1

CIVIL PROCEDURE RULE 1 (Section 2) Philippine Commercial and Industrial Bank vs CA, 159 SCRA 24, G.R. No. 34959, March 18, 1988 (Cortes) Gesmundo vs JRB Realty Corporation, 234 SCRA 153, G.R. No. 111077 , July 14, 1994 (Mendoza) Limpot vs CA, 170 SCRA 367, G.R. No. 44642, February 20, 1989 (Cruz) RULE 2 (Section 1 & 2) What is CIVIL ACTION and SPECIAL PROCEEDING? What is CAUSE of ACTION and RIGHT of ACTION?

De Guzman vs CA, 192 SCRA 507, G.R. No. 92029-30, December 20, 1990 (Gancayco) Supena vs Dela Rosa, A.M. No. RTJ-93-1031, January 23, 1997 (Hermosisima, JR.)

What is REAL and PERSONAL ACTION? ACTION in REM ACTION in PERSONAM ACTION QUASI in REM Elements of CAUSE of ACTION

Jimenez vs Camara, 107 Phil 590, G.R. No. L-14718, March 30, 1960 (Barrera) The City of Bacolod vs San Miguel Brewery, 29 SCRA 819, G.R. No. L-25134, October 30, 1969 (Barredo) Valencia vs CA, 263 SCRA 275, G.R. No. 111401, October 17, 1996 (Panganiban) Enguerra vs Dolosa, 21 SCRA 214, G.R. No. L-23233, September 28, 1967 (Concepcion)

ACTION in REM and ACTION in PERSONAM

Ching vs CA, 181 SCRA 9, G.R. No. L-59731, January 11, 1990 (Paras) Dial Corporation vs Soriano, 161 SCRA 737, G.R. No. L-82330, May 31, 1988 (GrioAquino)

REAL and PERSONAL ACTION

Hernandez vs DBP, 71 SCRA 290, G.R. No. L-31095, June 18, 1976 (Martin) Fortune Motors, Inc. vs CA, 178 SCRA 564, G.R. No. 76431, October 19, 1989 (Paras) Paderanga vs Buissan, 226 SCRA 786, G.R. No. 49475, September 28, 1993 (Bellosillo)

What is ORDINARY and SPECIAL CIVIL ACTION? What is the meaning of SUIT? What is LOCAL and TRANSITORY ACTION? Note: Memorize - PREAMBLE, RULE1 and RULE2

~Lea

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Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. L-34959 March 18, 1988 PHILIPPINE COMMERCIAL and INDUSTRIAL BANK petitioner, vs. THE HONORABLE COURT OF APPEALS & ALPHA INSURANCE and SURETY COMPANY, INC., respondents. CORTES, J.: On January 7, 1966, Philippine Commercial and Industrial Bank (PCIB) filed a complaint against Alpha Insurance and Surety Co., Inc., (ALPHA), Community Builders, Inc. and Filadelfo Rojas in the Court of First Instance (CFI) of Manila. The complaint alleged that Community Builders and Rojas borrowed P 150,000 from PCIB, that ALPHA issued Surety Bond No. G-1689 in the amount of P 50,000 to guarantee payment of the loan, and that upon maturity the defendants failed to pay. In its answer with cross-claim against Community Builders and Rojas, ALPHA admitted having issued Surety Bond No. G-1689 but alleged that the P 150,000 debt had been paid by virtue of the assignment by Rojas to PCIB of his receivables from the Armed Forces of the Philippines. As special defense, ALPHA alleged that the promissory note evidencing the loan is dated later than the surety bond which was issued for an amount less than the debt. (The promissory note is dated September 26, 1962 while the surety bond is dated August 22, 1960.) During the pre-trial, Rojas and Community Builders failed to appear; hence, they were declared as in default. ALPHA reiterated its defenses stated above, namely, (1) that the bond was issued for less than the amount of the debt, (2) that it was issued earlier, and (3) that the debt had been paid. These were reflected in the following pre-trial order dictated by the trial judge in open court: At the pre-trial conference, the parties agreed that the defendant defendants Filadelfo Rojas and Community Builders Co., Inc. secured a loan from the plaintiff in the amount of P 150,000 for which they executed a promissory note dated September 26, 1962. In order to secure the payment of this obligation which was to mature January 24, 1963, the defendants assigned their receivables based on three contracts which they had with the Armed Forces of the Philippines, plus the surety bond issued by the defendant Alpha Insurance & Surety Co., Inc. in the amount of P 50,000. Notwithstanding repeated demands and the expiration of the promissory note, the defendants failed to pay their obligation. The defendants Filadelfo Rojas and Community Builders have been declared as in default for failure to appear at the pre-trial conference. The remaining defendant Alpha Insurance and Surety Co., Inc. now contends that it is not bound by the surety bond for the reason that it was issued for less than the amount of the plaintiffs claim and that the same was issued prior to the execution of the promissory note, and that the obligation had already been fully paid by the assignment of the receivables.

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The issue, therefore, is whether the defendants have already paid the amount stated in the promissory note by virtue of the assignment aforesaid. On the basis of this issue, let the trial hereof on the merits be, as it is hereby, set for December 19, 1966, at 8:30 a.m. SO ORDERED. After trial, the CFI rendered judgment in favor of PCIB and against Rojas, Community Builders and ALPHA, ordering them to pay P50,000 plus attorney's fees and costs. The Court further ordered defendants Rojas and Community Builders to pay the remaining P100,000. Rojas and Community Builders appealed to the Court of Appeals. However, since their counsel could not be served with the notice to file brief, their appeal was dismissed. ALPHA likewise appealed to the appellate court which reversed the decision of the CFI on the ground that it was not shown that the surety bond bears any relation to the promissory note. Hence, this petition, PCIB raising a purely procedural issue. Petitioner contends that the appellate court erred in ruling in favor of ALPHA on the basis of a question of fact which had not been raised before the CFI and which is not within the issues raised in the pleadings, nor in the pre-trial order. The issue raised calls for a determination of whether or not the relation of the surety bond to the promissory note was ever raised as an issue in the Answer filed by ALPHA or in the pretrial conference held between the parties. The pertinent allegation in PCIB's complaint reads: 3. That in conjunction with the aforesaid promissory note entered into by and between the plaintiff and the defendants Filadelfo Rojas and Community Builders Co., Inc., as principals and the Alpha Insurance and Surety Co., Inc., as surety, executed jointly and severally in the City of Manila, Philippines, Alpha Bond No. G-1689 in the amount of P50,000 to guarantee the payment by the said principals of their obligation to the plaintiff in accordance with the terms and conditions recited in the said promissory note, copy of the surety bond is attached hereto as Annex "B" and made integral part hereof by reference; while the corresponding denial in the answer of ALPHA states: 3. (Defendant) ADMITS the material allegations of paragraph 3 of the complaint in so far as the same refers to its surety bond (Annex "B") only; that it has no knowledge nor information sufficient to form a belief as to the truth of the rest of the averments therein concerning the promissory note (Annex "A") hence, it specifically denies the rest of the allegations having reference to the promissory note; PCIB contends that paragraph (3) of the complaint states three material facts which are separable from each other, to wit (a) That defendants Filadelfo Rojas and Community Builders Co., Inc., as principals, and respondent Alpha Insurance and Surety Co., Inc., as surety, executed Surety Bond No. G-1689 (Annex "B" of the complaint); (b) That the said surety was executed to guarantee the payment of the promissory note (Annex "A" of the complaint); and

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(c) That the guarantee thus made secures the performance of the obligations of Filadelfo Rojas and Community Builders Co., Inc. as set forth or recited in the promissory note (Annex "A" of the complaint). It is asserted that since the answer of ALPHA "admits the allegations of paragraph (3) of the complaint in so far as the same refers to its surety bond," then what was admitted was not only the execution of the surety bond but also that the surety bond was issued to secure the promissory note. Hence, the answer did not raise any issue as to the relation of the security bond to the promissory note. One basic rule in interpretation of pleadings is that "pleadings (should) be liberally construed to do substantial justice." [Rule 6, Sec. 15] Constructions which result in absurdity must also be avoided. If we construe paragraph 3 of the answer together with paragraph 2 in which ALPHA denied knowledge of the debt contracted by Rojas and Community Builders, which debt was evidenced by the promissory note, it is clear that ALPHA could not have admit ted that the surety bond it issued secured the payment of the debt. It would have been inconsistent for ALPHA to claim in paragraph 2 that it was unaware of the debt, and then to admit in paragraph 3 that the surety bond it issued was executed to secure the debt. In fact, a reading of the suretyship contract readily shows that it was executed on August 22, 1960 to secure the P 50,000 discounting line credit accommodation granted by PCIB to Community Builders. At the time Surety Bond G-1689 was executed, the promissory note for P 150,000 dated September 26, 1962 was not yet executed. The Court thus rules that paragraph 3 of the answer of ALPHA merely admitted the execution of Surety Bond No. G-1689, but did not admit, nay, denied, that said bond secured the debt of Rojas and Community Builders. In view of the specific denial, the relation of the bond to the debt was properly raised as an issue in the Answer. We next consider the pre-trial order. PCIB calls the attention of this Court to that portion of the pre-trial order which reads: The issue, therefore, is whether the defendants have already paid the amount stated in the promissory note by virtue of the assignment aforesaid. and contends that since the trial court has so limited the issue, then ALPHA can no longer raise the defense that the bond bears no relation to the promissory note. The pertinent provision of the Rules of Court provides: Sec. 4. Record of pre-trial results. After the pre-trial the court shall make an order which recites the action taken at the conference, the amendments allowed to the pleadings, and the agreements made by the parties as to any of the matters considered. Such order shall limit the issues for trial to those not disposed of by admissions or agreements of counsel and when entered controls the subsequent course of action, unless modified before trial to prevent manifest injustice. (Emphasis supplied.) While the rule provides that the pre-trial order of the court "controls the subsequent course of action," it is categorical that the issues for trial must be limited to "those not, disposed of by admissions or agreements of counsel." In other words, the court has no discretion to exclude from trial issues not resolved by voluntary agreement between the parties. The pre-trial order clearly states that ALPHA claimed that "it is not bound by the surety bond for the reason that it was issued for less than the amount of the plaintiff s claim and that the same was issued prior to the execution of the promissory note." This particular issue not having been disposed of by admissions or agreements during the pre-trial, it remained a proper subject of litigation. In fact, this particular issue was raised by respondent ALPHA not only in its brief filed with the Court of Appeals, but even before the trial court, in its Memorandum and Motion for Reconsideration.

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One other important aspect of this case compels the Court to affirm the decision of the Court of Appeals insofar as it absolves ALPHA from any liability to PCIB. Even as appellate courts do not normally consider those errors not properly assigned or specified, the rule is not, without qualification. As the Court stated in Insular Life Assurance Co., Ltd. Employees Association- NATU v. Insular Life Assurance Co., Ltd., et al [G.R. No. L-25291, March 10, 1977, 76 SCRA 50, 61-62]: . . (T)he Supreme Court has ample authority to review and resolve matters not assigned and specified as errors by either of the parties in the appeal if it finds the consideration and determination of the same essential and indispensable in order to arrive at a just decision in the case. This Court, thus, has the authority to waive the lack of proper assignment of errors if the unassigned errors closely relate to errors properly pinpointed out or if the unassigned errors refer to matters upon which the determination of the questions raised by the errors properly assigned depend. The same also applies to issues not specifically raised by the parties. The Supreme Court, likewise, has broad discretionary powers, in the resolution of a controversy, to take into consideration matters on record which the parties fail to submit to the Court as specific questions for determination. Where the issues raised also rest on other issues not specifically presented, as long as the latter issues bear relevance and close relation to the former and as long as they arise from matters on record, the Court has authority to include them in its discussion of the controversy as well as to pass upon them. In brief, in those cases wherein questions not particularly raised by the parties surface as necessary for the complete adjudication of the rights and obligations of the parties and such questions fall within the issues already framed by the parties, the interests of justice dictate that the Court consider and resolve them. This qualification applies to the instant case. It is basic that liability on a bond is contractual in nature and is ordinarily restricted to the obligation expressly assumed therein. The extent of a surety's liability is determined only by the clause of the contract of suretyship. It cannot be extended by implication, beyond the terms of the contract. [Zenith Insurance Corp. v. CA et al., No. 57957, December 29, 1982, 119 SCRA 485.] In the case at bar, Surety Bond No. G-1689 was executed to secure a discounting line of credit accommodation granted by PCIB to Community Builders Co., Inc. in the amount of P50.000. PCIB contends that the loan evidenced by the promissory note signed by Filadelfo Rojas, both in his personal capacity and as President of Community Builders, was granted in line with the credit accommodation secured by the surety bond; hence, ALPHA is liable for the debt. Note however that by the express terms of Surety Bond No. G-1689, ALPHA bound itself to pay the discounting line of Community Builders only which has a personality distinct and separate from Rojas. The promissory note, on the other hand, was signed both by Rojas and by Community Builders. Also, the amount of the credit line which ALPHA agreed to secure was only P50,000; whereas, the promissory note was for P150,000. Clearly therefore, the debt on which PCIB bases its action is not within the purview of the Surety Bond No. G-1689. Thus, even granting that Rojas and Community Builders offered Surety Bond No. G-1689 as security for the P150,000 debt, ALPHA, which merely undertook to secure a P50,000 credit line of Community Builders, cannot be held answerable for the debt. WHEREFORE, the petition is hereby DENIED. The appealed decision is AFFIRMED. SO ORDERED. Fernan (Chairman,), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 111077 July 14, 1994 VIRGILIO B. GESMUNDO and EDNA C. GESMUNDO, petitioners, vs. JRB REALTY CORPORATION, JAIME R. BLANCO, and HON. OSCAR B. PIMENTEL, in his capacity as Presiding Judge of Branch 148 of the Regional Trial Court of Makati, respondents. Virgilio B. Gesmundo on his own and wife's behalf. Blanco Law Firm for private respondents.
MENDOZA, J.: This is a petition for review on certiorari of the order 1 of the Regional Trial Court of Makati (Branch 148), dismissing on the ground of improper venue a complaint which the spouses Virgilio B. Gesmundo and Edna C. Gesmundo filed against the JRB Realty Corporation and Jaime R. Blanco. 2

The facts of the case are as follows: On April 7, 1980, petitioner Virgilio B. Gesmundo, as lessee, and respondent JRB Realty Corporation, represented by its president, respondent Jaime R. Blanco, as lessor, entered into a lease contract covering Room 116, Blanco Suites, at 246 Villaruel St., Pasay City, the parties stipulating that the venue for all suits, whether for branch hereof or damages or any cause between the LESSOR and the LESSEE, and persons claiming under each, being the courts of appropriate jurisdiction in Pasay City. . . On March 19, 1993, petitioners filed the complaint below for damages against respondents. They alleged that from April 8, 1980 to November 1992, they had been in possession of the leased premises; that on or about November 9, 1992, they were; "shocked and stunned" upon receiving respondents' letter terminating their lease effective November 30, 1992; that no other tenant in the building had been sent a similar letter; that during their conversation over the telephone, respondent Blanco told petitioner Virgilio B. Gesmundo that since the Corporation for which the latter works did not pay him (Blanco) his retainer fees, he did not want petitioners in any of his apartment units; that on November 18, 1992, petitioners sent respondents a letter asking for reconsideration of the termination of their lease; that on November 27, 1992, respondents sent petitioners a statement of accounts reiterating their letter of November 9, 1992; that on November 28, 1992, petitioners were forced to vacate the leased premises and consequently they leased an apartment at P2,500.00 monthly; and that respondents' action was "unwarranted, unjustified, malicious, abusive, and capricious." Petitioners prayed for P33,500.00 as actual or compensatory damages; P1,000,000.00 as moral damages; P50,000.00 as attorney's fees, and costs. Respondents moved to dismiss the case on the ground that the venue of the action had been improperly laid in the RTC of Makati. They contended that pursuant to their lease contract, the venue of the action was in a court of competent jurisdiction in Pasay City.

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In their opposition to the motion to dismiss, petitioners alleged that their cause of action is not based on the lease contract and, therefore, the case is not covered by the stipulation as to venue. Instead it is governed by the general rule as to venue stated in Rule 4, sec. 2(b). 3 They also alleged that even assuming that the stipulation is applicable, it does not operate to limit the venue to Pasay City but merely provides for an additional forum.

On May 28, 1990, the trial court dismissed petitioners' action on the ground of improper venue. On July 9, 1993, it denied their motion for reconsideration. Hence this petition based on the following grounds: I. THE HONORABLE COURT BELOW ERRED IN CONSIDERING THE ACTION FOR DAMAGES AS REAL ACTION AND NOT PERSONAL. II. THE HONORABLE COURT BELOW ERRED IN CONSIDERING THE LEASE CONTRACT EXECUTED BETWEEN ONLY ONE OF THE PETITIONERS AND ONLY ONE OF THE PRIVATE RESPONDENTS APPLICABLE TO THE INSTANT COMPLAINT. III. THE HONORABLE COURT ERRED IN CONSIDERING THE COMPLAINT AS BASED ON THE CONTRACT OF LEASE. IV. THE HONORABLE COURT BELOW ERRED IN UTILIZING THE VERY ACT COMPLAINED OF (THE RIGHT ABUSED) TO DEFEAT THE COMPLAINT FILED BY PETITIONERS. V. THE HONORABLE COURT BELOW ERRED IN ATTEMPTING TO CAUSE THE FILING OF THE COMPLAINT IN A JURISDICTION OTHER THAN THE PLACE WHERE ALL THE PARTIES ARE FOUND WITHOUT ANY JUSTIFIABLE REASON. VI. THE HONORABLE COURT ERRED IN SUSTAINING A DISMISSAL SOLELY GROUNDED ON A TECHNICALITY. VII. ASSUMING FOR THE SAKE OF ARGUMENT THAT THE LEASE AGREEMENT IS APPLICABLE, THE HONORABLE COURT BELOW ERRED IN CONSIDERING THE PROVISION STIPULATING THE VENUE OF THE ACTION EXCLUSIVISTIC. These contentions boil down to one main issue: whether venue was properly laid in the Regional Trial Court of Makati.

