Consolidated Digests - Part 2

TITLE: fortune motors vs. CA OCT.
16, 1989
TOPIC: REAL ACTIONS
FACTS:
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.
The sheriff's certificate of sale was registered on October 24, 1984 with the one-year redemption
period to expire on October 24,1985.
Agreement:
Payment of loan
Cause of the dispute:
Due to financial difficulties and the onslaught of economic recession, the petitioner was not able
to pay the loan which became due.
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.
Case originally filed:

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".
Plaintiff’s averments:
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".
Plaintiff’s prayer:
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,
Defendant’s answer:
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.
Plaintiffs Reply:
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
RTC:
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.
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.
CA:
On June 11, 1986 the respondent Bank filed a petition for certiorari and prohibition in the Court
of Appeals.
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.
SC:
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.
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.
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
A prayer for annulment or rescission of contract does not operate to efface the true objectives
and nature of the action which is to recover real property.
An action for the annulment or rescission of a sale of real property is a real action. Its prime
objective is to recover said real property.
An action to annul a real estate mortgage foreclosure sale is no different from an action to annul
a private sale of real property.
ISSUE
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.
RULING
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).
the instant petition is DENIED for lack of merit and the assailed decision of the respondent Court
of Appeals is AFFIRMED.
TITLE: makasaet Petitioner vs FRANCISCO R. CO, JR Respondent

TOPIC: PERSONAL ACTIONS
FACTS:
On July 3, 2000, respondent, a retired police officer assigned at the Western Police District in
Manila, sued Abante Tonite, a daily tabloid of general circulation; its Publisher Allen A. Macasaet;
its Managing Director Nicolas V. Quijano; its Circulation Manager Isaias Albano; its Editors Janet
Bay, Jesus R. Galang and Randy Hagos; and its Columnist/Reporter Lily Reyes (petitioners), claiming
damages because of an allegedly libelous article petitioners published in the June 6, 2000 issue of
Abante Tonite.
was raffled to Branch 51 of the RTC, which in due course issued summons to be served on each
defendant, including Abante Tonite, at their business address at Monica Publishing Corporation,
301-305 3rd Floor, BF Condominium Building, Solana Street corner A. Soriano Street, Intramuros,
Manila.
In the morning of September 18, 2000, RTC Sheriff Raul Medina proceeded to the stated address
to effect the personal service of the summons on the defendants. But his efforts to personally
serve each defendant in the address were futile because the defendants were then out of the
office and unavailable. He returned in the afternoon of that day to make a second attempt at
serving the summons, but he was informed that petitioners were still out of the office. He decided
to resort to substituted service of the summons, and explained why in his sheriff’s return dated
September 22, 2005

. an allegedly libelous article petitioners published in the June 6, 2000 issue of Abante Tonite.

was raffled to Branch 51 of the RTC, which in due course issued summons to be served on each
defendant, including Abante Tonite, at their business address at Monica Publishing Corporation,
301-305 3rd Floor, BF Condominium Building, Solana Street corner A. Soriano Street, Intramuros,
Manila.
petitioners moved for the dismissal of the complaint through counsel’s special appearance in their
behalf, alleging lack of jurisdiction over their persons because of the invalid and ineffectual
substituted service of summons. They contended that the sheriff had made no prior attempt to
serve the summons personally on each of them in accordance with Section 6 and Section 7, Rule
14 of the Rules of Court.
They further moved to drop Abante Tonite as a defendant by virtue of its being neither a natural
nor a juridical person that could be impleaded as a party in a civil action.
RTC:
On March 12, 2001, the RTC denied the motion to dismiss, and directed petitioners to file their
answers to the complaint within the remaining period allowed by the Rules of Court,
Considering that summonses cannot be served within a reasonable time to the persons of all the
defendants, hence substituted service of summonses was validly applied. Secretary of the
President who is duly authorized to receive such document, the wife of the defendant and the
Editorial Assistant of the defendant, were considered competent persons with sufficient discretion
to realize the importance of the legal papers served upon them and to relay the same to the
defendants named therein (Sec. 7, Rule 14, 1997 Rules of Civil Procedure).
Petitioners filed a motion for reconsideration, asserting that the sheriff had immediately resorted
to substituted service of the summons upon being informed that they were not around to
personally receive the summons, and that Abante Tonite, being neither a natural nor a juridical
person, could not be made a party in the action.
On June 29, 2001, the RTC denied petitioners’ motion for reconsideration.
CA:
We find petitioners’ argument without merit. The rule is that certiorari will prosper only if there is
a showing of grave abuse of discretion or an act without or in excess of jurisdiction committed by
the respondent Judge. A judicious reading of the questioned orders of respondent Judge would
show that the same were not issued in a capricious or whimsical exercise of judgment. There are
factual bases and legal justification for the assailed orders. From the Return, the sheriff certified
that "effort to serve the summons personally xxx were made, but the same were ineffectual and
unavailing
Abante Tonite’s newspapers are circulated nationwide, showing ostensibly its being a corporate
entity, thus the doctrine of corporation by estoppel may appropriately apply.
An unincorporated association, which represents itself to be a corporation, will be estopped from
denying its corporate capacity in a suit against it by a third person who relies in good faith on such
representation.
SC:
Jurisdiction over the person, or jurisdiction in personam –the power of the court to render a
personal judgment or to subject the parties in a particular action to the judgment and other rulings
rendered in the action – is an element of due process that is essential in all actions, civil as well as
criminal, except in actions in rem or quasi in rem. Jurisdiction over the defendantin an action in
rem or quasi in rem is not required, and the court acquires jurisdiction over an actionas long as it
acquires jurisdiction over the resthat is thesubject matter of the action. The purpose of summons
in such action is not the acquisition of jurisdiction over the defendant but mainly to satisfy the
constitutional requirement of due process.
The settled rule is that the aim and object of an action determine its character. Whether a
proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature
and purpose, and by these only. A proceeding in personam is a proceeding to enforce personal
rights and obligations brought against the person and is based on the jurisdiction of the person,
although it may involve his right to, or the exercise of ownership of, specific property, or seek to
compel him to control or dispose of it in accordance with the mandate of the court. The purpose of
a proceeding in personam is to impose, through the judgment of a court, some responsibility or
liability directly upon the person of the defendant. Of this character are suits to compel a
defendant to specifically perform some act or actions to fasten a pecuniary liability on him. An
action in personam is said to be one which has for its object a judgment against the person, as
distinguished from a judgment against the property to determine its state. It has been held that
an action in personam is a proceeding to enforce personal rights or obligations; such action is
brought against the person. As far as suits for injunctive relief are concerned, it is well-settled that
it is an injunctive act in personam.
On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject
the property of such persons to the discharge of the claims assailed. In an action quasi in rem, an
individual is named as defendant and the purpose of the proceeding is to subject his interests
therein to the obligation or loan burdening the property. Actions quasi in rem deal with the status,
ownership or liability of a particular property but which are intended to operate on these
questions only as between the particular parties to the proceedings and not to ascertain or cut off
the rights or interests of all possible claimants. The judgments therein are binding only upon the
parties who joined in the action.
Philippine courts cannot try any case against a defendant who does not reside and is not found in
the Philippines because of the impossibility of acquiring jurisdiction over his person unless he
voluntarily appears in court; but when the case is an action in rem or quasi in rem enumerated in
Section 15, Rule 14 of the Rules of Court, Philippine courts have jurisdiction to hear and decide
the case because they have jurisdiction over the res, and jurisdiction over the person of the non-
resident defendant is not essential.
In the latter instance, extraterritorial service of summons can be made upon the defendant, and
such extraterritorial service of summons is not for the purpose of vesting the court with
jurisdiction, but for the purpose of complying with the requirements of fair play or due process,
so that the defendant will be informed of the pendency of the action against him and the
possibility that property in the Philippines belonging to him or in which he has an interest may be
subjected to a judgment in favor of the plaintiff, and he can thereby take steps to protect his
interest if he is so minded. On the other hand, when the defendant in an action in personam does
not reside and is not found in the Philippines, our courts cannot try the case against him because
of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court.
Under the Rules of Court, the service of the summons should firstly be effected on the defendant
himself whenever practicable. Such personal service consists either in handing a copy of the
summons to the defendant in person, or, if the defendant refuses to receive and sign for it, in
tendering it to him. The rule on personal service is to be rigidly enforced in order to ensure the
realization of the two fundamental objectives earlier mentioned. If, for justifiable reasons, the
defendant cannot be served in person within a reasonable time, the service of the summons may
then be effected either (a) by leaving a copy of the summons at his residence with some person
of suitable age and discretion then residing therein, or (b) by leaving the copy at his office or
regular place of business with some competent person in charge thereof. The latter mode of
service is known as substituted service because the service of the summons on the defendant is
made through his substitute.
ISSUE
1THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN HOLDING THAT THE TRIAL COURT
ACQUIRED JURISDICTION OVER HEREIN PETITIONERS.
2. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY SUSTAINING THE INCLUSION OF

ABANTE TONITE AS PARTY IN THE INSTANT CASE.
RULING
To warrant the substituted service of the summons and copy of the complaint, the serving officer
must first attempt to effect the same upon the defendant in person. Only after the attempt at
personal service has become futile or impossible within a reasonable time may the officer resort
to substituted service.
Summons must contain the name of the court and the names of the parties to the action; a
direction that the defendant answers within the time fixed by the Rules of Court; and a notice that
unless the defendant so answers, the plaintiff will take judgment by default and may be granted
the relief applied for.
the CA categorized Abante Tonite as a corporation by estoppel as the result of its having
represented itself to the reading public as a corporation despite its not being incorporated.
Thereby, the CA concluded that the RTC did not gravely abuse its discretion in holding that the
non-incorporation of Abante Tonite with the Securities and Exchange Commission was of no
consequence, for, otherwise, whoever of the public who would suffer any damage from the
publication of articles in the pages of its tabloids would be left without recourse. We cannot
disagree with the CA, considering that the editorial box of the daily tabloid disclosed that basis,
nothing in the box indicated that Monica Publishing Corporation had owned Abante Tonite.
WHEREFORE, the Court AFFIRMS the decision promulgated on March 8, 2002; and ORDERS
petitioners to pay the costs of suit.
TITLE: chua Petitioner vs. total office Defendant SEPT 30 2005

FACTS:
The said suit sought to annul a loan contract allegedly extended by petitioner to respondent
TOPROS in the amount of ten million four hundred thousand pesos (P10,400,000) and the
accessory real estate mortgage contract covering two parcels of land situated in Quezon City as
collateral.
Agreement:
grant a loan in the amount of ten million four hundred thousand pesos (P10,400,000) and the
accessory real estate mortgage contract covering two parcels of land situated in Quezon City as
collateral.

It appeared on the face of the subject contracts that TOPROS was represented by its president
John Charles Chang, Jr. However, TOPROS alleged that the purported loan and real estate
mortgage contracts were fictitious, since it never authorized anybody, not even its president, to
enter into said transaction.
On December 28, 1999, respondent Total Office Products and Services, Inc., (TOPROS) lodged a
complaint for annulment of contracts of loan and real estate mortgage against herein petitioner
Antonio T. Chua before the Regional Trial Court of Pasig City.
It appeared on the face of the subject contracts that TOPROS was represented by its president
John Charles Chang, Jr. However, TOPROS alleged that the purported loan and real estate
mortgage contracts were fictitious, since it never authorized anybody, not even its president, to
enter into said transaction.
to annul a loan contract allegedly extended by petitioner to respondent TOPROS in the amount
of ten million four hundred thousand pesos (P10,400,000) and the accessory real estate mortgage
contract covering two parcels of land situated in Quezon City as collateral.
petitioner filed a motion to dismiss on the ground of improper venue. He contended that the
action filed by TOPROS affects title to or possession of the parcels of land subject of the real estate
mortgage. He argued that it should thus have been filed in the Regional Trial Court of Quezon City
where the encumbered real properties are located, instead of Pasig City where the parties reside.
RTC:
On August 9, 2000, Judge Pahimna issued an order denying the motion to dismiss. She reasoned
that the action to annul the loan and mortgage contracts is a personal action and thus, the venue
was properly laid in the RTC of Pasig City where the parties reside.
Petitioner moved for a reconsideration of the said order, which Judge Pahimna denied in its order
of October 6, 2000. Hence, petitioner filed with the Court of Appeals a special civil action for
certiorari
CA:
The Court of Appeals dismissed said petition in its decision dated November 28, 2001. It held that
the authorities relied upon by petitioner, namely Pascual v. Pascual and Banco Espaol-Filipino v.
Palanca, are inapplicable in the instant case. The appellate court instead applied Hernandez v.
Rural Bank of Lucena, Inc. wherein we ruled that an action for the cancellation of a real estate
mortgage is a personal action if the mortgagee has not foreclosed the mortgage and the
mortgagor is in possession of the premises, as neither the mortgagors title to nor possession of
the property is disputed.
Dissatisfied, petitioner filed a motion for reconsideration, which the Court of Appeals denied for
lack of merit in its resolution of April 1, 2002.
SC:
Considering the facts and the submission of the parties, we find the petition bereft of merit.
Well-settled is the rule that an action to annul a contract of loan and its accessory real estate
mortgage is a personal action. In a personal action, the plaintiff seeks the recovery of personal
property, the enforcement of a contract or the recovery of damages. In contrast, in a real action,
the plaintiff seeks the recovery of real property, or, as indicated in Section 2 (a), Rule 4 of the then
Rules of Court, 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 mortgage on, real property.
In the Pascual case, relied upon by petitioner, the contract of sale of the fishpond was assailed as
fictitious for lack of consideration. We held that there being no contract to begin with, there is
nothing to annul. Hence, we deemed the action for annulment of the said fictitious contract
therein as one constituting a real action for the recovery of the fishpond subject thereof.
We cannot, however, apply the foregoing doctrine to the instant case. Note that in Pascual, title
to and possession of the subject fishpond had already passed to the vendee. There was, therefore,
a need to recover the said fishpond. But in the instant case, ownership of the parcels of land
subject of the questioned real estate mortgage was never transferred to petitioner, but remained
with TOPROS. Thus, no real action for the recovery of real property is involved. This being the case,
TOPROS action for annulment of the contracts of loan and real estate mortgage remains a personal
action.
Petitioners reliance on the Banco Espaol-Filipino case is likewise misplaced. That case involved a
foreclosure of real estate mortgage against a nonresident. We held therein that jurisdiction is
determined by the place where the real property is located and that personal jurisdiction over the
nonresident defendant is nonessential and, in fact, cannot be acquired.
Needless to stress, the instant case bears no resemblance to the Banco Espaol-Filipino case. In the
first place, this is not an action involving foreclosure of real estate mortgage. In the second place,
none of the parties here is a nonresident. We find no reason to apply here our ruling in Banco
Espaol-Filipino.
ISSUE
WHETHER AN ACTION TO ANNUL A LOAN AND MORTGAGE CONTRACT DULY ALLEGED AS

