal Case No. CBU-52248,[5] arose from the falsification of a deed of
real estate mortgage allegedly committed by respondents where they made it
appear that Concepcion, the owner of the mortgaged property known as the
Gorordo property, affixed her signature to the document. Hence, the criminal
case.[6]
Earlier, on September 10, 1999, Concepcion, who was a resident of Cebu
City, while on vacation in Manila, was unexpectedly confined at the Makati
Medical Center due to upper gastro-intestinal bleeding; and was advised to
stay in Manila for further treatment.[7]
On November 24, 1999, respondents filed a Motion for Suspension of the
Proceedings in Criminal Case No. CBU-52248 on the ground of prejudicial
question. They argued that Civil Case No. CEB-20359, which was an action
for declaration of nullity of the mortgage, should first be resolved.[8] On May
11, 2000, the RTC granted the aforesaid motion. Concepcions motion for
reconsideration was denied on June 5, 2000.[9]
This prompted Concepcion to institute a special civil action
for certiorari before the CA seeking the nullification of the May 11 and June
5 RTC orders. The case was docketed as CA-G.R. SP No. 60266 and remains
pending before the appellate court to date.[10]
On August 16, 2000, the counsel of Concepcion filed a motion to take the
latters deposition.[11] He explained the need to perpetuate Concepcions
testimony due to her weak physical condition and old age, which limited her
freedom of mobility.
On August 25, 2000, the RTC granted the motion and directed
that Concepcions deposition be taken before the Clerk of Court of Makati
City.[12] The respondents motion for reconsideration was denied by the trial
court on November 3, 2000. The court ratiocinated that procedural
technicalities should be brushed aside because of the urgency of the situation,
since Concepcion was already of advanced age.[13] After several motions for
change of venue of the deposition-taking, Concepcions deposition was finally
taken on March 9, 2001 at her residence.[14]
On a R65, CA reversed RTC holding that there was a defect in the
respondents petition by not impleading the People of the Philippines, an
indispensable party. This notwithstanding, the appellate court resolved the
matter on its merit, declaring that the examination of prosecution witnesses,
as in the present case, is governed by Section 15, Rule 119 of the Revised
Rules of Criminal Procedure and not Rule 23 of the Rules of Court. The latter
provision, said the appellate court, only applies to civil cases. Pursuant to the
specific provision of Section 15, Rule 119, Concepcions deposition should
have been taken before the judge or the court where the case is pending,
which is the RTC of Cebu, and not before the Clerk of Court of Makati City;
and thus, in issuing the assailed order, the RTC clearly committed grave
abuse of discretion. [18]
Hence this petition.
Issue:
W/N CA erred in holding that Rule 23 does not apply in this case – No, it
did not err.
Held:
No, it did not err.
On the more important issue of whether Rule 23 of the Rules of Court applies
to the instant case, we rule in the negative.
It is basic that all witnesses shall give their testimonies at the trial of the case
in the presence of the judge.[25] This is especially true in criminal cases in
order that the accused may be afforded the opportunity to cross-examine the
witnesses pursuant to his constitutional right to confront the witnesses face to
face.[26] It also gives the parties and their counsel the chance to propound such
questions as they deem material and necessary to support their position or to
test the credibility of said witnesses.[27] Lastly, this rule enables the judge to
observe the witnesses demeanor.[28]
Avila 4B | 2016
This rule, however, is not absolute. As exceptions, Rules 23 to 28 of the Rules
of Court provide for the different modes of discovery that may be resorted to
by a party to an action. These rules are adopted either to perpetuate the
testimonies of witnesses or as modes of discovery. In criminal proceedings,
Sections 12,[29] 13[30] and 15,[31] Rule 119 of the Revised Rules of Criminal
Procedure, which took effect on December 1, 2000, allow the conditional
examination of both the defense and prosecution witnesses.
In the case at bench, in issue is the examination of a prosecution witness,
who, according to the petitioners, was too sick to travel and appear before the
trial court. Section 15 of Rule 119 thus comes into play, and it provides:
Section 15. Examination of witness for the prosecution. When it satisfactorily
appears that a witness for the prosecution is too sick or infirm to appear at the
trial as directed by the court, or has to leave the Philippines with no definite
date of returning, he may forthwith be conditionally examined before the
court where the case is pending. Such examination, in the presence of the
accused, or in his absence after reasonable notice to attend the examination
has been served on him, shall be conducted in the same manner as an
examination at the trial. Failure or refusal of the accused to attend the
examination after notice shall be considered a waiver. The statement taken
may be admitted in behalf of or against the accused.
Petitioners contend that Concepcions advanced age and health condition
exempt her from the application of Section 15, Rule 119 of the Rules of
Criminal Procedure, and thus, calls for the application of Rule 23 of the Rules
of Civil Procedure.
The contention does not persuade.
The very reason offered by the petitioners to exempt Concepcion from the
coverage of Rule 119 is at once the ground which places her squarely within
the coverage of the same provision.
Rule 119 specifically states that a witness may be conditionally examined:
1) if the witness is too sick or infirm to appear at the trial; or
2) if the witness has to leave thePhilippines with no definite date of returning.
Thus, when Concepcion moved that her deposition be taken, had she not been
too sick at that time, her motion would have been denied. Instead of
conditionally examining her outside the trial court, she would have been
compelled to appear before the court for examination during the trial proper.
Undoubtedly, the procedure set forth in Rule 119 applies to the case at bar. It
is thus required that the conditional examination be made before the court
where the case is pending. It is also necessary that the accused be notified, so
that he can attend the examination, subject to his right to waive the same after
reasonable notice. As to the manner of examination, the Rules mandate that
it be conducted in the same manner as an examination during trial, that is,
through question and answer.
At this point, a query may thus be posed: in granting Concepcions motion and
in actually taking her deposition, were the above rules complied with? The
CA answered in the negative. The appellate court considered the taking of
deposition before the Clerk of Court of Makati City erroneous and contrary
to the clear mandate of the Rules that the same be made before the court where
the case is pending. Accordingly, said the CA, the RTC order was issued with
grave abuse of discretion.
We agree with the CA and quote with approval its ratiocination in this wise:
Unlike an examination of a defense witness which, pursuant to Section 5,
Rule 119 of the previous Rules, and now Section 13, Rule 119 of the present
Revised Rules of Criminal Procedure, may be taken before any judge, or, if
not practicable, a member of the Bar in good standing so designated by the
judge in the order, or, if the order be made by a court of superior
jurisdiction, before an inferior court to be designated therein, the
examination of a witness for the prosecution under Section 15 of the Revised
Rules of Criminal Procedure (December 1, 2000) may be done only before
the court where the case is pending.[32]
Rule 119 categorically states that the conditional examination of a
prosecution witness shall be made before the court where the case is pending.
Contrary to petitioners contention, there is nothing in the rule which may
remotely be interpreted to mean that such requirement applies only to cases
where the witness is within the jurisdiction of said court and not when he is
kilometers away, as in the present case. Therefore, the court may not
introduce exceptions or conditions. Neither may it engraft into the law (or the
Rules) qualifications not contemplated.[33] When the words are clear and
Avila 4B | 2016
categorical, there is no room for interpretation. There is only room for
application.[34]

It is true that Section 3, Rule 1 of the Rules of Court provides that the rules
of civil procedure apply to all actions, civil or criminal, and special
proceedings. In effect, it says that the rules of civil procedure have suppletory
application to criminal cases. However, it is likewise true that the criminal
proceedings are primarily governed by the Revised Rules of Criminal
Procedure. Considering that Rule 119 adequately and squarely covers the
situation in the instant case, we find no cogent reason to apply Rule 23
suppletorily or otherwise.

To reiterate, the conditional examination of a prosecution witness for the

purpose of taking his deposition should be made before the court, or at least
before the judge, where the case is pending. Such is the clear mandate of
Section 15, Rule 119 of the Rules. We find no necessity to depart from, or to
relax, this rule. As correctly held by the CA, if the deposition is made
elsewhere, the accused may not be able to attend, as when he is under
detention. More importantly, this requirement ensures that the judge would
be able to observe the witness deportment to enable him to properly assess
his credibility. This is especially true when the witness testimony is crucial
to the prosecutions case.

While we recognize the prosecutions right to preserve its witness testimony

to prove its case, we cannot disregard rules which are designed mainly for the
protection of the accuseds constitutional rights. The giving of testimony
during trial is the general rule. The conditional examination of a witness
outside of the trial is only an exception, and as such, calls for a strict
construction of the rules.

WHEREFORE, the petition is hereby DENIED. The Court of Appeals

Decision and Resolution dated August 25, 2000 and March 12, 2002,
respectively, in CA-G.R. SP No. 62551, are AFFIRMED.

Avila 4B | 2016
g. Purpose of taking deposition
Pajarilla v. Court of Appeals, G.R. No. 163515, October 31, 2008
Facts:
On November 24, 1995, private respondent Thomas T. Kalangeg filed with
the RTC of Bontoc, Mt. Province, Branch 36, a complaint[4] for a sum of
money with damages against petitioner Isidro T. Pajarillaga.
Since the parties failed to reach an amicable settlement, trial on the merits
ensued. On March 10, 1997, private respondent presented his first witness.
At the next scheduled hearing on August 8, 1997, neither petitioner nor his
counsel appeared despite notice. Upon private respondents motion, the trial
court allowed him to present his remaining two witnesses subject to
petitioners cross-examination on the next scheduled hearing on September 2,
1997. But when the case was called on that date, petitioner and his counsel
were again absent. Upon private respondents motion, the trial court declared
petitioner to have waived his right of cross-examination and allowed private
respondent to make a formal offer of evidence.
In an Order dated October 8, 1997, the trial court admitted all the exhibits
formally offered by private respondent. It also scheduled petitioners
presentation of evidence on October 28, 29 and 30, 1997.
Petitioner moved to reset the hearing to November 17, 1997. The trial court
granted his motion and reset the hearing to December 15, 1997.
On December 10, 1997, however, petitioner filed a Motion for Leave of
Court to Take the Deposition of the Defendant Upon Written
Interrogatories[5] on the grounds that: (1) petitioner resides in Manila which
is more than four hundred (400) kilometers from Bontoc, Mt. Province; and
(2) petitioner is suffering from an illness which prohibits him from doing
strenuous activities.
Private respondent opposed the motion. On December 15, 1997, neither
petitioner nor his counsel again appeared. Nonetheless, the trial court reset
the case to January 12, 1998 for the presentation of petitioners evidence.
RTC denied the motion holding that:
“Considering that the above-entitled case has been pending since November
24, 1995, and hearings thereof have been delayed almost always at the
instance of the defendant, the latters motion for leave of Court to take said
defendants deposition upon written interrogatories at this late stage of the
proceedings is hereby denied.
Wherefore, in the interest of justice defendant is granted one more chance to
adduce his evidence on February 18, 1998, at 8:30 oclock in the morning.
Otherwise, he shall be deemed to have waived his right thereto”.
On a R65, CA affirmed the RTC holding that:
First, the denial of petitioners motion was not tainted with grave abuse of
discretion since the trial court gave petitioner full opportunity to present his
evidence.
Second, petitioners motion came much too late in the proceedings since
private respondent has already rested his case.
Third, the medical certificate which petitioner submitted to validate his
allegation of illness merely contained a remark that the patient is advised to
avoid strenuous activity. It did not state that the travel from Manila to Mt.
Province for the scheduled hearings was too strenuous to endanger petitioners
health.
Fourth, the threats to petitioners life by private respondents relatives were
belatedly alleged only in his motion for reconsideration.
Hence this petition.
Arguments:
Petitioner asserts that the trial court should have allowed the taking of his
deposition through written interrogatories since: (1) this discovery measure
may be availed of by a party as a matter of right; (2) he has good reasons for
invoking his right to this discovery measure,i.e., he resides in Manila which
is more than four hundred (400) kilometers from Bontoc, Mt. Province and
he is suffering from an illness which prohibits him from doing strenuous
activities. Petitioner adds that there are serious threats to his life by private
respondents relatives.
Private respondent counters that petitioner could no longer avail of this
discovery measure since the trial court has already given him sufficient time
to present his evidence and yet he failed to do so. Private respondent adds that
petitioners motion was made purposely to further delay the resolution of the
case as it was invoked during the late stage of the proceedings. Private
respondent also avers that the medical certificate submitted to show
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petitioners illness does not contain any statement that he could not travel
from Manila to Mt.Province for the scheduled hearings. In fact, the medical
certificate was not even notarized.
Issue:
W/N the lower courts erred in denying the motion to take deposition by
petitioner – No.
Held:
No.
After considering the contentions and submissions of the parties, we are in
agreement that the petition lacks merit.
Deposition is chiefly a mode of discovery, the primary function of which is
to supplement the pleadings for the purpose of disclosing the real points of
dispute between the parties and affording an adequate factual basis during the
preparation for trial. It should be allowed absent any showing that taking it
would prejudice any party. It is accorded a broad and liberal treatment and
the liberty of a party to make discovery is well-nigh unrestricted if the matters
inquired into are otherwise relevant and not privileged, and the inquiry is
made in good faith and within the bounds of law. It is allowed as a departure
from the accepted and usual judicial proceedings of examining witnesses in
open court where their demeanor could be observed by the trial judge,
consistent with the principle of promoting just, speedy and inexpensive
disposition of every action and proceeding; and provided it is taken in
accordance with the provisions of the Rules of Court, i.e., with leave of court
if summons have been served, and without such leave if an answer has been
submitted; and provided further that a circumstance for its admissibility
exists.
There is nothing in the Rules of Court or in jurisprudence which restricts a
deposition to the sole function of being a mode of discovery before trial.
Under certain conditions and for certain limited purposes, it may be taken
even after trial has commenced and may be used without the deponent being
actually called to the witness stand. There is no rule that limits deposition-
taking only to the period of pre-trial or before it; no prohibition exists against
the taking of depositions after pre- trial. There can be no valid objection to
allowing them during the process of executing final and executory judgments,
when the material issues of fact have become numerous or complicated. Such
being the case, there is really nothing objectionable, per se, with petitioner
availing of this discovery measure after private respondent has rested his case
and prior to petitioner’s presentation of evidence. To reiterate, depositions
may be taken at any time after the institution of any action, whenever
necessary or convenient.
But when viewed vis the several postponements made by petitioner for the
initial presentation of his evidence, we are of the view that his timing is, in
fact, suspect. The records before us show that petitioner stopped attending the
hearings after private respondent presented his first witness. Petitioner
offered no excuse for his and his counsels absences. Moreover, the trial court
has set four (4) hearing dates for the initial presentation of his evidence. But
he merely moved for its resetting without invoking the grounds which he now
presents before us.
Besides, even as we scrutinize petitioners arguments, we think that he has not
sufficiently shown an exceptional or unusual case for us to grant leave and
reverse the trial and appellate courts.
Under Section 4, Rule 23 of the Rules of Court, depositions may be used for
the trial or for the hearing of a motion or an interlocutory proceeding, under
the following circumstances:
SEC. 4. Use of depositions.
xxxx
(c) The deposition of a witness, whether or not a party, may be used by any
party for any purpose if the court finds:
(1) that the witness is dead; or
(2) that the witness resides at a distance more than one hundred (100)
kilometers from the place of trial or hearing, or is out of the Philippines,
unless it appears that his absence was procured by the party offering the
deposition; or
(3) that the witness is unable to attend or testify because of age, sickness,
infirmity, or imprisonment; or
(4) that the party offering the deposition has been unable to procure the
attendance of the witness by subpoena; or
(5) upon application and notice, that such exceptional circumstances exist as
to make it desirable, in the interest of justice and with due regard to the
importance of presenting the testimony of witnesses orally in open court, to
allow the deposition to be used;
x x x x[13]
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In this case, petitioner invokes distance and illness to avail of the discovery
measure. We agree with private respondent that the matter of distance could
have been settled had petitioner requested for a change of venue earlier in the
proceedings. Petitioner has attended the pre-trial and the hearing where
private respondent presented his first witness. He need not await his turn to
present evidence before realizing the great inconvenience caused by the
enormous distance between his place of residence and the place of hearing.

Nor are we inclined to accept petitioners claim of illness. As aptly observed

by the Court of Appeals, the medical certificate submitted by petitioner
merely contained a remark that the patient is advised to avoid strenuous
activity. It was not alleged that the travel from Manila to Mt. Province for the
scheduled hearings was too strenuous to endanger petitioners health.

We also agree with the Court of Appeals that the threats to petitioners life by
private respondents relatives appear to be a mere afterthought since it was
raised only in petitioners motion for reconsideration of the trial courts denial
of his motion for leave. We also note that the incident which gave rise to the
alleged threats took place prior to the pre-trial. Surely, petitioner could have
informed the trial court of this incident had there been truth to, and serious
implication of, his allegation.

Finally, we must emphasize that while the rules on discovery are liberally
constructed so as to ascertain truth and to expedite the disposal of cases, the
trial court may disallow a deposition if there are valid reasons for so
ruling.[14] Here, we find the protracted delay in the litigation at petitioners
instance coupled with the belated and unsubstantiated allegations of illness
and threats to petitioners life, more than sufficient reasons for the trial court
to deny petitioners motion.

WHEREFORE, the instant petition is DENIED for lack of merit.

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h. Letters rogatory and commission
Dulay v. Dulay, G.R. No. 158857, November 11, 2005
Facts:
In a complaint[3] for recovery of his bank deposit with prayer for a writ of
attachment and damages, Rodrigo S. Dulay, a naturalized American citizen,
alleged that upon his petition sometime in October of 1996, his brother
Godofredo S. Dulay, Sr. and nephew Pfeger R. Dulay immigrated to
the United States of America. The two stayed with him in his house
atClaremont, Massachusetts. Godofredo, however, decided to return to
the Philippines because he could not endure the weather. Pfeger stayed
behind to take care of Rodrigo. Having nurtured affection, love and trust for
his nephew Pfeger, Rodrigo opened a trust account with the Bank of Boston
on 27 January 1997 with a deposit of Two Hundred Thirty Thousand U.S.
Dollars ($230,000.00), naming Pfeger as trustee thereof.
Five months later, Pfeger left Rodrigos house allegedly to join his girlfriend
in California. Rodrigo learned only later that Pfeger actually went back to
the Philippines. Pfeger returned to the United States in November of 1997,
but after a brief stay returned again to the Philippines where he went on a
spending binge. Upon knowing this, Rodrigo verified the status of his account
with the Bank of Boston, and to his shock and dismay discovered that Pfeger
had already emptied the account. Rodrigo additionally claimed that Pfeger
used the money from said account to buy several vehicles, loan money to
several people, open bank accounts for his siblings, and buy a house and lot
and jewelry for his wife. Whatever was left of the account was allegedly
transferred to Pfegers father, Godofredo.[4]
Denying the accusations, petitioner claimed that the money deposited in the
name of Pfeger was his own money and not Rodrigos. They assailed the
admissibility of the Statement of Account and the supporting Affidavit
attached to the Complaint. For his part, Pfeger asserted that he spent his own
money.[5]
Rodrigo filed a petition for the issuance of letters rogatory in order to get the
depositions of several witnesses residing abroad.[6] Petitioners, on the other
hand, moved to be allowed to file cross-examination questions to respondents
written interrogatories, which the trial court granted.[7]
RTC stated:
“These are petitions for letters Rogatory dated November 11,
1999 and November 22, 1999respectively praying that this Court order the
Clerk of Court to issue any order requiring the Clerk of Court in Boston
Ma., USA to conduct the examination of the following parties:
1. Mr. Rodrigo S. Dulay of 38 Claremont St. Malden, Ma., USA, and
2. Manager or authorized representative of the Bank of Boston, Ma., USA
and for the above-named persons to answer the attached questions (direct and
cross) attached to each petition, and for the Clerk of Court of Boston to
forward the same questions and answers as soon as the same were already
properly answered.
SO ORDERED.[8]”
Meanwhile, petitioners filed a motion to dismiss the complaint on the ground
of failure to prosecute.[9] This was however denied by the trial court, which
instead allowed Rodrigo to complete his depositions.[10] As it turned out,
however, the depositions could not be taken before the Clerk of Court of
Massachusetts, but were taken instead before a notary public inNew York.
On 2 February 2000, Rodrigo submitted to the trial court his answers to the
interrogatories and cross interrogatories of petitioners given before a notary
public in theUnited States. Thereafter, petitioners filed their Motion
Reiterating Motion to Dismiss Dated July 10, 2000,[11] which the trial court
denied in its 28 September 2000 Order.[12] In the same Order, the trial court
directed respondent to have the written and cross interrogatories taken by the
notary public authenticated by the consulate. Thus, respondent filed a motion
to withdraw the answers so that he could have them authenticated by a
Philippine consul in the United States.[13]
On 10 January 2001, petitioners filed an Omnibus Motion,[14] praying that the
written interrogatories be declared inadmissible and reiterating their prayer
for the dismissal of the complaint. The lower court denied the motion on 20
February 2001, at the same time directing the archival of the case while
waiting for the documents from the United States.[15]
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According to the trial court, the dismissal of the case is improper considering
that Rodrigo had already commenced presenting his evidence and that it is
mandated to hear the evidence on the counterclaims of the petitioners. Anent
the objection to the admission of the answers to the written interrogatories,
the trial court stated that the deposition taken before the Notary Public
from New York, whose authority was duly certified by the Philippine Consul
in New York, substantially complied with the Rules of Court.[16] Thus, on 31
August 2001, the trial court ordered the admission of the assailed documents.
Petitioners moved for the reconsideration of the order but the motion was
denied.[17]
On a R65, CA affirmed holding that the questioned depositions were
accomplished in substantial compliance with the Rules of
Court.[18] According to the Court of Appeals, Rodrigo could not be faulted
for the incidental delays in the proceedings, which were after all caused by
the refusal of the American tribunal which brushed aside the letters rogatory
issued by the trial court. Putting premium on merit rather than on technicality,
the Court of Appeals held that laxity in the application of the procedure is not
tantamount to laxity in the rendition of justice when equitable circumstances
exist to warrant the same.[19]
Hence this petition.
Issue:
W/N the lower courts erred in admitting the documents of respondent – No.
Held:
No.
Deposition is chiefly a mode of discovery, the primary function of which is
to supplement the pleadings for the purpose of disclosing the real points of
dispute between the parties and affording an adequate factual basis during the
preparation for trial. It may be taken with leave of court after jurisdiction has
been obtained over any defendant or over property that is the subject of the
action; or, without such leave, after an answer has been served. A party’s right
to avail itself of this procedure is “well-nigh unrestricted” if the matters
inquired into are otherwise relevant and not privileged, and the inquiry is
made in good faith and within the bounds of the law. Nevertheless, the use of
discovery procedures is directed to the sound discretion of the trial courts,
which, in general, are given wide latitude in granting motions for discovery
in order to enable the parties to prepare for trial or otherwise to settle the
controversy prior thereto.
While the letters rogatory issued by the trial court specifically directed the
Clerk of Court of Boston to take the depositions needed in the case, it became
impossible to follow the directive since the Clerk of Court of Boston merely
brushed it aside and refused to cooperate. Respondent cannot be faulted for
the resultant delay brought about by this circumstance. Neither can the trial
court be faulted for allowing the admission of the depositions taken not in
strict adherence to its original directive, nor for directing the petitioner to
have the depositions authenticated. Obviously, it was not within the trial
court’s power, much less the respondent’s to force the Clerk of Court of
Boston to have the deposition taken before it. It would be illogical and
unreasonable to expect respondent to comply with the letters rogatory without
the cooperation of the very institution or personality named in the letters
rogatory and requested to examine the witnesses. After all, while a court had
the authority to entertain a discovery request, it is not required to provide
judicial assistance thereto. This reality was recognized by the trial court when
it ordered respondent to have the questioned depositions authenticated by the
Philippine consulate. Indeed, refusing the allowance of the depositions in
issue would be going directly against the purpose of taking the depositions in
the first place, that is, the disclosure of facts which are relevant to the
proceedings in court.
More importantly, the Court finds that respondent substantially complied
with the requirements for depositions taken in foreign countries.
In our jurisdiction, depositions in foreign countries may be taken:
(a) on notice before a secretary of embassy or legation, consul general,
consul, vice consul, or consular agent of the Republic of the Philippines;
(b) before such person or officer as may be appointed by commission or under
letters rogatory; or
(c) before any person authorized to administer oaths as stipulated in writing
by the parties. While letters rogatory are requests to foreign tribunals,
commissions are directives to officials of the issuing jurisdiction.
Generally, a commission is an instrument issued by a court of justice, or other
competent tribunal, directed to a magistrate by his official designation or to
an individual by name, authorizing him to take the depositions of the
witnesses named therein, while a letter rogatory is a request to a foreign court
Avila 4B | 2016
to give its aid, backed by its power, to secure desired information.
Commissions are taken in accordance with the rules laid down by the court
issuing the commission, while in letters rogatory, the methods of procedure
are under the control of the foreign tribunal.

Leave of court is not required when the deposition is to be taken before a

secretary of embassy or legation, consul general, consul, vice-consul or
consular agent of the Republic of the Philippines and the defendant’s answer
has already been served. However, if the deposition is to be taken in a foreign
country where the Philippines has no secretary of embassy or legation, consul
general, consul, vice-consul or consular agent, it may be taken only before
such person or officer as may be appointed by commission or under letters
rogatory.

In the instant case, the authentication made by the consul was a ratification
of the authority of the notary public who took the questioned depositions. The
deposition was, in effect, obtained through a commission, and no longer
through letters rogatory. It must be noted that this move was even sanctioned
by the trial court by virtue of its Order dated 28 September 2000. With the
ratification of the depositions in issue, there is no more impediment to their
admissibility.

Besides, the allowance of the deposition can not be said to have caused any
prejudice to the adverse party. They were given the opportunity to cross-
examine the witnesses through their cross-interrogatories, which were in turn
answered by the deponents. Save for the complaint of delay in the
proceedings, petitioners were unable to point out any injury they suffered as
a result of the trial courts action.

WHEREFORE, premises considered, the petition is DENIED. Costs against

petitioners.

SO ORDERED.

Avila 4B | 2016
i. Failure to answer written interrogatories
Jaravata v. Karolus, G.R. No. 154988, June 21, 2007
Facts:
The case stemmed from an action for reconveyance and declaration of
nullity of titles and damages filed by petitioner on September 10, 1996 before
the RTC of Olongapo City alleging that she is the lawful owner and actual
occupant of a parcel of land situated in Cawag, Subic, Zambales with an area
of 83,931 square meters.
In her complaint, it was narrated that as early as 1950, petitioner and her
predecessors-in-interest have been in actual, continuous, open, and public
possession of Lots 1, 2, and 3 in the concept of an owner. In addition to the
uninterrupted physical possession, petitioner averred that she had planted and
cultivated the subject parcels of land and had declared the same for taxation
purposes.
Sometime in 1992, petitioner discovered that her relatives, herein
respondents, fraudulently and illegally secured titles over Lots 1 and 2.
Petitioner recounted that respondent Karolus, through fraud and
misrepresentation, was able to obtain approval, in her name, of Free Patent
No. (III-3) 008888[7] on July 11, 1988 and for which OCT No. P-9447 was
issued on September 12, 1988 by the Register of Deeds of Zambales
involving an area of 41,505 sq. m. It was further alleged that petitioners Lot 1
overlapped with the property registered in the name of respondent Karolus.
As affirmative and special defenses, respondents argued that petitioners
action for reconveyance had already prescribed since it was admitted in her
complaint that she came to know of the existence of the titles in the early part
of 1992. Accordingly, the four-year prescriptive period from the discovery of
fraud had already prescribed. On the declaration of nullity of the torrens titles,
respondents averred that petitioner had no cause of action because the matter
may only be raised by the government.
As compulsory counterclaims, respondents alleged that sometime in August
1995, petitioner, through stealth and strategy, forcibly entered the areas
covered by the torrens titles of respondents, ousting the latter from their
lawful possession and despite demands, refused to vacate the said area.
On November 11, 1996, respondents filed a third-party complaint against
Rudegelio D. Tacorda, petitioners counsel.
On December 3, 1996, petitioner served upon the respondents and their
counsel two separate and different sets of written interrogatories.
Respondents filed their objection to the written interrogatories. On December
18, 1996, Tacorda likewise served upon respondents and their counsel
separate and different sets of written interrogatories. In an Order dated
February 19, 1997, the RTC denied the objections interposed by the
respondents and allowed petitioners written interrogatories.
On March 2, 1997, respondents filed a manifestation and compliance
dated March 2, 1997 attaching their answers thereto to the written
interrogatories.
On April 24, 1997, petitioner and Tacorda filed a joint omnibus motion[11] to
compel the respondents to fully and completely answer their written
interrogatories.
In an Order[12] dated December 8, 1997, the RTC declared respondents in
default in accordance with Rule 29, Section 3 (c) of the Revised Rules of
Court for their failure to fully answer the written interrogatories in the
principal action, and for their refusal to answer the written interrogatories in
the third-party complaint.
On December 18, 1997, the RTC rendered judgment in default in favor of the
petitioner.
On appeal, CA reversed the RTC holding that the RTC erred in rendering a
judgment by default against defendants without first issuing an order to
compel answer and dismissed the complaint.
Hence this petition.
Petitioner argues that there was no trial on the merits and presentation of any
evidence before the court a quo and, therefore, the CA could not validly
dismiss the case. She adds that the CAs jurisdiction was merely limited to
reviewing whether or not the default judgment of the RTC was in accordance
with Rule 29 of the Rules of Court.
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Issue:
W/N CA erred in dismissing the complaint – Yes.