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We hold in the negative. We have in the past held stipulations limiting venue as valid and binding on the contracting parties, 4 based on Rule 4, sec. 3 which provides:

Venue by agreement. By written agreement of the parties, the venue of an action may be changed or transferred from one province to another. In the case at bar, it is clear from the parties' contract that the venue of any action which they might bring are the courts of competent jurisdiction in Pasay City, whether the action is for "breach [of the lease agreement] or damages or any other cause between the LESSOR and LESSEE and persons claiming under each." The language used leaves no room for interpretation. It clearly evinces the parties' intent to limit to the "courts of appropriate jurisdiction of Pasay City" the venue of all suits between the lessor and lessee and those between parties claiming under them. This means a waiver of their right to institute action in the courts provided for in Rule 4, sec. 2(b).
This case, therefore, differs from the cases 5 cited by petitioner. It is true that in Polytrade Corporation v. Blanco, 6 a stipulation that "The agree to sue and be sued in the City of Manila" was held to merely provide an additional forum in the absence of any qualifying or restrictive words. But here, by laying in Pasay City the venue for all suits, the parties made it plain that in no other place may they bring suit against each other for "breach [of their lease contract] or damages or any other cause between [them] and persons claiming under each [of them]." The stipulation in this case is similar to that involved in Hoechst Philippines, Inc. v. Torres 7 where the parties agreed that "in case of any litigation arising out of this agreement, the venue of any action shall be in the competent courts of the Province of Rizal." This court held: "No further stipulations are necessary to elicit the thought that both parties agreed that any action by either of them would be filed only in the competent courts of Rizal province exclusively." 8 The similarity in the language used in the stipulation in this case and that in the Hoechst case is striking. Again, in Villanueva v. Mosqueda 9 it was stipulated that if the lessor violated the contract of lease he could be sued in Manila, while if it was the lessee who violated the contract, the lessee could be sued in Masantol, Pampanga. It was held that there was an agreement concerning venue of action and that the parties were bound by their agreement. The agreement as to venue was not permissive but mandatory. Petitioners contend that neither they nor the private respondent Jaime Blanco reside in Pasay City. This fact is, however, irrelevant to the resolution of the issue in this case since parties do stipulate concerning the venue of an action without regard to their residence. In one case, it was held that the parties stipulated that the venue of action shall be in the City of Manila. It was held that it was reasonable to infer that the parties intended to fix the venue of their action, in connection with the contract sued upon, in the proper court of the City of Manila only, notwithstanding that neither one was a resident of Manila. 10

It is nonetheless contended that the stipulation as to venue is inapplicable because (1) only one of the petitioners (Virgilio B. Gesmundo) and only one of the private respondents (JRB Realty) are parties to the lease contract and (2) their cause of action is not based on the lease contract. The contention is without merit. Petitioner Edna C. Gesmundo is the wife of the lessee Virgilio B. Gesmundo, while Jaime R. Blanco is the president of the lessor JRB Realty Corporation. Their inclusion in this case is not necessary. What is more, as already noted, by its terms the stipulation applies not only to the parties to the contract but to "any persons claiming under each."
Petitioners claim that their cause of action is not based on the lease contract because it seeks neither its implementation nor its the cancellation. The contention is also without merit. Petitioners' action is for alleged breach of the lease contract which, it is contended, was terminated to spite them. 11 Petitioners view this act of respondents as an abuse of right under arts. 19, 20, and 21 of the Civil Code, warranting an award of damages. Their cause of action is ultimately anchored on their right under the lease contract and, therefore, they cannot avoid the limitation as to the venue in that contract. Nor is there any warrant for petitioners' view that a motion to dismiss on the ground of improper venue is based on a "mere technicality" which "does not even pretend to invoke justice" and, therefore, must not be sustained. As we have

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in other cases 12 held, "procedural rules are not to be belittled or dismissed simply because their non-observance may have resulted in prejudice to a party's substantive rights. Like all rules, they are required to be followed except only for the most persuasive of reasons when they may be relaxed to relieve a litigant of an injustice not commensurate with the degree of his thoughtlessness in not complying with the procedure prescribed." Here what is involved is no less than the parties' agreement to limit the venue of any action between them and those claiming under them under the contract. Petitioners must abide by that agreement.

WHEREFORE, the petition is DENIED and the order appealed from is AFFIRMED. SO ORDERED. Narvasa, C.J., Padilla, Regalado and Puno, JJ., concur. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-44642 February 20, 1989 AURIA LIMPOT, petitioner, vs. COURT OF APPEALS, PROV. SHERIFF, Southem Leyte, CONCHITA TAN DE LIM, MARCELINA LIM GO, RUDELIA LIM GO, DULCITA LIM HORTIGUELA, and EDITO LIM, respondents. Gilberto C. Alfafara for petitioner. Gertrudo G. Aquino for private respondents. CRUZ, J.: Rules of procedure are intended to ensure the orderly administration of justice and the protection of substantive rights in judicial and extrajudicial proceedings. It is a mistake to purpose that substantive law and adjective law are contradictory to each other or, as has often been suggested, that enforcement of procedural rules should never be permitted if it will result in prejudice to the substantive rights of the litigants. This is not exactly true; the concept is much misunderstood. As a matter of fact, the policy of the courts is to give effect to both kinds of law, as complementing each other, in the just and speedy resolution of the dispute between the parties. Observance of both substantive rights is equally guaranteed by due process whatever the source of such rights, be it the Constitution itself or only a statute or a rule of court.

In the case at bar, the petitioner claims that she has been deprived of her day in court because of a strict adherence to procedural rules and as a consequence prevented from defending her substantive rights. She asks that the decision of the Court of Appeals 1 sustaining the trial court be reversed and that the case be remanded to the court a quo for a thorough examination of the issues in contention between her and the plaintiffs, the private respondents herein. Briefly stated, the facts involved in this petition are as follows:

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On October 3, 1967, the private respondents filed a complaint for quieting of title and recovery of possession against the petitioner in the Court of First Instance of Southern Leyte. 2 After the plaintiffs had rested and following the presentation of one witness for the defendant, Atty. Braulio G. Alfaro, the petitioner's counsel, sent on August 12, 1972 a telegraphic motion for the postponement of the hearing set for August 22, 1972, alleging physical indisposition because of injuries sustained by him due to a fall from a bus. 3 The petitioner was informed of the motion, also by telegram, and asked to notify the adverse parties. 4 On the day of the scheduled hearing, the motion was opposed by the private respondents for lack of notice and failure to indicate the date of the resetting. 5Judge Gibson Ara-ula denied the motion and said he would continue with the hearing scheduled the following day. However, instead of proceeding with the trial on that date, he required the petitioner, who was present without counsel, to submit proof within five days that the plaintiffs had been notified of the motion for postponement. 6 No such proof was submitted. Accordingly, on September 2, 1972, the trial judge issued an order declaring the case submitted for decision on the basis of the evidence so far presented by the parties. 7 The petitioner received a copy of this order on October 12, 1972. 8 Ten days later, Atty. "Alfaro filed a motion for reconsideration on the ground of excusable negligence and/or honest mistake, alleging that his chent had misunderstood his telegram asking her to notify the private respondent herself as he did not have enough money for the additional telegrams. 9 This motion was denied on January 19, 1973. 10 On January 31, 1973, Atty. Alfaro's motion to withdraw as petitioner's counsel was granted 11 and Atty. Gilberts C. Alfafara filed his entry of appearance as replacement on March 10, 1973, coupled with the request that the court inform him of the status of the case. 12 Decision on the merits was rendered on March 15,1973, and a copy thereof was received by the petitioner on March 23, 1973. 13 On April 16, 1973, she filed a motion for new trial, which was denied on May 14, 1973. 14 She was notified of the denial on May 25, 1973. 15 The petitioner filed her notice of appeal and appeal bond on May 31, 1973, and the original record on appeal the following day, June 1, 1973. 16 On June 12, the private respondents filed a motion to dismiss the petitioner's appeal on the ground of tardiness, followed by an amended motion on July 5, 1973, amplifying their original motion. 17 After hearing, the trial court dismissed the appeal and ordered the issuance of a writ of execution. 18 On August 9, 1973, the petitioner elevated the case on certiorari to the Court of Appeals, which denied the same on July 15, 1976. 19 A motion for reconsideration was likewise denied on AugUst 30, 1976. 20 Notice of this denial was received on September 13, 1976, by the petitioner, who came to this Court on November 9, 1976, for certiorari under Rule 45 of the Rules of Court. 21 Her petition was denied for lack of merit on January 26, 1977 but, upon our reconsideration of the denial, given due course on May 6, 1977, with the parties being required to file their respective memoranda. 22 Only the private respondents did so despite the extension granted to but not availed of by the petitioner. The case was considered submitted for decision without the memorandum. 23 We find no error in the decision of the Court of Appeals. The petitioner has only herself to blame if judgment was rendered against her in the light of the circumstances above narrated. The Court is not unfamiliar with the ploy resorted to by losing parties of complaining that their right to due process has been violated where the rules of procedure they have not observed are applied against them. Such ploys do not persuade. The petitioner argues that in denying her motion for postponement and considering the case submitted for decision, the trial court deprived her of ber chance to fully ventilate ber side in the land conflict between her and the private respondents. The record does not support this contention. On the contrary, it appears that she filed a motion for reconsideration in which she argued that she had not understood her counsel's telegram that she take care of informing the private respondents of the telegraphic motion for postponement. She was heard by the trial court. If it nevertheless did not accept her explanation of honest mistake or excusable negligence, this did not signify that she was denied due process as she claims. Later, after the decision on the merits was rendered, her new counsel filed for her a motion for new trial, in which she again argued for the setting aside of the decision so she could submit additional evidence to resist the private respondents' claims. If the trial court was not convinced that she had a meritorious case, this too did not mean that she was deprived of her day in court.

11
The Court notes that Atty. Alfaro had all of ten days after sending his telegrams to file a regular motion for postponement, with copies furnished to the private respondents, conformably to the Rules of Court. He did not do so. Worse, he simply assumed that his telegraphic motion would be automatically granted and did not even bother to check with his client if she had notified the adverse panes of the motion as he had requested. He also assumed they would have no objection. Such assumptions are risky, let alone unjustified. The petitioner cannot contend that she was denied due process just because her lawyer's assumptions proved to be wrong. Atty. Alfafara complains that he was not informed of the status of the case as he had requested of the trial court when he entered his appearance as the petitioner's new counsel. The argument, as we understand it, is that the court should not have rendered its decision on the merits four days later without first acting on his request. Counsel should have known better. His posture was presumptuous. The trial court was not under any obligation to brief him on the progress of the case, the records of which were available to him for his own examination. It was for him-or his assistant if he had any-to examine such records for whatever he needed or wanted to know. It is fortunate for him in fact that, instead of reproving him as it could have, the trial court chose merely to ignore his impertinent request. The motion for new trial filed by the petitioner was deficient in form because it did not comply with Rule 37, section 2, of the Rules of Court. No afndavit of merit was attached, as required, to support the claim of honest mistake or excusable negligence when she failed to notify the private respondents of the telegraphic motion for postponement. As for the second ground, to wit, the insufficiency of the evidence to justify the decision, the trial court took pains to refute the petitioner's contentions, discussing her arguments one by one, and extensively. A careful reading of its order of May 14, 1973, wfll show that the motion was not denied out of hand in violation of her right to be heard, as the petitioner suggests. This is the reason why we cannot agree with the private respondents' submission that the motion for new trial was merely pro forma and so did not suspend the running of the period for appeal. The question of the timeliness of the petitionees appeal was resolved on the basis of the factual findings of both the trial court and the respondent court regarding the date the petitioner was notified of the decision of March 15, 1973. The petitioner claims it was March 25, 1973, but the correct date found was March 23, 1973, as established by the certification made by the postmaster of Cebu City and the registry return card. 24 There is no reason not to accept this determination. Conformably thereto, we also affirm the dismissal of the appeal on the following justification made by the trial court:
From March 23, 1973, the date a copy of thedecision was received by the defendant to April 16, 1973, the datethe motion for new trial was filed a period of twenty-four (24) days has elapsed after excluding the first day. Then from May 25, 1973, the day the defendant received a copy of the Order denying her motion for new trial to June 1, 1973, the day she filed and submitted her Record on Appeal, a period of eight (8) days had elapsed. Adding this eight (8) days to the twenty-four (24) days will give a total of thirty-two (32)days. So that when defendant filed her Notice of Appeal and Appeal Bond on May 31, 1973 and the Record on Appeal on June 1, 1973, it was already beyond the reglementary period of thirty (30) days within which a party may be allowed to appeal. 25

The Court notes that the petitioner could have filed the notice of appeal and the appeal bond within the reglementary period and then asked for an extension to submit the record on appeal if she needed more time to prepare it. No such extention was sought. Among conscientious practitioners, verification of the material dates, especially in connection with the reglementary periods, is a wise and indispensable precaution. This precaution was not taken in this case. Atty Alfafara's chimed mistake of misreading the date when the notice of the decision of March 15, 1973, was received-considering what be calls the ambiguity in the writing of the disputed ciphers-is, if anything, but still another proof of his inexcusable carelessness. It also does not advance the petitioner's cause that she first claimed she had received the notice on May 25, 1973, and then, when confronted with evidence to the contrary, averred that she had misread the figure "23" as "25."

12
The petitioner says she was also denied due process when the trial court resolved the motion to dismiss the appeal and the supplemental motion flied later by the private respondents although she had not yet been given an opportunity to file an opposition to the supplemental motion. She stresses that she learned of the amended motion only at the hearing schedule, as she thought, only on the original motion. We find no such denial. The supplemental motion was actually but an amplification of the original motion and merely adduced additional evidence to support the contention that the appeal had not been filed on time. The second motion was based on the same ground invoked in the first motion. By any reasonable standard, rejection of this contention by the trial court and the respondent court cannot be considered arbitrary. And now, to rectify her tardiness, the petitioner would ask us to consider ber subsequent petition for certiorari with the respondent court as a substitute for her lost appeal. Obviously, this should not be permitted. As we have repeatedly held in innumerable cases: ... Where another such remedy like an appeal may be taken, certiorari does not lie. And, it is by now abundantly clear that certiorari may not be utilized to offset the adverse effect of failure to appeal.
Here, petitioner had the remedy of appeal from the judgment of respondent judge. In fact, he did attempt to appeal. But his appeal was dismissed by this Court for failure to pay the docket fee on time. He cannot revive his appeal. He bad lost it through his own fault. certiorari is no substitute for appeal. 26 Where an appeal would have been an adequate remedy but it was lost through petitioner's inexcusable negligence, certiorari is not in order.'Time and again, this Court dismissed petitions for certiorari to annul decisions or final orders which could have, but were not, appealed. They were dismissed because certiorari cannot take the place of an appeal. 27

Curiously, while insisting that her appeal was filed on time, the petitioner would also justify her petition for certiorari with the respondent court as an exception to the above-discussed rule. The simple justification she offers for her inconsistency is that the judgment rendered by the trial court in Civil Case No. R-1564 was void ab initio forviolation of due process and therefore correctible by the present petition for certiorari. If that be so, the Court can only wonder why she attempted to file her appeal in the first place instead of coming directly to the respondent court in the petition for certiorari she claims is proper. The act that she sought to file an ordinary appeal clearly shows that she herself believed that the claimed errors of the trial court were appropriate for review only in that appeal and not by certiorari. It is obvious that when she subsequently filed the petition for certiorari after her appeal had been dismissed for tardiness, she was availing herself'of the second remedy only as a substitute for her lost appeal. The petitioner forgets that the two remedies are mutually exclusive and not alternative or successive. Recapitulating, we find that the petitioner's counsel did not comply with the requirements of the Rules of Court when he sent the telegraphic motion for postponement; that he did not rectify the deficiency even if he had sufficient time to do so before the hearing sought to be postponed; that it was therefore not improper for the trial court to consider the case submitted for decision on the basis of the evidence presented so far by the parties; that the petitioner had and enjoyed the chance to be heard through her motion for reconsideration and her subsequent motion for new trial; that the alleged erors sought to be reviewed were reversible only in an ordinary appeal, that this appeal was, however, not filed on time; and that the petition for certiorari with the respondent court could not be resorted to by the petitioner as a substitute for her dismissed appeal. The respondent court was therefore correct in denying the said petition. We conclude as we began, by stressing that procedural rules are not to be belittled or dismissed simply because their nonobservance may have resulted in prejudice to a party's substantive rights, as in this case. Like all rules, they are required to be followed except only when for the most persuasive of reasons

13
they may be relaxed to relieve a litigant of an injustice not commensurate with the degree of his thoughtlessness in not complying with the procedure prescribed. Such reasons are not present here. We do not find that compelling justification for the exception sought and so must sustain the respondent court. While it is true that a litigation is not a game of technicalities, this does not mean that the Rules of Court may be ignored at will and at random to the prejudice of the orderly presentation and assessment of the issues and their just resolution. Justice eschews anarchy. WHEREFORE, the petition is DENIED and the challenged decision of the respondent court is AFFIRMED, with costs against the petitioner. This decision is immediately executory. SO ORDERED. Narvasa (Chairman), Gancayco, Grio-Aquino and Medialdea, JJ., concur. FIRST DIVISION [G.R. Nos. 92029-30 : December 20, 1990.] 192 SCRA 507 NICANOR G. DE GUZMAN, JR., Petitioner, vs. HON. COURT OF APPEALS, Former Fifth Division, HON. REGIONAL TRIAL COURT, National Capital Judicial Region, Br. 48, Manila, and ENRIQUE KP. TAN, Respondents. DECISION GANCAYCO, J.: A cause of action is the fact or combination of facts which affords a party a right to judicial interference in his behalf. 1 An action means an ordinary suit in a court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prosecution or redress of a wrong. 2 The cause of action must always consist of two elements: (1) the plaintiff's primary right and the defendant's corresponding primary duty, whatever may be the subject to which they relate person, character, property or contract; and (2) the delict or wrongful act or omission of the defendant, by which the primary right and duty have been violated. 3 The cause of action is determined not by the prayer of the complaint but by the facts alleged. 4 The term right of action is the right to commence and maintain an action. 5 In the law on pleadings, right of action is distinguished from cause of action in that the former is a remedial right belonging to some persons, while the latter is a formal statement of the operative facts that give rise to such remedial right. The former is a matter of right and depends on the substantive law, while the latter is a matter of statement and is governed by the law of procedure. 6 The right of action springs from the cause of action, but does not accrue until all the facts which constitute the cause of action have occurred. 7 When there is an invasion of primary rights, then and not until then does the adjective or remedial law become operative, and under it arise rights of action. There can be no right of action until there has been a wrong a violation of a legal right and it is then given by the adjective law. 8 The herein petition for review on Certiorari of a decision of the Court of Appeals dated January 30, 1990 in CA G.R. No. 22481 9 puts into test the sufficiency of the cause of action of a complaint filed in the Regional Trial Court of Manila.
: nad

14
The undisputed antecedents are that on September 15, 1988, petitioner filed a complaint for damages and other equitable reliefs in the trial court, the relevant allegations of which are as follows: "3. Plaintiff and defendant have been friends and in the course of this relationship, they have exchanged mutual favors and accommodations, including discounting of check for cash. 4. More than seven (7) years ago, several checks were issued by plaintiff to defendant in exchange for cash which probably amounted to P280,900.00. In due time, these checks were either fully paid, settled, extinguished or condoned by agreement of the parties, and for which reason, plaintiff did not anymore redeem the checks precisely because they have been close and mutual friends. 5.a. Lately, however, plaintiff received from defendant's lawyer a demand letter dated 1988 supposedly detailing out therein the former's obligation to the latter, as follows: Principal Amount (Value of 66 dishonored checks) Legal Interest at 1% per Month (For 84 months or 7 years) Attorney's Collection Fee (At 10% Only) TOTAL Amount Due P568,541.00 ======== Copy of said letter is attached hereto as Annex A and made an integral part hereof. b. The claim of P568,541.00 is not due and owing from the plaintiff to the defendant because, as already stated, the amounts of the checks issued to defendant some more than (7) years ago, were either fully paid, settled, extinguished or treated as condoned by agreement of the parties. 6. In the said letter, Annex A hereof, defendant threatened to "institute the proper action and hold (plaintiff liable for the consequence," in the following manner: . . . unfortunately, you had not heeded his (defendant's) request and so we hereby inform you that this shall definitely be our last letter to you on this matter and we are giving you a final period of ten (10) days from receipts hereof to remit full payment of said sum of P568,541.00, otherwise, without need of further advice to you, we shall institute the proper action and hold you liable for the consequence.
:-c ralaw

P280,900.00

235,956.00

51,685.00

7. Defendant knows fully well that the sum of P568,541.00 is not wholly or partly due or owing to him from plaintiff particularly the huge, fantastic, and unwarranted claim for alleged legal interests in the sum of P235,956.00 which roughly accounts for 84% of the alleged principal amount being collected by defendant from plaintiff under his ill-tenored Annex A hereof, and the unwarranted claim for attorney's collection fees of P51,685.00.

