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Initiatory Pleading
a. Carpio vs. RB of Sto. Tomas, Batangas Inc, 489
SCRA 492
Facts:
On May
17,
1999,
spouses
Rodolfo Carpio and Remedios Orendain, petitioners, filed with the
RTC, Branch 83, Tanauan, Batangas, a Complaint (for annulment of
foreclosure sale and damages) against the Rural Bank of Sto.
Tomas, Batangas, Inc., respondent, and Jaime Ozaeta, clerk of court
and ex-officio sheriff of the same court. Petitioners alleged that
they are the absolute owners of a parcel of land with an area of
19,405 square meters, more or less, located at Barangay San
Vicente, Sto. Tomas, Batangas. That they obtained a loan from
respondent bank in the amount of P515,000.00, payable on January
27, 1996. To secure the loan, they executed a real estate
mortgage over the same property in favor of respondent
bank. Without prior demand or notice to petitioners, respondent
bank
filed
a Petition for Extra-Judicial
Foreclosure
of
Mortgage. Hence, a public auction sale of the mortgaged property
was conducted. Respondent bank was the only bidder for
P702,889.77.
Petitioners further alleged that the sale was conducted without
proper publication as the sheriffs notice of sale was published in a
newspaper which is not of general circulation. On the same day
the property was sold, the sheriff issued a certificate of sale in favor
of respondent bank. On February 25, 1999, respondent bank
executed an affidavit of consolidation of ownership over petitioners
property. They claimed that they were not notified of the
foreclosure sale and were not given an opportunity to redeem their
property.
However, respondent bank alleged inter alia that oral and written
demands were made upon petitioners to pay their loan but they
ignored the same; that they were properly notified of the filing of
the petition for extra-judicial foreclosure of the mortgage; that
there was proper publication and notices of the scheduled sale
through public auction; and that petitioners were actually given
more than two (2) years to redeem the property but they failed to
do so.
On September 8, 1999, petitioners filed a motion to dismiss the
counterclaim on the ground that respondent banks counterclaim

was not accompanied by a certification against forum


shopping. Respondent bank filed an opposition to the motion,
contending that its counterclaim, which is compulsory in nature, is
not
acomplaint or initiatory
pleading that
requires
a
certification against forum shopping.
RTC issued an Order denying the motion to dismiss the
counterclaim for lack of merit, as Under Section 5, Rule 7 of the
Rules of Court, the same requires the plaintiff or principal party to
certify under oath the complaint or other initiatory pleading
purposely to prevent forum shopping. In the case at bar, defendant
Rural Banks counterclaim could not be considered a complaint or
initiatory pleading because the filing of the same is but a result of
plaintiffs complaint and, being a compulsory counterclaim, is
outside the coverage of Section 5, Rule 7 of the Rules of Court.
On appeal, Court of Appeals affirmed the assailed twin Orders of
the RTC denying petitioners motion to dismiss the counterclaim
and dismissed the petition.
Ruling: Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as
amended, provides:
Sec. 5. Certification against forum shopping.
The plaintif or principal party shall certify under
oath
in
the complaint or
other
initiatory
pleading asserting a claim for relief, or in a
sworn
certification
annexed
thereto
and
simultaneously
filed therewith:
(a) that
he
has not theretofore commenced any action or
filed any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to
the best of his knowledge, no such other action or
claim is pending therein; (b) if there is such other
pending action or claim, a complete statement of the
present status thereof; and (c) if he should thereafter
learn that the same or similar action or claim has
been filed or is pending, he shall report that fact
within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has
been filed.

Failure to comply with the foregoing


requirements shall not be curable by mere
amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the
case without prejudice, unless otherwise provided,
upon motion and after hearing. The submission of a
false certification or non-compliance with any of the
undertakings therein shall constitute indirect
contempt of court, without prejudice to the
corresponding
administrative
and
criminal
actions. If the acts of the party or his counsel clearly
constitute willful and deliberate forum shopping, the
same shall be ground for summary dismissal with
prejudice and shall constitute direct contempt, as
well
as
a
cause
for
administrative
sanctions. (Underscoring supplied)
The rationale of the above provisions is to curb the malpractice
commonly referred to as forum shopping an act of a party
against whom an adverse judgment has been rendered in one
forum of seeking and possibly getting a favorable opinion in
another forum, other than by appeal or the special civil action
of certiorari, or the institution of two or more actions or proceedings
grounded on the same cause on the supposition that one or the
other court would make a favorable disposition.
Petitioners contention is utterly baseless. It bears stressing that
the Rule distinctly provides that the required certification against
forum shopping is intended to cover an initiatory pleading,
meaning an incipient application of a party asserting a claim for
relief. Certainly, respondent banks Answer with Counterclaim is
a responsive pleading, filed merely to counter petitioners
complaint that initiates the civil action. In other words, the rule
requiring
such
certification
does
not
contemplate
a
defendants/respondents claim for relief that is derived only from,
or is necessarily connected with, the main action or complaint. In
fact, upon failure by the plaintiff to comply with such requirement,
Section 5, quoted above, directs the dismissal of the case
without
prejudice,
not
the
dismissal
of
respondents counterclaim. Petition is DENIED.
b. Negros Merchants Enterprises Inc vs. CBC, 530
SCRA 478