Held:
Yes.

The petition has merit.

The CA rightly held that the court a quo erred in rendering a judgment by
default against the defendants for refusal or failure to answer written
interrogatories, without first requiring an application by the proponent to
compel an answer. This is the requisite procedure under Section 1 of Rule 29
of the 1997 Rules of Civil Procedure.

Nevertheless, the Court of Appeals erred in proceeding to decide the case on

the merits since there was as yet no trial or presentation of evidence in the
court a quo. Petitioners prayer to affirm the trial courts December 18,
1997 default decision does not mean that there was a trial. The decision of
the trial court was based on constructive admissions by the defendants of the
allegations of the plaintiff due to the courts application of the sanction for not
answering the written interrogatories. In reversing the application of the
sanction, the CA should have given the parties a chance to substantiate by
evidence their respective claims at the trial court. This is particularly true with
respect to the plaintiffs claim of physical possession for more than 30 years,
regarding which the CA said that clear and convincing evidence was required
but wanting. This is because the wrong procedure followed by the trial court
effectively aborted a trial and presentation of evidence.

WHEREFORE, the petition is GRANTED and the Decision of the Court of

Appeals in CA-G.R. CV No. 60953 is hereby MODIFIED in that the case
should be, as it is hereby, ordered REMANDED to the Regional Trial Court,
Branch 72, Olongapo City for trial and/or further proceedings under Civil
Case No. 298-0-96.

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j. Consequences of failure to answer interrogatories
Zepeda v. China Banking Corporation, G.R. No. 172175, October 9, 2006
Facts:
On February 18, 2003, spouses Expedito and Alice Zepeda filed a
complaint for nullification of foreclosure proceedings and loan
documents with damages[6] against respondent Chinabank before the
Regional Trial Court of San Jose, Camarines Sur, which was docketed as
Civil Case No. T-947 and raffled to Branch 30. They alleged that on June 28,
1995, they obtained a loan in the amount of P5,800,000.00 from respondent
secured by a Real Estate Mortgage over a parcel of land covered by Transfer
Certificate of Title (TCT) No. T-23136.
Petitioners subsequently encountered difficulties in paying their loan
obligations hence they requested for restructuring which was allegedly
granted by Chinabank. Hence, they were surprised when respondent bank
extrajudicially foreclosed the subject property on October 9, 2001 where it
emerged as the highest bidder. Respondent bank was issued a Provisional
Certificate of Sale and upon petitioners failure to redeem the property,
ownership was consolidated in its favor.
According to petitioners, the foreclosure proceedings should be annulled for
failure to comply with the posting and publication requirements. They also
claimed that they signed the Real Estate Mortgage and Promissory Note in
blank and were not given a copy and the interest rates thereon were
unilaterally fixed by the respondent.
Respondent bank filed and was denied its motion to dismiss, hence it filed an
answer with special affirmative defenses and counterclaim. It also filed a set
of written interrogatories with 20 questions. It also filed a motion to expunge
the complaint based on Section 3(c) of Rule 29
In an Order dated April 1, 2004, the trial court denied Chinabanks affirmative
defenses for lack of merit as well as its motion to expunge the complaint for
being premature. The trial court reiterated its denial of Chinabanks
affirmative defenses in its Order dated October 22, 2004 and directed the
Clerk of Court to set the pre-trial conference for the marking of the parties
documentary evidence.
On a R65, CA reversed RTC and held that the trial court gravely abused its
discretion in issuing the two assailed Orders. It ruled that compelling reasons
warrant the dismissal of petitioners complaint because they acted in bad faith
when they ignored the hearings set by the trial court to determine the veracity
of Chinabanks affirmative defenses; they failed to answer Chinabanks written
interrogatories; and the complaint states no cause of action.
Hence this petition.
Issue:
W/N the complaint should be dismissed for failure of petitioners to answer
respondents written interrogatories as provided for in Section 3(c), Rule 29
of the Rules of Court – No.
Held:
No.
The petition is meritorious.
Anent the second issue, we do not agree with the Court of Appeals ruling that
the complaint should be dismissed for failure of petitioners to answer
respondent banks written interrogatories.
It should be noted that respondent bank filed a motion to expunge the
complaint based on Section 3(c) of Rule 29.
As we have explained in Arellano v. Court of First Instance of
Sorsogon,[14] the consequences enumerated in Section 3(c) of Rule 29 would
only apply where the party upon whom the written interrogatories is served,
refuses to answer a particular question in the set of written interrogatories
and despite an order compelling him to answer the particular question, still
refuses to obey the order.
In the instant case, petitioners refused to answer the whole set of written
interrogatories, not just a particular question. Clearly then, respondent bank
should have filed a motion based on Section 5 and not Section 3(c) of Rule
29. Section 5 of Rule 29 reads:
SEC. 5. Failure of party to attend or serve answers. If a party or an officer or
managing agent of a party willfully fails to appear before the officer who is
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to take his deposition, after being served with a proper notice, or fails to serve
answers to interrogatories submitted under Rule 25 after proper service of
such interrogatories, the court on motion and notice, may strike out all or any
part of any pleading of that party, or dismiss the action or proceeding or any
part thereof, or enter a judgment by default against that party, and in its
discretion, order him to pay reasonable expenses incurred by the other,
including attorneys fees.

Due to respondent banks filing of an erroneous motion, the trial court cannot
be faulted for ruling that the motion to expunge was premature for lack of a
prior application to compel compliance based on Section 3.

This Court has long encouraged the availment of the various modes or
instruments of discovery as embodied in Rules 24 to 29 of the Rules of Court.

The imposition of sanctions under Section 5 is within the sound discretion of

the trial court. Thus, in Insular Life Assurance Co., Ltd. v. Court of
Appeals,[17] we held:

The matter of how, and when, the above sanctions should be applied is one
that primarily rests on the sound discretion of the court where the case pends,
having always in mind the paramount and overriding interest of justice. For
while the modes of discovery are intended to attain the resolution of
litigations with great expediency, they are not contemplated, however, to be
ultimate causes of injustice. It behooves trial courts to examine well the
circumstances of each case and to make their considered determination
thereafter. x x x

WHEREFORE, the petition is GRANTED.

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k. Request for Admission not answered
Sime Darby v. NLRC, G.R. No. 148021, December 6, 2006
Facts:
Sometime in October 1995, Sime Darby Employees Association (the Union)
submitted its proposal to Sime Darby Pilipinas, Inc. (the Company) for the
remaining two (2) years of their then existing Collective Bargaining
Agreement (CBA). The company gave its counter-proposal, but the parties
failed to reach a mutual settlement. Thus, in a letter to the union president,
the company declared a deadlock in the negotiations. Subsequently, the
company sought the intervention of the Department of Labor and
Employment (DOLE) by filing a Notice of CBA Deadlock and Request for
Preventive Mediation.[2] Such action did not sit well with the union,
which objected to the deadlock. It also filed its opposition to the Assumption
of Jurisdiction/Certification to Arbitration.
The company filed a Notice of Lockout on 21 June 1995, on the ground of
deadlock in the collective bargaining negotiations, docketed as NCMB-NCR-
NL-06-013-95, and sent a Notice of Lock Out Vote[3] dated 24 July 1995 to
the National Conciliation and Mediation Board (NCMB). On the other hand,
the union conducted its strike vote referendum on 23 June 1995, and filed its
Strike Vote Result Report [4]to NCMB also on 24 July 1995, and docketed as
NCMB-NCR-NS-Case No. 06-265-95.
On 06 August 1995, the company declared and implemented a lockout
against all the hourly employees of its tire factory on the ground of
sabotage[5] and work slowdown. On September 1995, the Union filed a
complaint for illegal lockout before the DOLE-NLRC, docketed as NLRC
NCR Case No. 00-09-06517-95.
Meanwhile, on 19 October 1995, the stockholders of the company approved
the sale of the company’s tire manufacturing assets and business
operation. The company issued a memorandum dated 20 October
1995 informing all its employees of the plan to sell the tire manufacturing
assets and operations. Consequently, on 27 October 1995, the company filed
with the DOLE a Closure and Sale of Tire Manufacturing Operation.
On 15 November 1995, the company individually served notices of
termination to all the employees, including the individual petitioners.[6]
In November 1995, petitioners filed a complaint for Illegal Dismissal before
the DOLE, docketed as NLRC NCR Case No. 00-11-07577-95.[8] In January
of the following year, petitioners filed a complaint for Unfair Labor Practice
(ULP), docketed as NLRC-NCR CaseNo. 00-01-00284-96. The cases for
illegal dismissal, illegal lockout and unfair labor practice were then
consolidated and eventually assigned to Labor Arbiter Enrico Portillo.
On 24 April 1996, the company sold its tire manufacturing plant and facilities
to Goodyear Philippines, Inc. (Goodyear) under a Memorandum of
Agreement of even date.
During the proceedings, the petitioner-employees filed and served a Request
for Admissions to respondents. Instead of filing an answer under oath,
respondents filed an unsworn reply/objection thereto.
LA dismissed petitioner’s complaint for lack of merit.
NLRC affirmed in toto.
On a R65, CA affirmed NLRC.
Hence this petition claiming that the labor arbiter erred when it failed to
consider as admitted the matters contained in their Request for Admission
after respondents failed to file a sworn answer thereto.
Issue:
W/N the LA erred when it did not consider as admitted the matters contained
in petitioners’ request for admission – No.
Held:
No.
The submission that petitioners Request for Admission should have been
deemed admitted in their favor after respondents had failed to file a sworn
reply or objection thereto cannot be sustained.
A request for admission is a remedy provided by Rule 26 of the Rules of
Court, which allows a party to file and serve upon any other party a written
request for the admission of :
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(i) the genuineness of any material and relevant document described in and by the petitioners, their request for admission would have only served to delay
exhibited with the request; or the proceedings.
(ii) the truth of any material and relevant matter of fact set forth in the request.
WHEREFORE, the petition is DENIED and the Decision dated 31 July 2000
Said request must be answered under oath within the period indicated in the in CA-G.R. SP No. 54424 is AFFIRMED.
request, otherwise the matters of which admission were requested should be SO ORDERED.
deemed admitted.

Petitioners claim that respondents, instead of filing an answer under oath,

filed an unsworn reply/objection thereto. Thus, the admissions should be
deemed admitted in their favor.

Petitioners Request for Admission does not fall under Rule 26 of the Rules
of Court. A review of said Request for Admission shows that it contained
matters which are precisely the issues in the consolidated cases, and/or
irrelevant matters; for example, the reasons behind the lockout, the
company’s motive in the CBA negotiations, lack of notice of dismissal, the
validity of the release and quitclaim, etc.[39]

Rule 26 as a mode of discovery contemplates of interrogatories that would

clarify and tend to shed light on the truth or falsity of the allegations in a
pleading. That is its primary function. It does not refer to a mere reiteration
of what has already been alleged in the pleadings.[40]

Otherwise stated, petitioner's request constitutes an utter redundancy and a

useless, pointless process which the respondent should not be subjected
to. The rule on admission as a mode of discovery is intended to expedite trial
and to relieve parties of the costs of proving facts which will not be disputed
on trial and the truth of which can be ascertained by reasonable inquiry. Thus,
if the request for admission only serves to delay the proceedings by abetting
redundancy in the pleadings, the intended purpose for the rule will certainly
be defeated.[41]

More importantly, well-settled is the rule that hearings and resolutions of

labor disputes are not governed by the strict and technical rules of evidence
and procedure observed in the regular courts of law. Technical rules of
procedure are not applicable in labor cases, but may apply only by analogy
or in a suppletory character, for instance, when there is a need to attain
substantial justice and an expeditious, practical and convenient solution to a
labor problem.[42] In view of the nature of the matters requested for admission

Avila 4B | 2016
l. Request for Admission instead of Offer to Stipulate
Manzano v. Despalidares, G.R.No. 148786, December 16, 2004
Facts:
In 1989, during the months of August and September, respondent Luz
Despabiladeras obtained on credit from petitioner Roger Manzano
various construction materials which she used in her construction project
at the Camarines Sur Polytechnic Colleges (CSPC).
By petitioners claim, he delivered to respondent during above-said period a
total of P307,140.50 worth of construction materials payable upon
respondents initial collection from CSPC, to bear 8% monthly interest until
fully paid.[1]
Respondent having paid the amount of only P130,000.00 exclusive of
interest, despite receipt of payments from CSPC, petitioner filed on April 6,
1990 a complaint[2] against her for sum of money with damages before the
Regional Trial Court of Iriga City.
In her Answer with Counterclaim,[3] respondent alleged that petitioner had
substantially altered the prices of the construction materials delivered to her;
and that in addition to the P130,000.00 she had paid petitioner, she had made
additional payments to petitioner via two checks (one in the amount
of P43,069.00 and the other in the amount of P14,000.00).
Branch 36 of the Iriga Regional Trial Court (the trial court) later granted
petitioners Motion to Establish and Enforce Plaintiffs Suppliers Lien and
accordingly ordered the President of the CSPC to retain the sum
of P201,711.74 from the final payment due to the defendant . . . pending final
resolution of this case.[4]
Issues having been joined, the case was set for pre-trial.
After the pre-trial, the trial judge issued the following order:[5]
“At this pre-trial conference, there is no dispute that the plaintiff delivered
and defendant received certain construction materials but the defendant does
not agree on the cost claimed by the plaintiff. Wherefore, it is mutually
agreed that the plaintiff shall submit an offer to stipulate showing an
itemized list of construction materials delivered to the defendant together
with the cost claimed by the plaintiff within fifteen (15) days furnishing
copy thereof to the defendant who will state her objections if any, or
comment therein within the same period of time.
x x x (Emphasis and underscoring supplied)”
Instead of submitting an offer to stipulate, petitioner filed on October 24,
1990 a Request for Admission[6] asking respondent to admit within 15 days
from receipt the following:
1. That on the specific dates set forth in Annexes A, A-1 and A-2
hereof, plaintiff delivered to and defendant received the various items
particularly described in said annexes duly covered by the invoices
respectively set forth therein;
2. That of the total amount of P314,610.50 representing the value of the goods
described in Annexes A, A-1 and A-2, plaintiff has paid only P130,000.00.
(Underscoring supplied)
No response to the Request for Admission was proffered by respondent until
in the course of the trial of the case or on April 8, 1991, respondent filed a
list[7] of items admitted to have been delivered and those not admitted, noting
therein that Deliveries admitted do not bear the actual price agreed [upon] or
the specifications requested, which filing the trial court noted in its order of
even date.[8]
Petitioner later filed a Motion for Partial Judgment and
Execution[9] alleging that substantial justice would be served if partial
judgment would issue (on the pleadings) in respect to those items admitted to
have been received by [respondent] and attaching as Annex A[10] a list
prepared by petitioner containing the items (with the corresponding prices)
admitted to have been received by the respondent.
On February 21, 1994, the trial court issued the following order:[12]
Considering that the defendant, up to this time ha[s] not answered under
oath the request for admission, dated October 23, 1990, as prayed for by the
counsel for the plaintiff, the facts requested to be admitted are hereby
confirmed.
By Decision[13] of July 7, 1997, the trial court found for petitioner.
x x x Despite receipt of said request for admission, defendant did not answer
the same, under oath, consequently, defendant is deemed to have admitted
that plaintiff delivered to her and she received the goods delivered with the
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total value of P314,610.50 and that of the said total amount, she has paid
onlyP130,000.00.
On appeal, CA reversed RTC holding that:
“If at all there was failure by the appellant to file a sworn statement denying
the request for admission, it was precisely because of the agreement by the
parties during the pre-trial period that the appellant would only file a
comment, which she did by submitting a list of items, either admitting receipt
of construction materials or denying receipt thereof. Necessarily, the
appellant could not have impliedly admitted the facts mentioned in the
request for admission. The Court even required the appellee to present
evidence on the matters mentioned in the request for admission, or on the
issue concerning payment and the balance of the indebtedness. Aside from
that, the appellee was even allowed to present evidence on rebuttal. This is
not to mention the fact that documents showing payments, other than
the P130,000.00, were admitted by the Court. If indeed the unpaid balance
was admitted, supposedly because of denial of the request for admission,
then, necessarily the appellant should have been prevented by the Court from
presenting evidence contradicting such admissions.”
Hence this petition.
Arguments:
Petitioner contends that when respondent failed to deny under oath the truth
of the material facts subject of petitioners Request for Admission, she is
deemed to have admitted them that he delivered to her, and she received
various construction materials costing a total of P314,610.50, P130,000.00 of
which had been partially paid.[18]
Petitioner further contends that the appellate court committed a reversible
error when it considered that the agreement in the October 2, 1990 pre-trial
and the request for admission dated October 23, 1990 refer to one and the
same thing;[19] that even the trial court on November 15, 1990[20] required
respondent to file her comment on the request for admission, [which]
comment is understood to mean the comment as required by Rule 26 which
should be under oath even the same is not stated in the pre-trial order of
November 15, 1990 because the trial court does not have any discretion to
amend or repeal Rule 26 and its effects;[21] that the list of items submitted by
respondent is not in keeping with what is required by Rule 26 and therefore
cannot be considered as compliance to said Rule;[22] and that the fact that
despite the admission by respondent of the matters contained in the request
for admission, the trial court allowed said respondent to present her evidence
that even tended to contradict her previous admission does not deprive the
trial court in the appreciation of evidence submitted prior to the rendition of
the decision to disregard the evidence presented by respondent for being
inconsistent [with] and immaterial [to] her previous admission by virtue of
her failure to respond the request for admission pursuant to Rule 26.[23]
Issue:
W/N the failure of respondents to reply under oath to the request for
admissions on time amounted to an admission of the matters therein – Yes.
Held:
Yes.
Petitioners arguments are impressed with merit.
At the commencement on April 6, 1990 of the action, the prevailing rule, Rule
26 of the 1964 Rules of Court, Sections 1 and 2 of which were substantially
reproduced in the present Rules,[24]provides:
“SECTION 1. Request for admission. At any time after issues have been
joined, a party may serve upon any other party a written request for the
admission by the latter of the genuineness of relevant documents described
in and exhibited with the request or of the truth of any material and relevant
matters of fact set forth in the request. Copies of the documents shall be
delivered with the request unless copies have already been furnished.
SECTION 2. Implied Admission. Each of the matters of which an
admission is requested shall be deemed admitted unless, within a period
designated in the request, which shall not be less than ten (10) days after
service thereof, or within such further time as the court may allow on
motion and notice, the party to whom the request is directed serves upon
the party requesting the admission a sworn statement either
denying specifically the matters of which an admission is requested
or setting forth in detail the reasons why he cannot truthfully either
admit or deny those matters.
Objections on the ground of irrelevancy or impropriety of the matter
requested shall be promptly submitted to the court for resolution.
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x x x (Emphasis and underscoring supplied)”

The agreement of the parties during the pre-trial conference of October 2,

1990, as reflected in the pre-trial order of even date, was that the [petitioner]
shall submit an offer to stipulate showing an itemized list of construction
materials delivered to the [respondent] together with the cost claimed by the
[petitioner] within fifteen (15) days[,] furnishing copy thereof to the
[respondent] who will state her objections if any, or comment there[o]n
within the same period of time. In substantial compliance with said
agreement, petitioner chose to instead file a request for admission, a remedy
afforded by a party under Rule 26.

The above-quoted Sections 1 and 2 of Rule 26 should not be disregarded, as

in fact the trial court did not, when it ordered respondent to file comment
thereon, just because the parties mutually agreed that petitioner submit an
offer to stipulate.

For, as stated earlier, the request for admission is a remedy afforded any party
after the issues had been joined.

Respondent having failed to discharge what is incumbent upon her under

Rule 26, that is, to deny under oath the facts bearing on the main issue
contained in the Request for Admission, she was deemed to have admitted
that she received the construction materials, the cost of which was indicated
in the request and was indebted to petitioner in the amount of P184,610.50
(P314,610.50 less the partial payment of P130,000.00).

WHEREFORE, the petition is hereby GRANTED. The Decision of the

Regional Trial Court of Iriga City, Branch 36, dated July 7, 1997 is hereby
REINSTATED with the MODIFICATION that respondent Luz
Despabiladeras is hereby ordered to pay petitioner Roger Manzano the
amount ofP62,610.50 plus interest at the legal rate (12% per annum) from the
filing of the complaint up to the time of actual payment, and that the award
of attorneys fees is deleted.
SO ORDERED.

Avila 4B | 2016
m. Failure to respond to a Request for Admission
Limos v. Spouses Odones, G.R. No.186979, August 11, 2011
Facts:
On June 17, 2005, private respondents-spouses Francisco Odones and
Arwenia Odones, filed a complaint for Annulment of Deed, Title and
Damages against petitioners Socorro Limos, Rosa Delos Reyes and Spouses
Rolando Delos Reyes and Eugene Delos Reyes, docketed as Civil Case No.
05-33 before the Regional Trial Court (RTC) of Camiling, Tarlac, Branch 68.
The complaint alleged that spouses Odones are the owners of a 940- square
meter parcel of land located at Pao 1st, Camiling, Tarlac by virtue of an
Extrajudicial Succession of Estate and Sale dated, January 29, 2004, executed
by the surviving grandchildren and heirs of Donata Lardizabal in whom the
original title to the land was registered. These heirs were Soledad Razalan
Lagasca, Ceferina Razalan Cativo, Rogelio Lagasca Razalan and Dominador
Razalan.
It took a while before respondents decided to register the document of
conveyance; and when they did, they found out that the lands Original
Certificate of Title (OCT) was cancelled on April 27, 2005 and replaced by
Transfer Certificate of Title (TCT) No. 329427 in the name of herein
petitioners.
Respondents sought the cancellation of these new TCTs on the ground that
the signatures of Donata Lardizabal and Francisco Razalan in the 1972 Deed
of Absolute Sale were forgeries, because they died on June 30, 1926 and June
5, 1971, respectively.[7]
In response, petitioners filed a Motion for Bill of Particulars[8] claiming
ambiguity in respondents claim that their vendors are the only heirs of Donata
Lardizabal. Finding no merit in the motion, the trial court denied the same
and ordered petitioners to file their answer to the complaint.[9]
In their answer,[10] petitioners pleaded affirmative defenses, which also
constitute grounds for dismissal of the complaint. These grounds were:
(1) failure to state a cause of action inasmuch as the basis of respondents
alleged title is void, since the Extrajudicial Succession of Estate and Sale was
not published and it contained formal defects, the vendors are not the legal
heirs of Donata Lardizabal, and respondents are not the real parties-in-interest
to question the title of petitioners, because no transaction ever occurred
between them;
(2) non-joinder of the other heirs of Donata Lardizabal as indispensable
parties; and
(3) respondents claim is barred by laches.
In their Reply, respondents denied the foregoing affirmative defenses, and
insisted that the Extrajudicial Succession of Estate and Sale was valid. They
maintained their standing as owners of the subject parcel of land and the
nullity of the 1972 Absolute Deed of Sale, upon which respondents anchor
their purported title.[11] They appended the sworn statement of Amadeo
Razalan declaring, among other things that:
“(2) Na hindi ko minana at ibinenta ang nasabing lupa kay Socorro Limos at
Rosa delos Reyes at hindi totoo na ako lang ang tagapagmana ni Donata
Lardizabal;
xxxx
(4) Ang aming lola na si Donata Lardizabal ay may tatlong (3) anak na patay
na sina Tomas Razalan, Clemente Razalan at Tomasa Razalan;
(5) Ang mga buhay na anak ni Tomas Razalan ay sina; 1. Soledad Razalan;
2. Ceferina Razalan; 3. Dominador Razalan; at 4. Amadeo Razalan. Ang mga
buhay na anak ni Clemente Razalan ay sina 1. Rogelio Lagasca (isang
abnormal). Ang mga buhay na anak ni Tomasa Razalan ay sina 1. Sotera
Razalan at 2 pang kapatid;”
Thereafter, petitioners served upon respondents a Request for Admission of
the following matters:
1. That the husband of the deceased Donata Lardizabal is Francisco Razalan;
2. That the children of the deceased Sps. Donata Lardizabal and Francisco Razalan
are Mercedes Razalan, Tomasa Razalan and Tomas Razalan;
3. That this Tomasa Razalan died on April 27, 1997, if not when? [A]nd her heirs
are (a) Melecio Partido surviving husband, and her surviving children are (b) Eduardo
Partido married to Elisa Filiana, (c) Enrique Razalan Partido married to Lorlita Loriana,
(d) Eduardo Razalan Partido, (e) Sotera Razalan Partido married to James Dil-is and (f)
Raymundo Razalan Partido married to Nemesia Aczuara, and all residents of Camiling,
Tarlac.
4. That Amadeo Razalan is claiming also to be a grandchild and also claiming to be
sole forced heir of Donata Lardizabal pursuant to the Succession by a Sole Heir with Sale
dated January 24, 2000, executed before Atty. Rodolfo V. Robinos.
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5. That Amadeo Razalan is not among those who signed the Extra[j]udicial
Succession of Estate and Sale dated January 29, 2004 allegedly executed in favor of the
plaintiffs, Sps. Francisco/Arwenia Odones;
6. That as per Sinumpaang Salaysay of Amadeo Razalan which was submitted by
the plaintiffs, the children of Tomasa Razalan are Sotera Razalan and 2 brothers/sisters.
These children of Tomasa Razalan did not also sign the Extra[j]udicial Succession of Estate
and Sale;
7. That there is/are no heirs of Clemente Razalan who appeared to have executed
the Extra[j]udicial Succession of Estate and Sale;
8. That Soledad Razalan Lagasca, Ceferina Razalan Cativo, Rogelio Lagasca Razalan
and Dominador Razalan did not file any letters (sic) of administration nor declaration of
heirship before executing the alleged Extra[j]udicial Succession of Estate and Sale in favor
of plaintiffs.[13]
Respondents failed to respond to the Request for Admission, prompting
petitioners to file a Motion to Set for Preliminary Hearing on the Special
and Affirmative Defenses,[14]arguing that respondents failure to respond or
object to the Request for Admission amounted to an implied admission
pursuant to Section 2 of Rule 26 of the Rules of Court. As such, a hearing on
the affirmative defenses had become imperative because petitioners were no
longer required to present evidence on the admitted facts.
Respondents filed a comment on the Motion, contending that the facts sought
to be admitted by petitioners were not material and relevant to the issue of
the case as required by Rule 26 of the Rules of Court. Respondents
emphasized that the only attendant issue was whether the 1972 Deed of
Absolute Sale upon which petitioners base their TCTs is valid.[15]
RTC denied the motion and held that item nos. 1 to 4 in the Request for
Admission were earlier pleaded as affirmative defenses in petitioners
Answer, to which respondents already replied on July 17, 2006. Hence, it
would be redundant for respondents to make another denial. The trial court
further observed that item nos. 5, 6, and 7 in the Request for Admission were
already effectively denied by the Extrajudicial Succession of Estate and Sale
appended to the complaint and by the Sinumpaang Salaysay of Amadeo
Razalan attached to respondents Reply.[16]
On a R65, CA affirmed.
Hence this petition claiming that the affirmative defenses raised in their
Motion are indubitable, as they were impliedly admitted by respondents when
they failed to respond to the Request for Admission. As such, a preliminary
hearing on the said affirmative defenses must be conducted pursuant to our
ruling in Gochan v. Gochan.[22]
Hence this petition.
Issue:
W/N the failure of respondents to respond to the Request for Admission
amounted to an implied admission on their part – No.
Held:
No.
Under these rules, a party who fails to respond to a Request for Admission
shall be deemed to have impliedly admitted all the matters contained therein.
It must be emphasized, however, that the application of the rules on modes
of discovery rests upon the sound discretion of the court.
As such, it is the duty of the courts to examine thoroughly the circumstances
of each case and to determine the applicability of the modes of discovery,
bearing always in mind the aim to attain an expeditious administration of
justice.[23]
The determination of the sanction to be imposed upon a party who fails to
comply with the modes of discovery also rests on sound judicial
discretion.[24] Corollarily, this discretion carries with it the determination of
whether or not to impose the sanctions attributable to such fault.
As correctly observed by the trial court, the matters set forth in petitioners
Request for Admission were the same affirmative defenses pleaded in their
Answer which respondents already traversed in their Reply. The said
defenses were likewise sufficiently controverted in the complaint and its
annexes. In effect, petitioners sought to compel respondents to deny once
again the very matters they had already denied, a redundancy, which if
abetted, will serve no purpose but to delay the proceedings and thus defeat
the purpose of the rule on admission as a mode of discovery which is to
expedite trial and relieve parties of the costs of proving facts which will not
be disputed on trial and the truth of which can be ascertained by reasonable
inquiry.[25]
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A request for admission is not intended to merely reproduce or reiterate the
allegations of the requesting party’s pleading but should set
forth relevant evidentiary matters of fact described in the request, whose
purpose is to establish said partys cause of action or defense. Unless it serves
that purpose, it is pointless, useless, and a mere redundancy.[26]

Verily then, if the trial court finds that the matters in a Request for Admission
were already admitted or denied in previous pleadings by the requested party,
the latter cannot be compelled to admit or deny them anew. In turn, the
requesting party cannot reasonably expect a response to the request and
thereafter, assume or even demand the application of the implied admission
rule in Section 2, Rule 26.

In this case, the redundant and unnecessarily vexatious nature of petitioners

Request for Admission rendered it ineffectual, futile, and irrelevant so as to
proscribe the operation of the implied admission rule in Section 2, Rule 26 of
the Rules of Court. There being no implied admission attributable to
respondents failure to respond, the argument that a preliminary hearing is
imperative loses its point.