FICTITIOUS FOR BEING WITH ABSOLUTELY NO CONSIDERATION IS A PERSONAL ACTION OR REAL
ACTION?
WHETHER IN AN ACTION TO ANNUL A LOAN AND MORTGAGE CONTRACT DULY ALLEGED AS
FICTITIOUS FOR BEING WITH ABSOLUTELY NO CONSIDERATION, THE PERSON ALLEGED TO HAVE
[LACKED] AUTHORITY TO ENTER INTO SAID CONTRACTS IS AN INDISPENSABLE PARTY?
RULING
first issue;
The Court of Appeals finds that Hernandez v. Rural Bank of Lucena, Inc. provides the proper
precedent in this case. In Hernandez, appellants contended that the action of the Hernandez
spouses for the cancellation of the mortgage on their lots was a real action affecting title to real
property, which should have been filed in the place where the mortgaged lots were situated. Rule
4, Section 2 (a), of the then Rules of Court, was applied, to wit:
SEC. 2. Venue in Courts of First Instance. (a) Real actions. Actions affecting title to, or for recovery
of possession, or for partition or 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.
The Court pointed out in the Hernandez case that with respect to mortgage, the rule on real
actions only mentions an action for foreclosure of a real estate mortgage. It does not include an
action for the cancellation of a real estate mortgage. Exclusio unios est inclusio alterius. The latter
thus falls under the catch-all provision on personal actions under paragraph (b) of the above-cited
section, to wit:
SEC. 2 (b) Personal actions. All other actions may be commenced and tried 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.
In the same vein, the action for annulment of a real estate mortgage in the present case must fall
under Section 2 of Rule 4, to wit:
SEC. 2. Venue of personal actions. All other actions may be commenced and tried where the
plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a non-resident defendant where he may be found, at the
election of the plaintiff.
second issue,
the second issue, Section 7, Rule 3 of the Revised Rules of Court provides:
SEC. 7. Compulsory joinder of indispensable parties. Parties in interest without whom no final
determination can be had of an action shall be joined either as plaintiffs or defendants. (Emphasis
ours)
The presence of indispensable parties is necessary to vest the court with jurisdiction. The absence
of an indispensable party renders all subsequent actuations of the court null and void, because of
that courts want of authority to act, not only as to the absent parties but even as to those present.
Thus, whenever it appears to the court in the course of a proceeding that an indispensable party
has not been joined, it is the duty of the court to stop the trial and order the inclusion of such
party.
A person is not an indispensable party, however, if his interest in the controversy or subject matter
is separable from the interest of the other parties, so that it will not necessarily be directly or
injuriously affected by a decree which does complete justice between them.[17]
Is John Charles Chang, Jr., the president of TOPROS who allegedly entered into the disputed
contracts of loan and real estate mortgage, an indispensable party in this case?
We note that although it is Changs signature that appears on the assailed real estate mortgage
contract, his participation is limited to being a representative of TOPROS, allegedly without authority.
The document which constitutes as the contract of real estate mortgage clearly points to
petitioner and TOPROS as the sole parties-in-interest to the agreement as mortgagee and
mortgagor therein, respectively. Any rights or liabilities arising from the said contract would
therefore bind only the petitioner and TOPROS as principal parties. Chang, acting as mere
representative of TOPROS, acquires no rights whatsoever, nor does he incur any liabilities, arising
from the said contract between petitioner and TOPROS. Certainly, in our view, the only
indispensable parties to the mortgage contract are petitioner and TOPROS alone.
the petition is DENIED. The assailed decision dated November 28, 2001 and resolution dated April 1,
2002 of the Court of Appeals upholding the Orders of Judge Lorifel Lacap Pahimna are AFFIRMED.
TITLE: paderanga vs.Hon. DIMALANES B. BUISSAN,and ELUMBA INDUSTRIES COMPANY
FACTS:
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.
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, although private
respondent maintains that this is not the case. At any rate, the validity of the repossession is not
here in issue.
Agreement:
The lease was for an indefinite period although the rent of P150.00 per month was paid on a
month-to-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.
On 18 July 1977, private respondent instituted an action for damages 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.
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.
On 18 July 1977, private respondent instituted an action for damages4 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.
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.
after the ruling of the RTC
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.
RTC:
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. 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. 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.
CA:
SC:
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.
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.
ISSUE
WON the action for damages and to fix the period of the lease contract is also a personal action.
RULING
the action is one of personam
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. 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 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 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.
petition is granted
TITLE: dela cruz vs el seminario jan 28 1911

TOPIC: MIXED ACTIONS
FACTS:
The appellee, Cayetano de la Cruz, was a member and the president of a Methodist Episcopal
religious association at Dinalupijan, Province of Bataan, Philippine Islands. The members of this
association, including Cayetano de la Cruz, having decided to lease a building site and erect
thereon a chapel, made voluntary contributions for that purpose, Cayetano de la Cruz being
among those who contributed.
Cayetano de la Cruz, as such member and president, was then authorized by the association to
lease a certain building site and to use the funds contributed for the purpose of constructing a
chapel. So on the 17th of May, 1907, he leased from one J. C. Miller, the agent of the appellant,
His Grace Jeremiah J. Harty, Archbishop of Manila and administrator of the hacienda of
Dinalupijan, for a period of two years, a certain lot or parcel of land, being a part of that hacienda
and which is fully described in the written contract of lease, agreeing to pay as rental P2 per year,
the first year's rent to be paid in advance. On the execution of this lease Cayetano de la Cruz, as
member and president of the Methodist Episcopal association, was placed in possession of this lot
or building site and proceeded to construct thereon a chapel for the use of the said religious
association.
About the time this chapel was completed an action of forcible entry and detainer was
commenced by one Raymundo Sinsuangco in the justice of the peace court of Dinalupijan, in which
Cayetano de la Cruz, as lessee of the lot upon which the chapel was constructed, and J. C. Miller,
as agent and representative of the appellants, who, in such capacity executed said lease, as lessor,
were made defendants. Judgment was rendered against the defendants in the action. The
appellants in the case at bar were duly notified of the judgment of the justice of the peace and
were requested to appeal to the Court of First Instance. No appeal was taken and the judgment
becoming final was executed in such a manner that the above-mentioned chapel was completely
destroyed.
on the 21st of October, 1907, Cayetano de la Cruz commenced this action in the Court of First
Instance of the city of Manila against the appellants to recover the sum of P2,000 as damages for
a breach of the rental contract.
Agreement:
17th of May, 1907, he leased from one J. C. Miller, the agent of the appellant, His Grace
Jeremiah J. Harty, Archbishop of Manila and administrator of the hacienda of Dinalupijan,
for a period of two years, a certain lot or parcel of land, being a part of that hacienda and
which is fully described in the written contract of lease, agreeing to pay as rental P2 per
year, the first year's rent to be paid in advance.

About the time this chapel was completed an action of forcible entry and detainer was
commenced by one Raymundo Sinsuangco in the justice of the peace court of Dinalupijan, in which
Cayetano de la Cruz, as lessee of the lot upon which the chapel was constructed, and J. C. Miller,
as agent and representative of the appellants, who, in such capacity executed said lease, as lessor,
were made defendants.

JUSTICE of the PEACE
Judgment was rendered against the defendants in the action. The appellants in the case at bar
were duly notified of the judgment of the justice of the peace and were requested to appeal to
the Court of First Instance. No appeal was taken and the judgment becoming final was executed
in such a manner that the above-mentioned chapel was completely destroyed.
Subsequently thereto, and on the 21st of October, 1907, Cayetano de la Cruz commenced this
action in the Court of First Instance of the city of Manila against the appellants to recover the sum
of P2,000 as damages for a breach of the rental contract.
After all the evidence had been submitted by both parties, the appellee, after due notice to the
appellants, presented an amended complaint, to conform, as he alleged, with the agreed
statement of facts and the admissions made by the appellants in their answer. This amended
complaint was admitted by the court without objection on the part of the appellants. The
amended complaint is the same as the original complaint, with the following exceptions: (1) A
number of unnamed person were made parties plaintiff; (2) in paragraph 2 of the amended
complaint it is alleged that Cayetano de la Cruz was the president, agent, and member of the
Methodist Episcopal religious association: and (3) a judgment for only P402 was asked.
to recover the sum of P2,000 as damages for a breach of the rental contract.
After all the evidence had been submitted by both parties, the appellee, after due notice to the
appellants, presented an amended complaint, to conform, as he alleged, with the agreed statement
of facts and the admissions made by the appellants in their answer. This amended complaint was
admitted by the court without objection on the part of the appellants. The amended complaint is
the same as the original complaint, with the following exceptions: (1) A number of unnamed
person were made parties plaintiff; (2) in paragraph 2 of the amended complaint it is alleged that
Cayetano de la Cruz was the president, agent, and member of the Methodist Episcopal religious
association: and (3) a judgment for only P402 was asked.
To this complaint the DEFENDANT, through their attorneys, presented a demurrer, based upon
the following grounds: (1) That the Court of First Instance of the city of Manila was without
jurisdiction to try and determine this action for the reason that damages for injuries caused to real
property situated in the Province of Bataan is sought to be recovered; and (2) the complaint fails
to allege facts sufficient to constitute a cause of action. This demurrer was overruled, the
appellants duly noting their exception.
RTC:
The court below on the 29th of March, 1909, rendered judgment in favor of the appellees-
Petitioner and against the Defendants-appellants for the sum of P402, P2 being the rent for the
first year paid in advance, and the P400 being the agreed value of the chapel which was
destroyed by the sheriff in executing the judgment rendered by the justice of the peace.
CA:
SC:
This is not an action to recover damages to real estate; it is an action for breach of covenant in a
lease. The fact that the damages to real estate are involved, as an incident to the breach of the
contract, does not change the character of the action. Such an action is personal and transistory.
The rule is well stated in the case of Neil vs. Owen
If the action is founded on privity of contract between the parties, then the action whether debt
or covenant, is transitory. But if there is no privity of contract and the action is founded on privity
of estate only, such a covenant that runs with the land in the hands of the remote grantees, then
the action is local and must be brought in the country wherein the land lies.
In an action on a covenant contained in a lease, whether begun by the lessor against the lessee,
or by the lessee against the lessor, the action is transitory because it is founded on a mere privity
of contract.
In general, also, actions which are founded upon contracts are transitory. In an action upon a lease
for nonpayment of rent or other breach of covenants, when the action is founded on the privity
of contract it is transitory and the venue may laid in any county.
Therefore, section 377 of the Code of Civil Procedure, which provides, among other things, that
actions to recover damages for injuries to real estate shall be brought in the province where the
land, or a part thereof, is situated, is not applicable.
ISSUE
That as this action is one for damages to real estate situated in the Province of Bataan, under the
provisions of section 377 of the Code of Civil Procedure the Court of First Instance of the city of
Manila had no jurisdiction;
RULING
The sum of P402, in our opinion, not being excessive damages for the injuries caused by the breach
of contract on the part of the defendants, the judgment should be and the same is hereby
affirmed, with costs against the appellants. So ordered.
TITLE: EMERGENCY LOAN PAWNSHOP INCORPORATED and DANILO R. NAPALA, petitioners, vs.
THE COURT OF APPEALS (Tenth Division) and TRADERS ROYAL BANK, respondents.
TOPIC: MIXED ACTION
FACTS:
On January 18, 1996, Traders Royal Bank (TRB for brevity) sold in favor of petitioner Emergency
Loan Pawnshop Incorporated (ELPI for brevity) a parcel of land located at Km. 3 Asin, Baguio City
for Five Hundred Thousand Pesos (P500,000.00).
Agreement:

At the time of the sale, TRB misrepresented to ELPI that the subject property was a vacant
residential lot valued at P600.00 to P800.00 per square meters, with a usable land area of 1,143.75
square meters (approximately 75% of the land area of 1,525 sq.m.) without any illegal occupants
or squatters, when it truth the subject property was dominantly a public road with only 140 square
meters usable area.

on April 16, 1996, ELPI filed with the Regional Trial Court, Davao, Branch 17, a complaint for
annulment of sale and damages against TRB.
ELPI, after having spent to fully ascertain the actual condition of the property, demanded from
TRB the rescission and cancellation of the sale of the property. TRB refused, hence, on April 16,
1996, ELPI filed with the Regional Trial Court, Davao, Branch 17, a complaint for annulment of sale
and damages against TRB.
On August 27, 1996, TRB filed a Motion to Dismiss the complaint on the ground of improper venue.
RTC:
On September 18, 1996 the trial court denied the motion to dismiss. On October 21, 1996, TRB
filed a motion for reconsideration. On November 14, 1996, the trial court denied the motion.
CA:
On January 15, 1997, TRB elevated the case to the Court of Appeals by petition for certiorari and
prohibition with preliminary injunction or temporary restraining order, contending that the trial
court committed a grave abuse of discretion in denying its motion to dismiss the complaint on the
ground of improper venue.
After due proceedings, on March 11, 1997, the Court of Appeals promulgated its decision, the
dispositive portion of which reads:
WHEREFORE, finding merit in the petition, the Orders dated September 18,1996 and November
14, 1996 are hereby ANNULED and SET ASIDE and Civil Case No. 24,317-96 is hereby DISMISSED
on ground of improper venue.
SC:
In the case at bar, we agree with the Court of Appeals that the trial court erred grievously
amounting to ousting itself of jurisdiction. The motion of respondent TRB was well founded
because venue was clearly improperly laid. The action in the Regional Trial Court was for
annulment of sale involving a parcel of land located at Km. 3 Asin Road, Baguio City. The venue of
such action is unquestionably within the territorial jurisdiction of the proper court where the real
property or part thereof lies An action affecting title to real property, or for recovery of, or
foreclosure of mortgage on real property, shall be commenced and tried in the proper court having
jurisdiction over the area where the real property or any part thereof lies.
Hence, the case at bar clearly falls within the exceptions to the rule. The Regional Trial Court has
committed a palpable and grievous error amounting to lack or excess of jurisdiction in denying the
motion to dismiss the complaint on the ground of improper venue.
ISSUE
WON the motion of respondent TRB with respect to venue was correct
RULING
WHEREFORE, the Court denies the petition and affirms the decision of the Court of Appeals
TITLE: ALFREDO CHING, petitioner, vs. THE HONORABLE COURT OF APPEALS & PEDRO ASEDILLO,
respondents.
TOPIC: ACTION IN PERSONAM
FACTS:
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.
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.
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.
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 administrator of Ching Leng's estate

for reconveyance of the abovesaid property and cancellation of T.C.T. No. 91137 in his favor based
on possession by pedro asidilo the respondent.
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
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
for reconveyance of the abovesaid property and cancellation of T.C.T. No. 91137 in his favor based
on possession.
"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;"
RTC:
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.
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.
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.
CA:
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.
Private respondent Pedro Asedillo died on June 7, 1981 at Makati, Metro Manila during the
pendency of the case with the Court of Appeals.
SC:
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.
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.
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).
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 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 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.
ISSUE
1.ETHER 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.
2.WHETHER OR NOT THE TRIAL COURT ACQUIRED JURISDICTION OVER THE SUBJECT MATTER AND
THE PARTIES.
3.WHETHER OR NOT A DEAD MAN CHING LENG AND/OR HIS ESTATE MAY BE VALIDLY SERVED
WITH SUMMONS AND DECISION BY PUBLICATION.
RULING
Petition Granted. Petitioner wins
TITLE: MARGARITA ROMUALDEZ-LICAROS, petitioner, vs. ABELARDO B. LICAROS, respondent.
TOPIC: ACTION IN REM
FACTS:
Abelardo Licaros (Abelardo, for short) and Margarita Romualdez-Licaros (Margarita, hereafter)
were lawfully married on December 15, 1968. Out of this marital union were born Maria
Concepcion and Abelardo, Jr. Ironically, marital differences, squabbles and irreconcilable conflicts
transpired between the spouses, such that sometime in 1979, they agreed to separate from bed
and board.
In 1982, Margarita left for the United States and there, to settle down with her two (2) children.
In the United States, on April 26, 1989, Margarita applied for divorce before the Superior Court of
California, County of San Mateo, where she manifested that she does not desire counseling at that
time. On August 6, 1990, Margarita was granted the decree of divorce. together with a distribution
of properties between her and Abelardo.
Not long after, on August 17, 1990, Abelardo and Margarita executed an Agreement of Separation
of Properties. This was followed-up by a petition filed on August 21, 1990 before the Regional Trial
Court of Makati for the dissolution of the conjugal partnership of gains of the spouses and for the
approval of the agreement of separation of their properties. This was docketed as Special
Proceeding No. 2551. On December 27, 1990, a decision was issued granting the petition and
approving the separation of property agreement.
For his part, on June 24, 1991, Abelardo commenced Civil Case No. 91-1757, for the declaration
of nullity of his marriage with Margarita, based on psychological incapacity under the New Family
Code. As Margarita was then residing at 96 Mulberry Lane, Atherton, California, U.S.A., Abelardo
initially moved that summons be served through the International Express Courier Service. The
court a quo denied the motion. Instead, it ordered that summons be served by publication in a
newspaper of general circulation once a week for three (3) consecutive weeks, at the same time
furnishing respondent a copy of the order, as well as the corresponding summons and a copy of
the petition at the given address in the United States through the Department of Foreign Affairs,
all at the expense of Abelardo. Respondent was given sixty (60) days after publication to file a
responsive pleading.
Abelardo was allowed to present his evidence ex-parte. On November 8, 1991, the Decision
(Annex A, Petition) was handed down in Civil Case No. 91-1757 declaring the marriage between
Abelardo and Margarita null and void.

