Advanced Problems in Remedial Law

1. The Problem of Prescription. X filed a complaint against Y. The complaint is sufficient in form and
substance. But X paid insufficient filing fees. In the meantime, the prescriptive period for the cause of
action of X against Y lapses. Y raises the issue of lack of jurisdiction on the ground of insufficient filing
fees and prescription of the cause of action. X pays additional sums of money to satisfy the
requirement of correct filing fees. Y moves for dismissal of the complaint on the ground of lack of
jurisdiction and prescription. Y interposes the defense that the subsequent payment of the differential
between the insufficient filing fees and the correct filing fees cured the defect in the filing of the
complaint. Rule on the motion.
The Manchester solution (Manchester Development Corporation v. Court of Appeals, G.R. No. L-75919,
May 7, 1987, 149 SCRA 562): Court has no jurisdiction.
The Sun Insurance solution (Sun Insurance Office, Ltd. v. Asuncion, G.R. Nos. 79937-38, February 13,
1989, 170 SCRA 274): Court has jurisdiction.
The Calculus of Solutions:
a. Payment within Reasonable Time and Prescription Period Analysis. The question of jurisdiction is
to be determined on the basis of the willingness of the complainant to pay the correct filing fees within
a reasonable time but always within the prescribed or reglementary period. This is the rule laid down
by the Supreme Court in the Sun Insurance Office, Ltd. v. Asuncion case (1989).
b. Intention Analysis. The question of jurisdiction is to be determined on the basis of whether there
was intent to defraud the government. This is the rule laid down in the case of Heirs of Bertuldo Hinog
v. Hon. Achilles Melicor, G.R. No. 140954, April 12, 2005, 455 SCRA 460). The rule is that if the
differential in the payment of correct filing fees is NOT attributable to intent on the part of the
complainant to defraud the government, then the court has jurisdiction. Conversely, if the differential
is attributable to intent on the part of the complainant to defraud the government, then the court has
no jurisdiction.
c. Negligence Analysis, Absence of Intent. In the absence of intention on the part of the complainant
to defraud the government, would negligence be a criterion to justify dismissal for lack of jurisdiction?
What kind of negligence if at all would justify dismissal? Simple negligence only or gross negligence?
c. Policy-weighing Analysis. The rules shall be liberally construed in order to promote their objective
of securing just, speedy and inexpensive disposition of every action and proceeding (Section 6, Rule 1,
Rules of Court). The policy considerations to be weighed by the Court are: on one hand, the policy of

liberal construction of the rules; and, on the other, the possibility of opening the floodgates to
pleadings filed with insufficient filing fees due to a relaxed policy on the part of the Court.
d. Equity Analysis. The Court shall take into consideration other factors such as equity, fairness, and
the administration of substantive justice. The problem with this form of analysis is that it
institutionalizes a tendency to depart from generality and uniformity and adopts a solution to legal
issues on a case-to-case basis.
e. Ratio Analysis. The Supreme Court may prescribe a rule based on ratio. The proposed rule would
set a range of ratio between the amount of filing fees actually paid and the amount due to the
government. We submit that this range of ratio would operationalize the issue on whether or not there
was intention to defraud the government.
f. Time Ratio Analysis The Supreme Court may also prescribe a rule based on time ratio. The
proposed rule would set a range of time ratio between the date when the incorrect filing fees were
paid and the date when the correct filing fees were paid. In addition to the money ratio analysis, this
rule would operationalize the issue on whether or not there was intention to defraud the government.
g. Correspondence between Statement of Claims-to-Reliefs Prayed for Semantic Analysis. This is the
rule laid down by the Supreme Court in the Manchester case. The rule is that there should be a
correspondence between the statement of the damages being claimed and the reliefs being prayed for.
The semantic structure of the doctrine in Manchester states: To put a stop to this irregularity,
henceforth all complaints, petitions, answers, and other similar pleadings should specify the amount of
damages being prayed for not only in the body of the pleading but also in the prayer, and said
damages shall be included in the assessment of the filing fees in any case. Any pleading that fails to
comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from
the record.
h. Previous Incidents and/or Behavioral Pattern of Counsel and/or Complainant Analysis. The
Supreme Court may also prescribe a rule based on previous incidents of non-payment of correct filing
fees by the legal counsel of the complainant and/or even by the complainant himself or herself. The
proposed rule is that permission by the Court may be granted for the complainant to subsequently pay
the differential in the correct filing fees based on the behavioral pattern in previous cases, if such is
the case. The basis for this can be observations, comments, reprimands contained in court orders,
decisions, resolutions, awards, etc. of which the courts may take judicial notice. In addition to the
Money Ratio Analysis and the Time Ratio Analysis, this rule would operationalize the question of
whether or not there was intention to defraud the government.