Moreover, jurisprudence[27] has always been firm and constant in declaring

that when the affirmative defense raised is failure to state a cause of action, a
preliminary hearing thereon is unnecessary, erroneous, and improvident.

WHEREFORE, foregoing considered, the instant Petition

is DENIED. The Decision of the Court of Appeals dated August 14, 2008
and its Resolution dated March 9, 2009 are herebyAFFIRMED.

SO ORDERED.

Avila 4B | 2016
n. Documents to be produced should be described with particlularity
Solidbank v. Gateway Electronics, G.R. No. 164805, April 30, 2008
Facts:
In May and June 1997, Gateway Electronics Corporation (Gateway) obtained
from Solidbank Corporation (Solidbank) four (4) foreign currency
denominated loans to be used as working capital for its manufacturing
operations.[2] The loans were covered by promissory notes[3](PNs) which
provided an interest of eight and 75/100 percent (8.75%), but was allegedly
increased to ten percent (10%) per annum, and a penalty of two percent (2%)
per month based on the total amount due computed from the date of default
until full payment of the total amount due.[4]
To secure the loans covered by PN 97-375[5] and PN 97-408,[6] Gateway
assigned to Solidbank the proceeds of its Back-end Services
Agreement[7] dated June 25, 2000 with Alliance Semiconductor Corporation
(Alliance).
Gateway failed to comply with its loan obligations. By January 31, 2000,
Gateways outstanding debt amounted to US$1,975,835.58. Solidbanks
numerous demands to pay were not heeded by Gateway. Thus, on February
21, 2000, Solidbank filed a Complaint[9] for collection of sum of money
against Gateway.
On June 16, 2002, Solidbank filed an Amended Complaint[10] to implead the
officers/stockholders of Gateway, namely, Nand K. Prasad, Andrew S. Delos
Reyes, Israel F. Maducdoc, Jaime M. Hidalgo and Alejandro S. Calderon who
signed in their personal capacity a Continuing Guaranty[11] to become sureties
for any and all existing indebtedness of Gateway to Solidbank. On June 20,
2002, the trial court admitted the amended complaint and impleaded the
additional defendants.
Earlier, on October 11, 2000, Solidbank filed a Motion for Production and
Inspection of Documents[12] on the basis of an information received from
Mr. David Eichler, Chief Financial Officer of Alliance, that Gateway has
already received from Alliance the proceeds/payment of the Back-end
Services Agreement. The pertinent portions of the motion read:
“8. Therefore, plaintiffs request that this Honorable Court issue
an Order requiring defendant GEC, through its Treasurer/Chief Financial Officer, Chief
Accountant, Comptroller or any such officer, to bring before this Honorable Court for
inspection and copying the following documents:
a) The originals, duplicate originals and copies of all documents pertaining to, arising
from, in connection with or involving the Back-end Services Agreement of defendant GEC
and Alliance Semiconductors;
b) The originals, duplicate originals and copies of all books of account, financial
statements, receipts, checks, vouchers, invoices, ledgers and other
financial/accounting records and documents pertaining to or evidencing financial and
money transactions arising from, in connection with or involving the Back-end Services
Agreement of defendant GEC and Alliance Semiconductors; and
c) The originals, duplicate originals and copies of all documents from whatever source
pertaining to the proceeds/payments received by GEC from Alliance Semiconductors.
d) Documents, as used in this section, means all writings of any kind, including the
originals and all non-identical copies, whether different from the originals by reason of any
notation made onsuch copies or otherwise, including without limitation, correspondence,
memoranda, notes diaries, statistics, letters, telegrams, minutes, contracts, reports, studies,
checks, statements,receipts, returns, summaries, pamphlets, books, inter-office and intra-
office communications, notations of any sort of conversations, telephone calls, meetings or
other communications,bulletins, printed matter, computer records, diskettes or print-
outs, teletypes, telefax, e-mail, invoices, worksheets, all drafts, alterations, modifications,
changes and amendments of any of the foregoing, graphic or oral records or representations
of any kind (including, without limitation, photographs, charts, graphs, microfiche,
microfilm, videotapes, recordings, motion pictures, CD-ROMs), and any electronic,
mechanical or electric records or representations (including, without limitation, tapes,
cassettes, discs, recordings and computer or computer-related memories).
9. Furthermore, plaintiffs request that said Order to the Treasurer/Chief Financial Officer,
Chief Accountant, Comptroller of defendant GEC include the following instructions:
a. If the response is that the documents are not in defendant GECs or the officers possession
or custody, said officer should describe in detail the efforts made to locate said records or
documents;
b. If the documents are not in defendant GECs or the officers possession and control, said
officer should identify who has control and the location of said documents or records;
c. If the request for production seeks a specific document or itemized category that is not
in defendant GECs or the officers possession, control or custody, the officer should provide
any documents he has that contain all or part of the information contained in the requested
document or category;
d. If the officer cannot furnish the originals of the documents requested, he should explain
in detail the reasons therefore; and
Avila 4B | 2016
 Held:
e. The officer should identify the source within or outside GEC of each of the documents Yes, RTC erred.
he produces.[13]”
Section 1, Rule 27 of the Rules of Court provides:
RTC granted the motion for production and inspection of documents.
“SECTION 1. Motion for production or inspection; order. Upon motion of
On May 31, 2001, the trial court issued an Order setting the production and
any party showing good cause therefor, the court in which an action is
inspection of documents on June 7, 2001 in the premises of Gateway.[20] It
pending may
was subsequently moved to July 24, 2001. On the said date, Gateway
(a) order any party to produce and permit the inspection and copying or
presented the invoices representing the billings sent by Gateway
photographing, by or on behalf of the moving party, of any designated
to Alliance in relation to the Back-end Services Agreement.[21]
documents, papers, books, accounts, letters, photographs, objects or tangible
things, not privileged, which constitute or contain evidence material to any
Solidbank was not satisfied with the documents produced by Gateway. Thus,
matter involved in the action and which are in his possession, custody or
on December 13, 2001, Solidbank filed a motion to cite Gateway and its
control; or
responsible officers in contempt for their refusal to produce the documents
(b) order any party or permit entry upon designated land or other property in
subject of the January 30, 2001 Order. In opposition thereto, Gateway
his possession or control for the purpose of inspecting, measuring, surveying,
claimed that they had complied with the January 30, 2001 Order and that the
or photographing the property or any designated relevant object or operation
billings sent to Alliance are the only documents that they have pertaining to
thereon.
the Back-end Services Agreement.[22]
The order shall specify the time, place and manner of making the inspection
RTC denied the motion for contempt and ruled that in accordance with Sec.
and taking copies and photographs, and may prescribe such terms and
3(a), Rule 29 of the Rules of Court, that the matters regarding the contents of
conditions as are just.”
the documents sought to be produced but which were not otherwise produced
by GEC, shall be taken to be established in accordance with plaintiffs claim,
The aforecited rule provides the mechanics for the production of documents
but only for the purpose of this action.
and the inspection of things during the pendency of a case. It also deals with
the inspection of sources of evidence other than documents, such as land or
On a R65, CA reversed RTC holding that both the Motion for Production of
other property in the possession or control of the other party.[30] This remedial
Documents and the January 30, 2001 Order of the trial court failed to comply
measure is intended to assist in the administration of justice by facilitating
with the provisions of Section 1, Rule 27 of the Rules of Court. It further held
and expediting the preparation of cases for trial and guarding against
that the trial court committed grave abuse of discretion in ruling that the
undesirable surprise and delay; and it is designed to simplify procedure and
matters regarding the contents of the documents sought to be produced but
obtain admissions of facts and evidence, thereby shortening costly and time-
which were not produced by Gateway shall be deemed established in
consuming trials.
accordance with Solidbanks claim.
It is based on ancient principles of equity. More specifically, the purpose of
Hence this petition.
the statute is to enable a party-litigant to discover material information which,
by reason of an opponent's control, would otherwise be unavailable for
Issue:
judicial scrutiny, and to provide a convenient and summary method of
W/N RTC erred in holding that the matters subject of the documents sought
obtaining material and competent documentary evidence in the custody or
to be produced but which were not produced by Gateway shall be deemed
under the control of an adversary. It is a further extension of the concept of
established in accordance with Solidbanks claim – Yes, RTC erred.
pretrial.[31]

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The modes of discovery are accorded a broad and liberal treatment.[32] Rule
27 of the Revised Rules of Court permits fishing for evidence, the only
limitation being that the documents, papers, etc., sought to be produced are
not privileged, that they are in the possession of the party ordered to produce
them and that they are material to any matter involved in the action.[33] The
lament against a fishing expedition no longer precludes a party from prying
into the facts underlying his opponents case. Mutual knowledge of all
relevant facts gathered by both parties is essential to proper litigation. To that
end, either party may compel the other to disgorge whatever facts he has in
his possession.[34] However, fishing for evidence that is allowed under the
rules is not without limitations.
In Security Bank Corporation v. Court of Appeals, the Court enumerated the
requisites in order that a party may compel the other party to produce or allow
the inspection of documents or things, viz.:
(a) The party must file a motion for the production or inspection of documents
or things, showing good cause therefor;
(b) Notice of the motion must be served to all other parties of the case;
(c) The motion must designate the documents, papers, books, accounts,
letters, photographs, objects or tangible things which the party wishes to be
produced and inspected;
(d) Such documents, etc., are not privileged;
(e) Such documents, etc., constitute or contain evidence material to any
matter involved in the action, and
(f) Such documents, etc., are in the possession, custody or control of the other
party.[35]
In the case at bench, Gateway assigned to Solidbank the proceeds of its Back-
end Services Agreement with Alliance in PN Nos. 97-375 and 97-408. By
virtue of the assignment, Gateway was obligated to remit to Solidbank all
payments received from Alliance under the agreement. In this regard,
Solidbank claims that they have received information from the Chief
Financial Officer of Alliance that Gateway had already received payments
under the agreement. In order to ascertain the veracity of the information,
Solidbank availed of the discovery procedure under Rule 27. The purpose of
Solidbanks motion is to compel Gateway to produce the documents
evidencing payments received from Alliance in connection with the Back-
end Services Agreement.
Solidbank was able to show good cause for the production of the documents.
It had also shown that the said documents are material or contain evidence
relevant to an issue involved in the action. However, Solidbanks motion
was fatally defective and must be struck down because of its failure to
specify with particularity the documents it required Gateway to produce.
Solidbanks motion for production and inspection of documents called for a
blanket inspection. Solidbanks request for inspection of all documents
pertaining to, arising from, in connection with or involving the Back-end
Services Agreement[36] was simply too broad and too generalized in scope.
A motion for production and inspection of documents should not demand a
roving inspection of a promiscuous mass of documents. The inspection
should be limited to those documents designated with sufficient particularity
in the motion, such that the adverse party can easily identify the documents
he is required to produce.[37]
The trial court held that as a consequence of Gateways failure to exert diligent
effort in producing the documents subject of the Order dated January 30,
2001, in accordance with Section 3(a), Rule 29[40] of the Rules of Court, the
matters regarding the contents of the documents sought to be produced but
which were not produced by Gateway, shall be considered as having been
established in accordance with Solidbanks claim.
We hold that the trial court committed grave abuse of discretion in issuing
the aforesaid Order. It is not fair to penalize Gateway for not complying with
the request of Solidbank for the production and inspection of documents,
considering that the documents sought were not particularly described.
Gateway and its officers can only be held liable for unjust refusal to comply
with the modes of discovery if it is shown that the documents sought to be
produced were specifically described, material to the action and in the
possession, custody or control of Gateway.
Neither can it be said that Gateway did not exert effort in complying with the
order for production and inspection of documents since it presented the
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invoices representing the billings sent by Gateway to Alliance in relation to
the Back-end Services Agreement. Good faith effort to produce the required
documents must be accorded to Gateway, absent a finding that it acted
willfully, in bad faith or was at fault in failing to produce the documents
sought to be produced.[41]

WHEREFORE, in view of the foregoing, the instant petition is DENIED for

lack of merit.

SO ORDERED.

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XX. Trial, Trial by Commissioners, Hearings and Consolidation of Cases
(Rules 30 to 32)
1. Lourdez de Castro v. Crispino de Castro, G.R. No. 172198, June
16, 2009
Facts:
Petitioner Ma. Lourdes C. De Castro and private respondent Crispino De
Castro, Jr. were married on January 1, 1971. In 1996, private respondent filed
a petition[2] for the declaration of nullity of their marriage before the RTC
of Manila.
In his petition, private respondent alleged that he was impulsive and reckless
in his youth; that while still in school, he impregnated petitioner, and they got
married so as not to expose both their families to further embarrassment; that
their quarrels intensified during the marriage; that due to immaturity and
inability to cope with their problems, he abandoned his family many times
and became involved in affairs with different women. He further alleged that
they tried to save their marriage through counseling, but to no avail. In 1992,
he left the family home for good, and lived with another woman with whom
he had three illegitimate children.
For failure of petitioner to file her Answer to the petition and upon motion of
private respondent, the case was set for hearing and private respondent
testified. Further, he presented psychiatrist, Dr. Cecilia Albaran, as an expert
witness. He then rested his case, with no opposition from the public
prosecutor.
RTC annulled the marriage between the parties based on psychological
incapacity of both parties.
On August 3, 1998, petitioner filed a Motion for Leave[4] to file an Omnibus
Motion[5] seeking a new trial or reconsideration of the June 22, 1998
Decision. She alleged that she was misled and prevented from participating
in the annulment case by private respondent, because of his promise of
continuous adequate support for the children, and the transfer of title to their
three children of their family home, including its lot.
The trial court granted the omnibus motion in an Order dated December 11,
1998. In the Order, petitioner was required to submit a question-and-answer
form affidavit which would constitute her direct testimony. Further, the cross-
examination of petitioner and her witnesses was scheduled on February 4,
1999.
On December 27, 1999, petitioner filed her Answer.
The trial court conducted hearings on petitioner's
(1) application for support pendente lite and
(2) urgent motion for judicial deposit of petitioner's [herein private
respondent's] separation benefits,[6] in light of his retirement/separation from
employment at Petron Corporation, effective August 31, 2000; and private
respondent's
(3) motion for judicial approval of the alleged voluntary agreement on the
dissolution of the conjugal partnership of gains and partition of the conjugal
properties.[7] The first has been resolved,[8] but the second and third remain
pending.
On July 17, 2002, petitioner was to present her first witness. The trial court
reset the hearing to August 21, 2002 as there was no return of the notice sent
to private respondent and his counsel.[9]
On August 21, 2002, petitioner started her direct testimony. However,
considering the length of her testimony, the continuance of her direct
examination was set on October 2, 2002.
On September 30, 2002, private respondent moved to reset the October 2,
2002 hearing to November 13, 2002, due to his trip to Europe.[10]
On November 8, 2002, private respondent again moved to reset
the November 13, 2002 hearing to December 11, 2002 or at the earliest
possible date as the calendar of the trial court would allow, for the reason that
his counsel was out of the country for important personal reasons and cannot
attend the hearing.[11]
During the hearing on December 11, 2002, petitioner's counsel moved for its
cancellation because of the absence of petitioner who was at that time
attending a very urgent business meeting in connection with her volunteer
work for Bantay Bata. The hearing was reset to February 6,
2003.[12] However, the records reveal that no hearing was conducted on said
date.
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On the next hearing of February 20, 2003, petitioner's counsel again moved
for the resetting of the hearing to March 27, 2003.[13]
On March 27, 2003, the hearing was reset to April 10, 2003 because the
Presiding Judge was on official leave.[14]
On April 10, 2003, the hearing was again reset to May 8, 2003, by agreement
of the parties.[15]
On May 8, 2003, the hearing was likewise reset to July 25, 2003 because of
the absence of counsel of both petitioner and private respondent.[16]
During the hearing on July 25, 2003, petitioner's counsel moved to reset the
hearing because of the absence of petitioner who was then in the U.S. helping
her daughter in taking care of her newborn baby. The trial court then ordered
the resetting of the hearing to August 20, 2003 for the last time.
In the hearing on August 20, 2003, counsel for petitioner again requested that
it be cancelled and reset due to the unavailability of witnesses. Petitioner was
still in the U.S. taking care of her newborn grandchild, while Dr. Maria
Cynthia Ramos-Leynes, who conducted a psychiatric evaluation on
petitioner, was likewise out of the country, attending a convention.
The motion was denied by the trial court and held that respondent has
waived her right to present further evidence.
Petitioner moved to reconsider the August 20, 2003 Order. She claimed that
her reasons for her absence during the hearings were justifiable and she had
no intention to delay the proceedings of this case. Further, she argued that
there were pending incidents yet to be resolved by the trial court, referring to
her motion for judicial deposit of private respondent's separation benefits and
private respondents motion for judicial approval of the alleged voluntary
agreement on the dissolution of the conjugal partnership of gains and partition
of the conjugal properties.[1
RTC denied the motion.
On a R65, CA affirmed the RTC holding that:
“We take notice of the several postponements of the hearings on the
continuation of petitioners testimony, mostly on account of petitioners own
urgings. Particularly, we find remarkably militating against petitioners cause
the Order dated 25 July 2003 where public respondent, maybe exasperated at
petitioners seemingly shallow interest to proceed with the case as manifested
in the prior motions to cancel the hearing, dutifully warned that another
postponement of the scheduled presentation of testimony would compel the
court to consider the case submitted for decision. We see this as a reasonable
exercise of discretion on the part of public respondent. Petitioner was
properly apprised and warned of the consequence of another non-appearance
in the hearing.”
Hence this petition claiming that the lower courts erred in ruling that she
waived her right to present further evidence when she failed to appear at the
August 20, 2003 hearing. She contends that in effect, she was declared in
default, which is violative of the state policy on marriage as a social
institution and the due process clause of the Constitution.
Issue:
W/N that the lower courts erred in ruling that she waived her right to present
further evidence when she failed to appear at the August 20, 2003 hearing –
No.
Held:
No.
The instant case was set for hearing twelve times.
The hearing of March 27, 2003 was cancelled because the presiding judge
was on official leave, while the April 10, 2003 hearing was reset by
agreement of the parties. Likewise, the hearing of May 8, 2003 was reset
because the counsels of both parties were absent.
On the other hand, the following postponements were made at the instance of
private respondent: (1) October 2, 2002 hearing, where private respondent,
on September 30, 2002, moved to reset the hearing because of his trip to
Europe; and (2) November 13, 2002 hearing, where private respondent, on
November 8, 2002, moved to reset the hearing because his counsel was out
of the country for important personal reasons.
In contrast, the following postponements were made at the instance of
petitioner: (1) December 11, 2002 hearing, where petitioner's counsel, on the
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day itself, moved for the cancellation of the hearing because of the absence
of his client who was at that time attending a very urgent business meeting in
connection with her volunteer work for Bantay Bata; (2) February 20, 2003
hearing, where petitioner's counsel, on the day itself, moved for the resetting
of the hearing; (3) July 25, 2003 hearing, where petitioner's counsel, on the
day itself, moved to reset the hearing because his client was in the U.S. taking
care of her newborn grandchild; and (4) August 20, 2003 hearing, where
petitioner's counsel, again only on the day itself, moved to cancel the hearing
because his client was still in the U.S. Further, Dr. Ramos-Leynes, petitioner's
witness who conducted a psychiatric evaluation on her, was likewise out of
the country.
We take note of the fact that all motions for postponement by petitioner were
made on the scheduled hearing dates themselves. On the August 20, 2003
hearing, despite previous warning that no further postponement would be
allowed, petitioner still failed to appear. We agree with the Court of Appeals
when it pointed out that petitioner obviously knew in advance that she could
not make it to the August 20, 2003 hearing. As of the last scheduled hearing
of July 25, 2003, she was still out of the country.
The least that petitioner could have done was to instruct her counsel to make
a timely representation with the trial court by filing an early motion-
manifestation for the resetting of the hearing. Between July 25, 2003 and
August 20, 2003 she had sufficient time to file one. Obviously, the warning
by the court of the consequence of another non-appearance in the hearing fell
on deaf ears. After having been granted numerous motions for postponement,
petitioner cannot now claim that she was denied due process.
In Ortigas, Jr. v. Lufthansa German Airlines,[23] we ruled that:
“Where a party seeks postponement of the hearing of this case for reasons
caused by his own inofficiousness, lack of resourcefulness and diligence if
not total indifference to his own interests or to the interests of those he
represents, thereby resulting in his failure to present his own evidence, the
court would not extend to him its mantle of protection. If it was he who
created the situation that brought about the resulting adverse consequences,
he cannot plead for his day in court nor claim that he was so denied of it.”
Further in Hap Hong Hardware Co. v. Philippine Company,[24] We
ratiocinated:
“The reason adduced in support of the motion for postponement is not
unavoidable and one that could not have been foreseen. Defendant ought to
have known long before the date of trial that the milling season would start
when the trial of the case would be held. The motion should have been
presented long in advance of the hearing, so that the court could have taken
steps to postpone the trial without inconvenience to the adverse party.
As it is, however, the motion was presented on the day of the trial. Knowing
as it should have known that postponements lie in the court's discretion and
there being no apparent reason why the defendant could not have presented
the motion earlier, thus avoiding inconvenience to the adverse party, the
appellant can not claim that the trial court erred in denying postponement.
Under all the circumstances we hold that the court was perfectly justified in
denying the motion for postponement.”
In the case at bar, petitioner's excuse that she was still in the U.S. taking care
of her newborn grandchild, while her witness, Dr. Maria Cynthia Ramos-
Leynes, who conducted a psychiatric evaluation on her, was likewise out of
the country, attending a convention was unjustified. These reasons were not
unavoidable and one that could not have been foreseen.
The date of the trial was set one month prior, and as of July 25, 2003,
petitioner was in the U.S. Certainly, petitioner would know in advance if she
could make it to the August 20, 2003 hearing. Likewise, attending a
convention is a scheduled event, also something known in advance. It is the
basic duty of a litigant to move for postponement before the day of the
hearing, so that the court could order its resetting and timely inform the
adverse party of the new date. This was not the case at bar for the subject
motion was presented only on the day of the trial without any
justification. We thus hold that the trial court did not abuse its discretion in
denying the motion for postponement.
Consequently, we cannot strike down the trial courts following orders: (1)
dated August 20, 2003, which denied petitioners motion for postponement,
and, instead, directed petitioner to submit her formal offer of exhibits after
the trial court considered her to have waived her right to present further
evidence; and (2) dated December 12, 2003, which denied petitioner's motion
for reconsideration. These orders are not violative of the state policy on
marriage as a social institution, for the trial judge has the duty to resolve
judicial disputes without unreasonable delay.
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Petitioner contends that because her direct examination has not been
completed and as she has not been cross-examined, her testimony has become
useless. Apparently, petitioner is alluding to the rule that oral testimony may
be taken into account only when it is complete, that is, if the witness has been
wholly cross-examined by the adverse party; until such cross-examination
has been finished, the testimony of the witness cannot be considered as
complete and may not, therefore, be allowed to form part of the evidence to
be considered by the court in deciding the case.[25] The rule will not apply to
the instant case.

Private respondent, who was present in court during the August 20, 2003
hearing and did not register any objection to the trial court's order nor move
to strike out petitioner's testimony from the records, is deemed to have waived
his right to cross-examine petitioner. Thus, petitioner's testimony is not
rendered worthless. The waiver will not expunge the testimony of petitioner
off the records. The trial court will still weigh the evidence presented by
petitioner vis--vis that of private respondent's. The situation is not akin to
default at all, where, for failure of defendant to file his responsive pleading
and after evidence for the plaintiff has been received ex parte, the court
renders a judgment by default on the basis of such evidence.

Lastly, the appellate court correctly pointed out that the assailed Orders are
interlocutory and there is yet no judgment in the case by the court a quo. If
the trial court renders a judgment that is adverse to petitioner, she can always
avail of the remedy of appeal to protect her legal rights.

IN VIEW WHEREOF, the petition is DENIED. The Decision of the Court

of Appeals in CA-G.R. SP No. 81856, dated April 4, 2006, is AFFIRMED.

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2. Zulueta v. Asia Brewery, G.R. No. 138137, March 8, 2001
Facts:
Respondent Asia Brewery, Inc., is engaged in the manufacture, the
distribution and sale of beer; while Petitioner Perla Zulueta is a dealer and
an operator of an outlet selling the formers beer products. A Dealership
Agreement governed their contractual relations.
On March 30, 1992, petitioner filed before the Regional Trial Court (RTC)
of Iloilo, Branch 22, a Complaint against respondent for Breach of
Contract, Specific Performance and Damages. The Complaint, docketed
as Civil Case No. 20341 (hereafter referred to as the Iloilo case), was
grounded on the alleged violation of the Dealership Agreement.
On July 7, 1994, during the pendency of the Iloilo case, respondent filed
with the Makati Regional Trial Court, Branch 66, a Complaint docketed
as Civil Case No. 94-2110 (hereafter referred to as the Makati case). The
Complaint was for the collection of a sum of money in the amount
of P463,107.75 representing the value of beer products, which respondent
had delivered to petitioner.
In view of the pendency of the Iloilo case, petitioner moved to dismiss the
Makati case on the ground that it had split the cause of action and violated
the rule against the multiplicity of suits. The Motion was denied by the
Makati RTC through Judge Eriberto U. Rosario.
On January 3, 1997, petitioner, in the Makati Court, moved for the
consolidation of the Makati case with the Iloilo case.
RTC Makati granted the consolidation. Respondent filed a Motion for
Reconsideration, which was denied in an Order dated May 19, 1997.
On August 18, 1997, respondent filed before the Court of Appeals a Petition
for Certiorari assailing Judge Parentala’s (Makati) February 13, 1997 and
May 19, 1997 Orders.
CA reversed holding that “There is no common issue of law or fact between
the two cases. The issue in Civil Case No. 94-2110 is private respondents
indebtedness for unpaid beer products; while in Civil Case No. 20341, it is
whether or not petitioner (therein defendant) breached its dealership contract
with private respondent.
Private respondent in her complaint aforequoted attempts to project a
commonality between the two civil cases, but it cannot be denied that her
obligation to pay for the beer deliveries can exist regardless of any stop
payment order she made with regard to the checks. Thus, the rationale for
consolidation, which is to avoid the possibility of conflicting decisions being
rendered, does not exist.”
Hence this petition.
Issue:
W/N the case should be consolidated – Yes.
Held:
Yes.
Apart from procedural problems, respondents cause is also afflicted with
substantial defects. The CA ruled that there was no common issue in law or
in fact between the Makati case and the Iloilo case. The former involved
petitioners indebtedness to respondent for unpaid beer products, while the
latter pertained to an alleged breach of the Dealership Agreement between
the parties. We disagree.
True, petitioners obligation to pay for the beer products delivered by
respondent can exist regardless of an alleged breach in the Dealership
Agreement. Undeniably, however, this obligation and the relationship
between respondent and petitioner, as supplier and distributor respectively,
arose from the Dealership Agreement which is now the subject of inquiry in
the Iloilo case. In fact, petitioner herself claims that her obligation to pay was
negated by respondents contractual breach. In other words, the non-payment
-- the res of the Makati case -- is an incident of the Iloilo case.
Inasmuch as the binding force of the Dealership Agreement was put in
question, it would be more practical and convenient to submit to the Iloilo
court all the incidents and their consequences. The issues in both civil cases
pertain to the respective obligations of the same parties under the Dealership
Agreement. Thus, every transaction as well as liability arising from it must
be resolved in the judicial forum where it is put in issue. The consolidation
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of the two cases then becomes imperative to a complete, comprehensive and
consistent determination of all these related issues.

When two or more cases involve the same parties and affect closely related
subject matters, they must be consolidated and jointly tried, in order to serve
the best interests of the parties and to settle expeditiously the issues
involved. Consolidation, when appropriate, also contributes to the declogging
of court dockets.

Two cases involving the same parties and affecting closely related subject
matters must be ordered consolidated and jointly tried in court, where the
earlier case was filed.[18] The consolidation of cases is proper when they
involve the resolution of common questions of law or facts.[19]

Indeed, upon the consolidation of the cases, the interests of both parties in the
two civil cases will best be served and the issues involved therein
expeditiously settled. After all, there is no question on the propriety of the
venue in the Iloilo case.

WHEREFORE, the Petition is hereby GRANTED and the assailed

Decision REVERSED and SET ASIDE. The Orders of the Makati RTC (Br.
142) dated February 13, 1997 and May 19, 1997 are
herebyREINSTATED. No costs.
SO ORDERED.