15
8. Plaintiff is very reluctant to file the instant complaint against his defendant friend but was gravely agitated to do so because of a clearly perceived and palpable injury to him as unequivocally expressed in defendant's letter, Annex A hereof. 9. In the circumstances given, defendant has kept possession of the alleged checks amounting to P280,900.00 at the expense of plaintiff and since the obligation thereunder has either been fully or wholly paid, settled, extinguished, or condoned by agreement of the parties, defendant holds them without just or legal ground and is bound to return them to plaintiff. 10. In writing the letter, Annex A hereof and demanding therein an obligation from plaintiff which is not due and owing from the latter, defendant failed to act with justice, observe honesty and good faith. 11. To prosecute the instant action, plaintiff has incurred actual expenses in the sum of at least P15,000.00. 12. In the circumstances herein-above given, defendant acted in a wanton, reckless, oppressive, or malevolent manner. Hence, exemplary damages in the sum of P200,000.00 should be imposed against the defendant for the public good, in addition to other damages claimed herein. 13. Nominal damages should be adjudicated against the defendant in order that the right of plaintiff which has been invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by the latter. 14. To prosecute the case herein, plaintiff has retained the services of counsel at the agreed attorney's fees of P75,000.00. WHEREFORE, it is respectfully prayed that, after due hearing judgment be rendered in favor of plaintiff and against defendant, as follows: 1. Ordering defendant to pay plaintiff the sum of P15,000.00 as actual or compensatory damages; 2. Ordering the defendant to pay plaintiff the exemplary damages in the sum of P200,000.00; 3. Ordering defendant to return to plaintiff the several checks mentioned in Annex A of the complaint and adjudicating nominal damages in favor of plaintiff and against the defendant; 4. Ordering defendant to pay plaintiff the sum of P75,000.00 for and as attorney's fees; and 5. Ordering the defendant to pay the costs of the suit.
: nad

Plaintiff prays for other relief just and proper in the premises of the case." 10 On October 8, 1988, private respondent filed a motion to dismiss the complaint for lack of cause of action and prescription. An opposition thereto was filed by petitioner to which a reply was made by private respondent. After a rejoinder was submitted by petitioner, on November 24, 1988 the trial court dismissed the complaint for failure to state a cause of action. 11 A motion for reconsideration thereof filed by petitioner, which was opposed by private respondent, and to which a reply was filed by petitioner, was denied by the trial court on March 17, 1989. 12 Hence, petitioner filed a petition for Certiorari and mandamus and other relief in the Court of Appeals against said orders of the trial court. As earlier stated, on January 30, 1990, the Court of Appeals rendered its decision dismissing the appeal with costs against petitioner. Thus, the herein petition whereby petitioner alleges that the trial court committed a grave abuse of discretion in issuing the questioned orders dated November 24, 1988 and March 17, 1989, and that the Court of Appeals did likewise in dismissing the appeal of petitioner thereby disregarding a question of substance not in accord with law.

16
The petition is impressed with merit. A reading of the complaint shows that it is therein alleged that more than seven (7) years ago, several checks were issued by petitioner to private respondent in exchange for cash amounting to P280,900.00; that in due time, said checks were "either fully paid, settled, extinguished or condoned by agreement of the parties" so petitioner did not anymore redeem the checks because of their friendship; that on August 30, 1988, private respondent's lawyer sent a letter of demand to petitioner to pay said principal amount plus interest and attorney's fees with a total amount due of P568,541.00, which claim is not due and owing having been settled between the parties; that in said letter threat of court action was made causing injury to petitioner; that private respondent illegally withheld the petitioner's checks which should be returned to petitioner; that for private respondent's act of demanding payment for an obligation not due and for the former's failure to act with justice, observe honesty and good faith, petitioner prays for relief by way of actual, exemplary and nominal damages, and also prays that the private respondent be ordered to return to petitioner the checks mentioned in the complaint, and to pay the costs. Contrary to the findings of the lower court and the appellate court that the complaint states no cause of action, this Court finds and so holds that it states a sufficient cause of action. It must be remembered that when a party files a motion to dismiss the complaint for lack of cause of action he is deemed to hypothetically admit the allegations thereof. From the allegation of the complaint in this case it appears that, (1) petitioner has a primary right, because of having paid his obligation to private respondent, to have the checks he issued to cover the amount returned to him or otherwise cancelled by private respondent; and (2) the primary right of was violated when private respondent demanded payment of a settled obligation relying on the very checks of petitioner he had not returned. Consequently, on account of such demand for payment for an obligation duly settled, the petitioner thereby suffered damages 13 and should be afforded such relief as prayed for in the complaint.
:-cralaw

Contrary to the observation made by the appellate court, the cause of action had not prescribed. The cause of action accrued only on August 20, 1988 when in a demand letter for payment private respondent thereby committed a wrongful act against petitioner. The complaint was filed promptly on September 15, 1988, well within the four (4) year prescriptive period of an action of this nature. 14 WHEREFORE, the petition is GRANTED and the questioned decision of the Court of Appeals dated January 30, 1990 as well as the questioned orders of the Regional Trial Court of Manila dated November 24, 1988 and March 17, 1989, are hereby REVERSED AND SET ASIDE. Let the records of this case be remanded to the trial court for further proceedings. Costs against private respondent. SO ORDERED. Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. RTJ-93-1031 January 28, 1997 RODRIGO B. SUPENA, petitioner, vs. JUDGE ROSALIO G. DELAROSA, respondent

17
HERMOSISIMA, JR., J.: In his verified complaint dated June 16, 1993, Mr. Rodrigo B. Supena, President of Mortgagee BPI Agricultural Development Bank (BAID, for short), charges respondent Judge Rosalio G. de la Rosa with gross ignorance of the law for issuing an unlawful Order, dated May 25, 1993, in Foreclosure Case No. 93-822,entitled, "BPI Agricultural Development Bank v. PQL, Realty Incorporated The Order in effect held in abeyance the public auction sale set on May 26, 1993, per Notice of Extrajudicial Sale of one (1) parcel of land, together with the building and all the improvements existing thereon, described and covered by TCT No. 112644 of the Registry of Deeds of Manila, on the basis of a mere Ex-Parte Motion to Hold Auction Sale in Abeyance filed by Mortgagor, PQL Realty Incorporated (PQL, for short). The antecedent facts are as follows: On April 1, 1993, mortgagee BAID decided to extrajudicially foreclose the Real Estate Mortgage 1 executed by mortgagor PQL in tbe former's favor. Accordingly, BAID petitioned the ExOfficio Sheriff of Manila to take the necessary steps for the foreclosure of the mortgaged property and its sale to the highest bidder. On April 21, 1993, Jesusa P. Maningas, the Clerk of Court and Ex-Officio Sheriff of Manila, issued a Notice of Extrajudicial Sale, scheduling the public auction sale on May 26, 1993 at 10:00 o'clock a.m. in front of the City Hall Building, Manila. Said notice was subseguently published in the People's Journal Tonight on May 4, 11 and 19, 1993. However, on May 23, 1993, or one day before the scheduled sale, the Hon. Rosalio G. de la Rosa, in his capacity as Executive Judge of the Regional Trial Court of Manila, issued an Order holding in abeyance the scheduled public auction sale, on the basis of a mere ex-parte motion filed by PQL, a copy of which was received by mortgagee-complainant only on May 31, 1993. Complainant avers that, said order is, for all practical intents and purposes, a restraining order for an indefinite period, issued without the proper case being filed and without the benefit of notice and hearing, or even an injunction bond from which the mortgagee may seek compensation and restitution for the damages it may suffer by reason of the improper cancellation of the auction sale. The only ground relied upon by the ex-parte Motion, "that the parties have agreed to hold the foreclosure proceedings in Makati and not in Manila," is patently without merit, according to the complainant, as the venue of foreclosure proceedings is fixed by law and cannot be subject of stipulation. In sum, complainant submits that the actuations of respondent judge in granting the ex-parte motion of mortgagor were without basis and highly suspicious. Respondent, in his comment, maintains that he held in abeyance the extrajudicial foreclosure and sale of the property mortgaged supposed to be held on May 26, 1993 and instead scheduled the same for hearing on June 16, 1993 (which however did not transpire), to determine two issues: first, whether the venue in Foreclosure Proceeding No. 93-822 was improperly laid in light of the stipulation in the "Loan Agreement" duly entered into by both parties and acknowledged before a Notary Public which provides:
14) VENUE OF ACTIONS Any action or suit brought under this Agreement or any other documents related hereto shall be instituted in the proper Courts of Makati, Metro Manila, Republic of the Philippines. 2

and, secondly, in order to determine the veracity of the mortgagor's allegation that the Five Hundred Thousand Pesos (P500,000.00) paid to BPI Agri-Bank last January, 1993 does not reflect and does not appear to have been credited or deducted from the accounts of mortgagor. It was, allegedly, under the principle of fair play, equity and substantial justice which compelled him to issue the Order dated May 25, 1993. 3 We find the respondent judge culpable as charged,

18
Any judge, worthy of the robe he dons, or any lawyer, for that matter, worth his salt, ought to know that different laws apply to different kinds of sales under our jurisdiction. We have three different types of sales, namely: an ordinary execution sale, a judicial foreclosure sale, and an extrajudicial foreclosure sale. And ordinary execution sale is governed by the pertinent provisions of Rule 39 of the Rules of Court on Execution, Satisfaction and Effect of Judgments. Rule 68 of the Rules, captioned Foreclosure of Mortgage, governs judicial foreclosure sales. On the other hand, Act No. 3135, as amended by Act No. 4118, otherwise known as "An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real Estate Mortgages," applies in cases of extrajudicial foreclosure sales of real estate mortgages. 4 The case at bench involves an extrajudicial foreclosure sale of a real estate mortgage executed by mortgagor PQL in favor of mortgagee BAID. If the main concern of respondent judge in holding in abeyance the auction sale in Manila scheduled on May 26, 1993 was to determine whether or not venue of the execution sale was improperly laid, he would have easily been enlightened by referring to the correct law, definitely not the Rules of Court, which is Act No. 3135, as amended, particularly Sections 1 and 2, viz: Sec. 1. When a sale is made under a special power inserted in or attached to any real estate mortgage hereafter made as security for the payment of money or the fulfillment of any other obligation, the provisions of the following sections shall govern as to the manner in which the sale and redemption shall be effected, whether or not provision for the same is made in thepower. Sec. 2. Said sale cannot be made legally outside of the province in which the property sold is situated; and in case the place within said province in which the sale shall be made is the subject of 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. Here, the real property subject of the sale is situated in Felix Huertas Street, Sta, Cruz, Manila. 5 Thus, by express provision of Section 2, the sale cannot be made outside of Manila. Moreover, were the intention of the parties be considered with respect to venue in case the properties mortgaged be extrajudicially foreclosed, they even unequivocably stipulated in the Deed of Real Estate Mortgage itself under paragraph 15 that: xxx xxx xxx
It is hereby agreed that in case of foreclosure of this mortgage under Act 3135, as amended by Act 4118, the auction sale, in case of properties situated in the province, shall be held at the capital thereof. 6

Respondent judge, therefore, had no valid reason to entertain any doubt as to the propriety of the venue of the auction sale in Manila. The law as well as the intention of the parties cannot be more emphatic in this regard. Respondent judge, however, refers to the venue stipulation in the Loan Agreement signed by the parties to the effect that, "Any action or suit brought under this Agreement or any other documents related hereto shall be instituted in the proper courts of Makati . . . " 7 And under the pertinent provisions of Rule 4 of the Rules of Court on Venue of Actions, which provide: Sec. 2. Venue in Courts of First Instance (a) Real actions. Actions affecting title to, or for recovery of possession, or partition condemnation of, or foreclosure of mortgage on, real property, shall be commenced and tried in the province where the property or any part thereof lies.

19
Sec. 3. Venue by agreement, By written agreement of the parties the venue of an action may be changed or transferred from one province to another. venue of the auction sale should have been laid in Makati as mutually agreed upon by the parties. Again, in this regard, we reiterate that the law in point here is Act No. 3135, as amended, which is a special law, dealing particularly on extrajudicial foreclosure sales of real estate mortgages, and not the general provisions of the Rules of Court on Venue of Actions, In fact, even Section 5, Rule 4, is quite explicit in stating that: When rule not applicable, This rule shall not apply in those cases where a specific rule or law provides otherwise. The failure of respondent to recognize this is an utter display of ignorance of the law to which he swore to maintain professional competence. 8 Furthermore, provisions quoted by respondent under Rule 4 pertains to the venue ofactions, which an extrajudicial foreclosure is not, Section 1, Rule 2 defines an action in this wise: Action means an ordinary suit in a court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong. Hagans v. Wislizenus 9 does not depart from this definition when it states that '[A]n action is a formal demand of one's legal rights in a court of justice in the manner prescribed by the court or by the law. . . ." It is clear that the determinative or operative fact which converts a claim into an "action or suit" is the filing of the same with a "court of justice." Filed elsewhere, as with some other body or office not a court of justice, the claim may not be categorized under either term. 10 Unlike an action, an extrajudicial foreclosure of real estate mortgage is initiated by filing a petition not with any court of justice but with the office of the sheriff 11of the province where the sale is to be made. By no stretch of the imagination can the office of the sheriff come under the category of a court of justice. And as aptly observed by the complainant, if ever the executive judge comes into the picture, it is only because he erercises administrative supervision over the sheriff. But this administrative supervision, however, does not change the fact that extrajudicial foreclosures are not judicial proceedings, actions or suits. Granting arguendo that an extrajudicial foreclosure sale can be classified as an "action or suit" (which it is not) and that the venue stipulation in the Loan Agreement would gain relevance, respondent judge still committed a grievous error in holding the auction sale in abeyance due to improper laying of venue. We again quote the subject stipulation for easy reference, to wit: 14) VENUE OF ACTIONS Any action or suit brought under this Agreement or any other documents related hereto shall be instituted in the proper Courts of Makati, Metro Manila, Republic of the Philippines. Written stipulations as to venue are either mandatory or permissive. In interpreting stipulations, inquiry must be made as to whether or not the agreement is restrictive in the sense that the suit may be filed only. in the place agreed upon or merely permissive in that the parties may their suits not only in the place agreed upon but also in the places fixed by the rules. 12 In Polytrade Corporation v. Blanco, 13 the stipulation on venue there involved read: The parties agree to sue and be sued in the Courts of Manila.

20
The Court, in ruling that venue had been properly laid in the then Court of First Instance of Bulacan (the place of defendant's residence), said:
. . . An accurate reading, however, of the stipulation, "The parties agree to sue and be sued in the Courts of Manila," does not preclude the filing of suits in the residence of plaintiff or defendant. The plain meaning is that the parties merely consented to be sued in Manila. Qualifying or restrictive words which would indicate that Manila and Manila alone is the venue are totally absent therefrom. We cannot read into that clause that plaintiff and defendant bound themselves tofile suits with respect to the last two transactions in question only or exclusively in Manila. For, that agreement did not change or transfer venue. It simply is permissive, The parties solely agreed to add the courts of Manila as tribunals to which they may resort. They did not waive their right to pursue remedy in the courts specifically mentioned in Section 2 (b) of Rule 4. Renuntiatio non praesumitur. 14

In Lamis Ents. v. Lagamon, 15 the promissory note sued on had the following stipulation: In case of litigation, jurisdiction shall be vested in the Court of Davao City. The collection suit was instituted in the then Court of First Instance of Tagum, Davao, where the defendant resides, and not in Davao City as stipulated. We rejected the defense of improper venue and, citing the case of Polytrade, therein held:
. . . Anent the claim that Davao City had been stipulated as the venue, suffice it to say that a stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or defendant under Section 2 (b), Rule 4, Rules of Court, in the absence of qualifying or restrictive words in the agreement which would indicate that the place named is the only venue agreed upon by the parties. The stipulation did not deprive Maningo of his right to pursue remedy in the court specifically mentioned in Section 2 (b) of Rule 4, Rules of Court, Renuntiatio non praesumitur. . . 16

In Western Minolco v. Court of Appeals, 17 the clause on venue read: The parties stipulate that the venue of the actions referred to in Section 12.01 [Article XII of the Agreement] shall be in the City of Manila. The initial action was commenced in the then Court of First Instance of Baguio and Benguet instead of Manila. This Court took the occasion to reiterate once more the Polytrade doctrine:
. . . In any event, it is not entirely amiss to restate the doctrine that stipulations in a contract, which specify a definite place for the institution of an action arising in connection therewith, do not, as a rule, supersede the general rules on the matter set out in Rule 4 of the Rules of Court, but should be construed merely as an agreement on an additional forum, not as limiting venue to the specified place. 18

It is true that there have been early decisions of the Supreme Court inconsistent with the Polytrade line of cases, notably Bautista v. de Borja. 19 and Hoechst Philippines, Inc. v. Torres. 20 However, Lamis Enterprises andWestern Minolco followed by Moles v. Intermediate Appellate Court. 21 Hongkong and Shanghai Banking Corporation v. Sherman, 22 Nasser v. Court of Appeals 23 and Surigao Century Sawmill Co., Inc. v. Court of Appeals 24 settled the matter by treading the path blazed by Polytrade. Hence, the inevitable conclusion to be drawn, which respondent judge should have appreciated and followed, is that Bautista and Hoechst Philippineshave been rendered obsolete by the Polytrade line of cases. Needless to say, the more recent jurisprudence shall be deemed modificatory of the old ones. Restating the settled rule, therefore, as belabored by this Court inPhilippine Banking Corporation v. Tensuan, 25 venue stipulations in a contract, while considered valid and enforceable, do not as a rule supersede the general rule set forth in Rule 4 of the Revised Rules of Court. In the absence of qualifying or restrictive words, they should be considered merely as an agreement on additional forum, not as limiting venue to the specified place. They are not exclusive but, rather permissive. Notwithstanding the above fundamental considerations, respondent judge still issued the May 25, 1993 Order stopping indefinitely the foreclosure sale scheduled the following day on May 26, 1993. Clearly, he

21
can be held accountable for ignorance of the foregoing jurisprudential developments on the applicable rules governing venue stipulations. It has been said that when the law transgressed is elementary, the failure to know or observe it constitutes gross ignorance of the law. 26 In this case, a mere reference by respondent judge to Act No. 3135, as opposed to Rule 4 of the Revised Rules of Court, as well as the Deed of the Real Estate Mortgage itself, would dictate that there is no justification whatsoever for him to hold in abeyance the ertrajudicial foreclosure sale scheduled on May 26, 1993 in front of the City Hall of Manila. A judge owes it to the public and to the legal profession to know the very law he is supposed to apply to a given controversy as mandated by the Code of Judicial Conduct. 27 He is called upon to exhibit more than just a cursory acquaintance with the statutes and procedural rules. 28 There will be great faith in the administration of justice if there be a belief on the part of the parties that the occupants of the bench cannot justly be accused of an apparent deficiency in their grasp of legal principles. 29 Unfortunately, respondent judge, instead of inspiring faith and confidence in the administration of justice, committed a rank disservice to its cause when he issued the May 25, 1993 Order based on the inapplicable provisions of the Rules of Court. As to the second averment of respondent judge, that he issued the May 25, 1993 Order so as to determine the truthfulness of the mortgagor's allegation that the P500,000.00 previously paid to the mortgagee BAID was not duly credited nor deducted from the accounts of the mortgagor, suffice it to state that the same, by no means, provide any justification for the highly questionable actuation of respondent judge in issuing the subject Order. This matter, respondent judge ought to have known, should have been the subject of a proper court action for the purpose of seeking a temporary restraining order with prayer for a possible injunction to stop the scheduled extrajudicial foreclosure sale. Definitely, a mere exparte Motion to Hold Auction Sale in Abeyance is not the proper remedy, and this recourse by PQL evinces a clear attempt on its part to shortcut the entire process. Unfortunately, respondent judge fell prey to this scheme, wittingly or unwittingly. Instead of providing some legal justification for his irregular conduct in issuing the questioned Order, this flimsy argument advanced by the respondent judge all the more has convinced this Court of his culpability. WHEREFORE, the Court, resolving to hold respondent Judge Rosalio G. de la Rosa administratively liable for gross ignorance of the law, imposes on him a FINE of P2,000.00, the same to be deducted from whatever retirement benefits he may be entitled to receive from the government. Bellosillo, Vitug and Kapunan, JJ., concur. Padilla, J., took no part. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-14718 March 30, 1960

VICENTE JIMENEZ, ET AL., plaintiffs-appellants, vs. CARMELO S. CAMARA, ET AL., defendants-appellees. Enrique F. Marino for appellants. Benedicto, Sumbingco and Associates, for appellees.