Code.

Code.
Almost nine (9) years later, on April 28, 2000, the petition at bench was commenced when
Margarita received a letter dated November 18, 1991 from a certain Atty. Angelo Q. Valencia
informing her that she no longer has the right to use the family name Licaros inasmuch as her
marriage to Abelardo had already been judicially dissolved by the Regional Trial Court of Makati
on November 8, 1991. Asseverating to have immediately made some verifications and finding the
information given to be true,
the extrinsic fraud alluded to consists of Abelardo coercing Margarita into signing the petition to
dissolve their conjugal partnership of gains together with the agreement of separation of
properties, by threatening to cut-off all financial and material support of their children then still
studying in the United States;
RTC:
Abelardo was allowed to present his evidence ex-parte. On November 8, 1991, the Decision
(Annex A, Petition) was handed down in Civil Case No. 91-1757 declaring the marriage between
Abelardo and Margarita null and void.
CA:
1.WON THERE WAS EXTRINSIC FRAUD IN THE PREPARATION AND FILING BY ABELARDO OF THE
PETITION FOR DISSOLUTION OF THE CONJUGAL PARTNERSHIP OF GAINS AND ITS ANNEX, THE
AGREEMENT OF SEPARATION OF PROPERTIES.
the extrinsic fraud alluded to consists of Abelardo coercing Margarita into signing the petition to
dissolve their conjugal partnership of gains together with the agreement of separation of
properties, by threatening to cut-off all financial and material support of their children then still
studying in the United States;
Antithetically, a meticulous perusal of the controversial petition (Annex B-1) and the agreement
of separation of properties (pp. 60-64, Rollo) readily shows that the same were signed by the
petitioner on the proper space after the prayer and on the portion for the verification of the
petition. The same is true with the agreement of separation of properties. What is striking to note
is that on August 6, 1990, Margarita appeared before Amado P. Cortez, Consul of the Republic of
the Philippines at the San Francisco, California, United States Consulate Office, to affirm and
acknowledge before said official that she executed the agreement of separation of properties of
her own free will and deed, after being informed of the contents thereof. And yet, there is no
showing that Abelardo was with her at the Philippine Consulate Office in confirming the separation
of property agreement.
The Court of Appeals also rejected Margaritas claim that the trial court lacked jurisdiction to hear
and decide the Petition for Declaration of Nullity of Marriage for improper service of summons on
her. The case involves the marital status of the parties, which is an action in rem or quasi in rem.
The Court of Appeals ruled that in such an action the purpose of service of summons is not to vest
the trial court with jurisdiction over the person of the defendant, but only to comply with due
process. The Court of Appeals concluded that any irregularity in the service of summons involves
due process which does not destroy the trial courts jurisdiction over the res which is the parties
marital status. Neither does such irregularity invalidate the judgment rendered in the case. Thus,
the Court of Appeals dismissed the petition for annulment of judgment,
SC:
Summons is a writ by which the defendant is notified of the action brought against him. Service of
such writ is the means by which the court acquires jurisdiction over his person.[9]
As a rule, when the defendant does not reside and is not found in the Philippines, 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 case is one of actions in rem or quasi
in rem enumerated in Section 15,[10] Rule 14 of the Rules of Court, Philippine courts have
jurisdiction to hear and decide the case. In such instances, Philippine courts have jurisdiction over
the res, and jurisdiction over the person of the non-resident defendant is not essential.
Actions in personam and actions in rem or quasi in rem differ in that actions in personam are
directed against specific persons and seek personal judgments. On the other hand, actions in rem
or quasi in rem are directed against the thing or property or status of a person and seek judgments
with respect thereto as against the whole world.
At the time Abelardo filed the petition for nullity of the marriage in 1991, Margarita was residing
in the United States. She left the Philippines in 1982 together with her two children. The trial court
considered Margarita a non-resident defendant who is not found in the Philippines. Since the
petition affects the personal status of the plaintiff, the trial court authorized extraterritorial service
of summons under Section 15, Rule 14 of the Rules of Court. The term personal status includes
family relations, particularly the relations between husband and wife.
Under Section 15 of Rule 14, a defendant who is a non-resident and is not found in the country
may be served with summons by extraterritorial service in four instances: (1) when the action
affects the personal status of the plaintiff; (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 consists, wholly or in part, in excluding the defendant
from any interest in property located in the Philippines; or (4) when the property of the defendant
has been attached within the Philippines.
In these instances, extraterritorial service of summons may be effected under any of three modes:
(1) by personal service out of the country, with leave of court; (2) by publication and sending a
copy of the summons and order of the court by registered mail to the defendants last known
address, also with leave of court; or (3) by any other means the judge may consider sufficient.
ISSUE
I.Whether Margarita was validly served with summons in the case for declaration of nullity of her
marriage with Abelardo;
RULING
In the instant case, Margarita acknowledged the Agreement before Consul Cortez. The certificate
of acknowledgment signed by Consul Cortez states that Margarita personally appeared before him
and acknowledged before me that SHE executed the same of her own free will and deed. Thus,
there is a prima facie presumption that Margarita freely and voluntarily executed the Agreement.
Margarita has failed to rebut this prima facie presumption with clear and convincing proof of
coercion on the part of Abelardo.
A document acknowledged before a notary public is prima facie evidence of the due and regular
execution of the document. A notarized document has in its favor the presumption of regularity
in its execution, and to contradict the same, there must be evidence that is clear, convincing and
more than merely preponderant.[21]
WHEREFORE, the Decision of the Court of Appeals in dismissing the petition to annul judgment is
AFFIRMED.
Gomez v CA, Trocino, March 10, 2004
Topic: Action in Rem
Facts:
Some time in 1975, the spouses Jesus and Caridad Trocino (defendant) mortgaged two
parcels of land covered by TCT Nos. 10616 and 31856 to Dr. Clarence Yujuico. The
mortgage was subsequently foreclosed and the properties sold at public auction and
before the expiry of the redemption period, the spouses Trocino sold the property to
(petitioners) Gomez on December 12, 1989, who in turn, redeemed the same from Dr.
Yujuico. The spouses Trocino, however, refused to convey ownership of the properties
to petitioners, hence, the complaint.
The trial court served summons to respondents (Trocino) thru Caridad (respondents’
mother).
NOTE: The respondent spouses DID NOT PERSONALLY RECEIVED THE

SUMMONS.
The RTC ruled in favor of plaintiffs (Gomez). The defendants were directed to execute
deed of sale in favor of the plaintiffs. This however did not happen, thus, the court directed
the Register of Deeds of Cebu City to nullify the existing titles of the lands and issue a
new one in favor of the plaintiffs.
On March 13, 1996, respondents Adolfo and Mariano Trocino filed with the Court of
Appeals, a petition for the annulment of the judgment rendered by the RTC-Cebu alleging
that the trial court’s decision is null and void on the ground that it did not acquire
jurisdiction over their persons as they were not validly served with a copy of the summons
and the complaint. According to them, at the time summons was served on them, Adolfo
Trocino was already in Ohio, U.S.A., and has been residing there for 25 years, while
Mariano Trocino was in Talibon, Bohol, and has been residing there since 1986. They
also refuted the receipt of the summons by Caridad A. Trocino.
The Court of Appeals granted the petition and annulling the decision of the RTC-Cebu.
The Register of Deeds of Cebu City is hereby ENJOINED from cancelling Transfer
Certificates of Title Nos. 10616 and 31856.
Issue:
Whether or not the RTC acquired Jurisdiction over the person of the respondents and
therefore the judgment of RTC is valid.
Ruling:
No, RTC did not acquire jurisdiction over the person of the respondents but only Caridad
(the mother).
The SC identified the nature of the action filed – is it action in personam, in rem, or quasi
in rem, because the rules on service of summons under Rule 14 of the Rules of Court
of the Philippines apply according to the nature of the action.
In actions in personam, summons on the defendant must be served by handing
a copy thereof to the defendant in person, or, if he refuses to receive it, by
tendering it to him. This is specifically provided in Section 7, Rule 14 of the Rules
of Court. If efforts to find defendant personally makes prompt service impossible,
substituted service may be effected by leaving copies of the summons at the
defendant's dwelling house or residence with some person of suitable age and
discretion then residing therein, or by leaving the copies at the defendant's office
or regular place of business with some competent person in charge thereof. In
substituted service, it is mandated that the fact of impossibility of personal service
should be explained in the proof of service. For non-residents, it is essential that
the person is within the state to acquire jurisdiction except when it is given to a
representative or attorney-in-fact of the non-resident (an exceptional
circumstance).
Meanwhile, in actions in rem or quasi in rem, jurisdiction over the person of the
defendant is not a prerequisite to confer jurisdiction on the court provided that the
court acquires jurisdiction over the res, although summons must be served upon
the defendant in order to satisfy the due process requirements.
In contrast, 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 be an action in personam and not
necessarily an action in rem.
In the present case, the summons was not personally served to the respondents.
Although it was received by Caridad, it did not acquire jurisdiction over the person of
herein respondents because the nature of the action filed is action in personam. The
Trocino reneged on their obligation to convey ownership of the two parcels of land. Thus,
petitioners pray in their complaint that the spouses Trocino be ordered to execute the
appropriate deed of sale and that the titles be delivered to them (petitioners); or in the
alternative, that the sale be revoked and rescinded; and spouses Trocino ordered to
return to petitioners their down payment in the amount of P500,000.00 plus interests. The
action instituted by petitioners affect the parties alone, not the whole world. Hence, it is
an action in personam, thus, any judgment therein is binding only upon the parties
properly impleaded.
WHEREFORE, the petition for review is DENIED. The decision of the Court of Appeals is
AFFIRMED
Case: Lucas v Lucas, June 6, 2011

Topic: Action in rem
Facts:
Jesse Lucas the petitioner filed a petition to establish illegitimate filiation with motion for
the parties to submit DNA Test before RTC. He narrated that her mother had intimate
relations with Jesus Lucas (respondent) and eventually the former got pregnant and gave
birth to Jesse. The relationship of his mother and Jesus ended, thus, the former raised
him alone.
The respondent was not served with copy of the petition but nonetheless leaned the
petition and went to court to obtain a copy. The RTC found that the petition is sufficient in
form and substance, thus, directed the petitioner to publish in any newspaper of general
circulation.
The respondent manifested that he was not summoned and received a copy of the petition
and that publication is improper due to confidentiality of the subject matter. He contended
that DNA testing cannot be basis of pointing him as the petitioner’s father.
The court opined that the petitioner must first establish four aspects – prima facie case,
affirmative defense, presumption of legitimacy and physical resemblance but the
petitioner failed to establish. Thus, RTC dismissed the case without prejudice but
eventually was resolved in his favor after he filed a motion for reconsideration because of
sufficiency in for ma and substance of the petition.
CA opined that the RTC did not acquire jurisdiction over the person of the respondent –
no summons served, the special appearance of Jesus was only to question the
jurisdiction of the court, the same not equivalent to waiver of his right to object jurisdiction
of the court over his person. The petitioner also failed to show the procedural aspects of
the traditional paternity action.
Thus, the petition.
Issue:
Whether the lower court acquired jurisdiction over the person of the respondent.
Ruling:
Yes. To establish illegitimate filiation is an action in rem. By simply filing the case before
the RTC, the later acquire jurisdiction through publication. Publication is a notie to the
whole world that the proceeding has for its object to bar indefinitely all who might be
minded to make an objection. Through publication, all interested parties are deemed
notified of the petition.
In action in rem, jurisdiction over the person is not a pre requisite to confer jurisdiction
provided that the latter has jurisdiction over the res – a. by seizure of the property under
legal process or b. as a result of the institution of legal proceedings, the power of court is
recognized.
Hence, failure to serve summons will not deprive the court of its jurisdiction to try and
decide the case. The procedural due process requirement has been satisfied when Jesus
has the opportunity to file his opposition to the petition.
Case: Spouses Yu v Pacleb, February 24, 2009
Topic: Action Quasi in rem
Facts:
In 1992, Baltazar Pacleb and Wife Angelita purportedly sold to Del Rosario a 18,000
square meter land situated in Cavite. The same year, the same lot was thereafter sold by
Del Rosario to Javier, who also sold it in a “contract to sell” to Spouses Yu (petitioner) for
900k. All sales were never registered.
In 1993, the petitioner filed a case of specific performance and damages against Javier
and to compel the later to deliver ownership and possession of the land. The spouses
also discovered that a certain Ramon is in possession (tenancy) over the property. But
the latter waived his tenancy rights over the Langcaan Property (the disputed lot). Javier
was declared in default by the RTC; thus, he was ordered to surrender ownership and
possession of the property and pay damages.
On October 1995, Pacleb (respondent) filed a case for the annulment of deed of sale
issued to Del Rosario, alleging that their signatures were forged.
While the case was pending, Baltazar (respondent) died. He was substituted by his
surviving spouse and children.
In 2002, the CASE FILED BY THE RESPONDENT (annulment of deed) was dismissed
by the RTC and held that Spouses Yu are purchasers in good faith, rationated that the
successive sales sealed the regularity of the purchase. Moreover, the RTC declared that
the case filed for specific performance with damages was final and can no longer be
altered.
However in CA, the appellate court ruled that the Spouses are not purchaser in good
faith.
Hence, this petition.
Issue(s):
(1) Whether Spouses Yu are innocent purchasers for value and in good faith.
(2) Whether the ownership vested by the RTC to Spouses Yu binds the respondents.
Ruling:
• No. there was discrepancy in the testimony of the petitioner as to when they found out
the existence of the tenancy (Ramon’s possession). In fact, it was found out that the
spouses had prior knowledge of the tenancy agreement entered by Ramon and Javier
(previous owner). Notably, the 2 previous deeds of sale were never registered and
sold only about 2 months apart and contain identical provisions, leaving the title of the
property still under the name of Baltazar Pacleb. Therefore, it’s expected from the
spouses to examine any flaws and necessary factual circumstances attached to the
land.
Based on the foregoing, the petitioner spouses cannot be considered as innocent

purchasers.
• No. the civil case for specific performance filed by the spouses against Javier was an
action in personam. Thus, the judgment entered by the lower court does not bind the
respondents since they were not privy to the civil case.
Proceeding in personam is to enforce personal rights and obligations and is based on