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3. Roque v. Magno, G.R. No. 138701, October 17, 2006
Facts:
The spouses Roque Yu, Sr. and Asuncion Yu are the controlling stockholders
of Leyte Lumber, a business enterprise engaged in the sale of lumber,
building and electrical supplies and other construction materials. During his
lifetime, Engr. Basilio G. Magno (Magno) entered into a verbal agreement
with Leyte Lumber through Roque Yu, Sr., whereby Roque Yu agreed to
supply Magno with building materials he may need in his construction
business. The success of Magno's business gave birth to the Basilio G. Magno
Construction and Development Enterprises, Inc. (BG Magno).
Owing to this fruitful relationship, the two (Roque Yu, Sr. and Magno)
entered into a joint venture, the Great Pacific Construction Company
(GREPAC), with Yu as President and Magno as Vice President.[3]
Magno, for what he obtained from Leyte Lumber, paid either in cash or by
check. The relationship between Yu and Magno began in 1975 and continued
until Magno's death on August 21, 1978.[4]
By the time the business relationship between Yu and Magno was coming to
an end, the respondents allege that the parties have dealt with each other to
the amount of at leastP7,068,000.00.[5]
On January 30, 1979, in the RTC of Tacloban City, the
petitioners instituted two (2) separate complaints for sums of money with
damages and preliminary attachment against the respondents.
One was Civil Case No. 5822,[6] raffled to Branch 8 of the court, instituted
by Leyte Lumber against BG Magno and the Estate of Basilio Magno, to
collect on the principal amount of P1,270,134.87 for construction materials
claimed to have been obtained on credit by BG Magno, and the other
was Civil Case No. 5823,[7] raffled to Branch 6, filed by the Yu spouses
against BG Magno and the Estate of Basilio Magno, to collect upon loans and
advances (P3,575,000.00) allegedly made by the spouses to BG Magno.
As defendants in Civil Case No. 5823, the respondents moved to dismiss the
case on the ground that the claims must be pursued against the estate of the
deceased Magno. The motion was denied, and eventually the estate of Magno
was dropped as party-defendant.
On the other hand, in Civil Case No. 5822, during the pretrial conference, the
petitioners, as plaintiffs in that case, proposed that a commissioner be
appointed. The respondents as defendants in the case interposed no
objections, and so Atty. Romulo Tiu was appointed and tasked with the
duty to examine and make a detailed report on the documents and books
of account of the parties to determine the nature and extent of their
respective claims and liabilities.[8] Atty. Tiu was later replaced by Mr.
Uldarico Quintana, and finally by Mr. Ernesto C. Silvano, who is a lawyer
and an accountant[9] by profession.
The commissioner prepared a summary of account receivables[10] and
submitted three reports: the first, dated November 1, 1980; the second,
dated February 19, 1981; and the third, dated March 29, 1982.[11] To these
reports the parties submitted their respective comments and objections.
During trial, the petitioners presented in Civil Case No. 5822 before Branch
8 three witnesses, namely: petitioner Roque Yu, Sr., himself, Atty. Ernesto
C. Silvano (the commissioner) and Yao Ping Chan, cashier of Consolidated
Bank and Trust Co., who testified merely on the circumstances surrounding
specific checks that were issued during the course of the transactions between
the parties. For their part, the respondents offered two witnesses: the widow
Perpetua Magno and commissioner Silvano.
As regards Civil Case No. 5823 before Branch 6, the petitioners presented
three witnesses: Roque Yu, Sr., Roque Yu, Jr., and senior bookkeeper
Eduardo de Veyra of the Tacloban Branch of the United Coconut Planters
Bank. For their part, the respondents did not present a single witness, but
adopted their evidence presented in Civil Case No. 5822. They did not,
however, make a formal offer of their evidence in both cases.
Later, RTC Branch 8 ruled in favor of the defendant-respondent and
dismissed the complaint.
Also on the same date, RTC branch 6 likewise ruled in favor of defendant-
respondents and dismissed the case.
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The two separate decisions of even date were penned by Judge Getulio M.
Francisco, the presiding judge of Branch 6 to which only Civil Case No. 5823
was raffled. In other words, Judge Francisco of Branch 6 rendered the
decision in Civil Case No. 5822 earlier raffled to and heard by Branch 8 of
which he was not the presiding judge. The parties did not move for a
reconsideration of the two decisions nor did they call the attention of Judge
Francisco on the absence of an order for consolidation of the two cases.
Instead, they directly interposed their respective appeals to the CA.
In the CA, the two cases on appeal were consolidated.
CA rendered its consolidated decision:
1. affirming civil case no. 5822 of Branch 8, holding that respondents made
overpayment. But exemplary damages were deleted.
2. reversing civil case no. 5823 of branch 6.
Hence this petition.
Arguments:
The petitioners question, first, the propriety of the presiding judge of Branch
6 rendering a decision in a case filed and heard in Branch 8. They claim that
Branch 6 had no jurisdiction to decide Civil Case No. 5822 pending in Branch
8 in the absence of a motion or order of consolidation of the two
cases; second, Branch 6 erred in considering the evidence presented in
Branch 8; and third, the preponderance of evidence in both cases warrants a
resolution of the cases in their favor.
Issue:
W/N the presiding judge of branch 6 erred in deciding civil case no. 5822
which was raffled to branch 8 – No.
Held:
No.
On the question of the propriety of Judge Francisco of Branch 6 formulating
the decision in Civil Case No. 5822 which was pending and tried in Branch
8, we declare that there was nothing irregular in the procedure taken. The
records show that there appears to have been a previous agreement to either
transfer or consolidate the two cases for decision by the presiding judge of
Branch 6.
As found by the CA:
“although Civil Case No. 5822 was raffled to and tried in Branch 8, the court
a quo issued joint orders dated February 16, 1993 and September 10, 1993 in
Civil Case Nos. 5822 and 5823. Recognizing the apparent transfer of Civil
Case No. 5822 to the court a quo, appellants [petitioners] counsel filed his
formal appearance dated October 20, 1993 with Branch 6. There is therefore
no basis to appellants contention that the court a quo is devoid of authority to
decide Civil Case No. 5822.[17]”
Indeed, when the respondents filed a Motion to Lift, Dissolve and Quash the
Writs of Attachment with Branch 6 on January 20, 1993, the caption thereof
indicated the docket numbers of both cases.[18]
Likewise, on October 29, 1993, when the petitioners' new counsel entered his
Formal Appearance, in the caption thereof was also written the docket
numbers of both cases.[19] Petitioners' previous counsel of longstanding
(whose representation dates back to the filing of the two complaints in 1979)
filed his Motion to Withdraw as Counsel on October 30, 1993, and the caption
thereof similarly indicated the docket numbers of both cases.[20]
Subsequent orders of the court which emanated from Branch 6 also bear, in
the caption thereof, the titles and docket numbers of both cases.[21]
In other words, as early as six months prior to the promulgation of Judge
Franciscos decisions in the two (2) cases, there appears to have been a transfer
or consolidation of said cases in Branch 6 and the parties knew of it, albeit
the actual date when the two cases were consolidated or transferred does not
appear on record.
Nonetheless, the fact remains that no opposition or objection in any manner
was registered by either of the parties to the same, thereby evincing their
consent thereto. It is, therefore, already too late in the day for the petitioners
to question the competence of Judge Francisco to render the separate
decisions in the two cases.
Petitioners may not now question the transfer or consolidation of the two
cases on appeal, for they knew of it and did not question the same in the court
below. They may not now make a total turn-around and adopt a contrary
stance; more so when the judgment issued is adverse to their cause.[22]
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II.
The next logical questions are: Is the consolidation of the two cases (Civil
Case Nos. 5822 and 5823) a procedural step which the court a quo could have
properly taken? Is it a remedy available within the context of the surrounding
circumstances?
We answer both questions in the affirmative. The two cases were filed just a
few months apart;[23] they involve simple cases of collection of sums of
money between identical parties and no other; the respondents (as defendants
therein) claim, in both cases, essentially the same defense, which is
overpayment; they cover the same period of transacting continuous business
that spans four years; they relate to simple issues of fact that are intimately
related to each other; they entailed the presentation of practically identical
evidence and witnesses; in fact, a broad part of the evidence and testimonies
in one case was totally adopted or reproduced in the other by either or both
parties. And the trial court, being multi-sala courts, its Branches 6 and 8
possessed jurisdiction to try either or both cases on their own.
A court may order several actions pending before it to be tried together where
they arise from the same act, event or transaction, involve the same or like
issues, and depend largely or substantially on the same evidence, provided
that the court has jurisdiction over the case to be consolidated and that a joint
trial will not give one party an undue advantage or prejudice the substantial
rights of any of the parties (citing 1 CJS, 1347). Consolidation of actions is
expressly authorized under Section 1, Rule 31 of the Rules of Court:
Section 1. Consolidation. When actions involving a common question of law
or fact are pending before the court, it may order a joint hearing or trial of
any or all the matters in issue in the actions; it may order all the actions
consolidated; and it may make such orders concerning proceedings therein as
may tend to avoid unnecessary costs or delay.
The obvious purpose of the above rule is to avoid multiplicity of suits, to
guard against oppression and abuse, to prevent delays, to clear congested
dockets, to simplify the work of the trial court; in short the attainment of
justice with the least expense and vexation to the parties litigants (citing 1
CJS 1342-1343).
Consolidation of actions is addressed to the sound discretion of the court, and
its action in consolidating will not be disturbed in the absence of manifest
abuse of discretion.
Likewise, it became apparent that, after the commissioner filed his reports in
court and the parties their comments thereto, but before trial could
commence, the claims and defenses of the parties in Civil Case No. 5823 are
covered by and may be threshed out by a consideration of the evidence
presented in Civil Case No. 5822 as well, which consisted mainly of the
reports of the commissioner. Based on the commissioners reports in the case
pending in Branch 8 (Civil Case No. 5822), the petitioners claims, including
those in Branch 6, appear to have been paid; indeed, this is in essence the
defense of the respondents as set forth in their Answers to the two complaints.
Yet, despite all these, neither of the lawyers for the parties sought a
consolidation of the two cases, which would otherwise have been mandatory.
When two or more cases involve the same parties and affect closely related
subject matters, they must be consolidated and jointly tried, in order to
serve the best interests of the parties and to settle expeditiously the issues
involved. Consolidation, when appropriate, also contributes to the declogging
of court dockets
Two cases involving the same parties and affecting closely related subject
matters must be ordered consolidated and jointly tried in court, where the
earlier case was filed. The consolidation of cases is proper when they involve
the resolution of common questions of law or facts.
Indeed, upon the consolidation of the cases, the interests of both parties in the
two civil cases will best be served and the issues involved therein
expeditiously settled. After all, there is no question on the propriety of the
venue in the Iloilo case.
Consolidation of cases, when proper, results in the simplification of
proceedings, which saves time, the resources of the parties and the courts,
and a possible major abbreviation of trial. It is a desirable end to be achieved,
within the context of the present state of affairs where court dockets are full
and individual and state finances are limited. It contributes to the swift
dispensation of justice, and is in accord with the aim of affording the parties
a just, speedy, and inexpensive determination of their cases before the courts.
Another compelling argument that weighs heavily in favor of consolidation
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is the avoidance of the possibility of conflicting decisions being rendered by
the courts in two or more cases which would otherwise require a single
judgment.[26]

In fine, we declare the consolidation of the two cases to have been made with
regularity.

Having given their assent to the consolidation of Civil Case Nos. 5822 and
5823, petitioners other assignment of errors must fail. The evidence in each
case effectively became the evidence for both, and there ceased to exist any
need for the deciding judge to take judicial notice of the evidence presented
in each case.

Finally, we admonish RTC Branches 6 and 8 for the manner in which the case
before each sala was handled and conducted. We note the lack of an order
of consolidation in the records of the cases. As to Judge Franciscos two
separate decisions, we do not perceive any advantage or benefit derived from
promulgating two separate decisions on the same day in the two cases that
have already been consolidated into one. Although we recognize no ill intent
or attribute no deliberate irregularity to the same, such demeanor can only
breed suspicion and promote distrust for our judicial institutions. A judge
should avoid every situation where the propriety of his conduct would be
placed in question. His official acts must at all times be above
reproach,[30] and they must be consistent with the proceedings taken in his
court.

WHEREFORE, judgment is hereby rendered MODIFYING the assailed

CA decision by SETTING ASIDE and DELETING the award of the
respondents counterclaim in the amount of P142,817.27 in Civil Case No.
5822; REITERATING the P50,000.00 award of attorneys fees and litigation
expenses in favor of the respondents in Civil Case No. 5822;
andDELETING the award of attorneys fees to the petitioners in Civil Case
No. 5823. In all other respects, the assailed decision is AFFIRMED.

Avila 4B | 2016
4. Mega Land v. C-E Construction, Inc., G.R. No. 165211, July
31, 2007
Facts:
Rarely would affixing the correct docket number to the pleading spell the
difference between a live and an extinct petition. This is one such rare
instance.
This unusual case involved a set of facts that are ultimately simpler than
meets the eye. Petitioner Mega-Land Resources and Development
Corporation and private respondent C-E Construction Corporation were the
disputants in a matter submitted for arbitration to public respondent
Construction Industry Arbitration Commission (CIAC). The subject and
cause of the dispute is of no relevance to this petition.
On 19 June 2002, the CIAC rendered a decision[1] ordering petitioner to
pay private respondent the sum of around P18.6 Million, plus interest.
Petitioner received a copy of the adverse CIAC decision on 20 June 2002.
Following Section 4, Rule 43 of the 1997 Rules of Civil Procedure, petitioner
had 15 days from notice of the decision, or until 5 July 2002, to appeal the
same to the Court of Appeals.[2] Before the CIAC, petitioner was represented
by the Fajardo Law Offices.
On 4 July 2002, petitioner, through Fajardo Law Offices, filed a Motion
for Extension of Time to file a Petition for Review Under Rule 43.[3] The
motion was docketed as CA-G.R. No. 71485 (hereinafter, the first case), and
it sought an extension until 20 July 2002 to file the petition for review. The
reason offered in the motion was the voluminous records, the complexity of
the legal and factual issues, and generally, the difficulty on the part of
petitioners counsel due to its other professional obligations to timely file the
petition.[4]
However, on 5 July 2002, petitioner, this time through its President and
General Manager Sy Siong Lato (Sy), filed a Motion for Extension of
Time to File Petition for Review on Certiorari Under Rule
43.[5] Unsurprisingly, this new motion for extension was assigned its own
docket number, CA-G.R. SP No. 71504 (hereinafter, the second case) and
also sought an extension until 20 July 2002 to file the petition for review. The
reason offered in this second motion was it was mutually agreed between
petitioner and its counsel, the Fajardo Law Offices, that petitioner should
secure another counsel due to the disagreements and/or differences of opinion
in the handling of the case as a consequence of which it went into the process
of retaining the services of another lawyer for the case.[6]
Petitioner would later claim that the filing made by Fajardo Law Offices in
the first case was without its prior knowledge.[7]
The first case was raffled to the Court of Appeals Sixteenth Division.
Despite the apparent termination of services of the Fajardo Law Offices, no
move was undertaken to withdraw or otherwise disavow the motion earlier
filed by that counsel.
On the other hand, the second case was raffled to the Court of Appeals
Fifth Division.
Both divisions of the Court of Appeals granted both motions for extension,
similarly prolonging the period to appeal until 20 July 2002, in separate
resolutions rendered just one day apart. The Resolution[8] in the first case was
penned by Associate Justice Marina L. Buzon, while the Resolution in the
second case was authored by Associate Justice Teodoro P. Regino.[9]
In the meantime, petitioner secured the services of Atty. Richard S. Flores to
represent it before the Court of Appeals. Atty. Flores duly filed in behalf of
petitioner a Motion for Second Extension of Time to File Petition for
Review with Formal Entry of Appearance,[10]offering as reason the fact
that his services were contracted only on 15 July 2002, or five (5) days before
the expiration of the extended reglementary period. Petitioner sought a new
period of 15 days, or until 4 August 2002, through the motion filed by Atty.
Flores.
The caption used in the new motion for extension, as prepared and filed
by Atty. Flores is that of the second case which was initiated by the motion
filed by Sy in behalf of petitioner. By this time, the former Fifth Division
hearing that case had been reorganized, and the second motion for extension
of time was assigned to the Special Third Division. In a Resolution dated 16
September 2002, the Special Third Division granted the second motion for
extension, again through a Resolution penned by Justice Regino as the
assigned ponente of the second case.[11]
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It is useful at this point to recount the status then of the two pending cases
before the Court of Appeals, involving the same set of petitioners and
respondents, and assailing the same decision of the CIAC. In the first case,
no further pleading was filed by petitioner or the Fajardo Law Offices after
the granting of the initial motion for extension therein. Thus, the period
within which to file the petition in the first case elapsed on 20 July 2002. On
the other hand, in the second case, two separate motions for extension had
been filed, the first by Sy in petitioners behalf and the second by Atty. Flores.
Since both motions were granted by the Court of Appeals, through Justice
Regino, petitioner had until 4 August 2002 to file its petition in the second
case.
The act that animates this present case is the filing on 1 August 2002, by Atty.
Flores in behalf of petitioner, of a Petition for Review[12] assailing the 19 June
2002 Decision of the CIAC. The caption of the petition clearly states the
docket number as CA-G.R. SP No. 71485,[13] that of the first case, or the
same docket number under which the earlier motion for extension filed
by Fajardo Law Offices was docketed.
Unfortunately for petitioner, its right to file the Petition on 1 August
2002 arose by virtue of the granting of the second motion for extension in the
second case. In contrast, petitioners right to file a petition in the first case had
expired on 20 July 2002, or 12 days before the actual filing of the petition
under the docket number of the first case. As such, the seemingly innocuous
typographical error resulted in multiple deleterious consequences.
Owing to the stated docket number in the caption of the Petition for Review
being that of the first case, the same was submitted for deliberation to the
Sixteenth Division to which the first case had been assigned. On 12
September 2002, the Sixteenth Division issued a Resolution in the first case
penned by Justice Buzon,[14] which noted that the petitioner had been granted
an extension until 20 July 2002 to file the petition, but that the petition had
actually been filed only on 2 August 2002. As such, the 12 September 2002
Resolution in the first case declared that [i]nasmuch as no motion for second
extension of time to file petition for review was received by this Court, the
petition for review was, therefore, filed beyond the prescribed period.[15]
In the meantime, the second case had since been reassigned to the
reconstituted Third Division of the Court of Appeals. On 8 October 2002, the
Third Division issued a Resolution in the second case penned by Justice
Regino, which simply held that [f]or failure of the petitioner to file the
petition for review within the extended period granted under Resolution
dated July 11, 2002, the Court Resolved to DISMISS the appeal.[17]
The 8 October 2002 Resolution in the second case failed to mention that a
second motion for extension had actually been granted in that case,
specifically in the Resolution dated 16 September 2002.[18] Still, no Petition
for Review was actually ever filed in the second case. In fact, after filing the
second motion for extension in the second case which also merited favorable
action, petitioner did not file any subsequent pleading in the same case, not
even any motion for reconsideration of the 8 October 2002 Resolution
dismissing the appeal in that case.
Instead, petitioner turned its sole focus to the first case. On 2 October 2002,
it filed a Motion for Reconsideration[19] of the 12 September 2002 Resolution
of the Sixteenth Division. Atty. Flores explained that he was confused with
the case number since petitioner corporation did not inform him that the
corporation, thru Fajardo Law Offices, likewise filed a motion for extension
of time before the CA, such that there were two docket numbers for the case.
The 16th division of CA denied the MR holding that petitioner should have
filed an MR in the second case.
Hence this petition claiming, among others, that the Sixteenth Division
should have forwarded the Petition for Review filed before it to the Third
Division, instead of dismissing the same;[25] and that the second motion for
extension of time to file the petition for review should have bound the
Sixteenth Division.
Issue:
W/N the CA in the first case erred in not allowing petitioner’s petition for
review – No.
Held:
No.
A party who commits such error in good faith has the obligation to correct
the same upon becoming aware of the anomaly.
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That petitioner was under such an obligation in this case is inescapably
evident. The fact that the petition for review intended for filing in the second
case bore instead the docket number of the first case indicates that petitioner
and its new counsel, Atty. Flores, knew of the first case earlier initiated by
Fajardo Law Offices. In short, at the time the petition was filed with the Court
of Appeals, petitioner had known that there were two similar cases involving
the same parties and causes of action.
There were a variety of options petitioner could have resorted to in order to
rectify the anomaly. Upon learning that there were actually two different
cases pending before the Court of Appeals, petitioner could have moved to
withdraw either any of the motions for extension of time, so that there would
be only one case pending with the appellate court. It really would not matter
if it were the first case or the second case which was withdrawn, since either
case was a viable vehicle for petitioners intended appeal. Had petitioner done
this at the onset, even if later the filed petition itself stated the wrong docket
number, the Court of Appeals could have easily recorded the pleading under
the case that remained in existence since it would anyway be incapable of
filing the same under the records of a case that had already been withdrawn.
Our procedural rules were not crafted with the intent of unilaterally
conferring fatal consequences on simple typographical errors.
But because petitioner was delinquent in ensuring that only one
of the two cases remained extant, as properly should be, the fiasco ensued
merely from applying the correct legal procedures. Even as no petition was
timely filed in the first case after no second motion for extension was sought
therein, said case had not yet been closed and terminated upon the belated
filing of the appeal. Since the appeal was filed beyond the reglementary
period, its dismissal was in accord with the rules of procedure. At the same
time, since no petition was filed at all in the second case despite the
providential granting of two successive motions for extension, the appeal was
correctly dismissed. Had petitioner been diligent enough to correct from the
onset the anomalous circumstances, the twin embarrassments would not have
occurred.
Thus, petitioner is left to raising extremely weak and wholly unsupported
arguments before us to allow its cause of action a ghost of a chance. Contrary
to petitioners claim, there was no obligation on the part of the Sixteenth
Division to forward the petition filed to the Third Division instead of
dismissing the same. The docket number indicated in the caption of that
petition made it clear that the same was addressed to the Sixteenth Division
instead of the Third. Since both cases involved the same parties and were
pivoted on the same ruling of the CIAC, it could not have been indubitably
obvious that the misfiled petition actually pertained to a different case.
The only indication in the petition that it was intended for filing in a different
case was the statement therein that a second motion for extension had been
previously filed, as it had been in the second case, but not the first case. Yet
even such fact would not have elicited the ineluctable conclusion on the part
of the Sixteenth Division that the petition had been misfiled under a wrong
docket number. The more plausible assumption for the appellate court, in
fact, would be that petitioner was lying in order to make it appear that the
petition had been timely filed. After all, the Sixteenth Division at that point
would not have had basis to know of the existence of the second case, their
information being limited to the averments made by petitioner before the
Sixteenth Division through its pleadings. And it was only in the Motion for
Reconsideration that the Sixteenth Division was first alerted to the existence
of the second case.
Petitioner now suggests that the duty to rectify the anomaly fell with the
Sixteenth Division. The notion is balderdash. The duty falls solely on the
party-litigants, especially on the party whose fault caused the anomaly. It
should be remembered that there is no inherent right of appeal, as appeals are
purely statutory.[35] Since the right to appeal is neither a natural right nor a
part of due process, it may be exercised only in the manner and in accordance
with the provisions of law.[36] In the matter of perfection of appeals in
accordance with substantive and procedural law, the function of appellate
courts is not to act as nannies to the appellants, clearing the pitfalls that
impede the perfected appeal. The responsibility is petitioners alone as
appellant, and petitioners theory wrongly implies that the appellate courts
also share that burden.
II.
The other argument raised by petitioner is that its second motion for extension
filed in the second case should have bound the Sixteenth Division hearing the
first case. Suffice it to say, a pleading filed in one case does not bind the
proceedings in another case, even if both cases are heard by just one court. A
contrary rule would simply lead to chaos.
Avila 4B | 2016
We have duly considered that perhaps this entire untidiness could have
been avoided had the Court of Appeals at the outset consolidated the two
cases. Yet such consideration is ultimately of no moment to petitioner. For
one, under the 2002 Internal Rules of the Court of Appeals (RIRCA), there
is no mandatory obligation to consolidate related cases. The language
utilized in Rule 3, Section 3 of the RIRCA, which authorizes consolidation is
cases, is merely directory in character, providing as it does: [w]hen related
cases are assigned to different Justices, they may be consolidated and
assigned to one Justice.[37] More importantly perhaps, the consolidation of
cases was never intended to cure the defect of forum-shopping. If one litigant
has filed multiple suits involving the same parties for the same cause of
action, the consolidation of these suits is not the correct palliative. These suits
should instead be dismissed on the ground of forum-shopping.

Petitioner lastly invokes the liberal construction of the rules to effect

substantial justice, in order that the case may be set aside on the merits and
not mere technicalities. However, petitioner through its negligence failed to
perfect the appeal under Rule 43 in accord with the jurisdictional
requirements. It would have been a different story if petitioner had from the
beginning acted within the boundaries of our procedural rules, by properly
withdrawing any one of the two cases it knew had been filed in its behalf. But
since it failed to do so, it should bear the consequences of its own neglect.
Equitable relief is not the supremacy of pity but the entitlement of due process
previously denied the litigant.[38] There was no denial of due process in this
case that would warrant us to restore jurisdiction lost upon the initiative and
fault of petitioner.

WHEREFORE, the petition is DENIED. Costs against petitioner.

Avila 4B | 2016
5. Neri v. Sandiganbayan, 2013
Facts:
Petitioner Romulo L. Neri (Neri) served as Director General of the National
Economic and Development Authority (NEDA) during the administration of
former President Gloria Macapagal-Arroyo.
In connection with what had been played up as the botched Philippine-
ZTE3 National Broadband Network (NBN) Project, the Office of the
Ombudsman (OMB ), on May 28, 2010, filed with the Sandiganbayan two
(2) criminal Informations, the first against Benjamin Abalos, for violation
of Section 3(h) of Republic Act No. (RA) 3019, as amended, otherwise
known as the Anti-Graft and Corrupt Practices Act, docketed as SB-10-CRM-
0098 (People v. Abalos), and eventually raffled to the Fourth Division of
that court.
The second Information against Neri, also for violation of Sec. 3(h), RA
3019, in relation to Sec. 13, Article VII of the 1987 Constitution, was
docketed as SB-10-CRM-0099 (People v. Neri) and raffled to the Fifth
Division of the Sandiganbayan.
Vis-à-vis the same project, the Ombudsman would also later file an
information against Macapagal-Arroyo and another information against her
and several others docketed as SB-11-CRM-0467 and SB-11-CRM-0468 to
0469, respectively, all of which ended up, like SB-10-CRM-0098, in the anti-
graft court’s 4th Division.
In the ensuing trial in the Neri case following the arraignment and pre-trial
proceedings, six (6) individuals took the witness stand on separate dates5 to
testify for the prosecution. Thereafter, the prosecution twice moved for and
secured continuance for the initial stated reason that the prosecution is still
verifying the exact address of its next intended witness and then that such
witness cannot be located at his given address.6
In the meantime, a pre-trial conference was conducted in the Abalos case
following which the Fourth Division issued on September 17, 2010 a Pre-
Trial Order7 containing, among other things, a list of witnesses and
documents the prosecution intended to present. On October 27, 2010, Neri,
whose name appeared high on the list, took the witness stand against Abalos
in the Abalos case.8
On January 3, 2012, in People v. Neri, the Office of the Special Prosecutor
(OSP), OMB, citing Sec. 22, Rule 119 of the Rules of Court in relation to
Sec. 2 of the Sandiganbayan Revised Internal Rules, moved for its
consolidation with SB-10-CRM-0098 (People v. Abalos), SB-11-CRM-
0467 (People v. Arroyo, et al.) and SB-11-0468 to 469 (People v. Arroyo).
The stated reason proffered: to promote a more expeditious and less
expensive resolution of the controversy of cases involving the same business
transaction. And in this regard, the prosecution would later manifest that it
would be presenting Yu Yong and Fan Yang, then president and finance
officer, respectively, of ZTE, as witnesses all in said cases which would entail
a substantive expense on the part of government if their testimonies are given
separately.9
Neri opposed and argued against consolidation, and, as he would later
reiterate, contended, among other things that:
(a) SB-10-CRM-0099 (Neri case), on one hand, and the other cases, on the
other, involve different issues and facts;
(b) the desired consolidation is oppressive and violates his rights as an
accused;
(c) consolidation would unduly put him at risk as he does not actually belong
to the Abalos group which had been negotiating with the ZTE officials about
the NBN Project;
(d) he is the principal witness and, in fact, already finished testifying, in the
Abalos case;
(e) the trial in the Neri and Abalos cases are both in the advanced stages
already; and
(f) the motion is but a ploy to further delay the prosecution of SB-10-CRM-
0099, considering the prosecution’s failure to present any more witnesses
during the last two (2) scheduled hearings.
By Resolution dated February 3, 2012, the Sandiganbayan Fifth Division,
agreeing with the position thus taken by the OSP, granted the consolidation
of SB-10-CRM-0099 (Neri case) with SB-10-CRM-0098 (Abalos case),
subject to the conformity of the Fourth Division of the Sandiganbayan.
In granting the consolidation, the 5th division SB held that consolidation is
proper inasmuch as the subject matter of the charges in both the Abalos and
Neri cases revolved around the same ZTE-NBN Project. And following the
movant’s line, the anti-graft court stated that consolidation would allow the
government to save unnecessary expenses, avoid multiplicity of suits, prevent
Avila 4B | 2016
delay, clear congested dockets, and simplify the work of the trial court
without violating the parties’ rights.
Hence this petition.
Issue:
W/N the SB erred in consolidating the cases – Yes, it erred.
Held:
Yes, it erred.
The petition is meritorious, owing for one on the occurrence of a supervening
event in the Sandiganbayan itself. As may be recalled, the assailed resolution
of the Sandiganbayan Fifth Division ordering the consolidation of SB-10-
CRM-0099 (the Neri case) with SB-10-CRM-0098 (the Abalos case) pending
with the Fourth Division, was subject to the "conformity of the said (4th)
Division." On October 19, 2012, the Fourth Division, on the premise that
consolidation is addressed to the sound discretion of both the transferring and
receiving courts, but more importantly the latter as the same transferred case
would be an added workload, issued a Resolution13 refusing to accept the Neri
case.
The Sandiganbayan Fourth Division wrote to justify, in part, its action:
“The Fourth Division already heard accused Neri testify against the accused
in the Abalos case, and in the course of the presentation of his testimony (on
direct examination, on cross-examination and based on his reply to the
questions from the Court), the individual members of the Fourth Division,
based on accused Neri’s answers as well as his demeanor on the dock, had
already formed their respective individual opinions on the matter of his
credibility. Fundamental is the rule x x x that an accused is entitled to nothing
less that the cold neutrality of an impartial judge. This Court would not want
accused Neri to entertain any doubt in his mind that such formed opinions
might impact on the proper disposition of the Neri case where he stands
accused himself.”
While it could very well write finis to this case on the ground of mootness,
the actual justiciable controversy requirement for judicial review having
ceased to exist with the supervening action of the Fourth Division, the Court
has nonetheless opted to address the issue with its constitutional law
component tendered in this recourse.
The interrelated assignment of errors converged on the propriety, under the
premises, of the consolidation of SB-10-CRM-0099 with SB-10-CRM-0098.
Consolidation is a procedural device granted to the court as an aid in deciding
how cases in its docket are to be tried so that the business of the court may be
dispatched expeditiously while providing justice to the parties.18 Toward this
end, consolidation and a single trial of several cases in the court’s docket or
consolidation of issues within those cases are permitted by the rules.
As held in Republic v. Sandiganbayan (Fourth Division), citing American
jurisprudence, the term "consolidation" is used in three (3) different senses or
concepts, thus:
(1) Where all except one of several actions are stayed until one is tried, in
which case the judgment in one trial is conclusive as to the others. This is not
actually consolidation but is referred to as such. (quasi consolidation)
(2) Where several actions are combined into one, lose their separate identity,
and become a single action in which a single judgment is rendered. This is
illustrated by a situation where several actions are pending between the same
parties stating claims which might have been set out originally in one
complaint. (actual consolidation)
(3) Where several actions are ordered to be tried together but each retains its
separate character and requires the entry of a separate judgment. This type of
consolidation does not merge the suits into a single action, or cause the parties
to one action to be parties to the other. (consolidation for trial)19 (citations
and emphasis omitted; italicization in the original.)
To be sure, consolidation, as taken in the above senses, is allowed, as Rule
31 of the Rules of Court is entitled "Consolidation or Severance." And Sec.
1 of Rule 31 provides:
Section 1. Consolidation. – When actions involving a common question of
law or fact are pending before the court, it may order a joint hearing or trial
of any or all the matters in issue in the actions; it may order all actions
consolidated; and it may make such orders concerning proceedings therein as
may tend to avoid unnecessary costs or delay.
The counterpart, but narrowed, rule for criminal cases is found in Sec. 22,
Rule 119 of the Rules of Court stating:
Sec. 22. Consolidation of trials of related offenses. - Charges for offenses
founded on the same facts or forming part of a series of offenses of similar
character may be tried jointly at the discretion of the court. (Emphasis
added.)
Avila 4B | 2016