2. The Problem of Legal Status. What is the legal status of the pleading between the date of filing
and the date of payment of correct filing fees? Upon payment of the correct filing fees, what is the
date when jurisdiction is deemed to have attached? Did jurisdiction attach on the earlier date when
the pleading was filed but without payment of the correct filing fees or the latter date when the correct
filing fees were paid?
3. The Problem of Forum Shopping. X filed a complaint against Y. The complaint is sufficient in form
and substance. But X paid insufficient filing fees. X filed another case against Y based on the same
cause of action but in a different court. The second complaint is sufficient in form and substance and X
paid the correct filing fees. In the meantime, the prescriptive period for the cause of action of X
against Y lapses. In the first case, Y raises the issue of lack of jurisdiction on the ground of insufficient
filing fees and prescription of the cause of action. X then pays additional sums of money to satisfy the
requirement of correct filing fees in the first case. Y moves for dismissal of the complaint in the first
case on the grounds of lack of jurisdiction, prescription and forum shopping. The Court in the second
case dismissed the complaint. Rule on the issues.

Part I. Civil Procedure

INTRODUCTION
1. The Law of Civil Procedure
BAUTISTA COMMENTARY (hereinafter Bautista, p. 1): The law of civil procedure is the law governing
the filing and processing of civil actions in our courts up to and including their resolution or
adjudication and enforcement of the final judgment or decretal order.
2. Aims of the Law of Civil Procedure
BAUTISTA (p. 2) The Rules refined this objective into that of securing a just, speedy and inexpensive
disposition of every action and proceeding.

Expedition and justice are therefore the projected

lodestars of our system of civil procedure.

Parties
1.

Capacity to sue and be sued

Only natural and juridical persons or entities authorized by law may sue or be sued in our courts And
an entity without juridical personality may not sue but it may be sued. Such an entity is suable under
the name by which its component members were generally or commonly known, but in such case the

names and addresses of the persons composing the entity must all be revealed in the answer of the
defendant.
General Rule: Spouses must sue or be sued jointly
Exceptions: Except in such instances where the wife may be sued alone. These instances are as
follows:
a) Spouses are judicially separated;
b) When they have in fact been separated for more than a year;
c) When there is a separation of property agreed upon in the marriage settlements;
d) If the administration of all the property in the marriage has been transferred to her;
e) When the litigation is between the husband and the wife;
f) If the suit concerns her paraphernal property;
g)When the action is upon the civil liability arising from a criminal offense;
h) If the litigation is incidental to the profession, occupation or business in which she is engaged;
i) In any civil action referred to in Articles 25 to 35 of the Civil Code; and
j) In an action upon a quasi-delict.
Right of a corporation
BAUTISTA(p. 16) The right of a corporation to sue and be sued in our courts is strictly defined. The
defining factors to be considered are whether the foreign corporation is doing business in the
Philippines and whether it is licensed to do business in this country. The term doing business has a
special meaning. It is statutorily defined in the Foreign Investments Act of 1991 (Republic Act No.
7042) as follows: The phrase doing business shall include soliciting orders, service contracts,
opening offices, whether called liaison offices or branches; appointing representatives or distributors
domiciled in the Philippines or, who, in any calendar year stay in the country for a period or periods
totaling one hundred eighty (180) days or more; participating in the management, supervision or
control of any domestic business, firm, entity or corporation in the Philippines; and any other act or
acts that imply a continuity of commercial dealings or arrangements and contemplate to that extent

the performance of acts or works, or the exercise of some of the functions normally incident to, and in
progressive