the jurisdiction of the person, although it may involve his right to, exercise ownership,
control or dispose of in accordance with the mandate of the court. Action quasi in rem
on the other hand is a proceeding that deals with the status, ownership or liability of a
particular property.
All told, the respondent has better right over the property as the true owner thereof.
Case: Asiavest Limited v CA and Heras, September 25, 1988
Topic: Action Quasi in Rem
Facts:
Asiavest filed a complaint against Heras before RTC to pay the amount awarded by
Hongkong Court of a judgment dated December 1984 and April 1987. The award
comprises of 1.8M Hongkong dollars, including 1.5k interest, cost of action and 80k
attorney’s fees (in dollar). Before judgment could be entered, the court was razed by fire,
then; a reconstitution of case records was done.
The RTC ruled in favor of Asiavest. The court concluded that the judgment should be
recognized and given effect in this jurisdiction for failure of Heras to overcome the legal
presumption in favor of the foreign judgment.
Heras appealed before CA – reversing the decision of the RTC. Ruling, that the foreign
tribunal did not acquire jurisdiction over the person and subject matter.
Issue:
Whether or not the foreign judgment in enforceable under the Philippine Jurisdiction.
Ruling:
No. Hongkong courts did not acquire jurisdiction over the person of Heras, the later was
not a resident of Hongkong. The action against him is one in personam, summons should
have been served on him.
In action in personam where the defendant is non-resident, personal service of summons

within the state is essential to the acquisition of jurisdiction over the person. If not found,
the court cannot acquire jurisdiction, therefore cannot validly try and decide against him
except in the case of Gemperle v Schenfer wherein a non-resident was served summons
thru his wife who was his representative and attorney-in-fact in a prior civil case; the
second case was a mere offshoot to the first.
On the other hand, in a proceeding in rem or quasi in rem, jurisdiction over the person of
the defendant is not a prerequisite to confer jurisdiction on the court provided that the
court acquires jurisdiction over the res. Nonetheless, summons must be served upon the
defendant not for the purpose of vesting the court with jurisdiction but merely for satisfying
the due process requirements. Thus, where the defendant is a non-resident who is not
found in the Philippines and (1) the action affects the personal status of the plaintiff; (2)
the action relates to, or the subject matter of which is property in the Philippines in which
the defendant has or claims a lien or interest; (3) the action seeks the exclusion of the
defendant from any interest in the property located in the Philippines; or (4) the property
of the defendant has been attached in the Philippines -- service of summons may be
effected by (a) personal service out of the country, with leave of court; (b) publication,
also with leave of court; or (c) any other manner the court may deem sufficient.
It then stressed that where the action is in personam and the defendant is in the
Philippines, the summons should be personally served on the defendant pursuant to
Section 7, Rule 14 of the Rules of Court. Substituted service may only be availed of where
the defendant cannot be promptly served in person; the fact of impossibility of personal
service should be explained in the proof of service.
It also found as persuasive HERAS argument that instead of directly using the clerk of
the Sycip Salazar Hernandez & Gatmaitan law office, who was not authorized by the
judge of the court issuing the summons, ASIAVEST should have asked for leave of the
local courts to have the foreign summons served by the sheriff or other court officer of the
place where service was to be made, or for special reasons by any person authorized by
the judge. But this procedure was not made by ASIAVEST.
The notice sent outside the state to a non-resident is unavailing to give jurisdiction in an
action against him personally for money recovery. Summons should have been
personally served on HERAS in Hong Kong, for, as claimed by ASIAVEST, HERAS was
physically present in Hong Kong for nearly 14 years. Since there was not even an attempt
to serve summons on HERAS in Hong Kong, the Hong Kong Supreme Court did not
acquire jurisdiction over HERAS. Nonetheless, it did not totally foreclose the claim of
ASIAVEST
Even assuming that Heras was formerly a resident of Hongkong, he was no longer so in
1984 when the extraterritorial summons was attempted to be made on him. His absence
in Hong Kong must have been the reason why summons was not served on him (1984).
It was only when a favorable judgment was rendered in Hongkong, that Asiavest
commissioned Hernandez and Gatmaitan Law Firm to serve summons extraterritorially
in the Philippines.
Wherefore, The Hongkong court did not acquire jurisdiction over the person of the
respondent. Thus, the foreign judgment cannot be recognized in our jurisdiction.
Case: BA Finance Corp. v CA and Reyes, July 5, 1996
Topic: Mixed Action
Facts:
Manahan executed promissory note in favor of Carmasters Inc. worth 83k in 36 monthly
installments commencing on July 1980 as payment of vehicle. A chattel mortgage was
also executed over a motor and a ford cotina. Carmaster later assigned the note ad
mortgage to BA Finance. Manahan defaulted payment, a case was filed for replevin and
damages against the Manahan and a certain John Doe after demand for payment was
not heeded. The court cautioned BA Finance that the case will be dismissed when it fails
to serve summons for failure to prosecute – to prevent freezing of foreclosure or replevin
cases as leverage for collection of unpaid installments.
Summons was served and was received by John Doe (identified as Reyes). The lower
court came out an order of the seizure of the vehicles from Reyes. Later on, it was of no
showing that the summons was served to the principal defendants, thus, the court ordered
for the dismissal of the case for failure to prosecute and ordered to return the vehicles to
Reyes. The later filed a motion for the return of the vehicles pursuant to earlier order of
the court, granted, but was later on recalled by the same court. The later also ordered the
private respondent to answer the case.
On August 1988, the court however declared the private respondent in default for failure
to file an answer within the reglementary period. But on 1989, the court dismissed the
case for failure of the petitioner to prosecute.
In its appeal to the CA, the petitioners asserted that the suit for replevin is action quasi in
rem but the appellate court hold that the judgment cannot bind spouses Manahan on the
ground that court has no jurisdiction over the persons, no summons have been served.
Issue:
Whether jurisdiction over the principal (Spouses Manahan) is necessary in proceeding in
rem.
Ruling:
Yes. Since in proceeding in rem, it will subject the principal (Spouses Manahan’s) interest
to the obligation or lien burdening the property. The principals were not brought before
the jurisdiction of the court for failure to serve summons, thus, there can also be no cause
of action against Reyes who is merely an ancillary debtor. The judgment if rendered is
void for it will deny the defendant spouses due process.
Replevin is described as a mixed action, being partly in rem and partly in personam-in
rem in so far as the recovery of specific property is concerned and in personam as to
damages involved. As in action In Rem, the gist of the replevin action is the right of the
plaintiff to obtain possession of specific property by reason of his being owner or having
special interest.
Case: Board of Liquidators v Zuleta, July 30, 1982
Topic: Commencement of Action
Facts:
In a case entitled Land Settlement Corp. v Zulueta (CC No. 22237), based on an amicable
settlement, the latter is ordered to pay P10,391.62 with interest at 4% in until fully paid.
On March 5, 1965, herein plaintiff, as trustee of the Land Settlement and Development
Corporation, filed a complaint in the CFI of Manila against defendant, docketed as Civil
Case No. 60112 to revive the judgment rendered in Civil Case No. 22237 which had not
been enforced by that time. Difficulty was encountered in serving summons on defendant.
Since then defendant has not yet been served with summons, no further action has been
taken by plaintiff; for lack of interest to prosecute, the instant case was DISMISSED
without prejudice.
Plaintiff filed a new complaint docketed as Civil Case No. 65341 which is the present
action and which is also for revival and enforcement of the judgment rendered in Civil
Case No. 22237.
The defendant filed a motion to dismiss the new complaint on ground of prescription but
the trial court denied the motion contending that case 60112 interrupted the running of
the case.
The plaintiff contends that the filing of the first action for revival of judgment interrupted
the period of prescription. On the other hand, the defendant argued that the dismissal of
the said action for lack of prosecution did not stop the period of prescription.
The plaintiff filed the present petition for review.
Issue:
Whether the plaintiffs cause of action in Civil Case No. 65341 had already prescribed.
Ruling:
No. It did not prescribe.
Article 1144 of the New Civil Code provides that an action based upon a judgment "must
be brought within ten (10) years from the time the right of action accrues." The prescriptive
period starts from the time that the judgment becomes final and executory.
There is no question that when the first revival action, docketed as Civil Case No. 60112,
was filed on March 5, 1965, only 9 years, 3 months and 12 days had elapsed from
November 23, 1955 (finality of compromised agreement). When the second action to
revive judgment was filed on May 10, 1965, it was already more than 10 years from the
finality of the decision rendered in Civil Case No. 22237 which is sought to be revived
therein. It is necessary to determine whether the filing of Civil Case No. 60112, the first
action to revive judgment tolled the running of the 10-year prescriptive period to enforce
the subject judgment. In the affirmative case, it would follow that the filing of Civil Case
No. 65341 on May 10, 1966 was well within the period allowed by law.
Article 1155 of the New Civil Code expressly provides that the "prescription of action is
interrupted when they are filed before the court ..." (Sotelo vs. Dizon, 67 Phil. 537;
Cabrera vs. Tianco, 8 SCRA 582.)
In the case under consideration, the first action for revival, Civil Case No. 60112, was
dismissed not by reason of abandonment. This was because, as stated in the petition for
review, the defendant was so elusive that when summons was forwarded to his address
at Iloilo City, the same was returned unserved because defendant was in Manila; and
when it was attempted to be served in Manila, he was supposed to be in Iloilo City. The
plaintiff may not be accused of having abandoned Civil Case No. 60112. They asserted
due diligence in trying to serve summons on defendant but unfortunately, their efforts
were thwarted due to the ability of the defendant to evade service of such court process
on him.
As already stated above, herein plaintiff-appellant may not be faulted with having
abandoned its claim against the defendant which the former had asserted in filing Civil
Case No. 60112. The said case was dismissed primarily due to the failure to serve
summons on defendant who had somehow managed to evade being placed under the
jurisdiction of the Court. Subsequent acts of plaintiff-appellant after the dismissal of Civil
Case No. 60112 adequately negated any supposed intention to waive or abandon its
claim against defendant.
There can be no serious dispute that the plaintiff Board of Liquidators can prosecute this
action as trustee of the abolished Land Settlement and Development Corporation, known
for short as LASEDECO.
WHEREFORE, the judgment appealed from is hereby REVERSED AND SET ASIDE. In
lieu thereof, another one is rendered ordering defendant-appellee to pay plaintiff-
appellant the sum of P10,391.62 with interest at four (4%) per cent per annum from
January 13, 1948 until full payment, with costs against defendant-appellee.
Case: Sotelo v Dizon (old case)
Topic: Commencement of Action
Facts:
This petition for certiorari assails the legality of the order issued by the respondent judge
on January 5, 1939, directing" the sheriff or any of his agents to execute the order of the
of said month appointing R. Marino Corpus receiver, by placing him in possession of the
cinematograph business established in the Savoy Theatre, together with its equipment
and existing funds.
On 1938, the respondent Harrie S. Everett brought civil case before CFI to recover
ownership and possession of the cinematograph business established in the Fox and
Savoy theatres, with its equipment and existing funds.
Everett asked in his complaint that a writ of preliminary injunction be issued. As the then
defendant alleged that the cinematograph business had been transferred by him to the
partnership Joseph Brothers, the respondent Everett amended his complaint by including
as defendants the said partnership and its partners, John Joseph and George Joseph.
Everett asked the court that Corpus be appointed receiver to take charge of the properties
in litigation during the pendency of the case.
The fact that the petitioner refused to deliver the properties, Everett filed a supplementary
complaint to include the petitioner as defendant and ask the appointment of a receiver
confirmed. The respondent judge issued an order allowing the supplementary complaint
and at the same time reiterated the appointment.
The receiver looked for the petitioner to require him to give up the properties under
receivership, but he was unable to locate him either in his office or in his house. On the
same date, January 4, 1939, Everett filed a motion asking that the court order the sheriff
or his agent to place the receiver in possession of the properties.
On the 5th of the said of January, the court favorably acted upon the motion, and on the
following day, January 6th, the deputy sheriff went to the Savoy Theatre to make delivery
thereof to the receiver, but the petitioner refused to make delivery and forthwith filed this
petition.
The petitioner was served with the supplementary complaint in the morning of January 6,
1939 and when he filed the petition for certiorari in this case he had already been duly
summoned. In the same morning of January 6, 1939 and before his petition for certiorari
was filed, the petitioner was likewise notified of the order of the respondent judge issued
on the 5th of the said month directing the sheriff to place the properties in the receiver's
possession.
The petitioner contends that the order for the placing of the properties in the possession
of the receiver is illegal because on said date there was yet no pending action against
him and because he was not duly served with the supplementary complaint, citing in his
support sections 173 and 389 of the Code of Civil Procedure reading as follows:
"Sec. 173. Receivers, who may appoint. A judge of the Supreme Court, or a judge of the
Court of First Instance in which the action is pending, may appoint one or more receivers
of the property, real, personal, or mixed, which is the subject of the action, in the manner
and under the conditions hereinafter provided."
"Sec. 389. Commencement of actions. Civil actions must be commenced by filing a