as complemented by Rule XII, Sec. 2 of the Sandiganbayan Revised Internal
Rules which states:
Section 2. Consolidation of Cases. – Cases arising from the same incident or
series of incidents, or involving common questions of fact and law, may be
consolidated in the Division to which the case bearing the lowest docket
number is raffled.
Whether as a procedural tool to aid the court in dispatching its official
business in criminal or civil cases, the rule allowing consolidation––in
whatsoever sense it is taken, be it as a merger of several causes of
actions/cases, in the sense of actual consolidation, or merely joint trial––is
designed, among other reasons, to avoid multiplicity of suits, guard against
oppression and abuse, attain justice with the least expense and vexation to the
litigants.20
While the assailed resolution is silent as to the resultant effect/s of the
consolidation it approved, there is nothing in the records to show that what
the prosecution vied for and what the Fifth Division approved went beyond
consolidation for trial or joint trial. This conclusion may be deduced from the
underscored portion of the following excerpts of the resolution in question,
thus:
“In its reply, the prosecution asserted that the rationale behind consolidation
of cases is to promote expeditious and less expensive resolution of a
controversy than if they were heard independently and separately. It is
claimed that the OMB and DOJ have already requested the participation in
the hearing of these cases of the ZTE executives, which will entail huge
expenses if they will be presented separately for each case. x x x
We agree with the prosecution.21 (Emphasis added.)”
Not to be overlooked is the fact that the prosecution anchored its motion for
consolidation partly on the aforequoted Sec. 22 of Rule 119 which
indubitably speaks of a joint trial.
Given the above perspective, petitioner should now disabuse himself of the
unfounded notion that what the Fifth Division intended was a fusion into one
criminal proceedings of the Abalos and Neri cases, where one is
unidentifiable from the other, or worse, where he will be tried as co-accused
in the Abalos case.
This thus brings us to the question of whether a consolidation of trial, under
the factual and legal milieu it was ordered, is proper.
Jurisprudence has laid down the requisites for consolidation of trial. As held
in Caños v. Peralta,22 joint trial is permissible "where the actions arise from
the same act, event or transaction, involve the same or like issues, and depend
largely or substantially on the same evidence, provided that the court has
jurisdiction over the cases to be consolidated and that a joint trial will
not give one party an undue advantage or prejudice the substantial rights
of any of the parties."
More elaborately, joint trial is proper where the offenses charged are similar,
related, or connected, or are of the same or similar character or class, or
involve or arose out of the same or related or connected acts, occurrences,
transactions, series of events, or chain of circumstances, or are based on acts
or transactions constituting parts of a common scheme or plan, or are of the
same pattern and committed in the same manner, or where there is a common
element of substantial importance in their commission, or where the same, or
much the same, evidence will be competent and admissible or required in
their prosecution, and if not joined for trial the repetition or reproduction of
substantially the same testimony will be required on each trial.23
In terms of its effects on the prompt disposition of cases, consolidation could
cut both ways. It may expedite trial or it could cause delays. Cognizant of this
dichotomy, the Court, in Dacanay v. People, stated the dictum that "the
resulting inconvenience and expense on the part of the government cannot
not be given preference over the right to a speedy trial and the protection of
a person’s life, liberty or property."
Indeed, the right to a speedy resolution of cases can also be affected by
consolidation. As we intoned in People v. Sandiganbayan, a case involving
the denial by the anti-graft court of the prosecution’s motion to consolidate a
criminal case for indirect bribery with another case for plunder, consolidation
should be refused if it will unduly expose a party, private respondent in that
instance, to totally unrelated testimonies, delay the resolution of the indirect
bribery case, muddle the issues, and expose him to the inconveniences of a
lengthy and complicated legal battle in the plunder case. Consolidation, the
Court added, has also been rendered inadvisable by supervening events––in
particular, if the testimonies sought to be introduced in the joint trial had
already been heard in the earlier case.25
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So it must be here.
The overt acts ascribed to the two accused which formed the basis of their
indictments under the separate criminal charge sheets can be summarized as
follows:
People v. Neri (For Violation of Section 3[h] RA 3019)28
1. Directly or indirectly having financial or pecuniary interest in the business
transaction between the Government of the Republic of the Philippines
(GRP) and ZTE for the implementation of the NBN Project, which requires
the review, consideration and approval by the accused, as then NEDA
Director General;
2. Meeting, having lunch and playing golf with representatives and/or
officials of the ZTE;
3. Meeting with then COMELEC Chairman Benjamin Abalos; and
4. Sending his emissary/representative, Engr. Rodolfo Noel Lozada, to meet
Abalos and Jose de Venecia III, President/General Manager of Amsterdam
Holdings Inc. (AHI), another proponent to implement the NBN Project and
discuss matters with them.
People v. Abalos (For Violation of Section 3[h], RA 3019)
1. Having financial or pecuniary interest in the business transaction between
the GRP and the ZTE for the implementation of the Philippines’ NBN;
2. Attending conferences, lunch meetings and golf games with said ZTE
officials in China, all expenses paid by them and socializing with them in
China and whenever they were here in the Philippines;
3. Offering bribes to petitioner in the amount of PhP 200,000,000 and to Jose
de Venecia III President and General Manager of AHI in the amount of USD
10,000,000, being also another proponent to implement said NBN Project of
the Government; and
4. Arranging meetings with Secretary Leandro Mendoza of the Department
of Transportation and Communications (DOTC).29
As can be gleaned from the above summary of charges, the inculpatory acts
complained of, the particulars and specifications for each of the cases are
dissimilar, even though they were allegedly done in connection with the
negotiations for and the implementation of the NBN Project. Due to this
variance, the prosecution witnesses listed in the pre-trial order in the Neri
case are also different from the list of the people’s witnesses lined up to testify
in the Abalos case, albeit some names appear in both the pre-trial orders. This
can be easily seen by a simple comparison of the list of witnesses to be
presented in the cases consolidated. The witnesses common to both cases are
underscored.
The names thus listed in the pre-trial order in the Abalos case do not yet
include, as aptly observed by the Fourth Division in its adverted October 19,
2012 Resolution,32 additional names allowed under a subsequent resolution.
In all, a total of at least 66 warm bodies were lined up to testify for the
prosecution.
It can thus be easily seen that veritably the very situation, the same mischief
sought to be avoided in People v. Sandiganbayan33 which justified the non-
consolidation of the cases involved therein, would virtually be present should
the assailed consolidation be upheld. Applying the lessons of People v.
Sandiganbayan to the instant case, a consolidation of the Neri case to that
of Abalos would expose petitioner Neri to testimonies which have no
relation whatsoever in the case against him and the lengthening of the
legal dispute thereby delaying the resolution of his case. And as in People
v. Sandiganbayan, consolidation here would force petitioner to await the
conclusion of testimonies against Abalos, however irrelevant or immaterial
as to him (Neri) before the case against the latter may be resolved––a
needless, hence, oppressive delay in the resolution of the criminal case
against him.
What is more, there is a significant difference in the number of witnesses to
be presented in the two cases. In fact, the number of prosecution witnesses in
the Neri case is just half (26) of that in Abalos (50). Awaiting the completion
in due course of the presentation of the witnesses in Abalos would doubtless
stall the disposition of the case against petitioner as there are more or less
thirty-five (35) prosecution witnesses listed in People v. Abalos who are not
so listed in People v. Neri.
In the concrete, this means, in the minimum, awaiting the completion of the
testimonies of thirty-five (35) additional witnesses, whose testimonies are
unrelated to the charges against him, before the case against petitioner may
finally be disposed of, one way or another. Also, petitioner will be exposed
to an extra thirty-five (35) irrelevant testimonies which even exceed those
relating to his case, since the prosecution only has roughly about twenty-six
(26) witnesses for his case. Further still, any delay in the presentation of any
Avila 4B | 2016
of the witnesses in People v. Abalos would certainly affect the speedy
disposition of the case against petitioner. At the end of the day, the assailed
consolidation, instead of contributing to the swift dispensation of justice and
affording the parties a just, speedy and inexpensive determination of their
cases, would achieve the exact opposite.

Before the Sandigabayan and this Court, petitioner has harped and rued on
the possible infringement of his right to speedy trial should consolidation
push through, noting in this regard that the Neri case is on its advanced stage
but with the prosecution unable to continue further with its case after
presenting six witnesses.

Petitioner's point is well-taken.

Clearly then, consolidation, assuming it to be proper owing to the existence

of the element of commonality of the lineage of the offenses charged
contemplated in Sec. 22 of Rule 119, should be ordered to achieve all the
objects and purposes underlying the rule on consolidation, foremost of which,
to stress, is the swift dispensation of justice with the least expense and
vexation to the parties. It should, however, be denied if it subverts any of the
aims of consolidation. And Dacanay and People v. Sandiganbayan are one in
saying, albeit implicitly, that ordering consolidation-likely to delay the
resolution of one of the cases, expose a party to the rigors of a lengthy
litigation and in the process undermine the accused's right to speedy
disposition of cases-constitutes grave abuse of discretion. Not lost on the
Court of course and certainly not on the Sandiganbayan 's Fourth Division is
the resulting absurdity arising from the consolidation of trial where the
accused (Neri) in one case would be the prosecution's main witness in the
other case.

WHEREFORE, premises considered, the assailed Resolution of the

Sandiganbayan Fifth Division dated February 3, 2012 in Criminal Case No.
SB-10-CRM-0099 and its Resolution dated April 26, 2012 are hereby
REVERSED and SET ASIDE. Let Criminal Case No. SB-10-CRM-0098 and
Criminal Case No. SB-1 0-CRM-0099 proceed independently and be
resolved with dispatch by the Divisions of the Sandiganbayan to which each
was originally raffled.

No pronouncement as to costs.
SO ORDERED.

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XXI. Demurrer to Evidence (Rule 33) XXX
XXII. Judgment on the Pleadings and Summary Judgment (Rule 34 and
35)
1. Wood Technology v. Equitable Banking, G.R. 153867, February
17, 2005
Facts:
The case originated from a Complaint for Sum of Money filed on October
21, 1996, before the Regional Trial Court of Manila, Branch 29, by
respondent Equitable Banking Corporation[3] against the petitioners,
Wood Technology Corporation (WTC), Chi Tim Cordova, and Robert Tiong
King Young.
The Complaint alleged that on December 9, 1994, WTC obtained from
respondent a loan in the amount of US$75,000, with 8.75% interest per
annum, as evidenced by a Promissory Note, No. FXBD94-00881, signed by
Cordova and Young as representatives of WTC. Cordova and Young
executed a Surety Agreement binding themselves as sureties of WTC for the
loan. Respondent bank made a final demand on April 19, 1996, for WTC to
pay its obligation, but petitioners failed to pay. Respondent prayed that
petitioners be ordered to pay it $75,603.65 or P2,018,617.46 (computed as of
October 10, 1995) plus interest, penalty, attorneys fees and other expenses of
litigation; and the cost of suit.
In their Answer, petitioners stated that WTC obtained the $75,000 loan; that
Cordova and Young bound themselves as its sureties. They claimed that only
one demand letter, dated April 19, 1996, was made by respondent. They
added that the promissory note did not provide the due date for payment.
Petitioners also claimed that the loan had not yet matured as the maturity date
was purposely left blank, to be agreed upon by the parties at a later date. Since
no maturity date had been fixed, the filing of the Complaint was premature,
and it failed to state a cause of action. They further claimed that the
promissory note and surety agreement were contracts of adhesion with terms
on interest, penalty, charges and attorneys fees that were excessive,
unconscionable and not reflective of the parties real intent. Petitioners prayed
for the reformation of the promissory note and surety agreement to make their
terms and conditions fair, just and reasonable. They also asked payment of
damages by respondent.
On May 5, 1997, respondent moved for a judgment on the pleadings.
RTC rendered judgment holding petitioner liable for USD75,000 with
stipulated interest of 8.75%.
On appeal, CA affirmed holding that petitioners admitted the material
allegations of the Complaint, with their admission of the due execution of the
promissory note and surety agreement as well as of the final demand made
by the respondent. The appellate court ruled that there was no need to present
evidence to prove the maturity date of the promissory note, since it was
payable on demand. In addition, the Court of Appeals held that petitioners
failed to show any ambiguity in the promissory note and surety agreement in
support of their contention that these were contracts of adhesion.
Hence this petition.
Petitioners argue that a judgment on the pleadings cannot be rendered because
their Answer tendered genuine issues and disputed the material allegations in
the Complaint. They claim that they did not totally or unqualifiedly admit all
the material allegations in the Complaint, and that they had alleged special
and affirmative defenses. If they were given the chance, they could have
presented witnesses to prove their special and affirmative defenses.[6]
For its part, respondent Equitable Banking Corporation states that the Court
of Appeals was correct in affirming the judgment on the pleadings granted by
the RTC. It adds that petitioners had admitted the material allegations of the
Complaint and they did not raise genuine issues of fact that necessitate
submission of evidence. It also contends that the special and affirmative
defenses raised by petitioners concern the proper interpretation of the
provisions of the promissory note and surety agreement. Respondent asserts
that these defenses may be resolved based on the pleadings and the applicable
laws and jurisprudence, without the need to present evidence
Issue:
W/N judgment on the pleadings was proper – No, it should have been
summary judgment.
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Held:
No, it should have been summary judgment.
Petitioners also contend that their Answer below raised issues that are very
material and genuine.[12] Hence, according to petitioners, judgment on the
pleadings was not proper. Respondent, on the other hand, argues that the
special and affirmative defenses raised by Petitioners are not genuine issues
that needed a hearing.[13]
We note now that
(1) the RTC knew that the Answer asserted special and affirmative defenses;
(2) the Court of Appeals recognized that certain issues were raised, but they
were not genuine issues of fact;
(3) petitioners insisted that they raised genuine issues; and
(4) respondent argued that petitioners defenses did not tender genuine issues.
However, whether or not the issues raised by the Answer are genuine is not
the crux of inquiry in a motion for judgment on the pleadings. It is so only in
a motion for summary judgment.[14]
In a case for judgment on the pleadings, the Answer is such that no issue is
raised at all. The essential question in such a case is whether there are issues
generated by the pleadings.[15] This is the distinction between a proper case
of summary judgment, compared to a proper case for judgment on the
pleadings.
We have explained this vital distinction in Narra Integrated Corporation v.
Court of Appeals,[16] thus,
The existence or appearance of ostensible issues in the pleadings, on the one
hand, and their sham or fictitious character, on the other, are what distinguish
a proper case for summary judgment from one for a judgment on the
pleadings. In a proper case for judgment on the pleadings, there is no
ostensible issue at all because of the failure of the defending party’s answer
to raise an issue. On the other hand, in the case a of a summary
judgment, issues apparently exist i.e. facts are asserted in the complaint
regarding which there is as yet no admission, disavowal or qualification; or
specific denials or affirmative defenses are in truth set out in the answer
but the issues thus arising from the pleadings are sham, fictitious or not
genuine, as shown by affidavits, depositions, or admissions. . . .
(Underscoring and emphasis supplied.)
Indeed, petitioner’s Answer apparently tendered issues. While it admitted that
WTC obtained the loan, that Cordova and Young signed the promissory note
and that they bound themselves as sureties for the loan, it also alleged special
and affirmative defenses that the obligation had not matured and that the
promissory note and surety agreement were contracts of adhesion.
Applying the requisites of a judgment on the pleadings vis--vis a summary
judgment, the judgment rendered by the RTC was not a judgment on the
pleadings, but a summary judgment. Although the Answer apparently raised
issues, both the RTC and the Court of Appeals after considering the parties
pleadings, petitioners admissions and the documents attached to the
Complaint, found that the issues are not factual ones requiring trial, nor were
they genuine issues.
Summary judgment[17] is a procedure aimed at weeding out sham claims or
defenses at an early stage of the litigation. The proper inquiry in this regard
would be whether the affirmative defenses offered by petitioners constitute
genuine issues of fact requiring a full-blown trial.[18] In a summary judgment,
the crucial question is: are the issues raised by petitioners not genuine so as
to justify a summary judgment?[19] A genuine issue means an issue of fact
which calls for the presentation of evidence, as distinguished from an issue
which is fictitious or contrived, an issue that does not constitute a genuine
issue for trial.[20]
We note that this is a case for a sum of money, and petitioners have admitted
that they obtained the loan. They also admitted the due execution of the loan
documents and their receipt of the final demand letter made by the
respondent. These documents were all attached to the Complaint. Petitioners
merely claimed that the obligation has not matured. Notably, based on the
promissory note, the RTC and the Court of Appeals found this defense not a
factual issue for trial, the loan being payable on demand. We are bound by
this factual finding. This Court is not a trier of facts.
When respondent made its demand, in our view, the obligation matured. We
agree with both the trial and the appellate courts that this matter proferred as
a defense could be resolved judiciously by plain resort to the stipulations in
the promissory note which was already before the trial court. A full-blown
trial to determine the date of maturity of the loan is not necessary. Also, the
act of leaving blank the maturity date of the loan did not necessarily mean
that the parties agreed to fix it later. If this was the intention of the parties,
Avila 4B | 2016
they should have so indicated in the promissory note. They did not show such
intention.

Petitioners likewise insist that their defense tendered a genuine issue when
they claimed that the loan documents constituted a contract of adhesion.
Significantly, both the trial and appellate courts have already passed upon this
contention and properly ruled that it was not a factual issue for trial. We agree
with their ruling that there is no need of trial to resolve this particular line of
defense. All that is needed is a careful perusal of the loan documents. As held
by the Court of Appeals, petitioners failed to show any ambiguity in the loan
documents. The rule is that, should there be ambiguities in a contract of
adhesion, such ambiguities are to be construed against the party that prepared
it. However, if the stipulations are clear and leave no doubt on the intention
of the parties, the literal meaning of its stipulations must be held
controlling.[21]

In sum, we find no cause to disturb the findings of fact of the Court of

Appeals, affirming those of the RTC as to the reasonableness of the interest
rate of 8.75% per annum on the loan. We also find no persuasive reason to
contradict the ruling of both courts that the loan secured by petitioner WTC,
with co-petitioners as sureties, was payable on demand. Certainly,
respondents complaint could not be considered premature. Nor could it be
said to be without sufficient cause of action therein set forth. The judgment
rendered by the trial court is valid as a summary judgment, and its affirmance
by the Court of Appeals, as herein clarified, is in order.

WHEREFORE, the Petition is DENIED for lack of merit.

Avila 4B | 2016
4. Smart Communications v. Aldecoa, 2013
Facts:
Petitioner is a domestic corporation engaged in the telecommunications
business. On March 9, 2000, petitioner entered into a contract of lease4 with
Florentino Sebastian in which the latter agreed to lease to the former a piece
of vacant lot, measuring around 300 square meters, located in Barangay Vira,
Roxas, Isabela (leased property). Petitioner, through its contractor, Allarilla
Construction, immediately constructed and installed a cellular base station on
the leased property. Inside the cellular base station is a communications
tower, rising as high as 150 feet, with antennas and transmitters; as well as a
power house open on three sides containing a 25KVA diesel power generator.
Around and close to the cellular base station are houses, hospitals, clinics,
and establishments, including the properties of respondents Arsenio Aldecoa,
Jose B. Torre, Conrado U. Pua, Gregorio V. Mansano, Jerry Corpuz, and
Estelita Acosta.
Respondents filed before the RTC on May 23, 2000 a Complaint against
petitioner for abatement of nuisance and injunction with prayer for
temporary restraining order and writ of preliminary injunction, docketed as
Civil Case No. Br. 23-632-2000. Respondents alleged in their Complaint that:
“7. With its structural design, SMART’s tower being constructed at Vira,
Roxas, Isabela, is weak, unstable, and infirm, susceptible to collapse like the
Mobiline tower which fell during a typhoon as earlier alleged, and its
structural integrity being doubtful, and not earthquake proof, this tower poses
great danger to life and limb of persons as well as their property, particularly,
the [respondents] whose houses abut, or are near or within the periphery of
the communications tower;
8. This tower is powered by a standby generator that emits noxious and
deleterious fumes, not to mention the constant noise it produces, hence, a
hazard to the health, not only of the [respondents], but the residents in the
area as well;
9. When in operation, the tower would also pose danger to the life and health
of [respondents] and residents of the barangay, especially children, because
of the ultra high frequency (UHF) radio wave emissions it radiates.
10. Worse, and in violation of law, [petitioner] constructed the tower without
the necessary public hearing, permit of the barangay, as well as that of the
municipality, the Environmental Compliance Certificate of the [Department
of Environment and Natural Resources (DENR)], construction permit, and
other requirements of the National Telecommunications Commission (NTC),
xxx.”
In its Answer/Motion to Oppose Temporary Restraining Order with
Compulsory Counterclaim, petitioner raised the following special and
affirmative defenses:
“13. Petitioner through its contractor, Allarilla Construction(hereafter
Allarilla), applied for a Building Permit through the office of Municipal
engineer Virgilio A. Batucal on 13 April 2000 and subsequently received its
approval 17 April 2000. (a copy of the Official receipt and the Building
Permit is hereto attached respectively as Annex "A" and "B" and made an
integral part hereof)
14. Petitioner, again through Allarilla applied for an Environmental
Compliance Certificate (ECC) the approval of which, at present, remains
pending with the DENR-[Environment Management Bureau (EMB)].
15. Petitioner should not in anyway be liable for fraud or bad faith as it had
painstakingly secured the consent of majority of the residents surrounding the
location of the Tower in order to seek their approval therewith. (a copy of the
list of residents who consented there to is attached herewith as Annex "C"
and made an integral part hereof)
16. Among the residents who signed the consent list secured by petitioner
include the respondent Jose B. Torre and a certain Linaflor Aldecoa, who is
related to respondent Arsenio Aldecoa.
17. Petitioner did not forge the Barangay Certification but actually secured
the consent of Barangay Captain Jose Torre through the efforts of
Sangguniang Bayan (SB) Board Member Florentino Sebastian.(a copy of the
Barangay Certification is attached herewith as Annex "D" and made an
integral part hereof)
18. Petitioner Tower’s safety has been pre-cleared and is unlikely to cause
harm in exposing the members of the public to levels exceeding health limits
considering that the antenna height of the Tower is 45.73 meters or equivalent
to 150 feet as stated in a Radio Frequency Evaluation report by Elizabeth H.
Mendoza health Physicist II, of the Department of Health Radiation Health
Service dated 9 May 2000. (a copy is hereto attached as Annex "E" and made
an integral part hereof)
19. The structural stability and soundness of the Tower has been certified by
Engr. Melanio A. Guillen Jr. of the Engineering Consulting firm Microflect
as contained in their Stress Analysis Report (a copy is hereto attached as
Annex "F" and made an integral part hereof)
Avila 4B | 2016
20. petitioner’s impetus to push through with the construction of the Tower
is spurred by the Telecommunications Act of 1995 or Republic Act 7925
which states that the "expansion of the telecommunications network shall
give priority to improving and extending basic services to areas not yet
served." Article II, Sec. 4 par. B.(a copy of RA 7925 is hereto attached as
Annex "G" and made an integral part hereof)7”
Petitioner filed a Motion for Summary Judgment.
RTC granted the Motion for Summary Judgment and dismissed
respondents’ Complaint holding that there was no genuine issue as to
any material fact in this case. It held that:
“This court finds the claim of the respondents to be highly speculative, if not
an isolated one. Elsewhere, we find several cellsite towers scattered (sic)
allover, both of the Smart, Globe, and others, nay even in thickly populated
areas like in Metro Manila and also in key cities nationwide, yet they have
not been outlawed or declared nuisance as the respondents now want this
Court to heed. To the thinking of the Court, the respondents are harping
imagined perils to their health for reason only known to them perhaps
especially were we to consider that the Brgy. Captain of Vira earlier gave its
imprimatur to this project. Noteworthy is the fact that the alleged cluster of
residential houses that abut the cellsite tower in question might be endangered
thereby, the respondents are but a few of those residents. If indeed, all those
residents in Vira were adversely affected for the perceived hazards posed by
the tower in question, they should also have been joined in as respondents in
a class suit. The sinister motive is perhaps obvious.
All the foregoing reasons impel this Court to grant the petitioner’s motion for
the dismissal of the complaint, the perceived dangers being highly speculative
without any bases in fact. Allegations in the complaint being more imaginary
than real, do not constitute factual bases to require further proceeding or a
trial.”
CA reversed and declared the cellular base station of petitioner a
nuisance that endangered the health and safety of the residents of Barangay
Vira, Roxas, Isabela because:
(1) the locational clearance granted to petitioner was a nullity due to the lack
of approval by majority of the actual residents of the barangay and a barangay
resolution endorsing the construction of the cellular base station; and
(2) the sound emission of the generator at the cellular base station exceeded
the Department of Environment and Natural Resources (DENR) standards.
Hence this petition claiming, among others, that the CA erred when it
encroached upon an executive function of determining the validity of a
locational clearance when it declared, contrary to the administrative findings
of the Housing Land Use and Regulatory Board (“HLURB”), that the
locational clearance of Petitioner was void.
Issue:
W/N RTC erred in rendering summary judgment – Yes.
Held:
Yes, it erred.
At the outset, the RTC erred in granting petitioner’s Motion for Summary
Judgment and ordering the dismissal of respondents’ Complaint in Civil Case
No. Br. 23-632-2000.
Summary judgments are governed by Rule 35 of the Rules of Court, pertinent
provisions of which state:
SEC. 2. Summary judgment for defending party. – A party against whom a
claim, counterclaim, or cross-claim is asserted or a declaratory relief is sought
may, at any time, move with supporting affidavits, depositions or admissions
for a summary judgment in his favor as to all or any part thereof.
SEC. 3. Motion and proceedings thereon. – The motion shall be served at
least ten (10) days before the time specified for the hearing. The adverse party
may serve opposing affidavits, depositions, or admissions at least three (3)
days before the hearing. After the hearing, the judgment sought shall be
rendered forthwith if the pleadings, supporting affidavits, depositions, and
admissions on file, show that, except as to the amount of damages, there is
no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law. (Emphases supplied.)
In Rivera v. Solidbank Corporation,33 the Court discussed extensively when
a summary judgment is proper:
“For a summary judgment to be proper, the movant must establish two
requisites:
(a) there must be no genuine issue as to any material fact, except for the
amount of damages; and
Avila 4B | 2016
(b) the party presenting the motion for summary judgment must be entitled
to a judgment as a matter of law.
Where, on the basis of the pleadings of a moving party, including documents
appended thereto, no genuine issue as to a material fact exists, the burden to
produce a genuine issue shifts to the opposing party. If the opposing party
fails, the moving party is entitled to a summary judgment.
A genuine issue is an issue of fact which requires the presentation of evidence
as distinguished from an issue which is a sham, fictitious, contrived or a false
claim.
The trial court can determine a genuine issue on the basis of the pleadings,
admissions, documents, affidavits or counter affidavits submitted by the
parties. When the facts as pleaded appear uncontested or undisputed, then
there is no real or genuine issue or question as to any fact and summary
judgment called for.
On the other hand, where the facts pleaded by the parties are disputed or
contested, proceedings for a summary judgment cannot take the place of a
trial. The evidence on record must be viewed in light most favorable to the
party opposing the motion who must be given the benefit of all favorable
inferences as can reasonably be drawn from the evidence.
Courts must be critical of the papers presented by the moving party and not
of the papers/documents in opposition thereto. Conclusory assertions are
insufficient to raise an issue of material fact. A party cannot create a genuine
dispute of material fact through mere speculations or compilation of
differences. He may not create an issue of fact through bald assertions,
unsupported contentions and conclusory statements. He must do more than
rely upon allegations but must come forward with specific facts in support of
a claim. Where the factual context makes his claim implausible, he must come
forward with more persuasive evidence demonstrating a genuine issue for
trial. (Emphases supplied; citations omitted.)”
Judging by the aforequoted standards, summary judgment cannot be rendered
in this case as there are clearly factual issues disputed or contested by the
parties. As respondents correctly argued in their Opposition to petitioner’s
Motion for Summary Judgment:
“1. Contrary to the claim of petitioner, there are several genuine issues as to
the cause of action and material facts related to the complaint. For one there
is an issue on the structural integrity of the tower, the ultra high frequency
(UHF) radio wave emission radiated by the communications tower affecting
the life, health and well being of the[respondents] and the barangay residents,
especially their children. Also, the noxious/deleterious fumes and the noise
produce[d] by the standby generator and the danger posted by the tower if it
collapses in regard to life and limb as well as the property of the [respondents]
particularly those whose houses abut, or are near/within the periphery of the
communications tower. x x x34”
Likewise constituting real or genuine issues for trial, which arose from
subsequent events, are the following:
1. whether the generator subject of respondents’ Complaint had been
removed;
2. whether said generator had been replaced by another that produces as much
or even more noise and fumes; and
3. whether the generator is a nuisance that can be abated separately from the
rest of the cellular base station.
Furthermore, the Court demonstrated in AC Enterprises, Inc. the extensive
factual considerations of a court before it can arrive at a judgment in an action
for abatement of nuisance:
“Whether or not noise emanating from a blower of the air conditioning units
of the Feliza Building is nuisance is to be resolved only by the court in due
course of proceedings. The plaintiff must prove that the noise is a nuisance
and the consequences thereof. Noise is not a nuisance per se. It may be of
such a character as to constitute a nuisance, even though it arises from the
operation of a lawful business, only if it affects injuriously the health or
comfort of ordinary people in the vicinity to an unreasonable extent. Injury
to a particular person in a peculiar position or of especially sensitive
characteristics will not render the noise an actionable nuisance. In the
conditions of present living, noise seems inseparable from the conduct of
many necessary occupations. Its presence is a nuisance in the popular sense
in which that word is used, but in the absence of statute, noise becomes
actionable only when it passes the limits of reasonable adjustment to the
conditions of the locality and of the needs of the maker to the needs of the
listener. What those limits are cannot be fixed by any definite measure of
quantity or quality; they depend upon the circumstances of the particular case.
They may be affected, but are not controlled, by zoning ordinances. The
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delimitation of designated areas to use for manufacturing, industry or general
business is not a license to emit every noise profitably attending the conduct
of any one of them.
The test is whether rights of property, of health or of comfort are so
injuriously affected by the noise in question that the sufferer is subjected to a
loss which goes beyond the reasonable limit imposed upon him by the
condition of living, or of holding property, in a particular locality in fact
devoted to uses which involve the emission of noise although ordinary care
is taken to confine it within reasonable bounds; or in the vicinity of property
of another owner who, though creating a noise, is acting with reasonable
regard for the rights of those affected by it.
The courts have made it clear that in every case the question is one of
reasonableness. What is a reasonable use of one’s property and whether a
particular use is an unreasonable invasion of another’s use and enjoyment of
his property so as to constitute a nuisance cannot be determined by exact
rules, but must necessarily depend upon the circumstances of each case, such
as locality and the character of the surroundings, the nature, utility and social
value of the use, the extent and nature of the harm involved, the nature, utility
and social value of the use or enjoyment invaded, and the like.
Persons who live or work in thickly populated business districts must
necessarily endure the usual annoyances and of those trades and businesses
which are properly located and carried on in the neighborhood where they
live or work. But these annoyances and discomforts must not be more than
those ordinarily to be expected in the community or district, and which are
incident to the lawful conduct of such trades and businesses. If they exceed
what might be reasonably expected and cause unnecessary harm, then the
court will grant relief.
A finding by the LGU that the noise quality standards under the law have not
been complied with is not a prerequisite nor constitutes indispensable
evidence to prove that the defendant is or is not liable for a nuisance and for
damages. Such finding is merely corroborative to the testimonial and/or other
evidence to be presented by the parties. The exercise of due care by the owner
of a business in its operation does not constitute a defense where,
notwithstanding the same, the business as conducted, seriously affects the
rights of those in its vicinity.35 (Citations omitted.)”
A reading of the RTC Order dated January 16, 2001 readily shows that the
trial court did not take into account any of the foregoing considerations or
tests before summarily dismissing Civil Case No. Br. 23-632-2000. The
reasoning of the RTC that similar cellular base stations are scattered in
heavily populated areas nationwide and are not declared nuisances is
unacceptable. As to whether or not this specific cellular base station of
petitioner is a nuisance to respondents is largely dependent on the particular
factual circumstances involved in the instant case, which is exactly why a
trial for threshing out disputed or contested factual issues is indispensable.
Evidently, it was the RTC which engaged in speculations and unsubstantiated
conclusions.
For the same reasons cited above, without presentation by the parties of
evidence on the contested or disputed facts, there was no factual basis for
declaring petitioner's cellular base station a nuisance and ordering petitioner
to cease and desist from operating the same.
WHEREFORE, premises considered, the instant Petition is PARTIALLY
GRANTED. The Decision dated July 16, 2004 and Resolution dated
December 9, 2004 of the Court of Appeals in CA-G.R. CV No. 71337 are
REVERSED and SET ASIDE. Let the records of the case be REMANDED
to the Regional Trial Court, Branch 23, of Roxas, Isabela, which is
DIRECTED to reinstate Civil Case No. Br. 23-632-2000 to its docket and
proceed with the trial and adjudication thereof with appropriate dispatch in
accordance with this Decision.
SO ORDERED.
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XXIII. Judgment (Rule 36)