prosecution

commercial

gain

for

the

purpose

and

object

of

the

business

organization: Provided, however, That the phrase doing business shall not be deemed to include
mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do
business, and/or the exercise of rights as such investor; nor having a nominee director or officer to
represent its interests in such corporation; nor appointing a representative or distributor domiciled in
the Philippines which transacts business in its own name and for its own account.
If the foreign corporation does business in the Philippines without a license it cannot sue before our
courts but it may be sued. But if the foreign corporation is not doing business in the Philippines, it may
sue even without a license in our courts on an isolated transaction or on causes of action entirely
independent of any business transaction. Therefore, if the foreign corporation does business in the
Philippines with the required license, it can sue before our courts on any transaction. The term doing
business implies a continuity of commercial dealings and arrangements, and contemplates the
performance of acts or the exercise of some of the functions normally incidental to the plaintiffs and
object for which the corporation was organized (M.R. Holdings Ltd. v. Bajar, 2002).
One may become a party to a litigation unwittingly and therefore may be bound by judgments or
orders rendered in the case. This may well happen to a person who becomes a party to the record
(i.e. one who files a performance bond)
Real party in interest
General Rule: Action can be prosecuted or defended in our courts only by and in the name of the real
party in interest.
Definition: A real party-in-interest is defined as one who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit.
BAUTISTA (p. 18) Test: In determining whether one is a real party in interest it may be helpful to ask
the following questions: Will the defendant be protected if he pays the plaintiff? Or, will the defendant
be bound by the judgment? The underlying notion behind the requirement of the real party in interest
is to protect the party who pays or recovers according to the judgment.
Representative parties
An action may be by or against one acting in a representative capacity in which case the beneficiary
shall be included in the title of the case and is to be deemed the real party-in-interest.

Such a

representative may also be a trustee of an express trust, a guardian, an executor or administrator or a

party authorized by law or these Rules to prosecute or defend an action in a representative capacity.
General Rule: An agent acting in his own name and for the benefit of an undisclosed principal may sue
or be sued without joining the principal
Exception: except when the contract involves things belonging to the principal.
Class suit
A group of persons may sue or be sued as a class. This may be done only when the subject matter of
the controversy is one of common or general interest to many persons so numerous that it is
impracticable to join all as parties, and the person purporting to represent the class may fully protect
their interest.
Scope of the Interest: The interest must be in thesubject matter of the controversy and not merely
in the legal question involved. (MVRS Publications, Inc. v. Islamic Daarah Council of the Philippines,
2003; Newsweek, Inc. v. Intermediate Appellate Court, 1986). The interest must be common and not
independent for each member of the class and should not conflict with each other (Hansberry v. Lee,
1940).
The authorization for a class suit is based on convenience. Extreme care must however be executed in
seeing to it that the class is a true class and that its members really have a common interest and that
the one suing in behalf of a class is a member of that class and adequately represents their interest.
The risk of inadequate or insufficient representation is that the judgment may bind the represented
parties who are actually absent.
Joinder of parties
General Rule (Permissive Joinder of Parties): Two or more persons may sue or be sued in one action.
Requisites:
(a) That there exist in their favor or against them a right to relief in respect to or arising out of the
same transaction or series of transactions, and
(b) that there be a question of law or fact common to all such plaintiffs or to all such defendants which
may arise in the action.

Distinction, Joinder of Plaintiff vs. Joinder of Causes of Action: The term joinder of parties must be
distinguished from the term joinder of causes of action. The term joinder of parties properly
applies when two or more persons have a joint right in one claim, or are jointly liable on one claim.
There is actually joinder of causes of action and not joinder of parties where two or more persons,
each having a cause of action against another person, join their causes of action in one complaint or
where a plaintiff having several causes of action, each against several persons, joins these causes of
action in one complaint (Blume & Reed, Pleading and Joinder, 1952).
Indispensable Party: A party is said to be indispensable when no final determination can be had of an
action without him being joined as plaintiff or as defendant.
On the other hand, when any of the two requirements for permissive joinder of parties is not satisfied,
then there is a case of misjoinder of parties. This may well happen where there is no question of law
common to the parties, or where the claims by or against the parties do not arise from the same
transaction or series of transactions
Necessary Party: A party is considered to be necessary where he ought to be joined as a party if
complete relief is to be accorded as to those already parties or for a complete determination or
settlement of the claim subject of the action.
Neither misjoinder nor non-joinder of parties is a ground for dismissal of an action. Any claim against
a misjoined party may be severed and proceeded with separately. Parties may be dropped or added by
order of the court on motion of any party or motu proprio at any stage of the action and on such
terms as are just.
In the case of non-joinder of an indispensable party, the party who insists on his impleader may move
for such joinder and upon failure of the party ordered to comply with the order of the court.
Substitution of parties
In either case, the counsel representing the party who dies is required to inform the court within thirty
(30) days from such death and to give the names and addresses of the legal representative of the
deceased.
The same substitution should be made where a party becomes incompetent or incapacitated, or,
where a party is a public officer who dies, resigns, or otherwise ceases to hold office, or where the
interest of a party is transferred pendente lite. Where party becomes incompetent or incapacitated,
the court upon motion with notice, may allow the action to be continued by or against the incompetent
or incapacitated by his legal guardian or guardian ad litem.