complaint with the clerk of the court in which the action is to be instituted. The date of the
filing of the complaint upon which process is issued and duly served shall be deemed to
be the true time of the commencement of the action."
The first contention is not justified by the facts because it appears that the supplementary
complaint had been admitted by the court on January 3, 1939, hence, when the order of
the 5th of said month was issued directing the sheriff to place the receiver in possession
of the properties, there was already an action in court against the petitioner.
As to the second legal question before us, the petitioner argues that he was not yet duly
served with the supplementary complaint when the order of January 5, 1939 was issued,
because the summons only took place on the 6th of the said month, and under section
389 no action in court was yet pending against him. We find no merit in this contention.
Under section 389, a civil action is deemed legally commenced from the date of the filing
and docketing of the complaint with the clerk of Court of First Instance, without taking into
account the issuance and service of the summons.
Under the facts the respondent judge had jurisdiction to issue the orders of January 3 and
5, 1939, and he did not exceed the same or the discretion conferred upon him by law in
such cases.
From the same facts it follows that the preliminary injunction obtained by the petitioner in
these proceedings was issued without just cause, wherefore, the petitioner is answerable
for damages which he might have caused the respondent Everett. We reserve to the latter
the right to claim and substantiate said damages in the Court of First Instance where the
principal cause is pending, upon petition which he may present for that purpose.
For the foregoing reasons, the remedy prayed for is denied, with the costs to the
petitioner. The preliminary injunction issued in this case is set aside.
TITLE: Manchester development vs CA; G.R. No. 75919 May 7, 1987
TOPIC: Payment of filing/docket fees- jurisdictional
(Overview of the case Manchester Development vs Court of Appeals;)
A complaint for specific performance was filed by Manchester Development Corporation against City Land
Development Corporation to compel the latter to execute a deed of sale in favor Manchester. Manchester also
alleged that City Land forfeited the former’s tender of payment for a certain transaction thereby causing damages
to Manchester amounting to P78,750,000.00. This amount was alleged in the BODY of their Complaint but it was not
reiterated in the PRAYER of same complaint. Manchester paid a docket fee of P410.00 only. Said docket fee is
premised on the allegation of Manchester that their action is primarily for specific performance hence it is incapable
of pecuniary estimation. The court ruled that there is an under assessment of docket fees hence it ordered
Manchester to amend its complaint. Manchester complied but what it did was to lower the amount of claim for
damages to P10M. Said amount was however again not stated in the PRAYER
Facts: (Present case)
Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987 and another
motion to refer the case to and to be heard in oral argument by the Court En Banc filed by petitioners, the motion
to refer the case to the Court en banc is granted but the motion to set the case for oral argument is denied.
Petitioners Contention:
Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended complaint
cite the case of Magaspi vs. Ramolete. They contend that the Court of Appeals erred in that the filing fee should be
levied by considering the amount of damages sought in the original complaint.
Difference between Magaspi Case and the present case as to:
kind of action:
The Magaspi case was an action for recovery of ownership and possession of a parcel of land with damages. While
the present case is an action for torts and damages and specific performance with prayer for temporary restraining
order, etc.
kind of prayer:
In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant to the
property, the declaration of ownership and delivery of possession thereof to plaintiffs but also asks for the payment
of actual moral, exemplary damages and attorney's fees arising therefrom in the amounts specified therein.
However, in the present case, the prayer is for the issuance of a writ of preliminary prohibitory injunction during the
pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs
for the property in question, to attach such property of defendants that maybe sufficient to satisfy any judgment
that maybe rendered, and after hearing, to order defendants to execute a contract of purchase and sale of the
subject property and annul defendants' illegal forfeiture of the money of plaintiff, ordering defendants jointly and
severally to pay plaintiff actual, compensatory and exemplary damages as well as 25% of said amounts as maybe
proved during the trial as attorney's fees and declaring the tender of payment of the purchase price of plaintiff valid
and producing the effect of payment and to make the injunction permanent. The amount of damages sought is not
specified in the prayer although the body of the complaint alleges the total amount of over P78 Million as damages
suffered by plaintiff.
Nature of the action:
Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in the
Magaspi case. The complaint was considered as primarily an action for recovery of ownership and possession of a
parcel of land. The damages stated were treated as merely to the main cause of action. Thus, the docket fee of only
P60.00 and P10.00 for the sheriff's fee were paid.
In the present case there can be no such honest difference of opinion. As maybe gleaned from the allegations of the
complaint as well as the designation thereof, it is both an action for damages and specific performance. The docket
fee paid upon filing of complaint in the amount only of P410.00 by considering the action to be merely one for
specific performance where the amount involved is not capable of pecuniary estimation is obviously erroneous.
Although the total amount of damages sought is not stated in the prayer of the complaint yet it is spelled out in the
body of the complaint totalling in the amount of P78,750,000.00 which should be the basis of assessment of the
filing fee.
When this under-re assessment of the filing fee in this case was brought to the attention of this Court together with
similar other cases an investigation was immediately ordered by the Court. Meanwhile plaintiff through another
counsel with leave of court filed an amended complaint on September 12, 1985 for the inclusion of Philips Wire and
Cable Corporation as co-plaintiff and by emanating any mention of the amount of damages in the body of the
complaint. The prayer in the original complaint was maintained. After this Court issued an order on October 15, 1985
ordering the reassessment of the docket fee in the present case and other cases that were investigated, on
November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the amounts which
they are asking for. It was only then that plaintiffs specified the amount of damages in the body of the complaint in
the reduced amount of P10,000,000.00. Still no amount of damages were specified in the prayer. Said amended
complaint was admitted.
On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3,104.00 as filing
fee covering the damages alleged in the original complaint as it did not consider the damages to be merely an or
incidental to the action for recovery of ownership and possession of real property. An amended complaint was filed
by plaintiff with leave of court to include the government of the Republic as defendant and reducing the amount of
damages, and attorney's fees prayed for to P100,000.00. Said amended complaint was also admitted.
Allegations of Complaint:
In the Magaspi case, the action was considered not only one for recovery of ownership but also for damages, so that
the filing fee for the damages should be the basis of assessment. Although the payment of the docketing fee of
P60.00 was found to be insufficient, nevertheless, it was held that since the payment was the result of an "honest
difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired jurisdiction over
the case and the proceedings thereafter had were proper and regular." Hence, as the amended complaint
superseded the original complaint, the allegations of damages in the amended complaint should be the basis of the
computation of the filing fee.
In the present case no such honest difference of opinion was possible as the allegations of the complaint, the
designation and the prayer show clearly that it is an action for damages and specific performance. The docketing fee
should be assessed by considering the amount of damages as alleged in the original complaint.
Issue:
Whether or not the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as docket
fee
Whether or not Court of Appeals, aptly ruled in the present case that the basis of assessment of the docket fee
should be the amount of damages sought in the original complaint and not in the amended complaint
Ruling: (The M.R was denied for lack of merit)
As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the
docket fee regardless of the actual date of filing in court . Thus, in the present case the trial court did not acquire
jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the amendment of the
complaint thereby vest jurisdiction upon the Court. For an legal purposes there is no such original complaint that
was duly filed which could be amended. Consequently, the order admitting the amended complaint and all
subsequent proceedings and actions taken by the trial court are null and void.
The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket fee
should be the amount of damages sought in the original complaint and not in the amended complaint.
The Court cannot close this case without making the observation that it frowns at the practice of counsel who filed
the original complaint in this case of omitting any specification of the amount of damages in the prayer although the
amount of over P78 million is alleged in the body of the complaint. This is clearly intended for no other purpose than
to evade the payment of the correct filing fees if not to mislead the docket clerk in the assessment of the filing fee.
This fraudulent practice was compounded when, even as this Court had taken cognizance of the anomaly and
ordered an investigation, petitioner through another counsel filed an amended complaint, deleting all mention of
the amount of damages being asked for in the body of the complaint. It was only when in obedience to the order of
this Court of October 18, 1985, the trial court directed that the amount of damages be specified in the amended
complaint, that petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00 in
the body of the complaint but not in the prayer thereof. The design to avoid payment of the required docket fee is
obvious.
The Court serves warning that it will take drastic action upon a repetition of this unethical practice.
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 considered in the assessment of the filing fees in any case. Any pleading that fails to comply with
this requirement shall not bib accepted nor admitted, or shall otherwise be expunged from the record.
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment
of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the
docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi case in so far as it is
inconsistent with this pronouncement is overturned and reversed.
TITLE: Nestle Phils. v. FY Sons, G.R. No. 150780, May 5, 2006

(Overview of the case Nestle Phils. vs. FY Sons)
Petitioner and respondent entered into a distributorship agreement. Nestle terminated the agreement
after FY Sons refused to pay the fine for supplying retail outlets proscribed by Nestle. Nestle demanded
payment of the balance of respondent’s accounts and When the alleged accounts were not settled,
petitioner applied the P500,000 time deposit which FY Sons gave as security for its credit purchases as
partial payment. FY Sons filed a complaint for damages against Nestle in the amount of P4,246,015.60
with a prayer for an award of 1,000,000, alleging bad faith. The Makati City RTC ruled in favor of the
respondent.
Petitioner appealed the decision to the CA. On January 11, 2001, the CA rendered a decision affirming
the RTC’s decision and ordering Nestle to refund the 500,000 time deposit to FY Sons and deleting the
payment of the balance of FY Sons’ account since Nestle failed to prove that respondent had an
outstanding balance. Hence the instant case. Petitioner asserts that the documentary evidence presented
by respondent to prove actual damages in the amount of P4,246,015.60 should not have been considered
because respondent’s complaint only prayed for an award of P1,000,000. It further contends that the
court acquires jurisdiction over the claim only upon payment of the prescribed docket fee
Facts:
Petitioner is a corporation engaged in the manufacture and distribution of all Nestle products nationwide.
Respondent, on the other hand, is a corporation engaged in trading, marketing, selling and distributing
food items to restaurants and food service outlets
Agreement:
On December 23, 1998, petitioner and respondent entered into a distributorship agreement
(agreement) whereby petitioner would supply its products for respondent to distribute to its food service
outlets. A deed of assignment was also executed by respondent in favor of petitioner on December 13,
1988, assigning the time deposit of a certain Calixto Laureano in the amount of P500,000 to secure
respondent’s credit purchases from petitioner. A special power of attorney was likewise executed by
Laureano authorizing the respondent to use the time deposit as collateral.
Area Covered by the Agreement:
Baguio, Dagupan, Angeles, Bulacan, Pampanga, Urdaneta, La Union, Tarlac and Olongapo. At the end of
1989, the agreement expired and the parties executed a renewal agreement on January 22, 1990. A
supplemental agreement was executed on June 27, 1990, to take effect on July 1, 1990.
Cause of Dispute:
Petitioner fined respondent P20,000 for allegedly selling 50 cases of Krem-Top liquid coffee creamer to Lu
Hing Market, a retail outlet in Tarlac. This was purportedly proscribed by the agreement. Respondent paid
the fine. In September 1990, Krem-Top liquid coffee creamer was sold to Augustus Bakery and Grocery,
an act again allegedly in violation of the agreement. Petitioner imposed a P40,000 fine which respondent
refused to pay.
Initial Actions before dispute arises:
Respondent, through counsel, wrote petitioner to complain about the latter’s breaches of their
agreement and the various acts of bad faith committed by petitioner against respondent. Respondent
demanded the payment of damages. In turn, on November 5, 1990, petitioner sent respondent a demand
letter and notice of termination, alleging that the latter had outstanding accounts of P995,319.81. When
the alleged accounts were not settled, petitioner applied the P500,000 time deposit as partial payment.
Contents of Complaint:
Respondent filed a complaint for damages against petitioner, alleging bad faith.4 According to
respondent:
… [petitioner] made representations and promises of rendering support, including marketing support,
assignment of representatives by way of assistance in its development efforts, and assurances of income
in a marketing area not previously developed. Thus, [respondent] was lured into executing a
distributorship agreement with the [petitioner]…. [Respondent] thereby invested huge sums of money,
time and efforts to abide by such distributorship agreement, and to develop market areas for [petitioner’s]
products. Thereafter, the [petitioner] breached the distributorship agreement by committing various acts
of bad faith such as: failing to provide promotional support; deliberately failing to promptly supply the
[respondent] with the stocks for its orders; intentionally diminishing the [respondent’s] sales by
supporting a non-distributor; and concocting falsified charges to cause the termination of the
distributorship agreement without just cause. By such termination, [petitioner] would be able to obtain
the market gains made by [respondent] at the latter’s own efforts and expenses. When [respondent]
complained to [petitioner] about the latter’s acts of bad faith, the latter terminated the agreement on the
allegation that [respondent] did not pay its accounts. [Petitioner] also seized [respondent’s] time deposit
collateral without basis; penalized [respondent] with monetary penalty for the concocted charge; and
unilaterally suspended the supply of stocks to [respondent]
Case first filed: (Makati City RTC; ruled in favor of the respondent)
Ruling of RTC: premises considered, judgment is hereby rendered in favor of the plaintiff and against
the defendant ordering the defendant to pay plaintiff the following:
1. The amount of P1,000,000.00 as actual damages sustained by the plaintiff by reason of the
unwarranted and illegal acts of the defendant in terminating the distributorship agreement;
2. The amount of P100,000.00 as exemplary damages;
3. The amount of P100,000.00 as attorney’s fees;