22
BARRERA, J.: This is an appeal, certified to this Court by the Court of Appeals, from the order of the Court of First Instance of Negros Occidental (in Civil Case No. 3364), dismissing plaintiffs' complaint to compel defendant Carmelo S. Camara to execute the necessary deeds of conveyance of 17 parcels of land in favor of plaintiffs. Plaintiffs Vicente Jimenez, Arturo Jimenez and Filomeno Jimenez, together with four others were originally the registered co-owners of 24 lots, situated in Isabela, Bago and La Carlota, Negros Occidental. All 24 lots were mortgaged to the Philippine National Bank. Due to the owners mortgagors' failure to pay their indebtedness on time, the said bank foreclosed the mortgage and acquired the said properties in public auction, subject to redemption. The mortgagors renounced their right of redemption in favor of one Adriano Golez, who appointed Vicente Jimenez, one of herein plaintiffs, as his attorney-infact. In order to redeem said properties from the Philippine National Bank, Adriano Golez and said Vicente Jimenez obtained the intervention and services of defendant Carmelo S. Camara, and on December 29, 1931, a document entitled "Escritura de Compromiso de Venta" (Annex A) was duly executed by said bank in favor of Camara, wherein the former promised to sell to the latter all its rights and interests in the mortgaged properties for the sum of P55,160.00. To give effectivity to said contract, the conformity of the judgment debtors was necessary; and this conformity was given, subject to the condition that defendant Camara should reconvey to Adriano Golez whatever rights and interests Camara may acquire from the Philippine National Bank over said properties. Simultaneously with the execution of said contract (Annex A), the previous owners-mortgagors ceded and renounced all their rights, interests, and participations on the redemption of said properties in favor of Adriano Golez. On December 31, 1931, Golez and his attorney-in-fact Vicente Jimenez, with the conformity of the previous owners-mortgagors executed a contract of lease known as "Escritura de Arrendamiento" (Annex B), in favor of defendant Camara over seven (7) of the 24 lots for a period of 8 agricultural years, with 2 years option, and ending with agricultural year 1941-1942. With the execution of the aforementioned contracts (Annexes A and B), the possession, control, use and enjoyment of the 7 the leased lots comprising Haciendas Buenavista and Aurelia were delivered to Camara. The other properties (17 lots) situated in Bago and La Carlota remained in possession of plaintiffs. By virtue of said contracts (Annexes A and B), Camara, on January 25, 1945, paid the entire obligation of the mortgaged properties to the Philippine National Bank, in the amount of P34,541.18 as the balance of said debt, plus interests. As a consequence of said debt, plus interests. As a consequence of said payment (totalling P55,160.00), said bank, on January 3, 1946, executed a document of absolute sale known as "Escritura de Venta Definitiva" on all of the aforesaid properties in favor of Camara. Thereafter, Camara caused to be registered in his name all the said 24 lots in the Office of the Register of Deeds, without notice to plaintiffs, notwithstanding his commitment under said contracts, Annexes A and B to retransfer and reconvey all said properties to Adriano Golez, or to his assigns, successors-in-interests and/or cessioners, the contract of lease (Annex B) having terminated on November 1, 1942. Because of Camara's refusal to relinquish possession of the 7 lots comprising Haciendas Buenavista and Aurelia notwithstanding the expiration of the lease, a complaint was filed with the Court of First Instance of Negros Occidental on March 16, 1946, docketed in said court as Civil Case No. 306, entitled "Adriano Golez, plaintiff vs.Carmelo S. Camara, defendant." In this case, the true import of the lease contract as well as the resulting relationship between the parties, was put in issue. From the decision of the lower court in that case, plaintiff appealed to this Court (G. R. No. L-4460, Golez vs. Camara, 93 Phil., 1081), and on October 31, 1953, we promulgated a decision in which we said: From all the circumstances and equities of the case, we are led to the conclusion that the relation between the appellant and the appellee was in effect one whereby the appellee accommodated

23
the appellant in the sense that he assumed the obligation of paying the price necessary to redeem the undivided portions of Haciendas Aurelia and Buenavista from the Philippine National Bank, under the terms herein before already noted, namely, that P5,516.00 was the down payment and the balance was payable by annual installments of 1,000 piculs of sugar to the bank. The appellee, in return, was given by the appellant a leasehold over the latter's undivided portions of the two farms, in addition to the possession of the portions already acquired by the bank, with the right of course to receive and enjoy the produce thereof, after deducting only 1,000 piculs of sugar to be delivered to the bank yearly beginning with the crop year 1932-1933. No other rental was paid to the owners. Besides, the appellant admits his obligation to pay compound interest of twelve per cent on the sum of P5,516.00, representing the down payment made by the appellee to the bank and on other amounts paid upon account of the purchase price. xxx xxx xxx

There is now no question as to the right of the appellant to redeem the properties in question from the appellee, the latter not having appealed, and the only point that arises refers to the amount which the appellant has to pay. From the foregoing observations we are inclined to hold that the appellant should pay to the appellee the sum of P5,516.00 less P3,560.00 already paid on said item, or P1,956.00, with 12 per cent interest compounded annually from January, 1932, (it being admitted under appellants' evidence transcript, pp. 37-388 that the sum of P3,560 was paid at the commencement of the lease contract executed on December 31, 1931), plus the sum of P55,541.18. The latter amount which was paid by the appellee on January 24, 1945, in Japanese Military notes must be reduced to actual Philippine currency under the Ballantyne Scale, since said disbursement could have been repaid in the same currency by the appellant during the Japanese occupation. After being so reduced, it shall also bear compound interest of twelve per cent per annum from January 24, 1945. xxx xxx xxx

Wherefore, it being understood that the appellant is indebted to the appellee upon account of the repurchase price of the land in question only in the sums of P1,956.00, with twelve per cent compound interest from January, 1932, and P296.18 with compound interest of twelve per cent from January 24, 1945, which indebtedness should first be settled by the appellant before he is entitled to a conveyance of the land in question, the appealed judgment is in all other respects affirmed, except further that the 90-day period fixed therein shall be computed from the date this decision becomes final. So ordered without costs. In compliance with said decision of this Court, Adriano Golez, on March 26, 1954, through his attorney-infact Vicente Jimenez, deposited with the Clerk of Court of the Court of First Instance of Negros Occidental the sum of P386.33 in cash, and P25,000.00 in P.N. 13. Cashier's check or a total of P25,386.33. Thereupon, two questions arose again in the lower court (1) whether the deposit in check was valid, and (2) whether Camara was under obligation to reconvey to Golez only the 7 lots under lease or all the 24 lots acquired by him from the Philippine National Bank in virtue of the contracts Annexes A and B. The trial court sustained the validity of the deposit and also ordered the reconveyance of the 24 lots. Camara appealed from this order and again the case reached this Court. Pending this appeal in this Court, (in G. R. No. L-9160)* the present plaintiffs-appellants, as assignees of Golez, filed the instant case (No. 3364) on March 12, 1955, in the Court of First Instance of Occidental Negros against the same Camara, praying, inter alia, that defendant be ordered to execute the necessary deeds of conveyance in their favor of the remaining 17 lots acquired by Camara from the Philippine National Bank in the manner already narrated. On August 8, 1955, defendant filed a motion to dismiss, on

24
the grounds that (1) the complaint states no cause of action, and (2) the action is violative of the rule on splitting a cause of action under Sections 3 and 4, Rule 2 of the Rules of Court. Resolving said motion to dismiss and the opposition thereto filed by defendant on August 18, 1955, the court, on August 31, 1955, issued an order dismissing plaintiffs' complaint, sustaining the view that since plaintiffs' predecessor-in-interest (Adriano Golez), in the previous case No. 306 against the same defendant, sought the recovery of 7 of the lots mentioned in Annex B in pursuance to the terms thereof, where he (Golez) could have also demanded the conveyance of the other 17 lots covered by the same contract Annex B relied upon by the plaintiffs in the present case, the instant action constitutes but a part of the former and, consequently, violates the rule against splitting a cause of action. From this order of dismissal, the plaintiffs have taken the appeal now before us. We do not believe the lower court committed an error in dismissing the complaint upon the ground stated by it. The cause of action in the previous case No. 306 arose out of the violation of the terms of the contract Annex B by the defendant Camara. Plaintiffs' cause of action in this case No. 3364 is predicated likewise in the alleged infringement of the same Annex B by the same defendant Camara. Present plaintiffs are successors-in-interest of Golez, plaintiff in the first case. There is only one delict or wrong upon which both complaints are based. Plaintiffs, however, argue that there is no splitting of a cause of action because the issue involved in said Civil Case No. 306 was recovery of possession of Haciendas Buenavista and Aurelia, after the lease contract (Annex B) expired which defendant refused to surrender to Adriano Golez, whereas the issue in the present case is the reconveyance of the titles of the 17 lots mentioned in the "Escritura de Compromiso de Venta" (Annex A). This is not exactly the case. The two contracts are not separate from or independent of each other. They are both part of a single transaction: to carry out and facilitate the redemption from the Philippine National Bank of the mortgaged properties. The lease contract was resorted to provide a mode of payment to the bank by the delivery of 1,000 piculs of sugar a year, which is the agreed rental of 7 of the mortgaged lots. In fine, both actions are founded on one and the same contract, and the rule is that where the covenant or contract is entire and the breach total, there can be only one action. (Blossom & Co. vs. Manila Gas Corporation, 55 Phil., 226.). When a trial is had, it is intended that all matters growing out of the controversy are to be finally determined in one and the same suit. The object is to prevent a multiplicity of actions and to prevent the possibility of one part of the cause being tried before one judge which would unnecessarily harass the parties and produce needless litigations and accumulate costs. (Pascua vs. Sideco, 24 Phil., 26; Strong vs. Gutierrez Repide, 22 Phil., 9.) There is another reason why the questioned order of the court a quo must be upheld. Earlier in this opinion, we adverted to the appeal taken by Camara from an order of the trial court in Case No. 306, directing him to reconvey to Golez all the 24 lots in question. That appeal (G. R. No. L-9160, entitled "Adriano Golez, plaintiff-appellee vs.Carmelo S. Camara, defendant-appellant", 101 Phil., 363), was decided by this Court on April 30, 1957, wherein we held that It is clear from the foregoing facts that Camara is bound to convey to Golez, not only the interest of Isidoro Jimenez, Aurelia Jimenez and Vicente Jimenez Yamson in the seven (7) lots constituting the Haciendas Aurelia and Buenavista, but, also, the other seventeen (17) lots described in the "promise to sell" and in the contract of lease above-mentioned. It is true that the sale at public auction of the share of Isidoro Jimenez, Aurelia Jimenez and Vicente Jimenez Yamzon, in said haciendas, was the factor responsible for the intervention of Camara in the contracts already adverted to. This fact, and the circumstances that the property leased to Camara were said haciendas, explain the emphasis given thereto in the pleadings and in the former decisions of the Court of First Instance and of this Court. Again, the issues then submitted for determination revolved on the amount to be paid by Golez to Camara, which hinged

25
primarily on the interpretation of said "escritura de arrendamiento" thus focussing attention on said contract of lease and on the property leased HaciendasAurelia and Buenavista. However, neither said "compromiso de venta", nor the aforementioned "escritura de arrendamiento," was limited to a promise to sell or to a contract of lease. The former involved, also, a cession of the right of redemption, which, although ostensibly made (in the promise to sell) in favor of Camara, turns out, in the language of the contract of lease which was part of the whole scheme agreed upon by the parties to be "por y para el Sr. Adriano Golez". The latter (contract of lease) contained, also, a promise to assign or sell in favor of Golez. In any event, said "compromisio de venta" expressly referred, not only to said haciendas, but, also, to the seventeen (17) other lots therein described. Similarly, the aforementioned "escritura de arrendamiento" explicitly states that one of the considerations therefor is said "compromiso de venta" of twenty-four (24) lots, the identification number of, and the location, area, and the interest held in each of which are specified therein. Said deed of lease, moreover, stipulates clearly that "una vez hecho el pago de la cantidad dicha al citado Banco Nacional Filipino, dichas propiedatie cubiertas por dicha escritura de compromiso de, venta . . . estaran todas entregadas y en posesion del . . . Sr. Adriano Golez.' In the light of the foregoing, and considering that the decision of this Court of October 3, 1953 (Golez vs. Camara, 93 Phil., 1081), and that of the former decision of the lower court, fixing the amount to be paid by Golez, obviously regarded that payment thereof is a condition precedent to, or the consideration for the conveyance undertaken to he made by Camara, there is no doubt in our mind that the phrase "land in question" used in the dispositive part of our aforementioned decision, referred to the twenty-four (24) lots described in both deeds, and that Camara is bound to convey said twenty-four (24) lots to Golez. (Emphasis supplied.) In the light of the above ruling by this Court, it is clear that the question involved in the instant case has become moot or res adjudicata. Wherefore, finding no reversible error in the order of the court a quo, the same is hereby affirmed, with costs against the plaintiffs-appellants, without prejudice to their right, as assignees of Adriano Golez, to enforce decision of this Court in G. R. No. L-9160 above referred to. So ordered. Paras, C. J., Bengzon, Montemayor, Labrador, Concepcion, Reyes, J.B.L., and Gutierrez David, JJ., concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-25134 October 30, 1969

THE CITY OF BACOLOD, plaintiff-appellee, vs. SAN MIGUEL BREWERY, INC., defendant-appellant. First Assistant City Fiscal Raymundo O. Rallos for plaintiff-appellee. Picazo and Agcaoili for defendant-appellant. BARREDO, J.:

26
An appeal from the decision of the Court of First Instance of Negros Occidental in its Civil Case No. 7355, ordering the San Miguel Brewery, Inc. to pay to the City of Bacolod the sum of P36,519.10, representing surcharges on certain fees which, under existing ordinances of the City of Bacolod, the San Miguel Brewery should have paid quarterly to the treasurer of the said city for and/or during the period from July, 1959 to December, 1962, but which were paid only on April 23, 1963. On February 17, 1949, the City Council of Bacolod passed Ordinance No. 66, series of 1949 imposing upon "any person, firm or corporation engaged in the manufacturer bottling of coca-cola, pepsi cola, tru orange, lemonade, and other soft drinks within the jurisdiction of the City of Bacolod, ... a fee of ONE TWENTY-FOURTH (1/24) of a centavo for every bottle thereof," plus "a surcharge of 2% every month, but in no case to exceed 24% for one whole year," upon "such local manufacturers or bottler abovementioned who will be delinquent on any amount of fees due" under the ordinance. In 1959, this ordinance was amended by Ordinance No. 150, series of 1959, by increasing the fee to "one-eighth (1/8) of a centavo for every bottle thereof." In other words, the fee was increased from P0.01 to P0.03 per case of soft drinks. Appellant refused to pay the additional fee and challenged the validity of the whole ordinance. Under date of March 23, 1960, appellee sued appellant in Civil Case No. 5693 of the Court of First Instance of Negros Occidental, with the corresponding Complaint alleging, inter alia: 3. That the defendant, Manager of the San Miguel Brewery, Bacolod Coca Cola Plant, Bacolod Branch since the approval of Ordinance No. 66, Series of 1949 as amended by Ordinance No. 150, Series of 1959, which took effect on July 1, 1959, only paid to the plaintiff herein the P0.01 bottling tax per case of soft drinks thereby refusing to pay the P0.03 bottling tax per case of soft drinks which amounted to P26,306.54 at P0.02 per case of soft drinks such as coca cola and tru orange manufactured or bottled by said company as per statement submitted by the Assistant City Treasurer of Bacolod City herewith attached as Annex "C" of this complaint; and praying ... that judgment be rendered for the plaintiff: "(a) Ordering the defendant to pay the plaintiff the bottling taxes of P0.03 per case of soft drinks as provided for in Section 1, Ordinance No. 66, Series of 1949, as amended by Ordinance No. 150, Series of 1959, as well as the sum of P26,306.54 representing unpaid bottling taxes due with legal rate of interest thereon from the date of the filing of this complaint until complete payment thereof; ... costs, etc."' In due time, appellant filed its answer. This was followed by a stipulation of facts between the parties, whereupon, the court rendered judgment on November 12, 1960; with the following dispositive portion: WHEREFORE, San Miguel Brewery Inc. is ordered to pay to the plaintiff the sum of P26,306.54 and the tax at the rate of three centavos per case levied in Ordinance No. 66 and 150 from March, 1960, and thereafter. Costs against the defendant. Appellant appealed from the said decision to this Court where it pressed the question of the invalidity of the abovementioned taxing ordinances. In that appeal (G.R. No. L-18290), however, this Court affirmed the decision appealed from and upheld the constitutionality of the questioned ordinances and the authority of the appellee to enact the same. For reasons not extant in the record, it was already after this decision had become final when appellee moved for the reconsideration thereof, praying that the same be amended so as to include the penalties and surcharges provided for in the ordinances. Naturally, the said motion was denied, for the reason that "the decision is already final and may not be amended." When execution was had before the lower court, the appellee again sought the inclusion of the surcharges