Facts: Negros Merchants Enterprises, Inc. (NMEI), through its


President and General Manager, Jacinto Y. Tan, Jr., applied for an P8
million Credit Accommodation with respondent China Banking
Corporation (CBC), with terms ONE YEAR LOAN LINE, RENEWABLE
AND RE-AVAILABLE ANNUALLY THEREAFTER. The loan was secured
by a real estate mortgage over its properties. On December 21,
1994, petitioner, through Tan, applied for an additional Case-toCase Loan worth P1,500,000.00. Both loans were respectively paid
on January 31 and March 27, 1996.
Meanwhile, beginning March 19, 1996, petitioner allegedly reavailed the P8 million credit line under the original Credit
Accommodation through promissory notes executed by Tan.
Petitioner failed to settle the obligation, hence respondent sent a
demand letter with warning to foreclose on the real estate
mortgage. Petitioner, through its counsel Atty. Raphael A. Diaz,
sent two letter to respondent requesting a detailed statement of
account and to hold in abeyance any legal action. The latter
replied that said statement could not be released without proper
board resolution or authorization. Subsequently, petitioners
properties were extrajudicially foreclosed and sold in public auction,
with respondent as the highest bidder. Petitioner filed a Complaint
for Annulment of Foreclosure Sale with Damages and Preliminary
Injunction. Respondent moved to dismiss the same on the ground
that petitioner failed to show by clear and convincing evidence that
it is entitled to the relief sought in the complaint. Petitioner later
filed an Amended Complaint impleading Tan and his spouse,
Corazon V. Tan, as well as respondents Bacolod Branch Manager
Ainalea Lim-Cortez. Respondent again sought to dismiss the
amended complaint for failure to state cause of action and for
failure to comply with the rules on non-forum shopping.
RTC, denied respondents Motion to Dismiss. On appeal CA annulled
and set aside the decision of RTC. The Court of Appeals held that
the Amended Complaint should have been dismissed because the
accompanying certification against forum shopping which was
signed by petitioners corporate secretary, Amelito Lizares, was
defective, for lack of authorization from the board of directors; that
the allegations in the amended complaint were insufficient to
establish a cause of action; that petitioner defaulted in paying the
loan, thus respondent rightfully foreclosed the mortgaged
properties; that petitioner cannot validly claim ignorance of the
foreclosure proceedings; that the alleged collusion between Tan and
respondents Bacolod branch manager lacks basis because
petitioner expressly authorized Tan to enter into loan transactions
in its behalf with the latter; and that the trial judge acted with

grave abuse of discretion in denying respondents Motion to


Dismiss.

certification of non-forum shopping. Moreover, no such board


resolution was appended to the complaint or amended complaint.

Petitioner claims that the amended complaint cannot be considered


an initiatory pleading which requires an accompanying certification
against forum shopping. Since respondents first motion to dismiss
did not raise in issue the alleged defective certification, it is
deemed to have waived any objection thereto, in accordance with
Section 8, Rule 15 of the Rules of Court. However, in the event the
certification is found to be defective, petitioner maintains that it
substantially complied with the rules and that the substance of the
complaint should not be subordinated to procedural lapses.

In Tamondong v. Court of Appeals, we held that if a complaint is


filed for and in behalf of the plaintiff who is not authorized to do so,
the complaint is not deemed filed. An unauthorized complaint does
not produce any legal effect. Hence, the court should dismiss the
complaint on the ground that it has no jurisdiction over the
complaint and the plaintiff. In the instant case, Lizares was not
authorized to file the complaint for and in behalf of petitioner
corporation. Thus, the complaint is not deemed filed by the proper
party in interest and should be dismissed.