1. Consing v. Court of Appeals, G.R. No. 143584, March 10, 2004

Antonio and Soledad draw our attention to the two-page decision of the trial
court penned by Judge Cicero U. Querubin (Judge Querubin). While Judge
Querubin mentioned his factual findings, the legal basis of his ruling is not
set out in the decision. Judge Querubin failed to meet faithfully the
requirement demanded by the Constitution from the courts in rendering their
decisions.

Section 14, Article VIII of the Constitution declares that:

Sec. 14. No decision shall be rendered by any court without expressing
therein clearly and distinctly the facts and the law on which it is based.

No petition for review or motion for reconsideration of a decision of the court

shall be refused due course or denied without stating the legal basis
therefor. (Emphasis supplied)

The court must inform the parties to a case of the legal basis for the courts
decision so that if a party appeals, it can point out to the appellate court the
points of law to which it disagrees.[12] Every judge should know the
constitutional mandate and the rationale behind it. Judge Querubin should
have known the exacting standard imposed on courts by Section 14, Article
VIII of the Constitution and should not have sacrificed the constitutional
standard for brevitys sake.

The failure of the trial court decision to measure up to the standard set by the
Constitution is too gross to ignore as it is in stark contrast to the Court of
Appeals decision. The Court of Appeals decision, while also brief, being only
three pages long, laid down the factual and legal reasons why Antonio
and Soledad are the ones liable to SPCMA, and not PNB. The Court of
Appeals discussion of the merits of this case enabled the parties to pinpoint
the proper issues that we now review.

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2. Heirs of Valdez v. Court of Appeals, G.R. No. 163208, August
13, 2008
The fact that the Ninth Division of the CA committed a monumental error
cannot be erased. But the error was not in the courts intent on what to do with
the forum shopping violation it found. In both resolutions, what is clear is
that the court intended to allow a rectification of the deficiency in Lopez
Resources non-forum shopping certification in view perhaps of what it
perceived to be the merits that the face of the petition showed. Thus, in the
first May 5, 2003 resolution, the CA resolved to dismiss the petition but
without prejudice to its re-filing. In the second resolution, it ordered the filing
of comment by the respondents, with the obligation on the part of Lopez
Resources to rectify the deficiency in its non-forum shopping certification.
conclude that one resolution lapsed to finality while the other did not. In legal
effect, there was effectively no definite resolution that could have lapsed to
finality because of the mistake the court committed. This status continued
until a clarification was made by the issuing court.
Even granting that the first May 5, 2003 Resolution became final and
executory, the rule on immutability of judgment does not apply in cases
where what is to be modified or altered involves:
(a) the correction of clerical errors;
(b) the so-called nunc pro tunc entries which cause no prejudice to any party;
(c) void judgments [such as a dismissal without prejudice that was not
intended to be issued] and those where circumstances transpire after the
finality that render the execution or enforcement, as in this case, of the
judgment unjust or inequitable.[20]

We have no doubt that it was within the CAs power and prerogative to issue To be sure, the rule does not apply in cases where a supervening event - such
what either resolution decreed without committing an abuse of discretion as the mistake undisputably committed by the court (i.e., the unintended
amounting to lack or excess of jurisdiction. release of one of the resolutions, thus resulting in the conflict and confusion)
- took place.[21]
Because the mistake was on the part of the court, it is axiomatic that none of
the parties should suffer for the mistake. This is particularly true given that
the parties all acted pursuant to the resolution they respectively received. To
be sure, Lopez Resources could have filed a motion for reconsideration upon
its receipt of the resolution of dismissal on May 9, 2003. The option it took,
however, was well within the legitimate choices it had and could not be
legally faulted; it accepted the dismissal and chose to re-file its petition, this
time supplying the deficiency that tainted its first petition. We note in this
regard that the re-filing was done onMay 23, 2003, i.e., prior to the finality
of the resolution of dismissal. This prompt action indicates to us that while
the order of dismissal technically lapsed to finality, such finality is in fact
legally immaterial since Lopez Resources immediately acted on the condition
that attended the dismissal, i.e. to re-file the petition because the dismissal
was without prejudice.By this act, Lopez Resources effectively kept its
petition legally alive.

To look at the matter from another perspective, the issuance of two

conflicting resolutions one for dismissal, the other for the continuation of the
case, with one canceling out the other can only mean that no definite, specific
determination was made by the court; at least, there was uncertainty on what
the court really intended to do. Under this situation, we find it fallacious to

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3. Intramuros Tennis v. PTA, G.R. No. 135630, September 26,
2000

Addressing petitioners argument that the dispositive portion of the RTC order
dated August 5, 1997 only provides that private respondents motion to
dismiss is granted and does not order private respondents to regain possession
of the Victoria Tennis Courts, suffice it to say that although as a rule,
execution must conform to the dispositive portion of a decision, the other
parts of the decision may be resorted to in order to determine the ratio
decidendi of the court.[26] In fact, a closer look at the RTC order shows that
the dispositive portion consists of two paragraphs, thus ---
“Accordingly, the writ of preliminary injunction is hereby lifted
and defendant is entitled to possess the Victoria Tennis Court.

WHEREFORE, premises considered, the motion to dismiss filed by PTA is

hereby granted. The bond posted by plaintiff is hereby declared
released. (Underscoring supplied)”[27]

Thus, petitioners representation that the RTC order did not intend to award
possession to private respondents of the disputed property as a result of the
lifting of the preliminary injunction is blatantly without basis.

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4. Polymer Rubber Corporation v. Salamuding, 2013

To hold Ang personally liable at this stage is quite unfair. The judgment of
the LA, as affirmed by the NLRC and later by the SC had already long
become final and executory. It has been held that a final and executory
judgment can no longer be altered. The judgment may no longer be modified
in any respect, even if the modification is meant to correct what is perceived
to be an erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by the
highest Court of the land.33 "Since the alias writ of execution did not conform,
is different from and thus went beyond or varied the tenor of the judgment
which gave it life, it is a nullity. To maintain otherwise would be to ignore
the constitutional provision against depriving a person of his property without
due process of law."34

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5. Commissioner of Internal Revenue v. Fortune Tobacco
Corporation, 2013

Petitioner FTC posits that the CTA should have issued the desired additional
writ of execution in CTA Case No. 6612 since the body of the Decision of
this Court in G.R. Nos. 167274-75 encompasses both CA G.R. Case No.
80675 which covers CTA Case Nos. 6365 and 6383 and CA G.R. Case No.
83165 which embraces CTA Case No. 6612. While the fallo of the Decision
dated July 21, 2008 in G.R. Case Nos. 167274-75 did not indeed specifically
mention CA G.R. SP No. 83165, petitioner FTC would nonetheless maintain
that such a slip is but an inadvertent omission in the fallo. For the text of the
July 21, 2008 Decision, FTC adds, clearly reveals that said CA case was
intended to be included in the disposition of the case.

After a scrutiny of the body of the aforesaid July 21, 2008 Decision, the Court
finds it necessary to render a judgment nunc pro tunc and address an error in
the fallo of said decision. The office of a judgment nunc pro tunc is to record
some act of the court done at a former time which was not then carried into
the record, and the power of a court to make such entries is restricted to
placing upon the record evidence of judicial action which has actually been
taken.9 The object of a judgment nunc pro tunc is not the rendering of a new
judgment and the ascertainment and determination of new rights, but is one
placing in proper form on the record, that has been previously rendered, to
make it speak the truth, so as to make it show what the judicial action really
was, not to correct judicial errors, such as to render a judgment which the
court ought to have rendered, in place of the one it did erroneously render,
not to supply non-action by the court, however erroneous the judgment may
have been.10 The Court would thus have the record reflect the deliberations
and discussions had on the issue. In this particular case it is a correction of a
clerical, not a judicial error. The body of the decision in question is clear
proof that the fallo must be corrected, to properly convey the ruling of this
Court.

We thus declare that the dispositive portion of said decision should be

clarified to include CA G.R. SP No. 83165 which affirmed the December
4,2003 Decision of the Court of Tax Appeals in CTA Case No. 6612,

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XXIV. Motion for Reconsideration and New Trial (Rule 37)
1. Fernandez v. Court of Appeals, G.R. No. 131094, May 16, 2005
The consequential question is: what is the legal effect of the filing by
Fernandez of a motion for new trial before the trial court? Assuming that
Fernandez filed his motion for new trial on time, we hold that the trial court
still had jurisdiction to rule on the matter as the jurisdiction it originally
acquired had not yet been lost.
2. Republic v. Peralta, G.R. No. 150327, June 18, 2003
The requirements entombed in Sections 4 and 5 of Rule 15 of the Rules of
Court are mandatory and non-compliance therewith is fatal and renders the
motion pro forma;a worthless piece of paper which the clerk of court has no
right to receive and which the court has no authority to act upon. In cases of
motions for a new trial or for the reconsideration of a judgment, the running
of the period for appeal is not tolled by the mere filing or pendency of said
motion.
The need, therefore, to determine once and for all whether the lands subject
of petitionerÊs reversion efforts are foreshore lands constitutes good and
sufficient cause for relaxing procedural rules and granting the third and fourth
motions for extension to file appellantÊs brief. PetitionerÊs appeal presents
an exceptional circumstance impressed with public interest and must then be
given due course.
3. People v. Odilao, April 14, 2004, G.R. No. 155451
However, it cannot be avoided that we remind the Court of Ap-peals of the
provisions of Section 15, Rule VI of the 2002 Internal Rules of the Court of
Appeals (effective August 22, 2002), which explicitly provides thus:
SEC. 15. Effect of Filing an Appeal in the Supreme Court.·No motion for
reconsideration or rehearing shall be acted upon if the movant has previously
filed in the Supreme Court a petition for review on certiorari or a motion for
extension of time to file such petition. If such petition or motion is
subsequently filed, the motion for reconsideration pending in this Court shall
be deemed abandoned.
4. Neypes v. Court of Appeals, G.R. No. 141524, September 14,
2005
To standardize the appeal periods provided in the Rules and to afford litigants
fair opportunity to appeal their cases, the Court deems it practical to allow a
fresh period of 15 days within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of the order dismissing a motion
for a new trial or motion for reconsideration.
5. Tan v. Court of Appeals, G.R. No. 130314, September 22, 1998
Liberal construction of this rule 15 has been allowed by this Court in the
following cases:
(1) where a rigid application will result in a manifest failure or miscarriage
of justice, especially if a party successfully shows that the alleged defect in
the questioned final and executory judgment is not apparent on its face or
from the recitals contained therein;
(2) where the interest of substantial justice will be served;
(3) where the resolution of the motion is addressed solely to the sound and
judicious discretion of the court; and
(4) where the injustice to the adverse party is not commensurate with the
degree of his thoughtfulness in not complying with the procedure prescribed.
Petitioner has failed to demonstrate that the case at bar falls under any of these
exceptions.
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XXV. Petition for Relief from Judgment (Rule 38)
1. Alaban v. Court of Appeals, G.R. No.156021, September 23,
2005
A motion for new trial or reconsideration and a petition for relief from
judgment are remedies available only to parties in the proceedings where the
assailed judgment is rendered. In fact, it has been held that a person who was
never a party to the case, or even summoned to appear therein, cannot avail
of a petition for relief from judgment.
3. Purcon v. MRM Philippines et al., G.R. No. 182718, September
26, 2008
A petition for relief from judgment is not an available remedy in the Supreme
Court·it is not included in the list of Rule 56 cases originally cognizable by
the Supreme Court.
While Rule 38 uses the phrase „any court,‰ it refers only to
Municipal/Metropolitan and Regional Trial Courts.

An action for annulment of judgment is a remedy in law independent of the

case where the judgment sought to be annulled was rendered. The purpose of
such action is to have the final and executory judgment set aside so that there
will be a renewal of litigation. It is resorted to in cases where the ordinary
remedies of new trial, appeal, petition for relief from judgment, or other
appropriate remedies are no longer available through no fault of the
petitioner, and is based on only two grounds: extrinsic fraud, and lack of
jurisdiction or denial of due process. A person need not be a party to the
judgment sought to be annulled, and it is only essential that he can prove his
allegation that the judgment was obtained by the use of fraud and collusion
and he would be adversely affected thereby.

Thus, it has been held that a proceeding for the probate of a will is one in rem,
such that with the corresponding publication of the petition the courtÊs
jurisdiction extends to all persons interested in said will or in the settlement
of the estate of the decedent.

2. Samartino v. Raon, G.R. No. 131482, July 3, 2002

The period within which to file a petition for relief should have been reckoned
from the date petitioner learned of the judgment of the Regional Trial Court.
It should not have been counted from the date of the Municipal Trial CourtÊs
decision because, precisely, petitioner appealed the same. It was the Regional
Trial CourtÊs decision that became final and, hence, was the proper subject
of the petition for relief from judgment. It is axiomatic that a petition for relief
is only available against a final and executory judgment.

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XXVI. Execution of Judgment (Rule 39)
1. Capa v. Court of Appeals, G.R. No. 160082, September 19, 2006
The issue for resolution is whether the CA committed grave abuse of
discretion when it did not act on petitioners Motion to Deny Third-Party
Claim with Motion to Admit Claim for Damages on the ground that the same
should have been filed with the Regional Trial Court of Cebu, Branch
VIII, Cebu City.
Clearly, as long as the motion for execution pending appeal is filed within the
period for perfecting the appeal and prior to the transmittal of the records to
the CA, the trial court may order execution pending appeal upon good reasons
to be stated in the Order granting execution pending appeal. The trial court
granted petitioners motion for execution pending appeal and issued the writ
of execution commanding sheriff Belarmino to levy the properties of
United Vismin.
However, a third party-claim was filed by Raco through her attorney-in-
fact Tolosa pursuant to Section 16, Rule 3 of the Rules of Court which
provides:
Sec. 16. Proceedings where property claimed by third person. - If the
property levied on is claimed by any person other than the judgment obligor
or his agent, and such person makes an affidavit of his title thereto or right to
the possession thereof, stating the grounds of such right or title, and serve the
same upon the officer making the levy and a copy thereof upon the
judgment obligee, the officer shall not be bound to keep the property, unless
such judgment obligee, on demand of the officer, files a bond approved by
the court to indemnify the third-party claimant in a sum not less than the value
of the property levied on. In case of disagreement as to such value, the same
shall be determined by the court issuing the writ of execution. No claim for
damages for the taking or keeping of the property may be enforced against
the bond unless the action therefor is filed within one hundred twenty days
(120) days from the date of the filing of the bond.
The officer shall not be liable for damages for the taking or keeping of the
property, to any third-party claimant if such bond is filed.
xxxx
In this case, Raco availed of the remedy known as terceria,[14] by serving on
the officer making the levy an affidavit of his title and a copy thereof upon
petitioners. Upon receipt of such affidavit, sheriff Belarmino who is not
bound to keep the properties because of such third party claim, notified
petitioners of such claim and required them to post an indemnity bond in the
amount of P2,700,000.00 on February 4, 2002 to answer for any liability he
may incur by reason of such execution. The matter of the invalidity of the
affidavit of the third-party claimant was never raised by petitioners in
the trial court which could have still ruled on the same since the records
were still with it at the time such third party claim was filed. Moreover,
petitioners even filed an indemnity bond in the amount of P1,400,000.00 with
the Office of the Sheriff on February 18, 2002.
As the appeal of private respondents United Vismin and Spouses Yhapon had
already been perfected and the records were elevated to the CA on February
6, 2002, petitioners then filed with the CA a motion seeking for the approval
of the sheriffs indemnity bond they posted on February 18, 2002. The CA
then held in abeyance the action therein pending submission of a certified true
copy of a surety bond and a certification from the Supreme Court that the
surety bond is not black-listed. Subsequently, petitioners motion to approve
bond in a Resolution dated October 1, 2001 was denied for failure to comply
with such directive. Despite motions for extension of time to look for a
qualified and sufficient indemnity bond affordable, petitioners failed to do so
which prompted the CA to deny the same.
Petitioners then filed a Motion to Deny Third-Party Claim with Motion to
Admit Claim for Damages which is a complete turn around from their motion
to approve indemnity bond. The CA did not commit grave abuse of
discretion in not acting on the same since the invalidity of the affidavit of
third-party claim should have been raised at the earliest opportunity
which is in the trial court. Petitioners could have then moved for
the quashal of the same, thus they could not now invoke the jurisdiction of
the CA to rule on the same when they in fact had already waived the alleged
defect in the affidavit when they sought from the CA the approval of the
indemnity bond they posted in the trial court.
We likewise find no basis for the petition for mandamus filed by petitioners
to compel the CA to act on petitioners Motion to Admit Claim for damages
as it had no jurisdiction to do so.
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The second paragraph of Section 16, Rule 39 of the Rules of Court which is
invoked by petitioners to support their claim provides:
x x x Nothing herein contained shall prevent such claimant or any third person
from vindicating his claim to the property in a separate action, or prevent the
judgment obligee from claiming damages in the same or separate action
against a third-party claimant who filed a frivolous or plainly spurious claim.

Clearly, a third party claimant or any third person may vindicate his claim to
his property wrongfully levied by filing a proper action which is distinct and
separate from that in which the judgment is being enforced. Such action
would have for its object the recovery of the possession of the property seized
by the sheriff, as well as damages resulting from the allegedly wrongful
seizure and detention thereof despite the third-party claim; and it may be
brought against the sheriff, of course, and such other parties as may be alleged
to have colluded with the sheriff in the supposedly wrongful execution
proceedings, such as the judgment creditor himself.[15]

The same paragraph also provides a remedy to a judgment obligee when a

frivolous and plainly spurious claim was filed by a third-party claimant, i.e.,
to file his claim for damages in the same court where the third-party claimant
filed his third-party claim or to file a separate action. Thus, petitioners claim
for damages must be filed in the trial court, whether in the same case where
a third-party claim has been filed or in a separate action for damages which
petitioners may institute. This is so in order to require the filing of proper
pleadings and to hold trial so as to give the parties the chance to submit their
respective evidence.

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2. Navaros v. Comelec, G.R. No. 157957, September 18, 2003
To grant execution pending appeal in election protest cases, the following
requisites must concur:
(1) there must be a motion by the prevailing party with notice to the adverse
party;
(2) there must be good reasons for the execution pending appeal; and
(3) the order granting execution pending appeal must state the good
reasons.[23]
Petitioner Navarosa concedes respondent Estos compliance with the first and
third requisites. What she contests is the trial courts finding that there are
good reasons to order discretionary execution of its decision.
In Ramas v. Commission on Elections,[24] the Court, after reviewing
pertinent jurisprudence, summarized the circumstances qualifying as good
reasons justifying execution pending appeal, thus:
In a nutshell, the following constitute good reasons, and a combination of two
or more of them will suffice to grant execution pending appeal:
(1) the public interest involved or the will of the electorate;
(2) the shortness of the remaining portion of the term of the contested office;
and
(3) the length of time that the election contest has been pending.
The trial court in the present case, relying on cases[25] reviewed
in Ramas, invoked two good reasons to justify its order allowing execution
pending appeal. First, the order will give substance and meaning to the
peoples mandate. Second, more than 10 months or nearly 1/3 of the 3-year
term of the office in question had already lapsed. The COMELEC found these
good reasons sufficient. Being consistent with Ramas, we find no grave abuse
of discretion in the ruling of the trial court or of the COMELEC.
Petitioner Navarosas invocation of Camlian v. Commission on
Elections[26] is unavailing. In Camlian, the COMELEC ruled that
circumstances such as public interest in the true outcome of the elections[;]
that the protestee illegally manufactured votes[;] and that the appeal was
interposed for delay do not suffice to justify execution pending appeal. On
appeal, we sustained the COMELEC, noting that not every invocation of
public interest with x x x reference to the will of the electorate can be
appreciated as a good reason especially so if the same appears to be self-
serving and has not been clearly established. The Court further pointed out
that the protestant failed to substantiate his claim that the appeal is dilatory
as it in fact assails the trial courts ruling. These circumstances are absent in
the present case, precluding Camlians application.
Section 3 of Rule 39 Not Applicable
To Election Protest Cases
Unlike the Election Code of 1971,[27] which expressly provided for execution
pending appeal of trial courts rulings in election protests, the present election
laws are silent on such remedy. Nevertheless, Section 2, Rule 39 (Section 2)
of the Rules of Court (now 1997 Rules of Civil Procedure) applies in
suppletory character to election cases, thus allowing execution pending
appeal in the discretion of the court.
Thus, a primordial public interest to obviate a hollow victory for the duly
elected candidate as determined by the trial court lies behind the present rule
giving suppletory application to Section 2. Only a more compelling contrary
policy consideration can prevent the suppletory application of Section 2. In
insisting that the simple expedient of posting a supersedeas bond can stay
execution pending appeal, petitioner Navarosa neither claims nor offers a
more compelling contrary policy consideration. Instead, she merely contends
that Section 3 of Rule 39 (Section 3) applies also in a suppletory character
because its Siamese twin[30] provision, Section 2, is already being so applied.
Such simplistic reasoning both ignores and negates the public interest
underlying Section 2s application. We cannot countenance such argument.
Furthermore, a supersedeas bond under Section 3 cannot fully protect the
interests of the prevailing party in election protest cases. Section 3 provides:
“Stay of discretionary execution. Discretionary execution issued under the
preceding section may be stayed upon approval by the proper court of a
sufficient bond, filed by the party against whom it is directed, conditioned
upon the performance of the judgment or order allowed to be executed in case
it shall be finally sustained in whole or in part. The bond thus given may be
proceeded against on motion with notice to the surety. (Emphasis supplied)”
A supersedeas bond secures the performance of the judgment or order
appealed from in case of its affirmation.[31] Section 3 finds application in
ordinary civil actions where the interest of the prevailing party is capable of
pecuniary estimation, and consequently, of protection, through the filing of a
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supersedeas bond. Thus, the penultimate sentence of Section 3 states: [T]he
bond thus given may be proceeded against on motion with notice to the
surety. Consequently, it finds no application in election protest cases where
judgments invariably include orders which are not capable of pecuniary
estimation such as the right to hold office and perform its functions.
3. International School v. Court of Appeals, G.R. No. 131109, June
29, 1999
I.
Coming now to the issue of the propriety of a special civil action
for certiorari filed before the appellate court to assail an order for execution
pending appeal, this issue has been squarely addressed in Valencia vs. Court
of Appeals[19] as follows:
xxx, we have ruled in Jaca, et al. vs. Davao Lumber Company, et al. that:
xxx Although Section 1, Rule 65 of the Rules of Court provides that the
special civil action for certiorari may only be invoked when `there is no
appeal, nor any plain, speedy and adequate remedy in the (ordinary) course
of law, this rule is not without exception. The availability of the ordinary
course of appeal does not constitute sufficient ground to prevent a party from
making use of the extraordinary remedy of certiorari where appeal is not an
adequate remedy or equally beneficial, speedy and sufficient. It is the
inadequacy-not the mere absence of all other legal remedies and the danger
of failure of justice without the writ that usually determines the propriety of
certiorari.
Thus, we held therein, and we so reiterate for purposes of the case at bar, that
certiorari lies against an order granting execution pending appeal where the
same is not founded upon good reasons. Also, the fact that the losing party
had appealed from the judgment does not bar the certiorari action filed in
respondent court as the appeal could not be an adequate remedy from such
premature execution.
That petitioner could have resorted to a supersedeas bond to prevent
execution pending appeal, as suggested by the two lower courts, is not to be
held against him. The filing of such bond does not entitle him to the
suspension of execution as a matter of right. It cannot, therefore, be
categorically considered as a plain, speedy and adequate remedy. Hence, no
rule requires a losing party so circumstanced to adopt such remedy in lieu or
before availment of other remedial options at hand.
Furthermore, a rational interpretation of Section 3, Rule 39 should be that the
requirement for a supersedeas bond presupposes that the case presents a
presumptively valid occasion for discretionary execution. Otherwise, even if
no good reason exists to warrant advance execution, the prevailing party
could unjustly compel the losing party to post a supersedeas bond through the
simple expedient of filing a motion for, and the trial court improvidently
granting, a writ of execution pending appeal although the situation is violative
of Section 2, Rule 39. This could not have been the intendment of the rule,
hence we give our imprimatur to the propriety of petitioners action for
certiorari in respondent court.[20]
Verily, a petition for certiorari lies against an order granting execution
pending appeal where the same is not founded upon good reasons.
II.
It must be stressed that private respondents-spouses motion/application for
an execution pending appeal was premised on the following reasons: that the
appeal was being taken for purpose of delay and that they are filing a bond. In
granting the motion for the exceptional writ over the strong opposition of the
ISM, the trial court adopted by reference the said grounds adduced by the
spouses Torralba in their motion in the first order dated June 19, 1996;[21] and
expressly reiterated the same grounds in the order denying the motion for
reconsideration dated August 27, 1996.[22]
In upholding the writ of execution pending appeal, the Court of Appeals
observed that the lower court had, prior to its issuance, duly noted the
presence of the circumstances laid down by Section 2, Rule 39 of the Rules
of Court,[23] allowing execution as an exception, or pending appeal, even
before final judgment, to wit:
(a) There must be a motion by the prevailing party with notice to the adverse
party;
(b) There must be good reasons for issuing the execution; and
(c) The good reasons must be stated in a special order.[24]
Likewise, the Court of Appeals accepted as `good reasons that ISMs appeal
appears to be dilatory in view of its virtual admission of fault when it adopted
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the project Code Red only after the death of plaintiffs-spouses Torralbas son,
and the delay of the case which already affected plaintiffs spouses Torralbas
financially.