27
referred to; and once again the move was frustrated by the Court of First Instance of Negros Occidental which denied the motion, as follows: Acting upon the motion dated October 24, 1963, filed by the Assistant City Fiscal, Raymundo Rallos, counsel for the plaintiff, and the opposition thereto filed by attorneys for the defendants dated November 9, 1963, as well as the reply to the opposition of counsel for the defendants dated December 5, 1963, taking into consideration that the decision of this Court as affirmed by the Supreme Court does not specifically mention the alleged surcharges claimed by the plaintiffappellee, the Court hereby resolves to deny, as it hereby denies, the aforesaid motion, for not being meritorious. Failing thus in its attempt to collect the surcharge provided for in the ordinances in question, appellee filed a second action (Civil Case No. 7355) to collect the said surcharges. Under date of July 10, 1964, it filed the corresponding complaint before the same Court of First Instance of Negros Occidental alleging, inter alia, that: 6. That soon after the decision of the Honorable Supreme Court affirming the decision of the Hon. Court, the defendant herein on April 23, 1963 paid to the City of Bacolod, the amount of ONE HUNDRED FIFTY SIX THOUSAND NINE HUNDRED TWENTY FOUR PESOS and TWENTY CENTAVOS (P156,924.20) as taxes from July, 1959 to December, 1962 in compliance with the provision of Section 1, Ordinance No. 66, Series of 1949, as amended by Ordinance No. 150, Series of 1959, which corresponds to the taxes due under said section in the amount of P0.03 per case of soft soft drinks manufactured by the defendant, but refused and still continued refusing to pay the surcharge as provided for under Section 4 of Ordinance No. 66, Series of 1949, as amended by Ordinance No. 150, Series of 1959, which reads as follows: "SEC. 4 A surcharge of 2% every month, but in no case to exceed 24% for one whole year, shall be imposed on such local manufacturer or bottlers above mentioned who will be delinquent on any amount of fees under the ordinance." which up to now amounted to THIRTY SIX THOUSAND FIVE HUNDRED NINETEEN PESOS AND TEN CENTAVOS (P36,519.10), as shown by the certified statement of the office of the City Treasurer of Bacolod City herewith attached as Annex "E" and made an integral part of this complaint; 7. That the said interest and/or penalties to the said bottling taxes which defendant refused to pay have long been overdue; and again praying ... that judgment be rendered for the plaintiff: (a) Ordering the defendant to pay the penalty and/or interest therein Section 4 of Ordinance No. 66, Series of 1949, as amended by Ordinance No. 150, Series of 1959 the total amount of THIRTY SIX THOUSAND FIVE HUNDRED NINETEEN PESOS and TEN CENTAVOS (P36,519.10), representing the surcharges from August, 1959 to December, 1962, inclusive, and the 24% penalty computed as of June 30, 1964, from the amount of P152,162.90, with legal rate of interest thereon from the date of the filing of this complaint until complete payment thereof;" plus costs, etc. On July 24, 1964, appellant filed a motion to dismiss the case on the grounds that: (1) the cause of action is barred by a prior judgment, and (2) a party may not institute more than one suit for a single cause of action. This motion was denied by the court a quo in its order dated August 22, 1964; so appellant filed its answer wherein it substantially reiterated, as affirmative defenses, the above-mentioned grounds of its

28
motion to dismiss. Thereafter, the parties submitted the case for judgment on the pleadings, whereupon, the court rendered judgment on March 11, 1965 with the following dispositive portion: . IN VIEW THEREOF, judgment is hereby rendered ordering the defendant San Miguel Brewery, Inc. to pay to the plaintiff the sum of P36,519.10 representing the surcharges as provided in section 4 of Ordinance 66, series of 1949 of the City of Bacolod. No costs. Appellants moved for reconsideration but its motion was denied, hence, the instant appeal. Appellant has only one assignment of error, to wit: THE LOWER COURT ERRED IN FINDING THE APPELLANT LIABLE TO THE APPELLEE FOR THE SUM OF P36,519.10 REPRESENTING SURCHARGES AS PROVIDED IN TAX ORDINANCE NO. 66, SERIES OF 1949, AS AMENDED, OF THE CITY OF BACOLOD. Under this, it argues that the action of appellee cannot be maintained because (1) a party may not institute more than one suit for a single cause of action; and (2) appellee's action for recovery of the surcharges in question is barred by prior judgment. We find appellant's position essentially correct. There is no question that appellee split up its cause of action when it filed the first complaint on March 23, 1960, seeking the recovery of only the bottling taxes or charges plus legal interest, without mentioning in any manner the surcharges. The rule on the matter is clear. Sections 3 and 4 of Rule 2 of the Rules of Court of 1940 which were still in force then provided: SEC. 3. Splitting a cause of action, forbidden. A single cause of action cannot be split up into two or more parts so as to be made the subject of different complaints. . SEC. 4. Effect of splitting. If separate complaints were brought for different parts of a single cause of action, the filing of the first may be pleaded in abatement of the others, and a judgment upon the merits in either is available as a bar in the others. Indeed, this rule against the splitting up of a cause of action is an old one. In fact, it preceded the Rules of Court or any statutory provision. In Bachrach Motor Co., Inc. vs. Icarangal et al.,1 this Court already explained its meaning, origin and purpose, thus: But, even if we have no such section 708 of our Code of Civil Procedure, or section 59 of the Insolvency Law, we have still the rule against splitting a single cause of action. This rule, though not contained in any statutory provision, has been applied by this court in all appropriate cases. Thus, in Santos vs. Moir (36 Phil. 350, 359), we said: "It is well recognized that a party cannot split a single cause of action into parts and sue on each part separately. A complaint for the recovery of personal property with damages for detention states a single cause of action which cannot be divided into an action for possession and one for damages; and if suit is brought for possession only a subsequent action cannot be maintained to recover the damages resulting from the unlawful detention." In Rubio de Larena vs. Villanueva (53 Phil. 923, 927), we reiterated the rule by stating that "... a party will not be permitted to split up a single cause of action and make it the basis for several suits" and that when a lease provides for the payment of the rent in separate installments, each installment constitutes an independent cause of action, but when, at the time the complaint is filed, there are several installments due, all of them constitute a single cause of action and should be included in a single complaint, and if some of them are not so included, they are barred. The same doctrine is stated inLavarro vs. Labitoria (54 Phil. 788), wherein we said that "a party will not be permitted to split up a single cause of action and make it

29
a basis for several suits" and that a claim for partition of real property as well as for improvements constitutes a single cause of action, and a complaint for partition alone bars a subsequent complaint for the improvements. And in Blossom & Co. vs. Manila Gas Corporation (55 Phil. 226240), we held that "as a general rule a contract to do several things at several times is divisible in its nature, so as to authorize successive actions; and a judgment recovered for a single breach of a continuing contract or covenant is no bar to suit for a subsequent breach thereof. But where the covenant or contract is entire, and the breach total, there can be only one action, and plaintiff must therein recover all his damages. The rule against splitting a single cause of action is intended "to prevent repeated litigation between the same parties in regard to the same subject of controversy; to protect defendant from unnecessary vexation; and to avoid the costs and expenses incident to numerous suits." (1 C.J. 1107) It comes from that old maximnemo debet bis vexare pro una et eadem causa (no man shall be twice vexed for one and the same cause). (Ex parte Lange, 18 Wall 163, 168; 21 Law Ed. 872; also U.S. vs. Throckmorton, 98 U.S. 61; 25 Law Ed. 93). And it developed, certainly not as an original legal right of the defendant, but as an interposition of courts upon principles of public policy to prevent inconvenience and hardship incident to repeated and unnecessary litigations. (1 C. J. 1107). In the light of these precedents, it cannot be denied that appellant's failure to pay the bottling charges or taxes and the surcharges for delinquency in the payment thereof constitutes but one single cause of action which under the above rule can be the subject of only one complaint, under pain of either of them being barred if not included in the same complaint with the other. The error of appellee springs from a misconception or a vague comprehension of the elements of a cause of action. The classical definition of a cause of action is that it is "a delict or wrong by which the rights of the plaintiff are violated by the defendant." Its elements may be generally stated to be (1) a right existing in favor of the plaintiff; (2) a corresponding obligation on the part of the defendant to respect such right; and (3) an act or omission of the plaintiff which constitutes a violation of the plaintiff's right which defendant had the duty to respect. For purposes, however, of the rule against splitting up of a cause of action, a clearer understanding can be achieved, if together with these elements, the right to relief is considered. In the last analysis, a cause of action is basically an act or an omission or several acts or omissions. A single act or omission can be violative of various rights at the same time, as when the act constitutes juridically a violation of several separate and distinct legal obligations. This happens, for example, when a passenger of a common carrier, such as a taxi, is injured in a collision thereof with another vehicle due to the negligence of the respective drivers of both vehicles. In such a case, several rights of the passenger are violated, inter alia, (1) the right to be safe from the negligent acts of either or both the drivers under the law on culpa-acquiliana or quasi-delict; (2) the right to be safe from criminal negligence of the said drivers under the penal laws; and (3) the right to be safely conducted to his destination under the contract of carriage and the law covering the same, not counting anymore the provisions of Article 33 of the Civil Code. The violation of each of these rights is a cause of action in itself. Hence, such a passenger has at least three causes of action arising from the same act. On the other hand, it can happen also that several acts or omissions may violate only one right, in which case, there would be only one cause of action. Again the violation of a single right may give rise to more than one relief. In other words, for a single cause of action or violation of a right, the plaintiff may be entitled to several reliefs. It is the filing of separate complaints for these several reliefs that constitutes splitting up of the cause of action. This is what is prohibited by the rule. In the case at bar, when appellant failed and refused to pay the difference in bottling charges from July 1, 1959, such act of appellant in violation of the right of appellee to be paid said charges in full under the Ordinance, was one single cause of action, but under the Ordinance, appellee became entitled, as a result of such non-payment, to two reliefs, namely: (1) the recovery of the balance of the basic charges; and (2) the payment of the corresponding surcharges, the latter being merely a consequence of the failure to pay the former. Stated differently, the obligation of appellant to pay the surcharges arose from the violation by said appellant of the same right of appellee from which the obligation to pay the basic

30
charges also arose. Upon these facts, it is obvious that appellee has filed separate complaints for each of two reliefs related to the same single cause of action, thereby splitting up the said cause of action. The trial court held that inasmuch as there was no demand in the complaint in the first case for the payment of the surcharges, unlike in the case of Collector of Internal Revenue vs. Blas Gutierrez, et al., G.R. No. L-13819. May 25, 1960, wherein there was such a demand, there is no bar by prior judgment as to said surcharges, the same not having been "raised as an issue or cause of action in Civil Case No. 5693." This holding is erroneous. Section 4 of Rule 2, above-quoted, is unmistakably clear as to the effect of the splitting up of a cause of action. It says, "if separate complaints are brought for different parts (reliefs) of a single cause of action, the filing of the first (complaint) may be pleaded in abatement of the others, and a judgment upon the merits in either is available as a bar in the others." In other words, whenever a plaintiff has filed more than one complaint for the same violation of a right, the filing of the first complaint on any of the reliefs born of the said violation constitutes a bar to any action on any of the other possible reliefs arising from the same violation, whether the first action is still pending, in which event, the defense to the subsequent complaint would be litis pendentia, or it has already been finally terminated, in which case, the defense would be res adjudicata.2 Indeed, litis pendentia and res adjudicata, on the one hand, and splitting up a cause of action on the other, are not separate and distinct defenses, since either of the former is by law only the result or effect of the latter, or, better said, the sanction for or behind it. It thus results that the judgment of the lower court must be, as it is hereby, reversed and the complaint of appellee is dismissed. No costs. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando and Teehankee, JJ.,concur. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 111401 October 17, 1996 ERIBERTO G. VALENCIA, substituted by his heirs: REBECCA S. VDA. DE VALENCIA, MA. CAROLINA S. VALENCIA, MA. ANTONETTE S. VALENCIA, PETER GELVIC S. VALENCIA, JOSE THERONE S. VALENCIA and MA. SOPHEA S. VALENCIA, petitioners, vs. COURT OF APPEALS, RICARDO BAGTAS and MIGUEL BUNYE, respondents. PANGANIBAN, J.:p Should the action for rescission of a lease contract (commenced by petitioner-lessor against private respondents-lessees) be deemed to bar on the ground of litis pendentia an action for damages brought by private respondents by reason of petitioner's violation of the restraining orders issued by the Court of Appeals which required the parties to maintain the status quo insofar as the lease relationship is concerned? The Court answers this query in the negative while resolving the instant petition for review on certiorari, which assails the Decision 1 of the respondent Court of Appeals 2 promulgated on February 18, 1993 in CA-G.R. CV No. 27590, affirming the decision 3 of the trial court 4 awarding moral and exemplary damages plus attorney's fees to herein private respondents.

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The Facts The facts are not controverted by the parties, and therefore, the factual recitals in the trial court's decision, which were quoted by the respondent appellate court in its own Decision, are hereinbelow reproduced: 5 The evidence shows that (private respondents) were lessees of a 24-hectare fishpond owned by (petitioner as substituted by his heirs) located at Paombong, Bulacan. The lease is covered by a lease contract by and between the said parties (Exh. A). The lease [executed on March 1, 1982] was supposed to have expired on May 1987, but before the said date, (petitioner) filed [on June 25, 1984] a complaint against (private respondents) for the rescission of the lease contract. The Regional Trial Court of Malolos, Bulacan which took cognizance of said case issued a writ of preliminary Mandatory Injunction ordering (private respondents) to surrender to the (petitioner) possession of the fishpond. In view whereof, (private respondents) filed a Petition for Certiorari with the Intermediate Appellate Court. The said court on September 21, 1984 issued a restraining order enjoining (petitioner) and the Regional Trial Court from enforcing the mandatory injunction (Exh. J of [private respondents] and Exh. 11 of [petitioner]). At the hearing in the Intermediate Appellate Court the parties agreed to maintain a status quo and the fishpond hut would be utilized by (private respondents) until the case is resolved by the Regional Trial Court of Malolos (Exh. N). However, despite this order of the Appellate Court (petitioner) filed an ex-parte motion for the designation of a member of the Philippine Constabulary to maintain order in the place which the Regional Trial Court of Malolos granted. With said order (petitioner) with the aid of PC men was able to eject plaintiffs from the main hut. (Petitioner) and their men also dried up a portion of the leased property where (private respondents) have previously scattered chemicals and fertilizer to grow fish food. As a result no fish food grew causing damage to (private respondents). (Private respondents) were also prevented from transferring the bigger fish to a more spacious portion of the fishpond resulting in death to many fishes which again caused damages to (private respondents). Subsequently another person came to the fishpond and introduced himself as the new lessee. The Regional Trial Court of Malolos then issued another order (Exh. 5-2) declaring that all the fishes located in the fishpond remain the properties of (private respondents) subject to their disposal, however the same was not honored by (petitioner). (Private respondents) then appealed again to the IAC which issued a resolution enjoining (petitioner) to maintain and observe status quo (Exh. V-VI), and subsequently another resolution categorically declaring (petitioner) Valencia without right of possession under status quo, and to vacate the main hut of the fishpond (Exh. Y). It was only then that (private respondents) gained complete and total control of the subject fishpond including its huts. (Private respondents) are now asking [the Regional Trial Court of Manila] for exemplary damages worth P400,000.00, moral damages of P400,000.00, attorney's fees of P100,000.00 and costs of suit. A Motion to Dismiss was filed by (petitioner) on April 8, 1985 which was opposed by (private respondents). The Motion to Dismiss was denied by the court on March 4, 1986. A Motion for Reconsideration was filed by (petitioner) which was denied by the court. After (petitioner) filed his Answer, pre-trial was set on November 14, 1986 and the same was terminated on February 26, 1987. Trial on the merits was held on April 3, 1987.

32
The evidence for the prosecution was brought forth through the testimonies of Ricardo Bagtas and Miguel Bunye and its Exhibits A to CC.
Instead of presenting evidence . . . , (petitioner) filed [on February 24, 1989] a Second Motion to Dismiss which was opposed by counsel for (private respondents). The Second Motion to Dismiss was denied by the court [on April 13, 1989]. 6

On August 31, 1989, the (petitioner) Eriberto Valencia testified, however his testimony was not terminated in view of the objection of counsel for the (private respondents) who claimed that the questions propounded to the witness touched on matters which have been passed upon by the Regional Trial Court of Malolos. (Petitioner) contended that proceedings in this court [RTC of Manila] should be suspended until after the case in the Regional Trial Court of Malolos which was appealed to the Court of Appeals is resolved, and filed a Motion to this effect, but the court denied the same. The trial court gave counsel for petitioner time to file the necessary pleadings, as prayed for, but he failed to do so. During the subsequent hearing, neither petitioner nor his counsel appeared. The trial court thus deemed petitioner to have waived his right to present further evidence, and the case was considered submitted for decision. On March 23, 1990, the trial court ruled in favor of private respondents, the fallo of its decision reading as follows: 7 WHEREFORE, premises considered, the court orders defendant (petitioner herein) to pay the plaintiffs moral damages in the amount of P30,000.00, exemplary damages in the amount of P20,000.00 and to pay plaintiffs P10,000.00 as and for attorney's fees. Petitioner and private respondents, being equally dissatisfied with the decision of the trial court, appealed to respondent Court. Petitioner alleged litis pendentia and contested the award of damages by the trial court; private respondents on the other hand were aggrieved that the trial court failed to award actual damages, and in addition sought an increase in the amount of moral and exemplary damages granted. On appeal, respondent Court affirmed the decision of the Manila RTC, and held that there was no litis pendentia: 8 It is not disputed that there was another suit, Civil Case No. 7554-M, then pending before the Regional Trial Court in Bulacan between plaintiffs-appellants and defendantappellant. To be sure, that case involved the same property. There, appellant Valencia sought the rescission of the lease contract he had entered into with plaintiffs on March 1, 1982. He based his claim upon the alleged failure of plaintiffs to abide by the stipulations of their agreement. In this case under consideration, plaintiffs Bagtas and Bunye are asking for compensation for the damages that they had sustained by reason of Valencia's violation of certain resolutions issued by this Court in (CA)-G.R. SP No. 04283 (Exhs. "J" & "N"). Clearly, the causes of action in the two cases are not the same; they are founded on different acts; the rights violated are different; and the reliefs sought are also different. Consequently, defendant-appellant's submission that lis pendens is a ground for dismissal of plaintiffs' suit is not valid. The dispositive portion of the now-assailed Decision reads: 9 WHEREFORE, judgment is hereby rendered affirming the appealed decision with the modification that plaintiffs-appellants [private respondents herein] are hereby additionally awarded the sum of P50,000.00 as and for actual damages. Costs against defendantappellant [herein petitioner].