Ruling: The petition lacks merit. In Espao, Sr. v. Court of


Appeals, the Court held that an order denying a motion to dismiss
is merely interlocutory and therefore not appealable, nor can it be
the subject of a petition for review on certiorari. Such order may
only be reviewed in the ordinary course of law by an appeal from
the judgment after trial. The ordinary procedure to be followed in
that event is to file an answer, go to trial, and if the decision is
adverse, reiterate the issue on appeal from the final judgment.
Thus, when the trial court denied respondents motion to dismiss,
its next course of action would have been to file an answer and
proceed with the trial of the case. It therefore erred when it filed
instead a petition for certiorari before the Court of Appeals.
Nevertheless, while indeed respondent erred in filing a petition
for certiorari before the appellate court, we agree with the Court of
Appeals that petitioners Amended Complaint should have been
dismissed due to its defective verification and certification against
forum shopping.

Indeed, there is jurisprudence where the Court allowed substantial


compliance with the rule on certification of no-forum shopping;
however, the exceptional circumstances and/or social justice
considerations present in those cases are wanting in petitioners
Complaint or Amended Complaint. The words used in petitioners
verification and certification of no-forum shopping clearly state that
Lizares solely caused the preparation of the present case, without
even averring that he had done so in behalf of petitioner. There
was no belated filing of a proper verification and certification, or
even a copy of the board resolution or a secretarys certificate
attesting that Lizares was authorized to file said complaint or the
amendment thereto. Instead, petitioner merely declared without
qualification or explanation in its Opposition to Motion to Dismiss
that there was sufficient compliance as could be gleaned from the
complaint.

It is settled that the requirement to file a certificate of non-forum


shopping is mandatory and that the failure to comply with this
requirement cannot be excused. The certification is a peculiar and
personal responsibility of the party, an assurance given to the court
or other tribunal that there are no other pending cases involving
basically the same parties, issues and causes of action. In a case
where the plaintiff is a private corporation, the certification may be
signed, for and on behalf of the said corporation, by a specifically
authorized person, including its retained counsel, who has personal
knowledge of the facts required to be established by the
documents.
As can be gleaned from the foregoing, there was no allegation that
petitioner Negros Merchants Enterprises, Inc., through a board
resolution, authorized Lizares to execute the verification and

There is likewise no merit in petitioners assertion that the


amended complaint was not an initiatory pleading. Section 8, Rule
10 of the Rules of Court clearly provides that an amended
complaint supersedes the complaint that it amends. The petition
is DENIED.
c. Pasino vs. Monterroyo, 560 SCRA 739
FACTS: Land dispute allegedly owned by petitioners where a
homestead patent was issued in their favor, however, they claim
that they did not receive the order for homestead from the Director
of Lands , hence, petitioners were not able to register the land.
Despite failure to register, they still claim that they have
continuously possessed and cultivated the land. Respondents on
the other hand are also claiming the same land, alleging open,
continuous, exclusive and notorious possession. An action for
recovery of possession was filed by petitioner against respondent,

respondent in turn filed a counterclaim claiming ownership of the


land. RTC ruled in favor of respondent and dismissed the
counterclaim of the defendants. They ruled that the respondents
counterclaim stands on the same footing as an independent action.
Thus, it is not subject to collateral attack on petitioners title.
Furthermore, the court ruled that the counterclaims were filed
within 1 year from the grant of petitioners title.
CA ruled that the validity of petitioners titles could be attacked in a
counterclaim. They said that respondents counterclaim was a
compulsory counterclaim.
Ruling: A Counterclaim is Not a Collateral Attack on the
Title. It is already settled that a counterclaim is considered an
original complaint and as such, the attack on the title in a case
originally for recovery of possession cannot be considered as a
collateral attack on the title. Development Bank of the Philippines
v. Court of Appeals is similar to the case before us insofar as
petitioner in that case filed an action for recovery of possession
against respondent who, in turn, filed a counterclaim claiming
ownership of the land. In that case, the Court ruled:
Nor is there any obstacle to the determination of the validity of TCT
No. 10101. It is true that the indefeasibility of torrens title cannot
be collaterally attacked. In the instant case, the original complaint
is for recovery of possession filed by petitioner against private
respondent, not an original action filed by the latter to question the
validity of TCT
No. 10101 on which petitioner bases its
right. To rule on the issue of validity in a case for recovery of
possession is tantamount to a collateral attack. However, it should
not [b]e overlooked that private respondent filed a counterclaim
against petitioner, claiming ownership over the land and seeking
damages. Hence, we could rule on the question of the validity of
TCT No. 10101 for the counterclaim can be considered a direct
attack on the same. A counterclaim is considered a complaint,
only this time, it is the original defendant who becomes the
plaintiff... It stands on the same footing and is to be tested by the
same rules as if it were an independent action. x x x.
As such, we sustain both the trial court and the Court of Appeals
on this issue.