The plaintiff however, is hereby ordered to pay the defendant the amount of P53,214,26 (sic) which
amount has been established as the amount the defendant is entitled from the plaintiff.
Second court; an appeal made to the C.A
Petitioner appealed the decision to the CA. On January 11, 2001, the CA rendered a decision affirming the
RTC’s decision with modification
The judgment appealed from is AFFIRMED with the following MODIFICATIONS: (1) the actual damages is
INCREASED from P1,000,000.00 to P1,500,000.00;7 and (2) the amount of P53,214.26 payable by the
appellee to the appellant is DELETED.
Conclusions of both court (CA & RTC)
Both the CA and the RTC found, among others, that petitioner indeed failed to provide support to
respondent, its distributor; that petitioner unjustifiably refused to deliver stocks to respondent; that the
imposition of the P20,000 fine was void for having no basis; that petitioner failed to prove respondent’s
alleged outstanding obligation; that petitioner terminated the agreement without sufficient basis in
law or equity and in bad faith; and that petitioner should be held liable for damages.
Issue:
THE [CA] COMMITTED A GRAVE ERROR IN LAW FOR NOT AWARDING TO THE PETITIONER ITS
COUNTERCLAIM
Ruling: (The petition was denied by the court for lack of merit)
Indeed, a court acquires jurisdiction over the claim of damages upon payment of the correct docket fees.
In this case, it is not disputed that respondent paid docket fees based on the amounts prayed for in its
complaint. Respondent adduced evidence to prove its losses. It was proper for the CA and the RTC to
consider this evidence and award the sum of P1,000,000. Had the courts below awarded a sum more than
P1,000,000, which was the amount prayed for, an additional filing fee would have been assessed and
imposed as a lien on the judgment.However, the courts limited their award to the amount prayed for.
Both the RTC and CA found that respondent had satisfactorily proven the factual bases for the damages
adjudged against the petitioner. This is a factual matter binding and conclusive upon this Court. It is well-
settled that –
. . . findings of fact of the trial court, when affirmed by the Court of Appeals, are binding upon the Supreme
Court. This rule may be disregarded only when the findings of fact of the Court of Appeals are contrary to
the findings and conclusions of the trial court, or are not supported by the evidence on record. But there
is no ground to apply this exception to the instant case. This Court will not assess all over again the
evidence adduced by the parties particularly where as in this case the findings of both the trial court and
the Court of Appeals completely coincide.
Likewise, the determination of the amount of damages commensurate with the factual findings upon
which it is based is primarily the task of the trial court. Considering that the amount adjudged is not
excessive, we affirm its correctness.
Moreover, given that petitioner was not able to prove that respondent had unpaid accounts in the amount
of P995,319.81, the seizure of the P500,000 time deposit was improper. As a result, the refund of this
amount with interest is also called for.
Finally, petitioner’s counterclaims are necessarily without merit. It failed to prove the alleged outstanding
accounts of respondent. Accordingly, it is not entitled to the supposed unpaid balance of P495,319.81
with interest.
Petitioner, being at fault and in bad faith, and there being no proof that respondent was guilty of any
wrongdoing, cannot claim moral and exemplary damages and attorney’s fees from respondent.
TITLE: Sun Insurance v. Asuncion, G.R. Nos. 79937-38, February 13, 1989
(Overview Sun Insurance v. Asuncion, G.R. Nos. 79937-38, February 13, 1989)
Petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the Regional Trial Court of
Makati, Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer
for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong. Tiong, on the
other hand, filed a complaint in the Regional Trial Court of Quezon City for the refund of premiums and
the issuance of a writ of preliminary attachment with damages amounting to 50M. But Tiong paid only
P210 as docket fees On the other hand, on March 28, 1984, private respondent filed a complaint in the
Regional Trial Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary
attachment.
When cases under the RTC of Quezon City was investigated for under-assessment of docket fees, the cases
were re-raffled and the case filed by Tiong was raffled to Branch 104 under Judge Asuncion. Tiong
amended his complaint stating therein a claim of "not less than P10,000,000.00 as actual compensatory
damages" in the prayer. In the body of the said second amended complaint however, private respondent
alleges actual and compensatory damages and attorney's fees in the total amount of about
P44,601,623.70. Judge Asuncion admitted the amended complaint and Tiong paid the reassessed docket
fee of P39,786.00 based on Tiong’s claim of "not less than P10,000,000.00 as actual and compensatory
damages."
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judge
Asuncion.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 as damages so the total claim amounts to about P64,601,623.70. On October 16, 1986, or
some seven months after filing the supplemental complaint, the private respondent paid the additional
docket fee of P80,396.00.
The CA later dismissed petitioner’s motion to dismiss but ordered the payment of additional docket fees
which Tiong paid.
Hence the instant case. Petitioner that the Court of Appeals erred in not finding that the lower court did
not acquire jurisdiction over Civil Case No. Q-41177 on the ground of non-payment of the correct and
proper docket fee considering that the total amount sought to be recovered in the amended and
supplemental complaint is P64,601,623.70 the docket fee that should be paid by private respondent is
P257,810.49, more or less. Not having paid the same, petitioners contend that the complaint should be
dismissed and all incidents arising therefrom should be annulled. In support of their theory, petitioner cite
the latest ruling of the Court in Manchester Development Corporation vs. CA.
On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to
Civil Case No. Q-41177 for at the time said civil case was filed in court there was no such Manchester ruling
as yet. Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v.
Ramolete, wherein this Court held that the trial court acquired jurisdiction over the case even if the
docket fee paid was insufficient.
Facts:
Court 1st filed (Petitioner; RTC Makati metro manila)
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the
Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire insurance
policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po
Tiong. Private respondent as declared in default for failure to file the required answer within the
reglementary period.
Court 1st filed (Private respondent ; RTC Quezon City)
On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of
Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment which was
docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and thereafter including E.B. Philipps
and D.J. Warby as additional defendants. The complaint sought, among others, the payment of actual,
compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs
of the suit. Although the prayer in the complaint did not quantify the amount of damages sought said
amount may be inferred from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00)
Administrative Circular for reassessment
On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC
directing the judges in said cases to reassess the docket fees and that in case of deficiency, to order its
payment. The Resolution also requires all clerks of court to issue certificates of re-assessment of docket
fees. All litigants were likewise required to specify in their pleadings the amount sought to be recovered
in their complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily
assigned, issued an order to the Clerk of Court instructing him to issue a certificate of assessment of the
docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his
assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case
to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the Resolution
of this Court of October 15, 1985 since the pleadings filed by private respondent did not indicate the exact
amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a "Re-
Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory
damages" in the prayer. In the body of the said second amended complaint however, private respondent
alleges actual and compensatory damages and attorney's fees in the total amount of about
P44,601,623.70.
Cause of Dispute
On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and
stating therein that the same constituted proper compliance with the Resolution of this Court and that a
copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The
reassessment by the Clerk of Court based on private respondent's claim of "not less than P10,000,000.00
as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid
by private respondent.
Second Court; CA
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie
Asuncion dated January 24, 1986
CA's Ruling:
August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks annulment of the order
(a) denying petitioners' motion to dismiss the complaint, as amended, and
(b) granting the writ of preliminary attachment, but giving due course to the portion thereof questioning
the reassessment of the docketing fee, and requiring the Honorable respondent Court to reassess the
docketing fee to be paid by private respondent on the basis of the amount of P25,401,707.00.
Main Contention;filed before S.C
The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did
not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and
proper docket fee.
Petitioners Allegation:
Petitioners allege that while it may be true that private respondent had paid the amount of P182,824.90
as docket fee as herein-above related, and considering that the total amount sought to be recovered in
the amended and supplemental complaint is P64,601,623.70 the docket fee that should be paid by
private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend that the
complaint should be dismissed and all incidents arising therefrom should be annulled. In support of their
theory, petitioners cite the latest ruling of the Court in Manchester Development Corporation vs. CA, 4
as follows:
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An
amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much
less the payment of the docket fee based on the amounts sought in the amended pleading. The ruling
in the Magaspi Case in so far as it is inconsistent with this pronouncement is overturned and reversed
Respondents Contention:
Private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. Q-
41177 for at the time said civil case was filed in court there was no such Manchester ruling as yet.
Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v.
Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction over the case even if the
docket fee paid was insufficient.
Issue:
Whether or not a court acquires jurisdiction over a case when the correct and proper docket
fee has not been paid
Ruling: (The Petition was dismissed of lack of merit)
The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating
the procedure of the courts will be construed as applicable to actions pending and undetermined at the
time of their passage. Procedural laws are retrospective in that sense and to that extent.
In Lazaro vs. Endencia and Andres, this Court held that the payment of the full amount of the docket fee
is an indispensable step for the perfection of an appeal.
The principle in Manchester could very well be applied in the present case. The pattern and the intent to
defraud the government of the docket fee due it is obvious not only in the filing of the original complaint
but also in the filing of the second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until the case was decided by
this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this
Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint
could not have been admitted inasmuch as the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for considering that, unlike
Manchester, private respondent demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the decision in Manchester must have had that
sobering influence on private respondent who thus paid the additional docket fee as ordered by the
respondent court. It triggered his change for stance by manifesting his willingness to pay such additional
docket fee as may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the
total amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly
authorized docket clerk or clerk in charge should determine and, thereafter, it any amount is found due,
he must require the private respondent to pay the same.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the
court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee prescribed therefore is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of of Court or his
duly authorized deputy to enforce said lien and assess and collect the additional fee.
TITLE: Phil. First Insurance v. Paramount Gen. Insurance, G.R. No. 165147, July 9, 2008
(Overview Phil. First Insurance v. Paramount Gen. Insurance)
Pyramid sought to recover the proceeds of two insurance policies issued to it by petitioner
Paramount and Philippine First. The complaint claimed P907,149.07 for the value of the insured goods
and 50,000 as attorney’s fees. Pyramid was assessed P610 docket fee, apparently on the basis of the
amount of P50,000 specified in the prayer representing attorney’s fees, which it duly paid. Petitioners
filed a Motion to Dismiss on the ground of, inter alia, lack of jurisdiction, Pyramid not having paid the
docket fees in full. But if Pyramid would insist that its claim against the defendants is only Php50,000.00
plus Php 1,500.00 as appearance fee per court hearing, then it follows that it is the Metropolitan Trial
Court which has jurisdiction over this case, not the RTC.
The RTC denied the motion to dismiss holding that the case being for specific performance, it is
not dismissible on that ground but unless proper docket fees are paid, it can only grant what was prayed
for in the Complaint. Hence, petitioner filed for certiorari with the CA which set aside the trial court’s
orders but ordered Pyramid to pay the correct docket fees within a reasonable time. Thus, the present
case by petitioners.
FACTS:
Pyramid sought to recover the proceeds of two insurance policies issued to it, Policy No. IN-002904 issued
by petitioner Paramount, and Policy No. MN-MCL-HO-00-0000007-00 issued by petitioner Philippine First.
Despite demands, petitioners allegedly failed to settle them, hence, it filed the complaint subject of the
present petition.
Pyramid's Contention; Court 1st filed; RTC Makati
Pyramid alleged that on November 8, 2000, its delivery van bearing license plate number PHL-545
which was loaded with goods belonging to California Manufacturing Corporation (CMC) valued at PESOS
NINE HUNDRED SEVEN THOUSAND ONE HUNDRED FORTY NINE AND SEVEN/100 (₱907,149.07) left the
CMC Bicutan Warehouse but the van, together with the goods, failed to reach its destination and its driver
and helper were nowhere to be found, to its damage and prejudice; that it filed a criminal complaint
against the driver and the helper for qualified theft, and a claim with herein petitioners as co-insurers of
the lost goods but, in violation of petitioners’ undertaking under the insurance policies, they refused
without just and valid reasons to compensate it for the loss; and that as a direct consequence of
petitioners’ failure, despite repeated demands, to comply with their respective undertakings under the
Insurance Policies by compensating for the value of the lost goods, it suffered damages and was
constrained to engage the services of counsel to enforce and protect its right to recover compensation
under said policies, for which services it obligated itself to pay the sum equivalent to twenty-five (25%) of
any amount recovered as and for attorney’s fees and legal expenses
Pyramids Prayer:
That after due proceedings, judgment be rendered, ordering [herein petitioners] to comply with
their obligation under their respective Insurance Policies by paying to [it] jointly and severally, the claims
arising from the subject losses.
THAT, [herein petitioners] be adjudged jointly and severally to pay to [it], in addition to the foregoing, the
following:
1. The sum of PHP 50,000.00 plus PHP 1,500.00 for each Court session attended by counsel until the
instant [case] is finally terminated, as and for attorney’s fees;
2. The costs of suit[;]3 (Underscoring supplied)
and for other reliefs just and equitable in the premises.
Assessment of docket fees; in relation to the cause of dispute
Pyramid was assessed ₱610 docket fee, apparently on the basis of the amount of ₱50,000 specified in the
prayer representing attorney’s fees, which it duly paid.5
Pyramid later filed a 1st Amended Complaint6 containing minor changes in its body but bearing the same
prayer. Branch 148 of the Makati RTC to which the complaint was raffled admitted the Amended
Complaint
Cause of Dispute;
Petitioners filed a Motion to Dismiss on the ground of, inter alia, lack of jurisdiction, Pyramid not having
paid the docket fees in full
Petitioners basis as to the cause of dispute
In the body of the Amended Complaint, plaintiff alleged that the goods belonging to California
Manufacturing Co., Inc. (CMC) is [sic] "valued at Php907,149.07" and consequently, "plaintiff incurred
expenses, suffered damages and was constrained to engage the services of counsel to enforce and protect
its right to recover compensation under the said policies and for which services, it obligated itself to pay
the sum equivalent to twenty-five (25%) of any recovery in the instant action, as and for attorney’s fees
and legal expenses".
On the other hand, in the prayer in the Complaint, plaintiff deliberately omitted to specify what these
damages are.
Verily, this deliberate omission by the plaintiff is clearly intended for no other purposes than to evade the
payment of the correct filing fee if not to mislead the docket clerk, in the assessment of the filing fee. In
fact, the docket clerk in the instant case charged the plaintiff a total of Php610.00 only as a filing fee,
which she must have based on the amount of Php50,000.00 [attorney’s fees] only.10 (Emphasis in the
original; italics and underscoring supplied)
Petitioners cited Manchester Development Corporation v. Court of Appeals which held:
x x x [A]ll complaints, petitions, answers and other similar pleadings should specify the amount of damages
being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be
considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this
requirement shall not be accepted or admitted, or shall otherwise be expunged from the record.
(Emphasis and underscoring supplied)
They cited too Sun Insurance Office, Ltd. v. Asuncion which held that "[i]t is not simply the filing of the
complaint or appropriate pleading, but the payment of the prescribed docket fee, that vests a trial court
with jurisdiction over the subject-matter or nature of the action.
RTC's Ruling
By Order of June 3, 2002, the trial court denied the Motion to Dismiss
a perusal of the Complaint reveals that while plaintiff made mention of the value of the goods, which were
lost, the prayer of plaintiff did not indicate its exact claim from the defendants. The Complaint merely
prayed defendants "to comply with their obligation under their respective insurance policies by paying to
plaintiff jointly and severally, the claims arising from the subject losses" and did not mention the amount
of PHP907,149.07, which is the value of the goods and which is also the subject of insurance. This resulted
to the assessment and payment of docket fees in the amount of P610 only. The Court, even without the
Motion to Dismiss filed by defendant, actually noted such omission which is actually becoming a practice
for some lawyers. For whatever purpose it may be, the Court will not dwell into it. In this instant case, this
being for specific performance, it is not dismissible on that ground but unless proper docket fees are paid,
the Court can only grant what was prayed for in the Complaint
Second Motion for Reconsidiration was also denied.
Second Court; CA
Petitioners did indeed eventually file before the Court of Appeals a Petition for Certiorari (With
Preliminary Injunction and Urgent Prayer for Restraining Order) posing the following two of three
queries, viz:
First. Does [Pyramid’s] deliberate omission to pay the required correct docket and filing fee vest the
trial court [with] jurisdiction to entertain the subject matter of the instant case?
CA's :
Basis:
Public respondent should have ordered private respondent to pay the correct docket fees on the basis
of the allegations of the complaint. x x x
xxxx
While it has been held in Manchester Development Corporation vs. Court of Appeals x x x that "any
pleading that fails to comply with this requirement of specifying the amount of damages not only in the
body of the pleading but also in the prayer shall not be accepted nor admitted, or shall otherwise be
expunged from the record," this rule was relaxed in subsequent cases, wherein payment of the correct
docket fees was allowed within a reasonable time. . .
xxxx
Ruling:
The petition is partially granted. The Orders dated June 3, 2002 and August 1, 2002 of public respondent
are partially set aside insofar as they dispensed with the payment of the correct docket fees.
Consequently, [Pyramid] is hereby directed to pay the correct docket fees on the basis of the losses
alleged in the body of the complaint, plus the attorney’s fees mentioned in the prayer, within a
reasonable time which should not go beyond the applicable prescriptive or reglementary period. In all
other respects, the said Orders are affirmed
A second motion for reconsideration was filed but it was denied, hence this present petition
ISSUE:
Whether respondent, Pyramid Logistics and Trucking Corporation (Pyramid), which filed on November 7,
2001 a complaint, denominated as one for specific performance and damages, against petitioners
Philippine First Insurance Company, Inc. (Philippine First) and Paramount General Insurance Corporation
(Paramount) before the Regional Trial Court (RTC) of Makati, paid the correct docket fee; if in the negative,
whether the complaint should be dismissed or Pyramid can still be ordered to pay the fee.
Ruling: (The Petition was denied by the court for lack of merit)
In Tacay v. Regional Trial Court of Tagum, Davao del Norte,the Court clarified the effect of the Sun
Insurance ruling on the Manchester ruling as follows:
As will be noted, the requirement in Circular No. 7 [of this Court which was issued based on the
Manchester ruling that complaints, petitions, answers, and similar pleadings should specify the amount
of damages being prayed for not only in the body of the pleading but also in the prayer, has not been
altered. What has been revised is the rule that subsequent “amendment of the complaint or similar
pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on
the amount sought in the amended pleading,” the trial court now being authorized to allow payment of
the fee within a reasonable time but in no case beyond the applicable prescriptive period or reglementary
period. Moreover, a new rule has been added, governing the awards of claims not specified in the pleading
– i.e., damages arising after the filing of the complaint or similar pleading – as to which the additional
filing fee therefore shall constitute a lien on the judgment.
Now, under the Rules of Court, docket or filing fees are assessed on the basis of the “sum claimed,” on
the one hand, or the “value of the property in litigation or the value of the estate,” on the other. . .
Where the action is purely for the recovery of money or damages, the docket fees are assessed on the
basis of the aggregate amount claimed, exclusive only of interests and costs. In this case, the complaint
or similar pleading should, according to Circular No. 7 of this Court, “specify the amount of damages being
prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered
in the assessment of filing fees in any case.”
Two situations may arise. One is where the complaint or similar pleading sets out a claim purely for money
and damages and there is no statement of the amounts being claimed. In this event the rule is that the
pleading will “not be accepted nor admitted, or shall otherwise be expunged from the record.” In other
words, the complaint or pleading may be dismissed, or the claims as to which amounts are unspecified
may be expunged, although as aforestated the Court may, on motion, permit amendment of the