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Petitioner's motion for reconsideration dated March 9, 1993 was denied by respondent Court. Thus he comes to us seeking relief. The Issue Petitioner raises the following lone "legal issue:" 10 THE DENIAL ORDERS AND THE DECISION OF THE MANILA COURT IN CIVIL CASE NO. 85-29514 AND THE DECISION OF RESPONDENT COURT IN CA-G.R. CV NO. 27590 ARE NOT IN ACCORD WITH THE LAW AND THE DECISIONS ON LITIS PENDENTIA. Petitioner contends that the error in the Decision lies in its failure to properly appreciate the complaint filed with the Manila court, which, when taken together with private respondents' documentary and testimonial evidence, discloses that the alleged wrongful acts for which they claimed damages arose out of, were connected with, and/or were incidents of the proceedings in the action for rescission before the Bulacan court. Petitioner claims that the action for damages commenced by private respondents constitutes splitting of a single cause of action which is prohibited by the Revised Rules of Court. 11 Petitioner argues that, for the aforesaid reasons, if indeed private respondents suffered any damage, they should have filed a compulsory counterclaim or supplemental pleading for the alleged acts of violation of restraining orders which are "transactions, occurrence or event which have happened since the date of the pleading sought to be supplemented. 12 He insists that the filing of a compulsory counterclaim is the proper recourse considering that petitioner had posted a bond in the rescission case to answer for damages that private respondents might suffer by reason of the issuance of the preliminary mandatory injunction. 13 He also ventures to say that the case filed with the Manila court can even be considered as a form of "forum shopping." 14 In fine, petitioner asserts that under the rule on litis pendentia the action for rescission filed with the Bulacan courtbars the action for damages filed in Manila. It is interesting to note that petitioner does not contest the correctness of the award of damages made by respondent Court; he merely insists on the dismissal (?) of the case for damages on the ground of litis pendentia, there being a pending case for rescission in which private respondents could have asserted their claim for damages. This being his lone assigned issue, the clear and unavoidable implication is that if his contention is struck down, he is deemed to have waived any objection against the award of damages by respondent Court. The Court's Ruling Petitioner's arguments are legally tenuous and patently unmeritorious. Litis Pendencia and Splitting of a Single Cause of Action Before discussing the petition on the merits, it is well to clarify certain concepts at the outset. If a partylitigant splits his single cause of action, the other action or actions filed may be dismissed by invoking litis pendentia, pursuant to Section 1(e), Rule 16 of the Revised Rules of Court. A party who splits his single cause of action cannot be accused of also "violating the rule against litis pendentia" as the former, a malpractice, gives rise to the latter, a ground for a motion to dismiss. This is made clear by Section 4, Rule 2 of the Rules, which speaks of cause and effect: Sec. 4. Effect of splitting a single cause of action. If two or more complaints are brought for different parts of a single cause of action, the filing of the first may be pleaded in abatement of the other or others, in accordance with section 1 (e) of Rule 16, and a judgment upon the merits in any one is available as a bar in the others.

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Now, to the main issues. No Litis Pendentia This Court has consistently held, in a long line of cases, that the requisites for the existence of litis pendentia as a ground for dismissal of an action are as follows: 1) identity of parties, or at least such parties as represent the same interests in both actions; 2) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and 3) the identity with respect to the two preceding particulars in the two cases is such that any judgment that may be rendered in the pending case, regardless of which party is successful, would amount tores adjudicata in the other case. 16 There may have been identity of parties in the two actions, but the other two requisites are not similarly satisfied. The case in Bulacan was of course founded upon alleged violations by the private respondents as lessees of certain stipulations in their lease contract with petitioner, and therefore, it cannot be gainsaid that the rights asserted (by petitioner as lessor) and relief sought therein (i.e., rescission of the lease contract) were entirely different from those asserted in Manila. The latter case stemmed from the prejudice suffered by private respondents due to petitioner's violation of the IAC's restraining orders for the observance of status quo between the parties, the relief demanded therein consisting of actual, moral and exemplary damages. Thus, the respondent Court committed no reversible error in holding that "the causes of action in the two cases are not the same; they are founded on different acts; the rights violated are different; and the reliefs sought are also different." The third requisite constitutes the test of identity in the aforestated particulars, and in connection therewith, this Court quoted 1 Cyc., 28 17 thus A plea of the pendency of a prior action is not available unless the prior action is of such a character that, had a judgment been rendered therein on the merits, such a judgment would be conclusive between the parties and could be pleaded in bar of the second action. (emphasis supplied) The res judicata test when applied to the two cases in question indicate in no uncertain terms that regardless of whoever will ultimately prevail in the Bulacan case, the final judgment therein whether granting or denying rescission of the lease contract will not be conclusive between the parties in the Manila case, and vice versa. In other words, to our mind, the outcome of the Bulacan case has nothing to do with whether petitioner should be held liable for the damage inflicted upon private respondents as a result of his violating the IAC restraining orders, the two cases having arisen from different acts and environmental circumstances. No Forum-Shopping Petitioner's allegations to the contrary notwithstanding, forum-shopping is not present in the case at bar. The established rule is that for forum-shopping to exist, both actions must involve the same transactions, same essential facts and circumstances and must raise identical causes of actions, subject matter, and issues. 18 As held by this Court in a recent case: 19 The test for determining whether a party violated the rule against forum shopping has been laid down in the 1986 case of Buan vs. Lopez (145 SCRA 34, October 13, 1986),

35
also by Chief Justice Narvasa, and that is, forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the other . . . (emphasis supplied) We have already established that litis pendentia could not have been properly pleaded to abate the second action brought in Manila, and that a final judgment in either case would not be res judicata with respect to the other. Thus, the allegation of forum-shopping must fail. In Jose Cuenco Borromeo, et al., vs. Hon. Intermediate Appellate Court, et al., 20 this Court capsulized the essence of what is abhorrent in the malpractice of forum-shopping, and the following excerpt shows why there can be no forum-shopping in this case: Ultimately, what is truly important to consider in determining whether forum-shopping exists or not is the vexation caused the courts and parties-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 for a upon the same issue. Claim Not A Compulsory Counterclaim for Damages

Petitioner erroneously insists that private respondents' claim for damages should have been made through a compulsory counterclaim in the same action for rescission. This could not have been done as the same cannot be considered or treated as a compulsory counterclaim in the Bulacan case. This Court, in an early case, 21 stated certain criteria or tests by which the compulsory or permissive nature of specific counterclaims can be determined, summarized as follows: 1. Are the issues of fact and law raised by the claim and counterclaim largely the same? 2. Would res judicata bar a subsequent suit on defendant's claim absent the compulsory counterclaim rule? 3. Will substantially the same evidence support or refute plaintiffs claim as well as defendant's counterclaim? 4. Is there any logical relation between the claim and the counterclaim? In this instance, the answers to all four queries are in the negative. Was Injunction Bond Sufficient Protection? Petitioner's argument that the bond he posted for the issuance by the Bulacan trial court of the writ of preliminary mandatory injunction could have answered for the damages claimed by private respondents is untenable. Such bond was required for a specific purpose, to wit: 22 (b) The plaintiff files with the clerk or judge of the court in which the action is pending a bond executed to the party enjoined, in an amount to be fixed by the court, to the effect that the plaintiff will pay to such party all damages which he may sustain by reason of the injunction if the court should finally decide that the plaintiff was not entitled thereto. No further scrutiny is necessary. The said bond was supposed to answer only for damages which may be sustained by private respondents, against whom the mandatory injunction was issued, by reason of the issuance thereof, and not to answer for damages caused by the actuations of petitioner, which may or

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may not be related at all to the implementation of the mandatory injunction. The purpose of the injunction bond is to protect the defendant against loss or damage by reason of the injunction in case the court finally decides that the plaintiff was not entitled to it, and the bond is usually conditioned accordingly. Thus, the bondsmen are obligated to account to the defendant in the injunction suit for all damages, or costs and reasonable counsel's fees, incurred or sustained by the latter in case it is determined that the injunction was wrongfully issued. 23 In the case at bar, the damages and expenses sustained by private respondents were a result of the willful contravention by petitioner of the IAC restraining orders, and thus, outside the coverage of the injunction bond. WHEREFORE, in view of the foregoing, the instant petition is hereby DENIED and the appealed Decision and Resolution are AFFIRMED. Costs against petitioner. SO ORDERED. Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-23233 September 28, 1967

LUIS ENGUERRA, plaintiff -appellant, vs. ANTONIO DOLOSA, defendant-appellee. Esteban Escalante, Jr. for plaintiff-appellant. Ruben M. Paps for defendant-appellee. CONCEPCION, C.J.: Appeal, by plaintiff Luis Enguerra, from an order of dismissal of the Court of First Instance of Sorsogon. Plaintiff Enguerra was chief baker for the De Lux Bakery and Grocery, in Sorsogon, Sorsogon, from June 18, 1959 to October 8, 1961. On December 14, 1961, he filed, with the municipal court of Sorsogon, Sorsogon, a complaint, against defendant Antonio Dolosa, as owner of said establishment, to recover the sum of P4,056.00, for unpaid overtime services allegedly rendered during said period. The court having later dismissed said complaint, Enguerra appealed to the Court of First Instance of Sorsogon, where the case was docketed as Civil Case No. 1800. Soon thereafter, or on January 24, 1963, Enguerra filed, with the same Court of First Instance, another complaint against Dolosa, which was docketed as Civil Case No. 1804, to recover the following: 1. Termination Pay P392.74 2. Underpayment of wages 64.90 3. Compensatory Damages, unearned income from unjustified dismissal 6,363.22

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4. Compensatory Damages, overtime 5. Moral Damages Exemplary Damages Attorney's fees unpaid 4,347.89 5,000.00 2,500.00 3,500.00

On motion of Dolosa, he was granted, on February 6, 1963, an extension of 30 days, "counted from to-day," to submit his answer. On March 8, 1963, he filed, instead, a motion to dismiss, upon the ground that said pending case No. 1800 is an action between the same parties for the same cause of action, and that the complaint in case No. 1804 violates "the rule against splitting a cause of action." Subsequently, or on March 12, 1963, Enguerra sought to have Dolosa declared in default, upon the ground that his motion to dismiss has been filed one (1) day late, and that it was merely pro forma, because of which it did not suspend the running of the period to file his answer. The Court of First Instance granted the motion to dismiss and denied the motion to declare Dolosa in default. A reconsideration of the orders to this effect having been denied, Enguerra interposed the present appeal, directly to the Supreme Court, alleging that the lower court had erred (a) in not declaring Dolosa in default; and (b) in dismissing the complaint herein. As regards the first alleged error, Enguerra maintains that the extension of 30 days granted in the order of February 6, 1963, expired on March 7, 1963, because the order stated that said period should be "counted from today," which, Enguerra maintains, should be understood to mean from February 6 to March 7, 1963. An identical theory was rejected in Ulpiando vs. Court of Agrarian Relations,1 in the following language: The petitioners raise procedural questions. On 2 August 1957 the respondents received a copy of the decision dated 22 July 1957 (See Annexes E & F). On 15 August they filed a "petition for extension of time to file motion for reconsideration," dated 13 August, because of lack of material time to read the voluminous transcript of stenographic notes and for that reason they could not readily formulate their arguments in support of the motion for reconsideration (Annex F). On the same day, 15 August, the Court entered an order granting the respondents "fifteen (15) days counted from today within which to file their motion for reconsideration of the decision rendered on July 29, 1957 (should be 22) in the instant case." (Italics supplied.) On August 30, the respondents mailed their motion for reconsideration in the post office of Cuyapo, Nueva Ecija. The petitioners claim that counting from 15 August, the day the 15-day period commenced to run, to 30 August, when the respondents mailed their motion for reconsideration, 16 days already had elapsed, and contend that the Court had already lost jurisdiction of the case and could no longer reconsider its decision dated 22 July. xxx xxx xxx

Rule 28 of the Rules of Court provides: "In computing any period of time prescribed or allowed by these rules, by order of court, or by any applicable statute, the day of the act, event, or default after which the designated period of time begins to run is not to be included. The last day of the period so computed is to be included, unless it is a Sunday or a legal holiday, in which event the time shall run until the end of the next day which is neither a Sunday nor a holiday."
1awphl.nt

This rule adopts the exclude-the-first and include-the-last day method for computing any period of time. Therefore, excluding the day when the order granting their petition for extension of time to file motion for reconsideration was entered by the Court (15 August) and including the day the respondents mailed their motion for reconsideration (30 August), only 15 days had elapsed. Hence, the respondents' motion for reconsideration was filed within the extension of time granted by the Court.

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No reason had been advanced, and we find none, to depart from this view, which is in line with the spirit and the letter of our laws and the Rules of Court, and is, accordingly, reiterated. As regards the second procedural ground of the objection to the motion to dismiss, it should be noted that a motion is said to be pro forma when it is apparent therefrom that the movant has not endeavored to make it reasonably persuasive or convincing, his purpose being merely to gain time or to delay the proceedings. In the case at bar, the motion explicitly states "that there is another action pending between the same parties for the same cause, namely: Luis Enguerra vs. Antonio Dolosa Civil Case No. 1800, now pending before this Honorable Court;" and "that the filing of the above entitled case is a violation of the rule against splitting a cause of action." Having thus expressed, not only the legal grounds for the motion, but, also the particular and concrete facts upon which said grounds rely with specification of the title and number of the case on which the motion was based and of the court before which the case is pending, coupled with the other circumstances hereinafter adverted to and appearing in the records of both cases said motion, manifestly, is not pro forma2 and its presentation suspended the running of the period for the filing of defendant's answer. The next and most important question for determination is whether or not Civil Case No. 1800 is for the same cause of action as Civil Case No. 1804, both being admittedly between the same parties. In this connection, it should be noted that the basis of the complaints in both cases is the same, namely: that Enguerra's rights as Dolosa's chief baker, from June 18, 1959 to October 8, 1961, have been violated by the latter. The alleged violations may have several aspects, such as: 1) underpayment of wages; 2) nonpayment of overtime; 3) transfer, allegedly equivalent to unjustified dismissal, and, hence, the claim for separation pay; 4) damages (compensatory, moral and exemplary, and attorney's fees). Yet, the cause of action the spring from which the right to sue emanates was only one and the same breach of their contract of employment, without which none of the claims made by plaintiff would have no leg to stand on. The statutory provisions regarding termination pay, minimum wage, overtime and damages are as much a part of said contract of employment as the pertinent provisions of the Civil Code on obligations and contracts, in general, and on lease of services, in particular. The difference between underpayment of wages on a given day and nonpayment of overtime for work done on the same day, is not insofar as the cause of action therefore is concerned materially at variance from that which exists between said underpayment of wages for the day given and the similar underpayment of wages for the next day. Indeed, if one month later, the aggrieved laborer should decide to sue the employer for breach of contract, it is obvious that the former cannot file a complaint for someeffects of such breach, and another complaint for its other effects. He must include in the complaint his claim for the underpayment for the aforementioned two (2) days, both being overdue at the time of the commencement of the action.3 Similarly, if underpayment of the minimum wage for a given day or month were coupled with failure or refusal to pay overtime, for the same day or month, a complaint filed thereafter should include both, underpayment of wages and overtime pay. In other words, Courts should not sanction a complaint for one, and another action for the other. Hence, in his own complaint herein, plaintiff has, in fact, included his claims for alleged underpayment of wages, overtime, compensatory, moral, and exemplary damages, and attorney's fees, under one cause of action. He is in estoppel, therefore, to deny that the cause of action asserted in both cases is one and the same. At any rate, it is clear that the overtime claimed in the present case is the very object of Case No. 1800. Moreover, it is well settled that damages incidental to a cause of action cannot be made the subject of a suit independent from the principal cause.4 WHEREFORE, the order appealed from should be, as it is hereby, affirmed, with costs against plaintiff, Luis Enguerra. It is so ordered.

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Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur. Bengzon, J.P., J., took no part. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-59731 January 11, 1990 ALFREDO CHING, petitioner, vs. THE HONORABLE COURT OF APPEALS & PEDRO ASEDILLO, respondents. Joaquin E. Chipeco & Lorenzo D. Fuggan for petitioners. Edgardo Salandanan for private respondent. PARAS, J.: This is a petition for review on certiorari which seeks to nullify the decision of respondent Court of Appeals (penned by Hon. Rodolfo A. Nocon with the concurrence of Hon. Crisolito Pascual and Juan A. Sison) in CA-G.R. No. 12358-SP entitled Alfredo Ching v. Hon. M. V. Romillo, et al. which in effect affirmed the decision of the Court of First Instance of Rizal, now Regional Trial Court (penned by Judge Manuel V. Romillo, Jr. then District Judge, Branch XXVII Pasay City) granting ex-parte the cancellation of title registered in the name of Ching Leng in favor of Pedro Asedillo in Civil Case No. 6888-P entitled Pedro Asedillo v. Ching Leng and/or Estate of Ching Leng. The facts as culled from the records disclose that: In May 1960, Decree No. N-78716 was issued to spouses Maximo Nofuente and Dominga Lumandan in Land Registration Case No. N-2579 of the Court of First Instance of Rizal and Original Certificate of Title No. 2433 correspondingly given by the Register of Deeds for the Province of Rizal covering a parcel of land situated at Sitio of Kay-Biga Barrio of San Dionisio, Municipality of Paranaque, Province of Rizal, with an area of 51,852 square meters (Exhibit "7", p. 80, CA, Rollo). In August 1960, 5/6 portion of the property was reconveyed by said spouses to Francisco, Regina, Perfects, Constancio and Matilde all surnamed Nofuente and Transfer Certificate of Title No. 78633 was issued on August 10, 1960 accordingly (Exhibit "8", pp. 81 and 82, Ibid.). By virtue of a sale to Ching Leng with postal address at No. 44 Libertad Street, Pasay City, Transfer Certificate of Title No. 91137 was issued on September 18, 1961 and T.C.T. No. 78633 was deemed cancelled. (Exhibit "5-2", pp. 76-77 and 83, Ibid.). On October 19, 1965, Ching Leng died in Boston, Massachusetts, United States of America. His legitimate son Alfredo Ching filed with the Court of First Instance of Rizal (now RTC) Branch III, Pasay City a petition for administration of the estate of deceased Ching Leng docketed as Sp. Proc. No. 1956-P. Notice of hearing on the petition was duly published in the "Daily Mirror", a newspaper of general circulation on November 23 and 30 and December 7, 1965. No oppositors appeared at the hearing on December 16, 1965, consequently after presentation of evidence petitioner Alfredo Ching was appointed