Alternative and unknown defendants

In the same that plaintiffs may be joined in the alternative, so may defendants be so joined. This may
happen where the plaintiff is uncertain against who of several persons he is entitled to relief, and he
may then join them in the alternative although a right to relief against one may be inconsistent with a
right of relief against the other.
Indigent Party
Consistent with the Constitutional policy of free access for all to our courts, a party may be allowed to
litigate in pauperis. Such authorization may be made upon an ex parte application and hearing
showing that the party is one who has no money or property sufficient and available for food, shelter,
and basic necessities for himself and his family.
The Solicitor General
May be invited by the court to appear where the action involved the validity of any treaty, law,
ordinance, executive order, presidential decree, rules or regulations.
New/Additional Parties in Multi-party Litigation
Apart from joinder, permissive or mandatory, of parties, there are other instances of multi-party
litigation. These instances are impleader, intervention and inter-pleader.
Intervention

Venue
1.

What is venue?
BAUTISTA (p. 12) Which of several courts in the Philippines having jurisdiction of a case shall take
cognizance of it? This is a question of venue. Determination of this question rests on the character of
the action being real or personal.
The real-vs.-personal dichotomy
Real actions are to be filed in the courts with jurisdiction over the area wherein the real property
involved or a portion thereof is situated.

Definition: Real actions are defined as those affecting title to or possession of real property or
interest therein. Forcible entry and unlawful detainer actions are expressly categorized as real actions
(RULES OF COURT, Rule 4, Section 1).
A personal action is one which does not involve title to or possession of real property or interest
therein. Personal actions may be filed in alternative places: first, where the plaintiff or any of the
principal plaintiffs resides, or, second, where the defendant or any of the defendants resides, or, third,
in the case of a non-resident, where he may be found, and in all these three cases at the election of
the plaintiff. However, where any of the defendants does not reside and is not found in the Philippines,
but the action affects the personal status of the plaintiff or property of the defendant in the
Philippines, venue may be laid in the place where the plaintiff resides or where the property or any
portion thereof is situated or found.
BAUTISTA (p. 13) The line between a personal and a real action is not a bright line. The defining
line which would seem to emerge from the cases which involve aspects of both real and personal
action is what is the dominant thrust of the complaint or the principal relief therein sought which is
determinative of its character as real or personal. The action is real if the principal relief affects title to
or possession of realty or an interest therein; otherwise, it is personal (Davao Abaca Plantation Co. v.
Dole Phils., Inc., 2000).
Venue is waivable and subject to party stipulation
Unlike subject-matter jurisdiction, the venue of an action is waivable and may be the subject of the
parties stipulation. The Supreme Court, however, is empowered by the Constitution to order a change
of venue to avoid a miscarriage of justice. Such an action may well be one where there is danger to
the lives of the parties or witnesses in what would otherwise be the proper venue.
The freedom of the parties to stipulate on the venue is however subject to the usual rules on contract
interpretation. Where the venue stipulation appears to be too one-sided as to amount to a contract of
adhesion, the consent of the parties thereto may well be vitiated and the venue stipulation will not be
given any effect (Sweet Lines v. Teves, 1978). At all events, the stipulation must be scrupulously
worded to effect a change or transfer of venue (Polytrade Corporation v. Blanco, 1969).