complaint and payment of the fees provided the claim has not in the meantime become time-barred. The
other is where the pleading does specify the amount of every claim, but the fees paid are insufficient; and
here again, the rule now is that the court may allow a reasonable time for the payment of the prescribed
fees, or the balance thereof, and upon such payment, the defect is cured and the court may properly take
cognizance of the action, unless in the meantime prescription has set in and consequently barred the right
of action.
Indeed, Pyramid captioned its complaint as one for “specific performance and damages” even if it was, as
the allegations in its body showed, seeking in the main the collection of its claims-sums of money
representing losses the amount of which it, by its own admission, “knew.”
And, indeed, it failed to specify in its prayer in the complaint the amount of its claims/damages.
When Pyramid amended its complaint, it still did not specify, in its prayer, the amount of claims/damages
it was seeking. In fact it has the audacity to inform this Court, in its Comment on the present Petition, that
x x x In the natural order of things, when a litigant is given the opportunity to spend less for a docket fee
after submitting his pleading for assessment by the Office of the Clerk of Court, he would not decline it
inasmuch as to request for a higher assessment under the circumstances [for such] is against his interest
and would be senseless. Placed under the same situation, petitioner[s] would certainly do likewise. To say
otherwise would certainly be dishonest, which comment drew petitioners to conclude as follows:
[This] only shows respondent’s dishonesty and lack of regard of the rules. Following this line of reasoning,
respondent would do everything if only for it to spend less for the filing fee, even to the extent of
circumventing and defying the rule on the payment of the filing fee.
In spite of the fact that the respondent was already caught in the quagmire of its own cobweb of
deception, it further justified its unethical act by ratiocinating that “placed under the same situation,
petitioner would certainly do likewise, to say otherwise would certainly be dishonest”. This attitude of the
respondent is very alarming! Having been caught red-handed, the honorable thing that respondent should
have done is admit its own violation rather than justify an act which it knows is a clear contravention of
the rules and jurisprudence.
Apparently, the trial court misinterpreted paragraph 3 of the [Sun Insurance] ruling of this Court wherein
it stated that “where the judgment awards a claim not specified in the pleading, or if specified, the same
has been left for the determination of the court, the additional filing fee therefor shall constitute a lien on
the judgment” by considering it to mean that where in the body and prayer of the complaint there is a
prayer xxx the amount of which is left to the discretion of the Court, there is no need to specify the amount
being sought, and that any award thereafter shall constitute a lien on the judgment.
x x x While it is true that the determination of certain damages x x x is left to the sound discretion of the
court, it is the duty of the parties claiming such damages to specify the amount sought on the basis of
which the court may make a proper determination, and for the proper assessment of the appropriate
docket fees. The exception contemplated as to claims not specified or to claims although specified are left
for determination of the court is limited only to any damages that may arise after the filing of the
complaint or similar pleading for then it will not be possible for the claimant to specify nor speculate as
to the amount thereof.
TITLE: Home Guaranty Corp. v. R-11 Home Guaranty Corp. v. R-11 Builders, G.R. No. 192649, March 9,
2011
(Overview of Home Guaranty Corp. v. R-11 Home Guaranty Corp. v. R-11 Builders, G.R. No. 192649,
March 9, 2011)
HGC and R-II Builders were guarantors in a Joint Venture Agreement (JVA) for the implementation
of the Smokey Mountain Development and Reclamation Project (SMDRP). When the SMPPCs (Smokey
Mountain Project Participation Certificates) were not redeemed by HGC when it matured, R-II Builders
filed the complaint against HGC and NHA before Branch 24 of the Manila Regional Trial Court, a Special
Commercial Court (SCC). R-II Builders alleged, among other matters, that the DAC (Deed of Assignment
and Conveyance) to HGC should be rescinded and it should be appointed as new trustee in the event of
the resolution of the DAC.
On 26 October 2005, Branch 24 of the Manila RTC issued the writ of preliminary injunction. But
HGC challenged the Special Commercial Court’s jurisdiction because no intra-corporate controversy was
involved. On 2 August 2007, R-II Builders, filed a motion to admit its Amended and Supplemental
Complaint which deleted the prayer for resolution of the DAC initially prayed for in its original complaint.
In lieu thereof, said pleading introduced causes of action for conveyance of title to and/or possession of
the entire Asset Pool, for NHA to pay the Asset Pool the sum of P1,803,729,757.88 and for an increased
indemnity for attorney’s fees in the sum of P2,000,000.00.
On 2 January 2008, the Special Commercial Court held that R-II Builders’ complaint was an
ordinary civil action and not an intra-corporate controversy and later issued a clarificatory order dated 1
February 2008 to the effect, among other matters, that it did not have the authority to hear the case and
ordered its transfer to an ordinary civil court. As a consequence, the case was re-raffled to respondent
Branch 22 of the Manila RTC (respondent RTC) which subsequently issued the 19 May 2008 order which,
having determined that the case is a real action, admitted the aforesaid Amended and Supplemental
Complaint, subject to R-II Builders’ payment of the “correct and appropriate” docket fees.
On 15 August 2008, however, R-II Builders filed a motion to admit it Second Amended Complaint,
on the ground that its previous Amended and Supplemental Complaint had not yet been admitted in view
of the non-payment of the correct docket fees therefor. Said Second Amended Complaint notably
resurrected R-II Builders’ cause of action for resolution of the DAC, deleted its causes of action for
accounting and conveyance of title to and/or possession of the entire Asset Pool, reduced the claim for
attorney’s fees to P500,000.00, sought its appointment as Receiver pursuant to Rule 59 of the Rules of
Court and, after an inventory in said capacity, prayed for approval of the liquidation and distribution of
the Asset Pool in accordance with the parties’ agreements.
On 2 September 2008, HGC filed its opposition to the admission of R-II Builders’ Second Amended
Complaint on the ground that respondent RTC had no jurisdiction to act on the case until payment of the
correct docket fees and that said pleading was intended for delay and introduced a new theory
inconsistent with the original complaint and the Amended and Supplemental Complaint. Claiming that R-
II Builders had defied respondent court’s 19 May 2008 order by refusing to pay the correct docket fees,
HGC additionally moved for the dismissal of the case pursuant to Section 3, Rule 17 of the 1997 Rules of
Civil Procedure.
The RTC denied HGCs motions and granted R-II Builders’ application for appointment of receiver. HGC
went on certiorari with the CA which held that the RTC had jurisdiction; that from the allegations of R-II
Builders’ original complaint and amended complaint the character of the relief primarily sought, i.e., the
declaration of nullity of the DAC, the action before respondent RTC is one where the subject matter is
incapable of pecuniary estimation; and R-II Builders need not pay any deficiency in the docket fees
considering its withdrawal of its Amended and Supplemental Complaint.
Hence, the instant case contending that the original court (the Special Commercial Court) was without
authority to hear the case and despite an unequivocal order from the trial court a quo, Private Respondent
(R-II Builders) failed and refused to pay the correct and proper docket fees, whether it be for a real or
personal action, based on the values of the properties or claims subject of the complaints.
Facts:
A Joint Venture Agreement (JVA) was entered into between respondents National Housing Authority
(NHA) and R-II Builders, Inc. (R-II Builders) for the implementation of the Smokey Mountain Development
and Reclamation Project (SMDRP). Amended and restated on 21 February 19943 and 11 August 1994,4
the JVA was aimed at implementing a two-phase conversion of the Smokey Mountain Dumpsite "into a
habitable housing project inclusive of the reclamation of the area across Radial Road 10 (R-10)".5
NHA and R-II Builders, alongside petitioner Housing Guaranty Corporation (HGC) as guarantor and the
Philippine National Bank (PNB) as trustee, entered into an Asset Pool Formation Trust Agreement which
provided the mechanics for the implementation of the project. To back the project, an Asset Pool was
created.
Execution of the Contract of Guaranty; Agreement
The parties likewise executed a Contract of Guaranty whereby HGC, upon the call made by PNB and
conditions therein specified, undertook to redeem the regular SMPPCs upon maturity and to pay the
simple interest thereon to the extent of 8.5% per annum.
Failure of the parties to redeem
Subsequent to R-II Builders' infusion of ₱300 Million into the project, the issuance of the SMPPCs and the
termination of PNB’s services on 29 January 2001, NHA, R-II Builders and HGC agreed on the institution of
Planters Development Bank (PDB) as trustee on 29 January 2001.11 By 24 October 2002, however, all the
Regular SMPPCs issued had reached maturity and, unredeemed, already amounted to an aggregate face
value of ₱2.513 Billion. The lack of liquid assets with which to effect redemption of the regular SMPPCs
prompted PDB to make a call on HGC’s guaranty and to execute in the latter’s favor a Deed of Assignment
and Conveyance (DAC) of the entire Asset Pool.
Court 1st filed; RTC Branch 24; a SPCC
R-II Builders filed the complaint against HGC and NHA which was docketed as Civil Case No. 05-113407
before Branch 24 of the Manila Regional Trial Court, a Special Commercial Court (SCC). Contending that
HGC’s failure to redeem the outstanding regular SMPPCs despite obtaining possession of the Asset Pool
ballooned the stipulated interests and materially prejudiced its stake on the residual values of the Asset
Pool.
R-II Builders sought the following reliefs: (a) a temporary restraining order/preliminary and permanent
injunction, enjoining disposition/s of the properties in the Asset Pool; (b) the resolution or, in the
alternative, the nullification of the DAC; (c) R-II Builders' appointment as trustee pursuant to Rule 98 of
the Rules of Court; (d) HGC’s rendition of an accounting of the assets and the conveyance thereof in favor
of R-II Builders; and, (e) ₱500,000.00 in attorney’s fees
RTC Branch 24; a SPCC; Ruling
Branch 24 of the Manila RTC issued the writ of preliminary injunction sought by R-II Builders which, upon
the challenge thereto interposed by HGC, was later affirmed by the CA in the 17 December 2007 decision
rendered in CA-G.R. SP No. 98953.
On 2 August 2007, R-II Builders, filed a motion to admit its Amended and Supplemental Complaint which
deleted the prayer for resolution of the DAC initially prayed for in its original complaint. In lieu thereof,
said pleading introduced causes of action for conveyance of title to and/or possession of the entire Asset
Pool, for NHA to pay the Asset Pool the sum of P1,803,729,757.88 and for an increased indemnity for
attorney’s fees in the sum of P2,000,000.00.
RTC Branch 22
On 2 January 2008, the Special Commercial Court held that R-II Builders’ complaint was an ordinary civil
action and not an intra-corporate controversy and later issued a clarificatory order dated 1 February 2008
to the effect, among other matters, that it did not have the authority to hear the case and ordered its
transfer to an ordinary civil court. As a consequence, the case was re-raffled to respondent Branch 22 of
the Manila RTC (respondent RTC) which subsequently issued the 19 May 2008 order which, having
determined that the case is a real action, admitted the aforesaid Amended and Supplemental Complaint,
subject to R-II Builders’ payment of the “correct and appropriate” docket fees.
Cause of Dispute in relation to the topic
On 15 August 2008, however, R-II Builders filed a motion to admit it Second Amended Complaint, on the
ground that its previous Amended and Supplemental Complaint had not yet been admitted in view of
the non-payment of the correct docket fees therefor. Said Second Amended Complaint notably
resurrected R-II Builders’ cause of action for resolution of the DAC, deleted its causes of action for
accounting and conveyance of title to and/or possession of the entire Asset Pool, reduced the claim for
attorney’s fees to ₱500,000.00, sought its appointment as Receiver pursuant to Rule 59 of the Rules of
Court and, after an inventory in said capacity, prayed for approval of the liquidation and distribution of
the Asset Pool in accordance with the parties’ agreements.
HGC's Opposition to the admition of Second Amended Complaint
HGC filed its opposition to the admission of R-II Builders’ Second Amended Complaint.
HGC's Contention
On the ground that respondent RTC had no jurisdiction to act on the case until payment of the
correct docket fees and that said pleading was intended for delay and introduced a new theory
inconsistent with the original complaint and the Amended and Supplemental Complaint.
that R-II Builders had defied respondent court’s 19 May 2008 order by refusing to pay the correct
docket fees, HGC additionally moved for the dismissal of the case pursuant to Section 3, Rule 17 of the
1997 Rules of Civil Procedure.
On 24 November 2008, R-II Builders also filed an Urgent Ex-Parte Motion for Annotation of Lis
Pendens on the titles of the properties in the Asset Pool, on the ground that HGC had sold and/or was
intending to dispose of portions thereof, in violation of the writ of preliminary injunction issued in the
premises.
Findings by RTC; frist asailed order
Finding that jurisdiction over the case was already acquired upon payment of the docket fees for
the original complaint and that the Second Amended Complaint was neither intended for delay nor
inconsistent with R-II Builders’ previous pleadings, respondent RTC issued its first assailed order dated 3
March 2009 which: (a) denied HGC’s motion to dismiss; (b) granted R-II Builders’ motion to admit its
Second Amended Complaint; and, (c) noted R-II Builders’ Urgent Ex-Parte Motion for Annotation of Lis
Pendens, to which the attention of the Manila Register of Deeds was additionally called
HGC filed another motion for reconsideration however it was denied.
Second Court
HGC filed the Rule 65 petition for certiorari and prohibition docketed as CA-G.R. SP No. 111153 before
the CA which, thru its Former Special Fifteenth Division, rendered the herein assailed 21 January 2010
decision,31 upon the following findings and conclusions.
xxxx
R-II Builders need not pay any deficiency in the docket fees considering its withdrawal of its Amended and
Supplemental Complaint;
xxxxx
HGC’s motion for reconsideration of the foregoing decision was denied for lack of merit in the CA’s
resolution dated 21 June 2010, hence, this petition.
Issue:
Whether the Honorable Court of Appeals Seriously Err When It Failed to Rule That:
the Regional Trial Court a quo had no jurisdiction to proceed with the case considering that:
Despite an unequivocal order from the trial court a quo, Private Respondent (R-II Builders) failed and
refused to pay the correct and proper docket fees, whether it be for a real or personal action, based on
the values of the properties or claims subject of the complaints
Ruling: ( the assailed Decision dated 21 January 2010 is REVERSED and SET ASIDE. In lieu thereof,
another is entered NULLIFYING the regular court’s, RTC Branch 22’s Orders dated 3 March 2009 and 29
September 2009 as well as the SCC’s, RTC Branch 24’s Order dated 26 October 2005 which was rendered
void by the SCC’s subsequent declaration of absence of authority over the case. The complaint of R-II
Builders docketed as Civil Case No. 05-113407 first before Br. 24 and thereafter before Br. 22 both of
the RTC of Manila is hereby DISMISSED)
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.
Granted that R-II Builders is not claiming ownership of the Asset Pool because its continuing stake is, in
the first place, limited only to the residual value thereof, the conveyance and/or transfer of possession of
the same properties sought in the original complaint and Amended and Supplemental Complaint both
presuppose a real action for which appropriate docket fees computed on the basis of the assessed or
estimated value of said properties should have been assessed and paid.
For failure of R-II Builders to pay the correct docket fees for its original complaint or, for that matter, its
Amended and Supplemental Complaint as directed in respondent RTC's 19 May 2008 order, it stands to
reason that jurisdiction over the case had yet to properly attach. Applying the rule that "a case is deemed
filed only upon payment of the docket fee regardless of the actual date of filing in court" in the landmark
case of Manchester Development Corporation v. Court of Appeals,76 this Court ruled that jurisdiction
over any case is acquired only upon the payment of the prescribed docket fee which is both mandatory
and jurisdictional. To temper said ruling, the Court subsequently issued the following guidelines in Sun
Insurance Office, Ltd. v. Hon. Maximiano Asuncion, viz.:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the
court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee
therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien and assess and collect the additional fee.
True to the foregoing guidelines, respondent RTC admitted R-II Builder’s Amended and Supplemental
Complaint and directed the assessment and payment of the appropriate docket fees in the order dated
19 May 2008. Rather than complying with said directive, however, R-II Builders manifested its intent to
evade payment of the correct docket fees by withdrawing its Amended and Supplemental Complaint and,
in lieu thereof, filed its Second Amended Complaint which deleted its cause of action for accounting and
conveyance of title to and/or possession of the entire Asset Pool, reduced its claim for attorney’s fees,
sought its appointment as Receiver and prayed for the liquidation and distribution of the Asset Pool. In
upholding the admission of said Second Amended Complaint in respondent RTC’s assailed 3 March 2009
Order, however, the CA clearly lost sight of the fact that a real action was ensconced in R-II Builders’
original complaint and that the proper docket fees had yet to be paid in the premises. Despite the latter’s
withdrawal of its Amended and Supplemental Complaint, it cannot, therefore, be gainsaid that
respondent RTC had yet to acquire jurisdiction over the case for non-payment of the correct docket fees.
Title: Unicapital v. Consing, G.R. Nos. 175277 & 175285, September 11, 2013
Topic: Payment of filing/docket fees- jurisdictional
(Overview of Unicapital v. Consing, G.R. Nos. 175277 & 175285, September 11, 2013)
Respondent Consing filed a Complex Action for Injunctive Relief against petitioners claiming that
the demands made against him by petitioners Unicapital and PBI to return to them the purchase price
they had paid for the subject property constituted harassment and oppression which severely affected
his personal and professional life. Consing claims for damages to the tune of around P2,000,000.00 per
month.
Petitioners filed a motion to dismiss for lack of cause of action. The RTC denied the motion to
dismiss holding that Consing, Jr.’s complaint sufficiently stated a cause of action for tort and damages
pursuant to Article 19 of the Civil Code. It equally refused to dismiss the action on the ground of non-
payment of docket fees, despite Consing, Jr.’s escalated claims for damages therein, as jurisdiction was
already vested in it upon the filing of the original complaint.
Aggrieved, petitioners elevated the denial of their motions to dismiss before the CA via a petition
for certiorari and prohibition which the CA dismissed. It ruled that while the payment of the prescribed
docket fee is a jurisdictional requirement, its non-payment will not automatically cause the dismissal of
the case. In this regard, it considered that should there be any deficiency in the payment of such fees, the
same shall constitute a lien on the judgment award. The CA also held that the complaint alleges a cause
of action and was principally one for damages over which the RTC has jurisdiction, and, in turn, there lies
no misjoinder of causes of action. Hence, the present petitions for review on certiorari in G.R. Nos.175277
and 175285.
Meanwhile, on August 4, 1999, Unicapital filed a complaint for sum of money with damages
against Consing, Jr. and Dela Cruz before the RTC-Makati City seeking to recover (a) the amount of
P42,195,397.16, representing the value of their indebtedness based on the Promissory Notes (subject
promissory notes) plus interests; (b) P5,000,000.00 as exemplary damages; (c) attorney's fees; and (d)
costs of suit which Consing loaned from Unicapital. PBI also filed a complaint for damages and attachment
against Consing, Jr. and Dela Cruz before the RTC of Manila PBI prayed that it be allowed to recover the
following: (a) P13,369,641.79, representing the total amount of installment payments made as actual
damages plus interests; (b) P200,000.00 as exemplary damages; (c) P200,000.00 as moral damages; (d)
attorney's fees; and (e) costs of suit. For his part, Consing, Jr. filed a Motion to Dismiss and motion to
consolidate which were, however, denied by the RTC-Makati City.
On September 30, 2009, the CA rendered a Decision sustaining the Orders dated July 16, 2007
and September 4, 2007 of the RTC-Makati City which denied Consing, Jr.’s motion for consolidation. It
held that consolidation is a matter of sound discretion on the part of the trial court which could be gleaned
from the use of the word "may" in Section 1, Rule38 of the Rules of Court. Hence, the instant petition
Facts:
In 1997, Consing, Jr., an investment banker, and his mother, Cecilia Dela Cruz (Dela Cruz), obtained an
₱18,000,000.00 loan from Unicapital,₱12,000,000.00 of which was acquired on July 24, 1997 and the
remaining₱6,000,000.00 on August 1, 1997. The said loan was secured by Promissory Notes10 and a Real
Estate Mortgage over a 42,443 square meter-parcel of land located at Imus, Cavite, registered in the name
of Dela Cruz as per Transfer Certificate of Title (TCT) No. T-687599 (subject property). Prior to these
transactions, Plus Builders, Inc. (PBI), a real estate company, was already interested to develop the subject
property into a residential subdivision. In this regard, PBI entered into a joint venture agreement with
Unicapital, through its real estate development arm, URI. In view of the foregoing, the loan and mortgage
over the subject property was later on modified into an Option to Buy Real Property and, after further
negotiations, Dela Cruz decided to sell the same to Unicapital and PBI. For this purpose, Dela Cruz
appointed Consing, Jr. as her attorney-in-fact.
Eventually, Unicapital, through URI, purchased one-half of the subject property for a consideration of
₱21,221,500.00 (against which Dela Cruz’s outstanding loan obligations were first offset), while PBI
bought the remaining half for the price of ₱21,047,000.00. In this relation, Dela Cruz caused TCT No. T-
687599 to be divided into three separate titles as follows: (a) TCT No. T-851861 for URI;17 (b) TCT No. T-
851862 for PBI;18 and (c)TCT No. T-51863 which was designated as a road lot. However, even before URI
and PBI were able to have the titles transferred to their names, Juanito Tan Teng (Teng) and Po Willie Yu
(Yu) informed Unicapital that they are the lawful owners of the subject property as evidenced by TCT
No.T-114708;20 that they did not sell the subject property; and that Dela Cruz’s title, i.e., TCT No. T-
687599, thereto was a mere forgery. Prompted by Teng and Yu’s assertions, PBI conducted further
investigations on the subject property which later revealed that Dela Cruz's title was actually of dubious
origin. Based on this finding, PBI and Unicapital sent separate demand letters to Dela Cruz and Consing,
Jr., seeking the return of the purchase price they had paid for the subject property.
Court first filed; RTC Pasig City
the demands made against him by petitioners Unicapital and PBI to return to them the purchase price
they had paid for the subject property constituted harassment and oppression which severely affected
his personal and professional life. Consing claims for damages to the tune of around P2,000,000.00 per
month.
Dispute of the Case in relation to the topic