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administrator of Ching Leng's estate on December 28, 1965 and letters of administration issued on January 3, 1966 (pp. 51-53, Rollo). The land covered by T.C.T. No. 91137 was among those included in the inventory submitted to the court (p. 75, Ibid.). Thirteen (13) years after Ching Leng's death, a suit against him was commenced on December 27, 1978 by private respondent Pedro Asedillo with the Court of First Instance of Rizal (now RTC), Branch XXVII, Pasay City docketed as Civil Case No. 6888-P for reconveyance of the abovesaid property and cancellation of T.C.T. No. 91137 in his favor based on possession (p. 33, Ibid.). Ching Leng's last known address is No. 44 Libertad Street, Pasay City which appears on the face of T.C.T. No. 91137 (not No. 441 Libertad Street, Pasay City, as alleged in private respondent's complaint). (Order dated May 29, 1980, p. 55, Ibid.). An amended complaint was filed by private respondent against Ching Leng and/or Estate of Ching Leng on January 30, 1979 alleging "That on account of the fact that the defendant has been residing abroad up to the present, and it is not known whether the defendant is still alive or dead, he or his estate may be served by summons and other processes only by publication;" (p. 38, Ibid.). Summons by publication to Ching Leng and/or his estate was directed by the trial court in its order dated February 7, 1979. The summons and the complaint were published in the "Economic Monitor", a newspaper of general circulation in the province of Rizal including Pasay City on March 5, 12 and 19, 1979. Despite the lapse of the sixty (60) day period within which to answer defendant failed to file a responsive pleading and on motion of counsel for the private respondent, the court a quo in its order dated May 25, 1979, allowed the presentation of evidence ex-parte. A judgment by default was rendered on June 15, 1979, the decretal portion of which reads: WHEREFORE, finding plaintiffs causes of action in the complaint to be duly substantiated by the evidence, judgment is hereby rendered in favor of the plaintiff and against the defendant declaring the former (Pedro Asedillo) to be the true and absolute owner of the property covered by T.C.T. No. 91137; ordering the defendant to reconvey the said property in favor of the plaintiff; sentencing the defendant Ching Leng and/or the administrator of his estate to surrender to the Register of Deeds of the Province of Rizal the owner's copy of T.C.T. No. 91137 so that the same may be cancelled failing in which the said T.C.T. No. 91137 is hereby cancelled and the Register of Deeds of the Province of Rizal is hereby ordered to issue, in lieu thereof, a new transfer certificate of title over the said property in the name of the plaintiff Pedro Asedillo of legal age, and a resident of Estrella Street, Makati, Metro Manila, upon payment of the fees that may be required therefor, including the realty taxes due the Government. IT IS SO ORDERED. (pp. 42-44, Ibid.) Said decision was likewise served by publication on July 2, 9 and 16, 1979 pursuant to Section 7 of Rule 13 of the Revised Rules of Court (CA Decision, pp. 83-84, Ibid.). The title over the property in the name of Ching Leng was cancelled and a new Transfer Certificate of Title was issued in favor of Pedro Asedillo (p. 77, CA Rollo) who subsequently sold the property to Villa Esperanza Development, Inc. on September 3, 1979 (pp. 125-126, Ibid.). On October 29, 1979 petitioner Alfredo Ching learned of the abovestated decision. He filed a verified petition on November 10, 1979 to set it aside as null and void for lack of jurisdiction which was granted by the court on May 29, 1980 (penned by Hon. Florentino de la Pena, Vacation Judge, pp. 54-59, Rollo). On motion of counsel for private respondent the said order of May 29, 1980 was reconsidered and set aside, the decision dated June 15, 1979 aforequoted reinstated in the order dated September 2, 1980. (pp. 60-63, Ibid.) On October 30, 1980, petitioner filed a motion for reconsideration of the said latter order but the same was denied by the trial court on April 12, 1981 (pp. 77-79, Ibid.)

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Petitioner filed an original petition for certiorari with the Court of Appeals but the same was dismissed on September 30, 1981. His motion for reconsideration was likewise denied on February 10, 1982 (pp. 8190, Ibid.) Private respondent Pedro Asedillo died on June 7, 1981 at Makati, Metro Manila during the pendency of the case with the Court of Appeals (p. 106, CA Rollo). Hence, the instant petition. Private respondent's comment was filed on June 1, 1982 (p. 117, Ibid.) in compliance with the resolution dated April 26, 1982 (p. 109, Ibid.) Petitioner filed a reply to comment on June 18, 1982 (p. 159, Ibid ), and the Court gave due course to the petition in the resolution of June 28, 1982 (p. 191, Ibid.) Petitioner raised the following: ASSIGNMENTS OF ERROR I WHETHER OR NOT A DEAD MAN CHING LENG AND/OR HIS ESTATE MAY BE VALIDLY SERVED WITH SUMMONS AND DECISION BY PUBLICATION. II WHETHER OR NOT AN ACTION FOR RECONVEYANCE OF PROPERTY AND CANCELLATION OF TITLE IS IN PERSONAM, AND IF SO, WOULD A DEAD MAN AND/OR HIS ESTATE BE BOUND BY SERVICE OF SUMMONS AND DECISION BY PUBLICATION. III WHETHER OR NOT THE PROCEEDINGS FOR CANCELLATION OF TITLE CAN BE HELD EX-PARTE. IV WHETHER OR NOT THE TRIAL COURT ACQUIRED JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES. V WHETHER OR NOT PRIVATE RESPONDENT IS GUILTY OF LACHES IN INSTITUTING THE ACTION FOR RECONVEYANCE AFTER THE LAPSE OF 19 YEARS FROM THE TIME THE DECREE OF REGISTRATION WAS ISSUED. Petitioner's appeal hinges on whether or not the Court of Appeals has decided a question of substance in a way probably not in accord with law or with the applicable decisions of the Supreme Court. Petitioner avers that an action for reconveyance and cancellation of title is in personam and the court a quo never acquired jurisdiction over the deceased Ching Leng and/or his estate by means of service of summons by publication in accordance with the ruling laid down in Ang Lam v. Rosillosa et al., 86 Phil. 448 [1950]. RECONVEYANCE AND

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On the other hand, private respondent argues that an action for cancellation of title is quasi in rem, for while the judgment that may be rendered therein is not strictly a judgment in in rem, it fixes and settles the title to the property in controversy and to that extent partakes of the nature of the judgment in rem, hence, service of summons by publication may be allowed unto Ching Leng who on the face of the complaint was a non-resident of the Philippines in line with the doctrine enunciated in Perkins v. Dizon, 69 Phil. 186 [1939]. The petition is impressed with merit. An action to redeem, or to recover title to or possession of, real property is not an action in rem or an action against the whole world, like a land registration proceeding or the probate of a will; it is an action in personam, so much so that a judgment therein is binding only upon the parties properly impleaded and duly heard or given an opportunity to be heard. Actions in personam and actions in rem differ in that the former are directed against specific persons and seek personal judgments, while the latter are directed against the thing or property or status of a person and seek judgments with respect thereto as against the whole world. An action to recover a parcel of land is a real action but it is an action in personam, for it binds a particular individual only although it concerns the right to a tangible thing (Ang Lam v. Rosillosa, supra). Private respondent's action for reconveyance and cancellation of title being in personam, the judgment in question is null and void for lack of jurisdiction over the person of the deceased defendant Ching Leng. Verily, the action was commenced thirteen (13) years after the latter's death. As ruled by this Court in Dumlao v. Quality Plastic Products, Inc. (70 SCRA 475 [1976]) the decision of the lower court insofar as the deceased is concerned, is void for lack of jurisdiction over his person. He was not, and he could not have been validly served with summons. He had no more civil personality. His juridical personality, that is fitness to be subject of legal relations, was lost through death (Arts. 37 and 42 Civil Code). The same conclusion would still inevitably be reached notwithstanding joinder of Ching Leng's estate as co-defendant. it is a well-settled rule that an estate can sue or be sued through an executor or administrator in his representative capacity (21 Am. Jr. 872). Contrary to private respondent's claims, deceased Ching Leng is a resident of 44 Libertad Street, Pasay City as shown in his death certificate and T. C. T. No. 91137 and there is an on-going intestate proceedings in the same court, Branch III commenced in 1965, and notice of hearing thereof duly published in the same year. Such misleading and misstatement of facts demonstrate lack of candor on the part of private respondent and his counsel, which is censurable. The complaint for cancellation of Ching Leng's Torrens Title must be filed in the original land registration case, RTC, Pasig, Rizal, sitting as a land registration court in accordance with Section 112 of the Land Registration Act (Act No. 496, as amended) not in CFI Pasay City in connection with, or as a mere incident in Civil Case No. 6888-P (Estanislao v. Honrado, 114 SCRA 748 [1982]). Section 112 of the same law requires "notice to all parties in interest." Since Ching Leng was already in the other world when the summons was published he could not have been notified at all and the trial court never acquired jurisdiction over his person. The ex-parte proceedings for cancellation of title could not have been held (Estanislao v. Honrado, supra). The cited case of Perkins v. Dizon, supra is inapplicable to the case at bar since petitioner Perkins was a non-resident defendant sued in Philippine courts and sought to be excluded from whatever interest she has in 52,874 shares of stocks with Benguet Consolidated Mining Company. The action being a quasi in rem summons by publication satisfied the constitutional requirement of due process. The petition to set aside the judgment for lack of jurisdiction should have been granted and the amended complaint of private respondent based on possession and filed only in 1978 dismissed outrightly. Ching

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Leng is an innocent purchaser for value as shown by the evidence adduced in his behalf by petitioner herein, tracing back the roots of his title since 1960, from the time the decree of registration was issued. The sole remedy of the landowner whose property has been wrongfully or erroneously registered in another's nameafter one year from the date of the decreeis not to set aside the decree, but respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for damages if the property has passed unto the hands of an innocent purchaser for value (Sy, Sr. v. Intermediate Appellate Court, G.R. No. 66742; Teoville Development Corporation v. IAC, et al., G.R. No. 75011, June 16, 1988). Failure to take steps to assert any rights over a disputed land for 19 years from the date of registration of title is fatal to the private respondent's cause of action on the ground of laches. Laches is the failure or neglect, for an unreasonable length of time to do that which by exercising due diligence could or should have been done, earlier; it is negligence or omission to assert a right within a reasonable time warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it (BailonCasilao v. Court of Appeals, G.R. No. 78178, April 15, 1988; Villamor v. Court of Appeals, G.R. No. 41508, June 27, 1988). The real purpose of the Torrens system is to quiet title to land and to stop forever any question as to its legality. Once a title is registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting on the "mirador su casa," to avoid the possibility of losing his land (National Grains Authority v. IAC, 157 SCRA 388 [1988]). A Torrens title is generally a conclusive evidence of the ownership of the land referred to therein (Section 49, Act 496). A strong presumption exists that Torrens titles are regularly issued and that they are valid. A Torrens title is incontrovertible against any "information possessoria" or title existing prior to the issuance thereof not annotated on the title (Salamat Vda. de Medina v. Cruz, G.R. No. 39272, May 4, 1988). PREMISES CONSIDERED, (1) the instant petition is hereby GRANTED; (2) the appealed decision of the Court of Appeals is hereby REVERSED and SET ASIDE; (3) the trial court's decision dated June 15, 1979 and the Order dated September 2, 1980 reinstating the same are hereby declared NULL and VOID for lack of jurisdiction and (4) the complaint in Civil Case No. 6888-P is hereby DISMISSED. SO ORDERED. Melencio-Herrera, Sarmiento and Regalado, JJ., concur. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-82330 May 31, 1988 THE DIAL CORPORATION, C & T REFINERY INC., NALIN Sdn. Bhb. BERISFORD COMMODITIES, LTD., and PACIFIC MOLASSES COMPANY, petitioners, vs. THE HON. CLEMENTE M. SORIANO, Presiding Judge, Regional Trial Court, Branch 3, MANILA PUBLIC RESPONDENT and IMPERIAL VEGETABLE OIL COMPANY, INC., respondents. Guerrero & Torres Law Office for petitioners.

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Abad & Associates for respondents. GRIO-AQUINO, J.: The petitioners are foreign corporations organized and existing under the laws of the United States, the United Kingdom, and Malaysia, are not domiciled in the Philippines, nor do they have officers or agents, place of business, or property in the Philippines; they are not licensed to engage, and are not engaged, in business here. The respondent Imperial Vegetable Oil Company, Inc. (or "IVO" for brevity) is a Philippine corporation which through its president, Dominador Monteverde, had entered into several contracts for the delivery of coconut oil to the petitioners. Those contracts stipulate that any dispute between the parties will be settled through arbitration under the rules of either the Federation of Oils Seeds and Fats Association (FOSFA) or the National Institute of Oil Seed Products (NIOP). Because IVO defaulted under the contracts, the petitioners and 15 others, initiated arbitration proceedings abroad, and some have already obtained arbitration awards against IVO. On April 8, 1987, IVO filed a complaint for injunction and damages against nineteen (19) foreign coconut oil buyers including the petitioners, with whom its president, Dominador Monteverde, had entered into contracts for the delivery of coconut oil (Civil Case No. 87-40166, RTC Manila entitled "Imperial Vegetable Oil Co., Inc. vs. Dial Corporation et al."). IVO repudiated Monteverde's contracts on the grounds that they were mere "paper trading in futures" as no actual delivery of the coconut oil was allegedly intended by the parties; that the Board of Directors of IVO convened in a special meeting on March 21, 1987 and removed Dominador Monteverde from his position as president of the corporation, named in his place, Rodrigo Monteverde, and disowned Dominador Monteverde's allegedly illegal and unauthorized acts; that the defendants have allegedly "harassed" IVO to comply with Dominador's contracts and to come to a settlement with them. IVO prayed for the issuance of a temporary restraining order or writ of preliminary injunction to stop the defendants from harassing IVO with their insistent demands to recognize the contracts entered into by Dominador Monteverde and from portraying the IVO as one that defaults on its contracts and obligations and has fallen into bad times and from interfering with IVO's normal conduct of business. IVO also prayed that the defendants pay it moral damages of P5 million, actual damages of P10 million, exemplary damages of P5 million, attorney's fees of P1 million, P3,000 per appearance of counsel, and litigation expenses. On motion of IVO, respondent Judge authorized it to effect extraterritorial service of summons to all the defendants through DHL Philippines corporation (Annex B). Pursuant to that order, the petitioners were served with summons and copy of the complaint by DHL courier service. On April 25, 1987, without submitting to the court's jurisdiction and only for the purpose of objecting to said jurisdiction over their persons, the petitioners filed motions to dismiss the complaint against them on the ground that the extraterritorial service of summons to them was improper and that hence the court did not acquire jurisdiction over them. On December 15, 1987, the court denied their motions to dismiss and upheld the validity of the extraterritorial service of summons to them on the ground that "the present action relates to property rights which lie in contracts within the Philippines, or which defendants claim liens or interests, actual or inchoate, legal or equitable (par. 2, complaint). And one of the reliefs demanded consists, wholly or in part, in excluding the defendants from any interest in such property for the reason that their transactions with plaintiff's former president are ultra vires." Furthermore, "as foreign corporations doing business in the Philippines without a license, they opened themselves to suit before Philippine courts, pursuant to Sec. 133 of the Corporation Code of the Philippines." (Annex H) The petitioners' motions for reconsideration of that order were also denied by the court (Annex M), hence this petition for certiorari with a prayer for the issuance of a temporary retraining order which We granted. The petition is meritorious. Section 17, Rule 14 of the Rules of Court provides:

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Section 17. Extraterritorial service. When the defendant does not reside and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 7; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shag not be less than sixty (60) days after notice, within which the defendant must answer. Only in four (4) instances is extraterritorial service of summons proper, namely: "(1) when the action affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and (4) when the defendant nonresident's property has been attached within the Philippines" (De Midgely vs. Fernandos, 64 SCRA 23). The complaint in this case does not involve the personal status of the plaintiff, nor any property in the Philippines in which the defendants have or claim an interest, or which the plaintiff has attached. The action is purely an action for injunction to restrain the defendants from enforcing against IVO ("abusing and harassing") its contracts for the delivery of coconut oil to the defendants, and to recover from the defendants P21 million in damages for such "harassment." It is clearly a personal action as well as an action in personam, not an action in rem or quasi in rem. "An action in personam is an action against a person on the basis of his personal liability, while an action in remedies is an action against the thing itself, instead of against the person." (Hernandez vs. Rural Bank of Lucena, Inc., 76 SCRA 85). A personal action is one brought for the recovery of personal property, for the enforcement of some contract or recovery of damages for its breach, or for the recovery of damages for the commission of an injury to the person or property (Hernandez vs. Development Bank of the Philippines, 71 SCRA 292).
<re||an1w>

As Civil Case No. 87-40166 is a personal action, personal or substituted service of summons on the defendants, not extraterritorial service, is necessary to confer jurisdiction on the court. The rule is explained in Moran's Comments on the Rules of Court thus: As a general rule, when the defendant is not residing and is not found in the Philippines, the Philippine courts cannot try any case against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. But, when the action affects the personal status of the plaintiff residing in the Philippines, or is intended to seize or dispose of any property, real or personal, of the defendant located in the Philippines, it may be validly tried by the Philippine courts, for then, they have jurisdiction over the res, i.e., the personal status of the plaintiff or the property of the defendant and their jurisdiction over the person of the non-resident defendant is not essential. Venue in such cases may be laid in the province where the property of the defendant or a part thereof involved in the litigation is located. (5 Moran's Comments on the Rules of Court, 2nd Ed., p. 105.) In an action for injunction, extraterritorial service of summons and complaint upon the non-resident defendants cannot subject them to the processes of the regional trial courts which are powerless to reach them outside the region over which they exercise their authority (Sec. 3-a, Interim Rules of Court; Sec. 21, subpar. 1, B.P. Blg. 129). Extraterritorial service of summons will not confer on the court jurisdiction or power to compel them to obey its orders.

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Neither may the court by extraterritorial service of summons acquire jurisdiction to render and enforce a money judgment against a non-resident defendant who has no property in the Philippines for "the fundamental rule is that jurisdiction in personam over non-residents, so as to sustain a money judgment, must be based upon personal service within the state which renders the judgment "(Boudard vs. Tait, 67 Phil. 170, 174). Respondents' contention that "the action below is related to property within the Philippines, specifically contractual rights that petitioners are enforcing against IVO" is specious for the "contractual rights" of the petitioners are not property found in the Philippines for the petitioners have not filed an action in the local courts to enforce said rights. They have not submitted to the jurisdiction of our courts. The lower court invoked Section 33 of the Corporation Code which provides that a "foreign corporation transacting business in the Philippines without a license may be sued or proceeded against before Philippine courts or administrative tribunal on any valid cause of action recognized under Philippine laws." It assumed that the defendants (herein petitioners) are doing business in the Philippines, which allegation the latter denied. Even if they can be considered as such, the Corporation Code did not repeal the rules requiring proper service of summons to such corporations as provided in Rule 14 of the Rules of Court and Section 128 of the Corporation Code. The respondent court's finding that, by filing motions to dismiss, the petitioners hypothetically admitted the allegations of the complaint that they are doing business in the Philippines without any license, and that they may be served with summons and other court processes through their agents or representatives enumerated in paragraph 2 of the complaint, is contradicted by its order authorizing IVO to summon them by extraterritorial service, a mode of service which is resorted to when the defendant is not found in the Philippines, does not transact business here, and has no resident agent on whom the summons may be served. WHEREFORE, We hold that the extraterritorial service of summons on the petitioners was improper, hence null and void. The petition for certiorari is granted. The orders dated April 24, 1987 (Annex B) and December 15, 1987 (Annex H) of the respondent Judge are hereby set aside. The complaint in Civil Case No. 87-40166 is hereby dismissed as against the petitioners for failure of the court to acquire jurisdiction over them. SO ORDERED. Narvasa, Cruz and Gancayco, JJ., concur. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-31095 June 18, 1976 JOSE M. HERNANDEZ, petitioner, vs. DEVELOPMENT BANK OF THE PHILIPPINES and COURT OF FIRST INSTANCE OF BATANGAS, LIPA CITY BRANCH, respondents. Tomas Yumol for petitioners.