In fine, the rule is now settled that the mere filing of a bond by the
successful party is not a good reason for ordering execution pending
appeal, as a combination of circumstances is the dominant consideration
which impels the grant of immediate execution, the requirement of a
bond is imposed merely as an additional factor, no doubt for the
protection of the defendants creditor.[30] Since we have already ruled that
the reason that an appeal is dilatory does not justify execution pending appeal,
neither does the filing of a bond, without anything more, justify the
same. Moreover, ISM could not be faulted for its withdrawal of its
supersedeas bond inasmuch as the lower court granted the execution pending
appeal and rejected its offer of supersedeas bond.

Finally, we note that writ of execution pending appeal covered the moral and
exemplary damages adjudged by the lower court against ISM. In this regard,
we likewise reproduce what was said in Radio Communications of the
Philippines, Inc. (RCPI) vs. Lantin, et al.[31] that awards for moral and
exemplary damages cannot be the subject of execution pending appeal,
under the following rationale:

xxx The execution of any award for moral and exemplary damages is
dependent on the outcome of the main case. Unlike the actual damages for
which the petitioners may clearly be held liable if they breach a specific
contract and the amounts of which are fixed and certain, liabilities with
respect to moral and exemplary damages as well as the exact amounts remain
uncertain and indefinite pending resolution by the Intermediate Appellate
Court and eventually the Supreme Court. The existence of the factual bases
of these types of damages and their causal relation to the petitioners act will
have to be determined in the light of errors on appeal. It is possible that the
petitioners, after all, while liable for actual damages may not be liable for
moral and exemplary damages. Or as in some cases elevated to the Supreme
Court, the awards may be reduced.

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4. Manacop v. Equitable Bank, G.R. No. 162814, August 25, 2005
The general rule is that only judgments which have become final and
executory may be executed.[52] However, discretionary execution of appealed
judgments may be allowed under Section 2 (a) of Rule 39 of the Revised
Rules of Civil Procedure upon concurrence of the following requisites: (a)
there must be a motion by the prevailing party with notice to the adverse
party; (b) there must be a good reason for execution pending appeal; and (c)
the good reason must be stated in a special order.[53]
The yardstick remains the presence or the absence of good reasons
consisting of exceptional circumstances of such urgency as to outweigh
the injury or damage that the losing party may suffer, should the
appealed judgment be reversed later.[54] Since the execution of a judgment
pending appeal is an exception to the general rule, the existence of good
reasons is essential.[55]
In the case at bar, petitioners insist that execution pending appeal is justified
because respondent insurance companies admitted their liabilities under the
insurance contracts and thus have no reason to withhold payment.
We are not persuaded. The fact that the insurance companies admit their
liabilities is not a compelling or superior circumstance that would
warrant execution pending appeal. On the contrary, admission of their
liabilities and willingness to deliver the proceeds to the proper party militate
against execution pending appeal since there is little or no danger that the
judgment will become illusory.
As held in BF Corporation v. Edsa Shangri-la Hotel:[56]
... it is not for the trial judge to determine the merit of a decision he rendered
as this is the role of the appellate court. Hence, it is not within competence of
the trial court, in resolving a motion for execution pending appeal, to rule that
the appeal is patently dilatory and rely on the same as basis for finding good
reasons to grant the motion. Only an appellate court can appreciate the
dilatory intent of an appeal as an additional good reason in upholding an
order for execution pending appeal...[57]
Lastly, petitioners assert that Lavines financial distress is sufficient reason to
order execution pending appeal. Citing Borja v. Court of Appeals,[58] they
claim that execution pending appeal may be granted if the prevailing party is
already of advanced age and in danger of extinction.
Borja is not applicable to the case at bar because its factual milieu is different.
In Borja, the prevailing party was a natural person who, at 76 years of age,
may no longer enjoy the fruit of the judgment before he finally passes
away.[59] Lavine, on the other hand, is a juridical entity whose existence
cannot be likened to a natural person. Its precarious financial condition is
not by itself a compelling circumstance warranting immediate execution
and does not outweigh the long standing general policy of enforcing only
final and executory judgments.[60]

There is likewise no merit in petitioners contention that the appeals are merely
dilatory because, while the insurance companies admitted their liabilities, the
matter of how much is owing from each of them and who is entitled to the
same remain unsettled. It should be noted that respondent insurance
companies are questioning the amounts awarded by the trial court for being
over and above the amount ascertained by the Office of the Insurance
Commission. There are also three parties claiming the insurance proceeds,
namely: petitioners, Equitable Bank, and Lavine as represented by the group
of Chandru.

Besides, that the appeal is merely dilatory is not a good reason for
granting execution pending appeal.

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5. Curata v. PPA, G.R. No. 154211, June 22, 2009
The genuine issue to be resolved is whether or not execution pending appeal
is applicable to expropriation proceedings.
The Court rules that discretionary execution of judgments pending
appeal under Sec. 2(a) of Rule 39 does not apply to eminent domain
proceedings.
As early as 1919 in Visayan Refining Co. v. Camus and Paredes,[100] the Court
held:
When the Government is plaintiff the judgment will naturally take the form
of an order merely requiring the payment of the award as a condition
precedent to the transfer of the title, as a personal judgment against the
Government could not be realized upon execution.
In Commissioner of Public Highways v. San Diego,[101] no less than the
eminent Chief Justice Claudio Teehankee explained the rationale behind the
doctrine that government funds and properties cannot be seized under a writ
of execution, thus:
The universal rule that where the State gives its consent to be sued by private
parties either by general or special law, it may limit claimants action only up
to the completion of proceedings anterior to the stage of execution and that
the power of the Courts ends when the judgment is rendered, since
government funds and properties may not be seized under writs of execution
or garnishment to satisfy such judgments, is based on obvious considerations
of public policy. Disbursements of public funds must be covered by the
corresponding appropriation as required by law. The functions and public
services rendered by the State cannot be allowed to be paralyzed or disrupted
by the diversion of public funds from their legitimate and specific objects, as
appropriated by law.
PPAs monies, facilities and assets are government properties. Ergo, they are
exempt from execution whether by virtue of a final judgment or pending
appeal.
PPA is a government instrumentality charged with carrying out governmental
functions through the management, supervision, control and regulation of
major ports of the country. It is an attached agency of the Department of
Transportation and Communication pursuant to PD 505.
This Courts disquisition in Manila International Airport Authority v. Court
of Appeals[102]ruling that MIAA is not a government-owned and/or controlled
corporation (GOCC), but an instrumentality of the National Government and
thus exempt from local taxation, and that its real properties are owned by the
Republic of the Philippinesis instructive. Therein we found that MIAA is
neither a stock or a non-stock corporation, for its capital is not divided into
shares nor does it have members. Moreover, the airport lands and buildings
it administers are owned by the Republic, which certainly takes them outside
the commerce of man and makes MIAA a mere trustee thereof. These
findings are squarely applicable to PPA, as it is similarly situated as
MIAA. First, PPA is likewise not a GOCC for not having shares of stocks or
members. Second, the docks, piers and buildings it administers are likewise
owned by the Republic and, thus, outside the commerce of man. Third, PPA
is a mere trustee of these properties. Hence, like MIAA, PPA is clearly a
government instrumentality, an agency of the government vested with
corporate powers to perform efficiently its governmental functions.[103]
Therefore, an undeniable conclusion is that the funds of PPA partake of
government funds, and such may not be garnished absent an allocation by its
Board or by statutory grant. If the PPA funds cannot be garnished and its
properties, being government properties, cannot be levied via a writ of
execution pursuant to a final judgment, then the trial court likewise cannot
grant discretionary execution pending appeal, as it would run afoul of the
established jurisprudence that government properties are exempt from
execution. What cannot be done directly cannot be done indirectly.
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6. Garcia v. PAL, G.R. No. 164856, January 20, 2009
In Pioneer Texturing Corp. v. NLRC,[18] which was cited inPanuncillo v. CAP
Philippines, Inc.,[19] the Court observed:
x x x The provision of Article 223 is clear that an award [by the Labor Arbiter]
for reinstatement shall be immediately executory even pending
appeal and the posting of a bond by the employer shall not stay the
execution for reinstatement. The legislative intent is quite obvious, i.e., to
make an award of reinstatement immediately enforceable, even pending
appeal. To require the application for and issuance of a writ of
execution as prerequisites for the execution of a reinstatement award would
certainly betray and run counter to the very object and intent of Article
223, i.e., the immediate execution of a reinstatement order.
The reason is simple. An application for a writ of execution and its issuance
could be delayed for numerous reasons. A mere continuance or postponement
of a scheduled hearing, for instance, or an inaction on the part of the Labor
Arbiter or the NLRC could easily delay the issuance of the writ thereby
setting at naught the strict mandate and noble purpose envisioned by Article
223. In other words, if the requirements of Article 224 [including the issuance
of a writ of execution] were to govern, as we so declared in Maranaw, then
the executory nature of a reinstatement order or award contemplated by
Article 223 will be unduly circumscribed and rendered ineffectual. In
enacting the law, the legislature is presumed to have ordained a valid and
sensible law, one which operates no further than may be necessary to achieve
its specific purpose. Statutes, as a rule, are to be construed in the light of the
purpose to be achieved and the evil sought to be remedied. x x x In
introducing a new rule on the reinstatement aspect of a labor decision under
Republic Act No. 6715, Congress should not be considered to be indulging
in mere semantic exercise. x x x[20] (Italics in the original; emphasis and
underscoring supplied)
The Court reaffirms the prevailing principle that even if the order of
reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on
the part of the employer to reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal by the higher court.[21]
It settles the view that the Labor Arbiter's order of reinstatement is
immediately executory and the employer has to either re-admit them to work
under the same terms and conditions prevailing prior to their dismissal, or to
reinstate them in the payroll, and that failing to exercise the options in the
alternative, employer must pay the employees salaries.[22]
After the labor arbiters decision is reversed by a higher tribunal, the
employee may be barred from collecting the accrued wages, if it is shown
that the delay in enforcing the reinstatement pending appeal was without
fault on the part of the employer.
The test is two-fold:
(1) there must be actual delay or the fact that the order of reinstatement
pending appeal was not executed prior to its reversal; and
(2) the delay must not be due to the employers unjustified act or omission.
If the delay is due to the employers unjustified refusal, the employer may still
be required to pay the salaries notwithstanding the reversal of the Labor
Arbiters decision.
Case law recognizes that unless there is a restraining order, the
implementation of the order of reinstatement is ministerial and
mandatory.[32] This injunction or suspension of claims by legislative
fiat[33] partakes of the nature of a restraining order that constitutes a legal
justification for respondents non-compliance with the reinstatement
order. Respondents failure to exercise the alternative options of actual
reinstatement and payroll reinstatement was thus justified. Such being the
case, respondents obligation to pay the salaries pending appeal, as the normal
effect of the non-exercise of the options, did not attach.
While reinstatement pending appeal aims to avert the continuing threat or
danger to the survival or even the life of the dismissed employee and his
family, it does not contemplate the period when the employer-corporation
itself is similarly in a judicially monitored state of being resuscitated in order
to survive.
The parallelism between a judicial order of corporation rehabilitation as a
justification for the non-exercise of its options, on the one hand, and a claim
of actual and imminent substantial losses as ground for retrenchment, on the
other hand, stops at the red line on the financial statements. Beyond the
analogous condition of financial gloom, as discussed by Justice Leonardo
Quisumbing in his Separate Opinion, are more salient distinctions. Unlike the
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ground of substantial losses contemplated in a retrenchment case, the state of
corporate rehabilitation was judicially pre-determined by a competent court
and not formulated for the first time in this case by respondent.

More importantly, there are legal effects arising from a judicial order placing
a corporation under rehabilitation. Respondent was, during the period
material to the case, effectively deprived of the alternative choices under
Article 223 of the Labor Code, not only by virtue of the statutory injunction
but also in view of the interim relinquishment of management control to give
way to the full exercise of the powers of the rehabilitation receiver. Had there
been no need to rehabilitate, respondent may have opted for actual physical
reinstatement pending appeal to optimize the utilization of resources. Then
again, though the management may think this wise, the rehabilitation receiver
may decide otherwise, not to mention the subsistence of the injunction on
claims.

In sum, the obligation to pay the employees salaries upon the employers
failure to exercise the alternative options under Article 223 of the Labor Code
is not a hard and fast rule, considering the inherent constraints of corporate
rehabilitation.

Avila 4B | 2016
7. Arcenas v. Court of Appeals, G.R. No. 150233, February 16,
2005
I.
In Civil Case No. 35349, the judgment of the trial court ordered only
petitioners co-defendant Emilio Espino to return the barge MV Sta. Lucia I
to private respondent Jose de la Riva and to pay P 48,000.00 a month as
unrealized profit from February 3, 1980 or until June 18, 1980. The said
judgment absolved petitioner from any liability insofar as the barge is
concerned but found him jointly liable to private respondent and Antonio Sy,
Sr., for moral and exemplary damages.
On the other hand, the revived judgment now subject of this case,
substantially modified the original judgment by directing petitioner to pay
private respondent the sum of P171,022.00 representing double the value of
the barge; P10,000.00 as moral and exemplary damages; and 15% of the
amount recoverable by way of attorneys fees.
These new monetary awards can not be allowed since they were not adjudged
in the original judgment which had long become final and executory. For, it
is a fundamental rule that when a final judgment becomes executory, it
thereby becomes immutable and unalterable. The judgment may no longer be
modified in any respect, even if the modification is meant to correct what is
perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the court rendering it or
by the highest Court of the land.
The only recognized exceptions are the correction of clerical errors or
the making of so-called nunc pro tunc entries which cause no prejudice
to any party, and, of course, where the judgment is void.[16]
Any amendment or alteration which substantially affects a final and
executory judgment is null and void for lack of jurisdiction, including the
entire proceedings held for that purpose.[17]
The purpose of the action for revival of a judgment is not to modify the
original judgment subject of the action but is merely to give a creditor a new
right of enforcement from the date of revival.[18] The rule seeks to protect
judgment creditors from wily and unscrupulous debtors who, in order to
evade attachment or execution, cunningly conceal their assets and wait until
the statute of limitation sets in.[19]
II.
As pointed out by the appellate court, an action for revival of judgment is a
new and independent action, different and distinct from either the recovery
of property case or the reconstitution case, wherein the cause of action is the
decision itself and not the merits of the action upon which the judgment
sought to be enforced is rendered.[15]
However, revival of judgment is premised on the assumption that the decision
to be revived, either by motion or by independent action, is already final and
executory.[16] Hence, the need to make a determination of whether or not the
decision in Civil Case No. 7281 has indeed become final and executory. For
if the subject decision has already reached finality, then the conclusion of the
appellate court is correct that the dismissal of the reconstitution case would
not prevent respondents from reviving and thereafter executing the said
decision.
A decision issued by a court is final and executory when such decision
disposes of the subject matter in its entirety or terminates a particular
proceeding or action, leaving nothing else to be done but to enforce by
execution what has been determined by the court,[17] such as when after the
lapse of the reglementary period to appeal, no appeal has been perfected. In
the case at bar, it is an undisputed fact that when the records of the original
case were destroyed in the fire there was a pending motion for reconsideration
of the disapproval of the record on appeal filed by petitioner. A motion for
reconsideration has the effect of suspending the statutory period after which
an order, decision, or judgment, in connection with which said motion was
filed, becomes final. In effect, such motion for reconsideration has prevented
the decision from attaining finality.
The findings of the Court of Appeals that notwithstanding the pendency of
the motion for reconsideration, the decision in Civil Case No. 7281 has
become final and executory by reason of laches cannot be sustained. As
discussed above, the doctrine of laches cannot operate to lend finality to the
decision since petitioners failure to pursue the motion for reconsideration was
not due to her negligence or abandonment, but was rather brought upon by
the dismissal of the reconstitution case. Therefore, it is clear that the case has
not reached finality at the time the records of the case were burnt.
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8. RCBC v. Serra, 2013

The Rules of Court provide that a final and executory judgment may be
executed by motion within five years from the date of its entry or by an action
after the lapse of five years and before prescription sets in.11 This Court,
however, allows exceptions when execution may be made by motion even
after the lapse of five years. These exceptions have one common
denominator: the delay is caused or occasioned by actions of the judgment
obligor and/or is incurred for his benefit or advantage.12

In Camacho v. Court of Appeals,13 we held that where the delays were

occasioned by the judgment debtor’s own initiatives and for her advantage as
well as beyond the judgment creditor’s control, the five-year period allowed
for enforcement of the judgment by motion is deemed to have been
effectively interrupted or suspended.

In the present case, there is no dispute that RCBC seeks to enforce the
decision which became final and executory on 15 April 1994. This decision
orders Serra to execute and deliver the proper deed of sale in favor of RCBC.
However, to evade his obligation to RCBC, Serra transferred the property to
his mother Ablao, who then transferred it to Liok. Serra’s action prompted
RCBC to file the Annulment case. Clearly, the delay in the execution of the
decision was caused by Serra for his own advantage.

Thus, the pendency of the Annulment case effectively suspended the five-
year period to enforce through a motion the decision in the Specific
Performance case. Since the decision in the Annulment case attained finality
on 3 March 2009 and RCBC’s motion for execution was filed on 25 August
2011, RCBC’s motion is deemed filed within the five-year period for
enforcement of a decision through a motion.

This Court has reiterated that the purpose of prescribing time limitations for
enforcing judgments is to prevent parties from sleeping on their rights.14 Far
from sleeping on its rights, RCBC has pursued persistently its action against
Serra in accordance with law. On the other hand, Serra has continued to evade
his obligation by raising issues of technicality. While strict compliance with
the rules of procedure is desired, liberal interpretation is warranted in cases
where a strict enforcement of the rules will not serve the ends of justice.15

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9. Infante v. Aran Builders, G.R. No. 156596, August 24, 2007
Thus, the proper venue depends on the determination of whether the present
action for revival of judgment is a real action or a personal action. Applying
the afore-quoted rules on venue, if the action for revival of judgment affects
title to or possession of real property, or interest therein, then it is a real action
that must be filed with the court of the place where the real property is
located. If such action does not fall under the category of real actions, it is
then a personal action that may be filed with the court of the place where the
plaintiff or defendant resides.
The allegations in the complaint for revival of judgment determine whether
it is a real action or a personal action.
The present case for revival of judgment being a real action, the complaint
should indeed be filed with the Regional Trial Court of the place where the
realty is located.
10. Josef v. Santos, G.R. No. 165060, November 27, 2008
The petition is meritorious.
Petitioner, in his opposition to respondents motion for issuance of a writ of
execution, claimed that he was insolvent; that he had no property to answer
for the judgment credit; that the house and lot in which he was residing at the
time was his family home thus exempt from execution; that the household
furniture and appliances found therein are likewise exempt from execution;
and that these furniture and appliances belonged to his children Jasmin Josef
and Jean Josef Isidro. Thus, as early as during proceedings prior to the
issuance of the writ of execution, petitioner brought to the fore the issue of
exemption from execution of his home, which he claimed to be a family home
in contemplation of the civil law.
The family home is a real right which is gratuitous, inalienable and free from
attachment, constituted over the dwelling place and the land on which it is
situated, which confers upon a particular family the right to enjoy such
properties, which must remain with the person constituting it and his heirs. It
cannot be seized by creditors except in certain special cases.[15]
Upon being apprised that the property subject of execution allegedly
constitutes petitioners family home, the trial court should have observed the
following procedure:
1. Determine if petitioners obligation to respondent falls under either of the
exceptions under Article 155[16] of the Family Code;
2. Make an inquiry into the veracity of petitioners claim that the property was
his family home;[17] conduct an ocular inspection of the premises; an
examination of the title; an interview of members of the community where
the alleged family home is located, in order to determine if petitioner actually
resided within the premises of the claimed family home; order a submission
of photographs of the premises, depositions, and/or affidavits of proper
individuals/parties; or a solemn examination of the petitioner, his children
and other witnesses. At the same time, the respondent is given the opportunity
to cross-examine and present evidence to the contrary;
3. If the property is accordingly found to constitute petitioner’s family home,
the court should determine:
a) if the obligation sued upon was contracted or incurred prior to, or after, the
effectivity of the Family Code;[18]
b) if petitioners spouse is still alive, as well as if there are other beneficiaries
of the family home;[19]
c) if the petitioner has more than one residence for the purpose of determining
which of them, if any, is his family home;[20] and
d) its actual location and value, for the purpose of applying the provisions of
Articles 157[21] and 160[22] of the Family Code.
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11. D-Armoured Security v. Orpia, G.R. No. 151325, June 27, 2005

Obviously, the exemption under Rule 39 of the Rules of Court and Article
1708 of the New Civil Code is meant to favor only laboring men or women
whose works are manual. Persons belonging to this class usually look to the
reward of a days labor for immediate or present support, and such persons are
more in need of the exemption than any other [Gaa vs. Court of Appeals, 140
SCRA 304 (1985)].

In this context, exemptions under this rule are confined only to natural
persons and not to juridical entities such as petitioner. Thus, the rule
speaks of salaries, wages and earning from the personal services rendered by
the judgment obligor. The rule further requires that such earnings be intended
for the support of the judgment debtors family.

Necessarily, petitioner which is a corporate entity, does not fall under the
exemption. If at all, the exemption refers to petitioners individual employees
and not to petitioner as a corporation.

x x x. Parenthetically, in a parallel case where a security agency claimed that

the guns it gives to its guards are tools and implements exempt from
execution, the Supreme Court had the occasion to rule that the exemption
pertains only to natural and not to juridical persons, thus:

However, it would appear that the exemption contemplated by the provision

involved is personal, available only to a natural person, such as a dentists
dental chair and electric fan (Belen v. de Leon, G.R. No. L-15612, 30 Nov.
1962). As pointed out by the Solicitor General, if properties used in business
are exempt from execution, there can hardly be an instance when a judgment
claim can be enforced against the business entity [Pentagon Security and
Investigation Agency vs. Jimenez, 192 SCRA 492 (1990)].

It stands to reason that only natural persons whose salaries, wages and
earnings are indispensable for his own and that of his familys support are
exempted under Section 13 (i) of Rule 39 of the Rules of Court. Undeniably,
a corporate entity such as petitioner security agency is not covered by the
exemption.

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12. Caja v. Nanquil, A.M. P-04-1885, September 13, 2004
Since the case stemmed from the final judgment of the lower court in a
collection case, the pertinent rules are the provisions of the Rules of Court
regarding writs of execution and execution of money judgments.
Section 8 of Rule 39 deals with the issuance, form and contents of a writ of
execution. Said section reads:
Sec. 8. Issuance, form and contents of a writ of execution --- The writ of
execution must issue in the name of the Republic of the Philippines from the
court in which the judgment or order is entered; must intelligently refer to
such judgment or order, stating the court, province, and municipality where
it is of record, and the amount actually due thereon if it be for money; and
must require the sheriff or other proper officer to whom it is directed
substantially as follows:
(a) If the execution be against the property of the judgment debtor, to satisfy
the judgment, with interest, out of the personal property of such debtor, and
if sufficient personal property cannot be found, then out of his real property;
x x x. (underscoring supplied)
Section 15 of Rule 39 provides the manner by which the execution of a money
judgment must be enforced:
Sec. 15. Execution of money judgments. --- The officer must enforce an
execution of a money judgment by levying on all the property, real and
personal of every name and nature whatsoever, and which may be disposed
for value, of the judgment debtor not exempt from execution, or on a
sufficient amount of such property, if there be sufficient, and selling the same,
and paying to the judgment creditor, or his attorney, so much of the proceeds
as will satisfy the judgment. Any excess in the proceeds over the judgment
and accruing costs must be delivered to the judgment debtor, unless otherwise
directed by the judgment or order of the court. When there is more property
of the judgment debtor than is sufficient to satisfy the judgment and accruing
costs, within the view of the officer, he must levy only on such part of the
property as is amply sufficient to satisfy the judgment and costs.
Real property, stocks, shares, debts, credits, and other personal property, or
any interest in either real or personal property, may be levied on in like
manner and with like effect as under a writ of attachment.
It is clear in Section 8(a) of Rule 39 that satisfaction of the judgment must be
carried out first through the personal property of the judgment debtor, and
then through his real property. This directive is evident from the Writ of
Execution and Alias Writ of Execution issued by the Regional Trial Court.
Going over the record of the case, it appears that after the decision of the
lower court became final and a writ of execution was issued, the first thing
respondent sheriff did was to serve a Notice of Garnishment to the Manager
of PAG-IBIG (Take-Out Office) advising the latter not to deliver, transfer or
dispose of money credits, shares, interests, and deposits in his control and
possession belonging to Subic Realty Corporation, Florentino Caja and
Erickson Y. Caja.[43] Subsequently, an alias writ of execution was issued and
pursuant thereto, he levied the real property of complainant on May 19, 1997
and then the latters personal properties on July 1, 1997.
Clearly, what respondent sheriff levied first was personal
property via garnishment. Garnishment is considered as a specie of
attachment for reaching credits belonging to the judgment debtor and owing
to him from a stranger to the litigation.[44] It involves money, stocks, credits,
and other incorporeal property which belong to the party but is in the
possession or under the control of a third person.[45] Since the properties
involved in garnishment are personal properties, garnishment is thus a levy
on personal property.
We, however, find that respondent sheriff still violated the rule that
satisfaction of the judgment must be carried out first through the personal
property of the judgment debtor, and then through his real property. After
levying the real property of complainant, respondent sheriff then levied
complainants personal properties which is a direct violation of Section 8,
Rule 39 and of the writ and alias writ of execution issued by the court.
Respondent sheriffs contention that he levied the personal properties of
complainant after the judgment creditor desisted from proceeding with the
levy on the real property when it was discovered that the real property he
previously levied was already mortgaged for P5,000,000.00, cannot give him
any relief.
II.
Levy is different from an execution sale. Levy has been defined as the act or
acts by which an officer sets apart or appropriates a part or the whole of a
judgment debtors property for the purpose of satisfying the command of the
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writ of execution.[49] On the other hand, an execution sale is a sale by a sheriff custody. The levied property must be in the substantial presence and
or other ministerial officer under the authority of a writ of execution which possession of the levying officer who cannot act as special deputy of any
he has levied on property of the debtor.[50] In the case before us, there was a party litigant.[57] They should not have been delivered to any of the
levy on real property but the levied property was not sold in an execution sale parties[58] or their representative.[59] The courts lack of storage facility to
because said property, if sold, will not satisfy the judgment debt because of house the attached properties is no justification.[60] Respondent sheriff could
an existing encumbrance thereon. have deposited the same in a bonded warehouse[61] or could have sought prior
authorization from the court that issued the writ of execution.[62]
There being a levy on the complainants real property, the amount thereof
must be considered in determining if there was an overlevy. As gathered from
the Tax Declaration of the real property involved, including its
improvements, its assessed value amounted to P1,786,870.00. It must be
remembered, however, that said property is mortgaged for P10,000,000.00 in
favor of Town Savings and Loan Bank of Bulacan. The fact that the property
is mortgaged for ten million pesos only means that its value is more than said
amount. This Court takes judicial notice of the fact that the value of a property
is usually bigger than the amount for which it can be mortgaged. No person,
in the ordinary course of business, would give a loan which is bigger than the
value of the property that is used to secure such debt. Certainly, the issue of
what is bigger -- the amount of the loan or the amount of the security for its
payment -- is within public knowledge and capable of unquestionable
demonstration.[51]

The amount of the real property levied upon is definitely more than ten
million pesos since the property was mortgaged for ten million. This amount
alone is more or less ten times greater than the judgment debt. As it is, there
is already a clear case of overlevy. Although the levied realty was not
auctioned at an execution sale, its value should still be taken into account in
computing the total amount levied by respondent sheriff.