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Graciano V. Sebastian for respondent Development Bank of the Philippines. MARTIN, J.: This is a case which involves the question of proper venue in a real action. Petitioner Jose M. Hernandez was an employee of private respondent Development Bank of the Philippines in its Legal Department for twenty-one (21) years until his retirement on February 28, 1966 due to illness. On August 12, 1964, in due recognition of his unqualified service as Assistant Attorney in its Legal Department, the private respondent awarded to the petitioner a lot, identified as Lot No. 15, Block No. W-21, in the private respondent's Housing Project at No. 1 West Avenue, Quezon City, containing an area of 810 square meters with a Type E house. On August 31, 1968, after the petitioner received from the private respondent's Housing Project Committee a statement of account of the purchase price of the said lot and house in the total amount of P21,034.56, payable on a monthly amortization of P153.32 for a term of fifteen (15) years, he sent to the said Committee a Cashier's Check No. 77089 CC, dated -October 21, 1968, issued by the Philippine Banking Corporation in the name of his wife in the sum of P21,500.00 to cover the cash and full payment of the purchase price of the lot and house awarded to him. However, more than a week thereafter, or on October 29, 1968, the Chief Accountant and Comptroller of the private respondent returned to the petitioner ,the aforementioned check, informing him that the private respondent, through its Committee on Organization, Personnel and Facilities, had cancelled the award of the lot and house previously awarded to him on the following grounds: (1) that he has already retired; (2) that he has only an option to purchase said house and lot; (3) that there are a big number of employees who have no houses or lots; (4) that he has been given his retirement gratuity; and (5) that the awarding of the aforementioned house and lot to an employee of the private respondent would better subserve the objective of its Housing Project. Petitioner protested against the cancellation of the award of the house and lot in his favor and demanded from private respondent the restoration of all his rights to said award. However, private respondent refused. On May 15, 1969 the petitioner filed a complaint in the Court of First Instance of Batangas against the private respondent seeking the annulment of the cancellation of the award of the lot and house in his favor and the restoration of all his rights thereto. He contends that the cancellation of said award was unwarranted and illegal for he has already become the owner of said house and lot by virtue of said award on August 12, 1964 and has acquired a vested right thereto, which cannot be unilaterally cancelled without his consent; that he. had requested the private respondent to restore to him all his rights to said award but the latter refused and failed and still refuses and fails to comply with said request. Private respondent filed a motion to dismiss the complaint on the ground of improper venue, contending that since the petitioner's action affects the title to a house and lot situated in Quezon City, the same should have been commenced in the Court of First Instance of Quezon City where the real property is located and not in the Court of First Instance of Batangas where petitioner resides. On July 24, 1969, the respondent Court sustained the motion to dismiss filed by private respondent on the ground of improper venue. Hence, the instant petition to review the order of respondent Court. The only issue in this petition is whether the action of the petitioner was properly filed in the Court of First Instance of Batangas. It is a well settled rule that venue of actions or, more appropriately, the county where the action is triable 1 depends to a great extent on the nature of the action to be filed, whether it is real or personal. 2 A real action is one brought for the specific recovery of land, tenements, or hereditaments. 3 A personal action is one brought for the recovery of personal property, for the enforcement of some contract or recovery of damages for its breach, or for the recovery of damages for the commission of an injury to the person or property. 4 Under Section 2, Rule 4 of the Rules of Court, "actions affecting title to, or for recovery of possession, or for partition, or condemnation of , or foreclosure of mortgage in real property, shall be commenced and tried where the defendant or any of the defendants

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resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff". A close scrutiny of the essence of the petitioner's complaint in the court a quo would readily show that he seeks the annulment of the cancellation of the award of the Quezon City lot and house in his favor originally given him by respondent DBP in recognition of his twenty-one years of service in its Legal Department, in pursuance of his contention that he had acquired a vested right to the award which cannot be unilaterally cancelled by respondent without his consent. The Court agrees that petitioner's action is not a real but a personal action. As correctly insisted by petitioner, his action is one to declare null and void the cancellation of the lot and house in his favor which does not involve title and ownership over said properties but seeks to compel respondent to recognize that the award is a valid and subsisting one which it cannot arbitrarily and unilaterally cancel and accordingly to accept the proffered payment in full which it had rejected and returned to petitioner. Such an action is a personal action which may be properly brought by petitioner in his residence, as held in the case of Adamus vs. J.M. Tuason & Co., Inc. 5 where this Court speaking through former Chief Justice Querube C. Makalintal distinguished the case from an earlier line of J.M. Tuaxon & Co., Inc. cases involving lot purchasers from the Deudors 6, as follows: ... All the allegations as well as the prayer in the complaint show that this is not a real but a personal action to compel the defendants to execute the corresponding purchase contracts in favor of the plaintiffs and to pay damages. The plaintiffs do not claim ownership of the lots in question: they recognize the title of the defendant J.M. Tuason & Co., Inc. They do not ask that possession be delivered to them, for they allege to be in possession. The case cited by the defendants (Abao, et al. vs. J. M. Tuason & Co., Inc. G.R. No. L-16796, Jan. 30, 1962) is therefore not in point. In that case, as stated by this Court in its decision, the 'plaintiffs' action is predicated on the theory that they are 'occupants, landholders,' and 'most' of them owners by purchase' of the residential lots in question; that, in consequence of the compromise agreement adverted to above, between the Deudors; and defendant corporations, the latter had acknowledged the right and title of the Deudors in and to said lots; and hence, the right and title of the plaintiffs, as successors-in-interest of the Deudors; that, by entering into said agreement, defendant corporations had, also, waived their right to invoke the indefeasibility of the Torrens title in favor of J. M. Tuason & Co., Inc.; and that defendants have no right, therefore, to oust plaintiffs from the lots respectively occupied by them and which they claim to be entitled to hold. Obviously, this action affects, therefore, not only the possession of real property, but, also, the title thereto. Accordingly, it should have been instituted in the Court of First Instance of the Province of Rizal in which said property is situated (Section 3, Rule 5 of the Rules of Court). WHEREFORE, the order of dismissal appealed from is set aside and the case is remanded for further proceedings and disposition on the merits. No costs. Teehankee (Chairman), Makasiar, Esguerra and Muoz Palma, JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. R. No. 76431 October 16, 1989

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FORTUNE MOTORS, (PHILS.) INC., petitioner, vs. THE HONORABLE COURT OF APPEALS, METROPOLITAN BANK and TRUST COMPANY, respondents. Quirante & Associates Law Office for petitioner. Bautista, Cruz & Associates Law Offices for private respondent. PARAS, J.: This is a petition for review on certiorari seeking the reversal of: (a) the July 30, 1986 decision of the Court of Appeals in AC-G.R. SP No. 09255 entitled "Metropolitan Bank & Trust Co. v. Hon. Herminio C. Mariano, et al."dismissing Civil Case No. 8533218 entitled "Fortune Motors (Phils.) Inc. v. Metropolitan Bank & Trust Co." filed in the Regional Trial Court of Manila, Branch IV for improper venue and (b) the resolution dated October 30, 1986 denying petitioner's motion for reconsideration. The undisputed facts of the case are as follows: On March 29,1982 up to January 6,1984, private respondent Metropolitan Bank extended various loans to petitioner Fortune Motors in the total sum of P32,500,000.00 (according to the borrower; or P34,150,000.00 according to the Bank) which loan was secured by a real estate mortgage on the Fortune building and lot in Makati, Rizal. (Rollo, pp. 60-62) Due to financial difficulties and the onslaught of economic recession, the petitioner was not able to pay the loan which became due. (Rollo, p. 62) For failure of the petitioner to pay the loans, the respondent bank initiated extrajudicial foreclosure proceedings. After notices were served, posted, and published, the mortgaged property was sold at public auction for the price of P47,899,264.91 to mortgagee Bank as the highest bidder. (Rollo, p. 11) The sheriff's certificate of sale was registered on October 24, 1984 with the one-year redemption period to expire on October 24,1985. (Rollo, p. 12) On October 21, 1985, three days before the expiration of the redemption period, petitioner Fortune Motors filed a complaint for annulment of the extrajudicial foreclosure sale alleging that the foreclosure was premature because its obligation to the Bank was not yet due, the publication of the notice of sale was incomplete, there was no public auction, and the price for which the property was sold was "shockingly low". (Rollo, pp. 60-68) Before summons could be served private respondent Bank filed a motion to dismiss the complaint on the ground that the venue of the action was improperly laid in Manila for the realty covered by the real estate mortgage is situated in Makati, therefore the action to annul the foreclosure sale should be filed in the Regional Trial Court of Makati. (Rollo, pp. 67-71-A ) The motion was opposed by petitioner Fortune Motors alleging that its action "is a personal action" and that "the issue is the validity of the extrajudicial foreclosure proceedings" so that it may have a new one year period to redeem. (Rollo, pp. 72-73) On January 8, 1986 an order was issued by the lower court reserving the resolution of the Bank's motion to dismiss until after the trial on the merits as the grounds relied upon by the defendant were not clear and indubitable. (Rollo, p. 81)

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The Bank filed a motion for reconsideration of the order dated January 8, 1986 but it was denied by the lower court in its order dated May 28, 1986. (Rollo, Annex "L" pp. 93-96; Annex "N" p. 99) On June 11, 1986 the respondent Bank filed a petition for certiorari and prohibition in the Court of Appeals. (Rollo, Annex "O" pp. 100-115) And on July 30, 1986, a decision was issued by the Court of Appeals, the dispositive part of which reads as follows: WHEREFORE, the petition for certiorari and prohibition is granted. The complaint in the Civil Case No. 85-33218 is dismissed without prejudice to its being filed in the proper venue. Costs against the private respondent. SO ORDERED. (Rollo, p. 15) A motion for reconsideration was filed on August 11, 1986 on the said decision and on October 30, 1986 a resolution was issued denying such motion for reconsideration. (Rollo, Annex "O" pp. 121-123; Annex "S" p. 129) Hence, the petition for review on certiorari. On June 10, 1987 the Court gave due course to the petition, required the parties to file their respective memoranda within twenty (20) days from the notice hereof, and pay deposit for costs in the amount of P80.40. Both parties have filed their respective memoranda, and the case was submitted for Court's resolution in the resolution dated December 14, 1987. (Rollo,Metrobank's Memorandum pp. 45-59; petitioner's memorandum pp.130-136; Res. p. 138) The only issue in this case is whether petitioner's action for annulment of the real estate mortgage extrajudicial foreclosure sale of Fortune Building is a personal action or a real action for venue purposes. In a real action, the plaintiff seeks the recovery of real property, or as indicated in Sec. 2 (a) of Rule 4, a real action is an action affecting title to real property, or for the recovery of possession, or for the partition or condemnation of, or foreclosure of a mortgage on real property. (Comments on the Rules of Court by Moran, Vol. 1, p. 122) Real actions or actions affecting title to, or for the recovery of possession, or for the partition or condemnation of, or foreclosure of mortgage on real property, must be instituted in the Court of First Instance of the province where the property or any part thereof lies. (Enriquez v. Macadaeg, 84 Phil. 674,1949; Garchitorena v. Register of Deeds, 101 Phil. 1207, 1957) Personal actions upon the other hand, may be instituted in the Court of First Instance where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff (Sec. 1, Rule 4, Revised Rules of Court). 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. (Inton, et al., v. Quintan, 81 Phil. 97, 1948) 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. (Gavieres v. Sanchez, 94 Phil. 760,1954)

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An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private sale of real property. (Munoz v. Llamas, 87 Phil. 737,1950) 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. Respondent Court, therefore, did not err in dismissing the case on the ground of improper venue (Sec. 2, Rule 4) which was timely raised (Sec. 1, Rule 16). (Punzalan, Jr. v. Vda. de Lacsamana, 121 SCRA 336, [1983]). Thus, as aptly decided by the Court of Appeals in a decision penned by then Court of Appeals Associate Justice now Associate Justice of the Supreme Court Carolina C. Grio-Aquino, the pertinent portion reads: "Since an extrajudicial foreclosure of real property results in a conveyance of the title of the property sold to the highest bidder at the sale, an action to annul the foreclosure sale is necessarily an action affecting the title of the property sold. It is therefore a real action which should be commenced and tried in the province where the property or part thereof lies." PREMISES CONSIDERED, the instant petition is DENIED for lack of merit and the assailed decision of the respondent Court of Appeals is AFFIRMED. SO ORDERED. Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. L-49475 September 28, 1993 JORGE C. PADERANGA, petitioner, vs. Hon. DIMALANES B. BUISSAN, Presiding Judge, Court of First Instance of Zamboanga del Norte, Branch III and ELUMBA INDUSTRIES COMPANY, represented by its General Manager, JOSE J. ELUMBA,respondents. A.E. Dacanay for petitioner. Uldarico Mejorada & Associates for private respondent. BELLOSILLO, J.: We are called upon in this case to determine the proper venue of an action to fix the period of a contract of lease which, in the main, also prays for damages.

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Sometime in 1973, petitioner JORGE C. PADERANGA and private respondent ELUMBA INDUSTRIES COMPANY, a partnership represented by its General Manager JOSE J. ELUMBA, entered into an oral contract of lease for the use of a commercial space within a building owned by petition in Ozamiz City. 1 The lease was for an indefinite period although the rent of P150.00 per month was paid on a monthto-month basis. ELUMBA INDUSTRIES COMPANY utilized the area under lease as the Sales Office of Allied Air Freight in Ozamiz City. On 4 April 1977, PADERANGA subdivided the leased premises into two (2) by constructing a partition wall in between. He then took possession of the other half, which repossession was said to have been undertaken with the acquiescence of the local manager of ELUMBA, 2 although private respondent maintains that this is not the case. 3 At any rate, the validity of the repossession is not here in issue. On 18 July 1977, private respondent instituted an action for damages 4 which, at the same time, prayed for the fixing of the period of lease at five (5) years, before the then court of First Instance of Zamboanga del Norte based in Dipolog City. 5 Petitioner, a resident of Ozamiz City, moved for its dismissal contending that the action was a real action which should have been filed with the Court of First Instance of Misamis Occidental stationed in Ozamiz City where the property in question was situated. On 6 November 1978, respondent Judge Dimalanes B. Buissan denied the Motion to Dismiss and held that Civil Case No. 2901 merely involved the enforcement of the contract of lease, and while affecting a portion of real property, there was no question of ownership raised. 6 Hence, venue was properly laid. Petitioner pleaded for reconsideration of the order denying his Motion to Dismiss. He contended that while the action did not involve a question of ownership, it was nevertheless seeking recovery of possession; thus, it was a real action which, consequently, must be filed in Ozamiz City. 7 On 4 December 1978, respondent judge denied reconsideration. 8 While admitting that Civil Case No. 2901 did pray for recovery of possession, he nonetheless ruled that this matter was not the main issue at hand; neither was the question of ownership raised. Not satisfied, petitioner instituted the present recourse. PADERANGA argues that inasmuch as ELUMBA seeks to recover possession of the portion surrendered to him by the local manager of private respondent, as well as to fix the period of lease at five (5) years, Dipolog City could not be the proper venue of the action. it being a real action, venue is laid in the court having jurisdiction over the territory in which the property lies. ELUMBA counters that the present action is chiefly for damages arising from an alleged breach in the lease contract; hence, the issue of recovery of possession is merely incidental. ELUMBA further argues that the action is one in personam and not in rem. Therefore venue may be laid in the place where plaintiff or defendant resides at the option of plaintiff. Private respondent appears to be confused over the difference between personal and real actions vis-avisactions in personam and in rem. The former determines venue; the latter, the binding effect of a decision the court may render over the party, whether impleaded or not. In the case before us, it is indubitable that the action instituted by private respondent against petitioner affects the parties alone, not the whole world. Hence, it is an action in personam, i.e., any judgment therein is binding only upon the parties properly impleaded. 9 However, this does not automatically mean that the action for damages and to fix the period of the lease contract is also a personal action. For, a personal action may not at the same time be an action in rem. In Hernandez v. Rural Bank of Lucena, Inc., 10 we held thus In a personal action, the plaintiff seeks the recovery of personal property, the enforcement of a contract or the recovery of damages. In a real action, the plaintiff seeks

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the recovery of real property, or, as indicated in section 2(a) of Rule 4, a real action is an action affecting title to real property or for the recovery of possession, or for partition or condemnation of, or foreclosure of a mortgage on, real property. An action in personam is an action against a person on the basis of his personal liability, while an action in rem is an action against the thing itself, instead of against the person. Hence, a real action may at the same time be an action in personam and not necessarily an action in rem. Consequently, the distinction between an action in personam and an action in rem for purposes of determining venue is irrelevant. Instead, it is imperative to find out if the action filed is a personal action or real action. After all, personal actions may be instituted in the Regional Trial Court (then Court of First Instance) where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff. 11 On the other hand, real actions should be brought before the Regional Trial Court having jurisdiction over the territory in which the subject property or part thereof lies. 12 While the instant action is for damages arising from alleged breach of the lease contract, it likewise prays for the fixing of the period of lease at five (5) years. If found meritorious, private respondent will be entitled to remain not only as lessee for another five (5) years but also to the recovery of the portion earlier taken from him as well. This is because the leased premises under the original contract was the whole commercial space itself and not just the subdivided portion thereof. While it may be that the instant complaint does not explicitly pray for recovery of possession, such is the necessary consequence thereof. 13 The instant action therefore does not operate to efface the fundamental and prime objective of the nature of the case which is to recover the one-half portion repossessed by the lessor, herein petitioner. 14 Indeed, where the ultimate purpose of an action involves title to or seeks recovery of possession, partition or condemnation of, or foreclosure of mortgage on, real property, 15 such an action must be deemed a real action and must perforce be commenced and tried in the province where the property or any part thereof lies. Respondent judge, therefore, in denying petitioner's Motion to Dismiss gravely abused his discretion amounting to lack or excess of jurisdiction. WHEREFORE, the Petition for Prohibition is GRANTED. The Orders of 6 November 1978 and 4 December 1978 of respondent Judge Dimalanes B. Buissan are SET ASIDE. The branch of the Regional Trial Court of Dipolog City where Civil Case No. 2901 may be presently assigned is DIRECTED to DISMISS the case for improper venue. This decision is immediately executory. Costs against private respondent ELUMBA INDUSTRIES COMPANY. SO ORDERED. Cruz, Davide, Jr. and Quiason, JJ., concur. Grio-Aquino, J., is on leave.