Respondent sheriffs act of levying complainants real property despite its

being mortgaged is tantamount to negligence. As an officer of the court, he
knew fully well that the property cannot be used to satisfy the judgment debt
since the mortgagee is the preferred creditor in relation to said property.

III.

Respondent sheriffs argument that he kept the levied personal properties at

the judgment creditors place because the Regional Trial Court of Olongapo
City does not have any warehouse or place to keep the same does not hold
water. A levying officer must keep the levied properties securely in his

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13. Zamora v. Villanueva, A.M. P-04-1898, July 28, 2008 an execution sale. Respondents refusal to conduct the execution sale was
baseless and illegal.
It is undisputed that respondent demanded and received P10,000 from
complainant. He, however, reasoned that the amount was to defray the
expenses he incurred in implementing the writ of execution and annotating
the notice of levy on defendants property in Nasugbu,
Batangas. Nevertheless, his justifications for demanding and receiving the
amount from complainant are futile attempts to exculpate himself from
liability under the law.

Sec. 9, Rule 141 of the Rules of Court requires the sheriff to secure the courts
prior approval of the estimated expenses and fees needed to implement the
writ.

Thus, a sheriff is guilty of violating the Rules if he fails to observe the

following:
(1) prepare an estimate of expenses to be incurred in executing the writ, for
which he must seek the court's approval;
(2) render an accounting; and
(3) issue an official receipt for the total amount he received from the judgment
debtor.[20]

The rule requires the sheriff executing writs or processes to estimate the
expenses to be incurred. Upon the approval of the estimated expenses, the
interested party has to deposit the amount with the Clerk of Court and ex-
officioSheriff. The expenses shall then be disbursed to the executing Sheriff
subject to his liquidation within the same period for rendering a return on the
process or writ. Any unspent amount shall be refunded to the party who made
the deposit.[21]

In the present case, there was no evidence showing that respondent submitted
to the court, for its approval, the estimated expenses for the execution of the
writ before he demanded P10,000 from complainant. Neither was it shown
that he rendered an accounting and liquidated the said amount to the
court. Any act deviating from these procedures laid down by the Rules is
misconduct that warrants disciplinary action.

As regards respondents refusal to proceed with the execution sale, allegedly

due to the parties refusal to pay the sales commission, nowhere in the Rules
can it be inferred that payment of any such commission is a pre-requisite to

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14. Landrito v. Court of Appeals, G.R. No. 133079, August 9, 2005
In a long line of cases[5], this Court has consistently ruled that the one-year
redemption period should be counted not from the date of foreclosure sale,
but from the time the certificate of sale is registered with the Register of
Deeds. Here, it is not disputed that the sheriffs certificate of sale was
registered on 29 October 1993. From the foregoing, it is clear as day that even
the complaint filed by the petitioners with the trial court on 09 November
1994 was instituted beyond the 1-year redemption period.
sale is not suspended by the institution of an action to annul the foreclosure
sale.[9] It is clear, then, that petitioners have lost any right or interest over the
subject property primarily because of their failure to redeem the same in the
manner and within the period prescribed by law. Their belated attempts to
question the legality and validity of the foreclosure proceedings and public
auction must accordingly fail.

Xxx

Even on this score, petitioners case must fall.

For, in Lazo v. Republic Surety & Insurance Co., Inc.[8], this Court has made
it clear that it is only where, by voluntary agreement of the parties, consisting
of extensions of the redemption period, followed by commitment by the
debtor to pay the redemption price at a fixed date, will the concept of legal
redemption be converted into one of conventional redemption.

Here, there is no showing whatsoever that petitioners agreed to pay the

redemption price on or before 11 November 1994, as allegedly set by Mrs.
San Diegos husband. On the contrary, their act of filing their complaint on 09
November 1994 to declare the nullity of the foreclosure sale is indicative of
their refusal to pay the redemption price on the alleged deadline set by the
husband. At the very least, if they so believed that their loan obligation was
only for P1,000,000.00, petitioners should have made an offer to redeem
within one (1) year from the registration of the sheriffs certificate of sale,
together with a tender of the same amount. This, they never did.

It must be remembered that the period of redemption is not a prescriptive

period but a condition precedent provided by law to restrict the right of the
person exercising redemption. Correspondingly, if a person exercising the
right of redemption has offered to redeem the property within the period
fixed, he is considered to have complied with the condition precedent
prescribed by law and may thereafter bring an action to enforce redemption.
If, on the other hand, the period is allowed to lapse before the right of
redemption is exercised, then the action to enforce redemption will not
prosper, even if the action is brought within the ordinary prescriptive period.
Moreover, the period within which to redeem the property sold at a sheriffs

Avila 4B | 2016
15. Marsmony Trading v. Court of Appeals, G.R. No. 170515, May
6, 2010

Now, nothing is more settled in law than when a final judgment becomes
executory, it thereby becomes immutable and unalternable. The judgment
may no longer be modified in any respect, even if the modification is meant
to correct what is perceived to be an erroneous conclusion of law or fact, and
regardless of whether the modification is attempted to be made by the court
rendering it or by the highest court of the land. The only recognized exception
are the correction of clerical errors or the making of so-called nune pro
tunc entries which cause no injury to any party, and, of course, where the
judgment is void x x x.[38]

We disfavor delay in the enforcement of the labor arbiters decision. Once a

judgment becomes final and executory, the prevailing party should not be
denied the fruits of his victory by some subterfuge devised by the losing
party. Final and executory judgments can neither be amended nor altered
except for correction of clerical errors, even if the purpose is to correct
erroneous conclusions of fact or of law.[39] Trial and execution proceedings
constitute one whole action or suit such that a case in which execution has
been issued is regarded as still pending so that all proceedings in the
execution are proceedings in the suit.[40]

Furthermore, petitioners did not succeed in overturning the decisions of the

NLRC and the Court of Appeals. As well, this Court denied petitioners
petition in G.R. No. 145881.

Everything considered, what should be enforced thru an order or writ of

execution in this case is the dispositive portion of the Labor Arbiters decision
as affirmed by the NLRC, the Court of Appeals and this Court. Since the writ
of execution issued by the Labor Arbiter does not vary but is in fact
completely consistent with the final decision in this case, the order of
execution issued by the Labor Arbiter is beyond challenge.

Avila 4B | 2016
16. Benitez v. Acosta, A.M. P-01-1473, March 27, 2001
As per the pertinent portion of the order issuing the writ of execution,
respondent should have made a return on the writ within 60 days from his
receipt of the order, or by February 9, 1998. To date, respondent has not
submitted or made a return on the writ and has violated a mandate of the
court. It is well settled that the sheriff's duty in the execution of a writ issued
by a court is purely ministerial.[8] As such, any failure to comply with such
constitutes nonfeasance in the performance of his duties.
Second. Rule 39, 14 of the 1997 Revised Rules of Civil Procedure provides
that:
Sec. 14 Return of the writ of execution. - The writ of execution shall be
returnable to the court issuing it immediately after the judgment has been
satisfied in part or in full. If the judgment cannot be satisfied in full within
thirty (30) days after his receipt of the writ, the officer shall report to the
court and state the reason therefore. Such writ shall continue in effect during
the period within which the judgment may be enforced by motion. The officer
shall make a report to the court every thirty (30) days on the proceedings
taken thereon until the judgment is satisfied in full, or its effectivity expires.
The returns or periodic reports shall set forth the whole of the proceedings
taken, and shall be filed with the court and copies thereof promptly furnished
the parties. (Emphasis supplied.)
Thus, under this provision, respondent is required (1) to make a return and
submit it to the court immediately upon satisfaction in part or in full of the
judgment; and (2) if the judgment cannot be satisfied in full, to make a report
to the court within 30 days after his receipt of the writ and state why full
satisfaction could not be made. The Sheriff shall continue making a report
every 30 days on proceedings being taken thereon until the judgment is full
satisfied. The reason for this requirement is to update the court as to the status
of the execution and give it an idea why the judgment has not been satisfied. It
also provides the court an idea as to how efficient court processes are after
the judgment has been promulgated. The over-all purpose of the requirement
is to ensure the speedy execution of decisions.
Third. Rule 39, 14 of the 1997 Revised Rules of Civil Procedure provides
that:
“Sec. 9. Execution of judgments for money, how, enforced. - a) Immediate
payment on demand.- The officer shall enforce an execution of a judgment
for money by demanding from the judgment obligor the immediate payment
of the full amount stated in the writ of execution and all lawful fees. The
judgment obligor shall pay in cash, certified bank check payable to the
judgment obligee or any other form of payment acceptable to the latter, the
amount of the judgment debt under proper receipt directly to the judgment
obligee, or his authorized representative if present at the time of payment.
The lawful fees shall be handed under proper receipt to the executing sheriff
who shall turn over the said amount within the same day to the clerk of court
that issued the writ.
If the judgment obligee or his authorized representative is not present to
receive payment, the judgment obligor shall deliver the aforesaid payment to
the executing sheriff. The latter shall turn over all the amounts coming into
his possession within the same day to the clerk of court of the court that issued
the writ, or if the same is not practicable, deposit said amounts to a fiduciary
account in the nearest government depository bank of the Regional Trial
Court of the locality.
The clerk of said court shall thereafter arrange for the remittance of the
deposit to the account of the court that issued the writ whose clerk of court
shall then deliver said payment to the judgment obligee in satisfaction of the
judgment. The excess, if any, shall be delivered to the judgment obligor while
the lawful fees shall be retained by the clerk of court for disposition as
provided by law. In no case shall the executing sheriff demand that any
payment by check be payable to him.”
Thus, fees collected by the sheriff are required to be paid over to the judgment
obligee or the latter's authorized representative. In the absence of both,
respondent is obligated to pay them over to the clerk of the court who issued
the writ or, if this is not possible, to deposit the amount in the nearest
government depository bank.
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17. St. Aviation Services v. Grand International Airways, G.R.
No.140288, October 23, 2006
The conditions for the recognition and enforcement of a foreign judgment in
our legal system are contained in Section 48, Rule 39 of the 1997 Rules of
Civil Procedure, as amended, thus:
“SEC. 48. Effect of foreign judgments. The effect of a judgment or final order
of a tribunal of a foreign country, having jurisdiction to render the judgment
or final order is as follows:
(a) In case of a judgment or final order upon a specific thing, the judgment
or final order is conclusive upon the title to the thing; and
(b) In case of a judgment or final order against a person, the judgment or
final order is presumptive evidence of a right as between the parties and their
successors in interest by a subsequent title;
In the Philippines, jurisdiction over a party is acquired by service of summons
by the sheriff,[7] his deputy or other proper court officer either personally by
handing a copy thereof to the defendant[8] or by substituted service.[9] In this
case, the Writ of Summons issued by the Singapore High Court was served
upon respondent at its office located at Mercure Hotel (formerly Village
Hotel), MIA Road, Pasay City. The Sheriffs Return shows that it was received
on May 2, 1998 by Joyce T. Austria, Secretary of the General Manager of
respondent company.[10] But respondent completely ignored the summons,
hence, it was declared in default.

In either case, the judgment or final order may be repelled by evidence of a

want of jurisdiction, want of notice to the party, collusion, fraud, or clear
mistake of law or fact.”

Under the above Rule, a foreign judgment or order against a person is merely
presumptive evidence of a right as between the parties. It may be repelled,
among others, by want of jurisdiction of the issuing authority or by want of
notice to the party against whom it is enforced. The party attacking a foreign
judgment has the burden of overcoming the presumption of its validity.[3]

Respondent, in assailing the validity of the judgment sought to be enforced,

contends that the service of summons is void and that the Singapore court did
not acquire jurisdiction over it.

Generally, matters of remedy and procedure such as those relating to the

service of process upon a defendant are governed by the lex fori or the internal
law of the forum,[4]which in this case is the law of Singapore. Here, petitioner
moved for leave of court to serve a copy of the Writ of Summons
outside Singapore. In an Order dated December 24, 1997, the Singapore High
Court granted leave to serve a copy of the Writ of Summons on the
Defendant by a method of service authorized by the law of the Philippines
for service of any originating process issued by the Philippines at ground
floor, APMC Building, 136Amorsolo corner Gamboa Street, 1229 Makati
City, or elsewhere in the Philippines.[5]

Avila 4B | 2016
18. City Government of Makati v. Odena, 2013
Second, although the general rule is that an order of execution is not
appealable, the CA failed to consider that there are exceptions to this rule, as
illustrated in this case.
A writ of execution is a direct command of the court to the sheriff to carry
out the mandate of the writ, which is normally the enforcement of a
judgment.61 By analogy, the CSC Resolutions were orders of execution and
were issued in connection with the implementation of this Court’s 2007
Decision.
It is obvious from both the body and the dispositive portions of the CSC
Resolutions that they carried instructions to enforce this Court’s 2007
Decision, albeit erroneously made.
Indeed, the general rule is that an order of execution is not appealable;
otherwise, a case would never end.67 The CA, however, failed to consider that
there are exceptions to this rule. This Court in Banaga v.
Majaducon68enumerated the exceptions as follows:
Even prior to the promulgation of the 1997 Rules of Civil Procedure, the rule
that no appeal lies from an order or writ directing the execution of a final
judgment, for otherwise a case will not attain finality, is not absolute since a
party aggrieved by an improper or irregular execution of a judgment is not
without a remedy. Thus, in Limpin v. Intermediate Appellate Court, the Court
enumerated the exceptional circumstances where a party may elevate the
matter of an improper execution for appeal, to wit:
judgment debt has been paid or otherwise satisfied, or the writ was issued
without authority;
In these exceptional circumstances, considerations of justice and equity
dictate that there be some mode available to the party aggrieved of elevating
the question to a higher court. That mode of elevation may be either by appeal
(writ of error or certiorari), or by a special civil action of certiorari,
prohibition, or mandamus.
In the instant case, the appeal of the CSC Resolutions under Rule 43 is proper
on two (2) points: (1) they varied the 2007 Decision and (2) the judgment
debt has been paid or otherwise satisfied.
First, the CSC Resolutions have varied the 2007 Decision, considering that
instead of directing the payment of backwages for a period not exceeding five
(5) years, the CSC ordered petitioner to pay an amount equivalent to almost
eight (8) years.
Second, the judgment debt arising from the 2007 Decision has been satisfied
as respondent has already received payment from petitioner the amount
of P558,944.19, representing her back salaries not exceeding five (5) years,
as computed by petitioner.

There may, to be sure, be instances when an error may be committed in the

course of execution proceedings prejudicial to the rights of a party. These
instances, rare though they may be, do call for correction by a superior court,
as where —
1) the writ of execution varies the judgment;
2) there has been a change in the situation of the parties making execution
inequitable or unjust;
xxxx
6) it appears that the writ of execution has been improvidently issued, or that
it is defective in substance, or is issued against the wrong party, or that the

Avila 4B | 2016
XXVII. Appeals/Original Actions in the Supreme Court and Court of
Appeals (Rules 40 to 56 except Rule 47)
1. Fernando v. Santamaria, G.R. No. 160730, December 10, 2004
A several judgment is proper when the liability of each party is clearly
separable and distinct from that of his co-parties, such that the claims against
each of them could have been the subject of separate suits, and judgment for
or against one of them will not necessarily affect the other.
The right to appeal is not a natural right or a part of due process. It is merely
a statutory privilege, and may be exercised only in the manner and in
accordance with the provisions of law. The party who seeks to avail of the
same must comply with the requirements of the rules. Failing to do so, the
right to appeal is lost.
2. Madrigal Transport v. Lapanday, G.R. No. 156067, August 11,
2004
Between an appeal and a petition for certiorari, there are substantial
distinctions which shall be explained below.
As to the Purpose. Certiorari is a remedy designed for the correction of errors
of jurisdiction, not errors of judgment. The supervisory jurisdiction of a court
over the issuance of a writ of certiorari cannot be exercised for the purpose
of reviewing the intrinsic correctness of a judgment of the lower court·on the
basis either of the law or the facts of the case, or of the wisdom or legal
soundness of the decision. Even if the findings of the court are incorrect, as
long as it has jurisdiction over the case, such correction is normally beyond
the province of certiorari. Where the error is not one of jurisdiction, but of an
error of law or fact·a mistake of judgment·appeal is the remedy.
As to the Manner of Filing. Over an appeal, the CA exercises its appellate
jurisdiction and power of review. Over a certiorari, the higher court uses its
original jurisdiction in accordance with its power of control and supervision
over the proceedings of lower courts. An appeal is thus a continuation of the
original suit, while a petition for certiorari is an original and independent
action that was not part of the trial that had resulted in the rendition of the
judgment or order complained of. The parties to an appeal are the original
parties to the action. In contrast, the parties to a petition for certiorari are the
aggrieved party (who thereby becomes the petitioner) against the lower court
or quasi-judicial agency, and the prevailing parties (the public and the private
respondents, respectively).
As to the Subject Matter. Only judgments or final orders and those that the
Rules of Court so declare are appealable. Since the issue is jurisdiction, an
original action for certiorari may be directed against an interlocutory order of
the lower court prior to an appeal from the judgment; or where there is no
appeal or any plain, speedy or adequate remedy.
As to the Period of Filing. Ordinary appeals should be filed within fifteen
days from the notice of judgment or final order appealed from. Where a
record on appeal is required, the appellant must file a notice of appeal and a
record on appeal within thirty days from the said notice of judgment or final
order. A petition for review should be filed and served within fifteen days
from the notice of denial of the decision, or of the petitionerÊs timely filed
motion for new trial or motion for reconsideration. In an appeal by certiorari,
the petition should be filed also within fifteen days from the notice of
judgment or final order, or of the denial of the petitionerÊs motion for new
trial or motion for reconsideration. On the other hand, a petition for certiorari
should be filed not later than sixty days from the notice of judgment, order,
or resolution. If a motion for new trial or motion for reconsideration was
timely filed, the period shall be counted from the denial of the motion.
As to the Need for a Motion for Reconsideration. A motion for
reconsideration is generally required prior to the filing of a petition for
certiorari, in order to afford the tribunal an opportunity to correct the alleged
errors. Note also that this motion is a plain and adequate remedy expressly
available under the law. Such motion is not required before appealing a
judgment or final order.
Avila 4B | 2016
3. BPI v. Sarabia Manor Hotel, 2013
It is fundamental that a petition for review on certiorari filed under Rule 45
of the Rules of Court covers only questions of law. In this relation, questions
of fact are not reviewable and cannot be passed upon by the Court unless, the
following exceptions are found to exist: (a) when the findings are grounded
entirely on speculations, surmises, or conjectures; (b) when the inference
made is manifestly mistaken, absurd, or impossible; (c) when there is a grave
abuse of discretion; (d) when the judgment is based on misappreciation of
facts; (e) when the findings of fact are conflicting; (f) when in making its
findings, the same are contrary to the admissions of both parties; (g) when
the findings are contrary to those of the trial court; (h) when the findings are
conclusions without citation of specific evidence on which they are based; (i)
when the facts set forth in the petition as well as in the petitioner’s main and
reply briefs are not disputed by the respondent; and (j) when the findings of
fact are premised on the supposed absence of evidence and contradicted by
the evidence on record.
4. NAPOCOR v. Paderanga, G.R. No. 155065, July 28, 2005
While admittedly a complaint for expropriation is not a special proceeding,
the above-quoted rule requires the filing of a record on appeal in „other cases
of multiple or separate appeal.‰ Jurisprudential law, no doubt, recognizes
the existence of multiple appeals in a complaint for expropriation.
Multiple or separate appeals being existent in the present expropriation case,
NPC should have filed a record on appeal within 30 days from receipt of the
trial courtÊs decision. The trial courtÊs dismissal of its appeal, which was
affirmed by the appellate court, was thus in order.
5. State Investment v. Delta Motors, G.R. No. 144444
Section 9 of Rule 41 of the Rules of Court explains the instances when the
trial court loses jurisdiction over a case: „A partyÊs appeal by record on
appeal is deemed perfected as to him with respect to the subject matter thereof
upon the approval of the record on appeal filed in due time. xxx xxx xxx „In
appeals by notice of appeal, the court loses jurisdiction over the case upon
the perfection of the appeals filed in due time and the expiration of the time
to appeal of the other parties. xxx xxx xxx „In either case, prior to the
transmittal of the original record or the record on appeal, the court may issue
orders for the protection and preservation of the rights of the parties which
do not involve any matter litigated by the appeal, approve compromises,
permit appeals of indigent litigants, order execution pending appeal in
accordance with Section 2 of Rule 39, and allow withdrawal of the appeal.‰
6. Aguilar v. Comelec, G.R. No. 185140, June 30, 2009
It should be noted from the afore-quoted sections of the Rule that the appeal
fee of P1,000.00 is paid not to the COMELEC but to the trial court that
rendered the decision. Thus, the filing of the notice of appeal and the payment
of the P1,000.00 appeal fee perfect the appeal, consonant with Sections 10
and 11 of the same Rule. Upon the perfection of the appeal, the records have
to be transmitted to the Electoral Contests Adjudication Department of the
COMELEC within 15 days. The trial court may only exercise its residual
jurisdiction to resolve pending incidents if the records have not yet been
transmitted and before the expiration of the period to appeal.
The non-payment or the insufficient payment of the additional appeal fee of
PhP3,200.00 to the Commission on Elections (COMELEC) Cash Division,
in accordance with Rule 40, Section 3 of the COMELEC Rules of Procedure,
as amended, does not affect the perfection of the appeal and does not result
in outright or ipso facto dismissal of the appeal; Following Rule 22 Section
9(a) of the Commission on Elections (COMELEC) Rules, the appeal may be
dismissed.
7. Cardona v. Amansec, G.R. No. 147216, April 15, 2004
Nonetheless, we resolve to deny due course to and dismiss the instant petition
for review on certiorari on the ground that the proper remedy from a decision
of the PARAD was an appeal to the DARAB and not a petition for review in
the Court of Appeals under Rule 43 of the Rules of Court.
8. Canedo v. Kampilan Secutiry and Detective Agency, 2013
“[I]t is settled that a nonappellant cannot, on appeal, seek an affirmative
relief.” It was held that “a party cannot impugn the correctness of a judgment
not appealed from by him, and while he may make counter-assignment of
errors, he can do so only to sustain the judgment on other grounds but not to
seek modification or reversal thereof for in such a case he must appeal.”
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9. Esteban v. Marcelo, 2013

Points of law, theories, issues and arguments not brought to the attention of
the trial court will not be and ought not to be considered by a reviewing court,
as these cannot be raised for the first time on appeal. Basic consideration of
due process impels this rule.

10. Dyoco v. Court of Appeals, 2013

The proper remedy to obtain a reversal of judgment on the merits, final order
or resolution is appeal. This holds true even if the error ascribed to the court
rendering the judgment is its lack of jurisdiction over the subject matter, or
the exercise of power in excess thereof, or grave abuse of discretion in the
findings of fact or of law set out in the decision, order or resolution. The
existence and availability of the right of appeal prohibits the resort to
certiorari because one of the requirements for the latter remedy is the
unavailability of appeal.

11. Ang v. San Joaquin, 2013

When there is a divergence between the findings of facts of the NLRC and
that of the CA, there is a need to review the records. In the present case, not
only is there a divergence of findings of facts; the conclusions arrived at by
the two tribunals are diametrically opposed. For this reason, the doctrine that
the findings of specialized administrative agencies or tribunals should be
respected must be set aside for a moment.

XXVIII. Petition for Annulment of Judgment (Rule 47)

1. Orbeta v. Sendiong, July 8, 2005

2. Nery v. Leyson, G.R. No. 139306, August 29, 2000
3. Ceruila v. Delantar, G.R. No. 140305, December 9, 2005
4. Salera v. A-1 Investors, G.R. No. 141238, February 15, 2002
5. Cole v. Court of Appeals, December 26, 2000, G.R. No. 137561
6. Arcenas v. Queen City Development, G.R. No. 166819, June 16,
2010

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XXIX. Provisional Remedies
XXX. Special Civil Actions
a. Attachment (Rule 57)
a. Interpleader (Rule 62)
a.1 Security Pacific v. Amelia Tria-Infante, G.R. No. 1444740, August 31,
2005. a.1 Ocampo v. Tirona, G.R. No. 147812, April 6, 2005
a.2 Torres v. Satsatin, G.R. No. 166759, November 25, 2009 a.2 Maglente v. Padilla, G.R. No. 148182, March 7, 2007
a.3 Insular Savings v. Court of Appeals, G.R. No.123638, June 15, 2006 a.3 Arreza v. Diaz, G. R. No. 133113, August 30, 2001
a.4 Yu v. Ngo Yet Te, G.R. No. 155868, February 6, 2007
b. Declaratory Relief (Rule 63)
b. Preliminary Injunction (Rule 58)
b.1 Almeda v. Bathala Marketing, G.R. No. 150608, January 28, 2008
b.1 Universal Motors v. Rojas, A.M. RTJ 03-1814, May 26, 2005 b.2 Malana v. Tapa, G.R. No. 181303, September 17, 2009
b.2 Greenstar v. Andiong, A.M. RTJ 041826, February 6, 2008 b.3 Sabistana v. Muertegi, 2013
b.3 Aldover v. Court of Appeals, 2013 b.4 Republic v. Roque, 2013
b.4 Bacolod City Water v. Labayen, G.R. No. 157994, December 10, 2004
b.5 Calawag v. University of the Philippines-Visayas, 2013 c. Review of Judgment of COA or COMELEC (Rule 64)

d. Certiorari, Prohibition and Mandamus (Rule 65)

c. Receivership (Rule 59)
d.1 Certiorari
c.1 Citibank v. Court of Appeals, G.R. No. 61508, March 17, 1999 1. Republic v. Carmel Development, G.R. No.142572, February 20,
c.2 Republic v. Saludares, G.R. No. 111174, March 9, 2000 2002
c.3 Tantano v. Espino-Caboverde, 2013 2. Jiao et al. v. NLRC, G.R. No. 182331, April 18, 2012
3. PNB v. Arcobillas, 2013

d.2 Prohibition
1. City Government of Quezon City v. Bayantel, G.R. No. 162015,
March 6, 2006
d. Replevin (Rule 60) 2. LTFRB v. Stronghold Insurance Company, Inc., 2013
3. Vivas v. Monetary Board of the BSP, 2013
d.1 Twin Ace Holding v. Rufina and Company, G.R. No. 160191, June 8, 4. Corales v. Republic, 2013
2006.
d.2 Superlines Transportation v. PNCC, G.R. No. 169596, March 28, 2007 d.3 Mandamus
d.3 Dagudag v. Paderanga, A.M.-RTJ No. 06-2017, June 19, 2008 1. Raul Lambino v. Comelec, G.R. No. 174153, October 25, 2006
2. Esquivel v. Ombudsman, G.R. No. 137237, September 17, 2002
e. Support Pendete Lite (Rule 61) 3. Dolot v. Paje, 2013

e.1 Mangonon v. Court of Appeals, G.R. No. 125041, June 30, 2006
e. Quo Warranto (Rule 66)

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1. Liban v. Gordon, G.R. No. 175352, July 15, 2009
2. Divinagracia v. Consolidated Broadcasting, G.R. No. 162272, April
7, 2009

f. Expropriation (Rule 67)

1. Bardillon v. Bgy. Masili, G.R. No. 146886, April 30, 2003

2. Republic v. Mangotara, G.R. No. 170375, July 7, 2010
3. Republic v. Court of Appeals, July 7, 2010, August 14, 2009
4. NPC v. Santa Loro, G.R. No. 175176, October 17, 2008
5. Apo Fruits v. Court of Appeals, G.R. No. 164195, December 4, 2009
6. Republic v. Holy Trinity Development Corp., G.R. No. 172410,
April 14, 2008

g. Judicial Foreclosure (Rule 68)

1. Huerta Alba v. Court of Appeals, G.R. No. 128567, September 1,

2000
2. Bacaling v. Muya, G.R. No. 148404, April 11, 2002
3. Monzon v. Relova, G.R. No. 171827, September 17, 2008
4. Nagtalon v. UCPB, 2013

h. Judicial Partition (Rule 69)

Sepulveda v. Pelaez, G.R. No. 152195, January 31, 2005

i. Ejectment (Rule 70)

1. Inocencio v. Hospicio de San Jose, 2013

2. Serrano v. Gutierrez, G.R. No. 162366, November 10, 2006
3. Esteban v. Marcelo, 2013
4. Philippine Tourism Authority v. Sabandal-Herzentiel, 2013

j. Contempt (Rule 71)

1. Curata v. PPA, G.R. No. 154211, June 22, 2009

Fuentes v. Albarracin, A.M. RTJ 05-1587, April 15, 2005

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