dismiss holding that Consing, Jr.’s complaint sufficiently stated a cause of action for tort and damages
pursuant to Article 19 of the Civil Code. It equally refused to dismiss the action on the ground of non-
payment of docket fees, despite Consing, Jr.’s escalated claims for damages therein, as jurisdiction was
already vested in it upon the filing of the original complaint.
Court of Appeals
October 20, 2005, the CA rendered a Joint Decision holding that no grave abuse of discretion was
committed by the RTC-Pasig City in refusing to dismiss Consing, Jr.'s complaint. At the outset, it ruled that
while the payment of the prescribed docket fee is a jurisdictional requirement, its non-payment will not
automatically cause the dismissal of the case. In this regard, it considered that should there be any
deficiency in the payment of such fees, the same shall constitute a lien on the judgment award. It also
refused to dismiss the complaint for lack of proper verification upon a finding that the copy of the
amended complaint submitted to the RTC-Pasig City was properly notarized.
The Proceedings Antecedent to G.R. No. 192073
On August 4, 1999, Unicapital filed a complaint for sum of money with damages against Consing,
Jr. and Dela Cruz before the RTC-Makati City seeking to recover (a) the amount of P42,195,397.16,
representing the value of their indebtedness based on the Promissory Notes (subject promissory notes)
plus interests; (b) P5,000,000.00 as exemplary damages; (c) attorney's fees; and (d) costs of suit which
Consing loaned from Unicapital. PBI also filed a complaint for damages and attachment against Consing,
Jr. and Dela Cruz before the RTC of Manila PBI prayed that it be allowed to recover the following: (a)
P13,369,641.79, representing the total amount of installment payments made as actual damages plus
interests; (b) P200,000.00 as exemplary damages; (c) P200,000.00 as moral damages; (d) attorney's fees;
and (e) costs of suit. For his part, Consing, Jr. filed a Motion to Dismiss and motion to consolidate which
were, however, denied by the RTC-Makati City
and September 4, 2007 of the RTC-Makati City which denied Consing, Jr.’s motion for consolidation. It
held that consolidation is a matter of sound discretion on the part of the trial court which could be gleaned
from the use of the word "may" in Section 1, Rule38 of the Rules of Court.
Issue:
whether or not in G.R. Nos.175277 and 175285, whether or not the CA erred in upholding the
RTC-Pasig City’s denial of Unicapital, et al.’s motion to dismiss
Ruling: (the petitions in G.R. Nos. 175277, 175285 and 192073 are DENIED. Accordingly, the Court of
Appeals’ Joint Decision dated October 20, 2005 and Resolution dated October 25, 2006 in CA-G.R. SP
Nos. 64019 and 64451 and the Decision dated September 30, 2009 and Resolution dated April 28, 2010
in CA-G.R. No. 101355 are hereby AFFIRMED.)
Non-Payment of docket fees as cause of dismissal inapplicable in the absence of intent to defraud, Neither
should Consing, Jr.’s failure to pay the required docket fees lead to the dismissal of his complaint.It has
long been settled that while the court acquires jurisdiction over any case only upon the payment of the
prescribed docket fees, its non-payment at the time of the filing of the complaint does not automatically
cause the dismissal of the complaint provided that the fees are paid within a reasonable period.
Consequently, Unicapital, et al.’s insistence that the stringent rule on non-payment of docket fees
enunciated in the case of Manchester Development Corporation v. CA85 should be applied in this case
cannot be sustained in the absence of proof that Consing, Jr. intended to defraud the government by his
failure to pay the correct amount of filing fees. As pronounced in the case of Heirs of Bertuldo Hinog v.
Hon. Melicor:
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-
payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is
paid within the applicable prescriptive or reglementary period, more so when the party involved
demonstrates a willingness to abide by the rules prescribing such payment.
Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud
the government, the Manchester rule does not apply.(Emphasis and italics in the original)
Indeed, while the Court acknowledges Unicapital, et al.'s apprehension that Consing, Jr.'s "metered" claim
for damages to the tune of around P2,000,000.00 per month88 may balloon to a rather huge amount by
the time that this case is finally disposed of, still, any amount that may by then fall due shall be subject to
assessment and any additional fees determined shall constitute as a lien against the judgment as explicitly
provided under Section 2,89 Rule 141 of the Rules.
Title: Anama v. Phil. Savings Bank, G.R. No. 187021, January 25, 2012
Topic: Construction
(Overview of Anama v. Phil. Savings Bank, G.R. No. 187021)
Sometime in 1973, the Petitioner, Douglas F. Anama (Anama), and the Respondent, Philippine
Savings Bank (PSB), entered into a “Contract to Buy,” on installment basis, the real property owned by
PSB. However, Anama defaulted in paying his obligations thereunder, thus, PSB rescinded the said
contract and title to the property remained with the latter. Subsequently, the property was sold by PSB
to the Spouses Saturnina Baria and Tomas Co (Co Spouses) who, after paying the purchase price in full,
caused the registration of the same in their names.
Resultantly, Anama filed before the Respondent Court a complaint for declaration of nullity of the
deed of sale, cancellation of transfer certificate of title, and specific performance with damages against
PSB, the Co Spouses, and the Register of Deeds of Metro Manila, District II.
On August 21, 1991 and after trial on the merits, the trial Court dismissed Anama’s complaint and upheld
the validity of the sale between PSB and the Co Spouses. Undaunted, Anama appealed, at first, to the
Court of Appeals, and after failing to obtain a favorable decision, to the Supreme Court.
On January 29, 2004, the Supreme Court rendered judgment denying Anama’s petition and
sustaining the validity of the sale between PSB and the Co Spouses. Its decision became final and
executory on July 12, 2004. Pursuant thereto, the Co Spouses moved for execution, which was granted by
the trial Court per its Order, dated November 25, 2005.
Aggrieved, Anama twice moved for the reconsideration of the Respondent Court’s November 25,
2005 Order arguing that the Co Spouses’ motion for execution is fatally defective. He averred that the
Spouses’ motion was pro forma because it lacked the required affidavit of service and has a defective
notice of hearing, hence, a mere scrap of paper. The trial Court, however, denied Anama’s motion(s) for
reconsideration.
Dissatisfied, the petitioner questioned the RTC Order before the CA for taking judicial cognizance
of the motion for execution filed by spouses Tomas Co and Saturnina Baria (Spouses Co) which was (1)
not in accord with Section 4 and Section 15 of the Rules of Court because it was without a notice of hearing
addressed to the parties; and (2) not in accord with Section 6, Rule 15 in conjunction with Section 13, Rule
13 of the Rules of Court because it lacks the mandatory affidavit of service.
On March 31, 2008, the CA rendered a decision dismissing the petition. It reasoned out, among others,
that the issue on the validity of the deed of sale between respondents, Philippine Savings Bank (PSB) and
the Spouses Co, had long been laid to rest considering that the January 29, 2004 Decision of this Court
became final and executory on July 12, 2004. Hence, execution was already a matter of right on the part
of the respondents and the RTC had the ministerial duty to issue a writ of execution enforcing a final and
executory decision. Not satisfied with the CA’s unfavorable disposition, petitioner filed this petition
praying for the reversal thereof. Basically, petitioner argues that the respondents failed to substantially
comply with the rule on notice and hearing when they filed their motion for the issuance of a writ of
execution with the RTC.
On the other hand, The Spouses Co counter that the petition should be dismissed outright for
raising both questions of facts and law in violation of Section 1, Rule 45 of the Rules of Court. they assert
that they have substantially complied with the requirements of notice and hearing provided under
Sections 4 and 5 of Rule 15 and Section 13, Rule 13 of the Rules of Court. Contrary to petitioner’s
allegations, a copy of the motion for the issuance of a writ of execution was given to petitioner through
his principal counsel, the Quasha Law Offices. Spouses Co argue that what they sought to be executed
was the final judgment of the RTC duly affirmed by the CA and this Court, thus, putting the issues on the
merits to rest. The issuance of a writ of execution .
Facts:
Sometime in 1973, the Petitioner, Douglas F. Anama (Anama), and the Respondent, Philippine Savings
Bank (PSB), entered into a "Contract to Buy," on installment basis, the real property owned and covered
by Transfer Certificate of Title (TCT) No. 301276 in the latter’s name. However, Anama defaulted in paying
his obligations thereunder, thus, PSB rescinded the said contract and title to the property remained with
the latter. Subsequently, the property was sold by PSB to the Spouses Saturnina Baria and Tomas Co (Co
Spouses) who, after paying the purchase price in full, caused the registration of the same in their names
and were, thus, issued TCT No. 14239.
Court first filed: RTC Pasay City
Resultantly, Anama filed before the Respondent Court a complaint for declaration of nullity of the deed
of sale, cancellation of transfer certificate of title, and specific performance with damages against PSB,
the Co Spouses, and the Register of Deeds of Metro Manila, District II.
On August 21, 1991 and after trial on the merits, the Respondent Court dismissed Anama’s complaint and
upheld the validity of the sale between PSB and the Co Spouses. Undaunted, Anama appealed, at first, to
this Court, and after failing to obtain a favorable decision, to the Supreme Court.
On January 29, 2004, the Supreme Court rendered judgment denying Anama’s petition and sustaining the
validity of the sale between PSB and the Co Spouses. Its decision became final and executory on July 12,
2004. Pursuant thereto, the Co Spouses moved for execution, which was granted by the Respondent Court
per its Order, dated November 25, 2005.
Aggrieved, Anama twice moved for the reconsideration of the Respondent Court’s November 25, 2005
Order arguing that the Co Spouses’ motion for execution is fatally defective. He averred that the Spouses’
motion was pro forma because it lacked the required affidavit of service and has a defective notice of
hearing, hence, a mere scrap of paper. The Respondent Court, however, denied Anama’s motion(s) for
reconsideration.
Court of Appeals
Dissatisfied, the petitioner questioned the RTC Order before the CA for taking judicial cognizance of the
motion for execution filed by spouses Tomas Co and Saturnina Baria (Spouses Co) which was (1) not in
accord with Section 4 and Section 15 of the Rules of Court because it was without a notice of hearing
addressed to the parties; and (2) not in accord with Section 6, Rule 15 in conjunction with Section 13,
Rule 13 of the Rules of Court because it lacks the mandatory affidavit of service.
On March 31, 2008, the CA rendered a decision dismissing the petition. It reasoned out, among others,
that the issue on the validity of the deed of sale between respondents, Philippine Savings Bank (PSB) and
the Spouses Co, had long been laid to rest considering that the January 29, 2004 Decision of this Court
became final and executory on July 12, 2004. Hence, execution was already a matter of right on the part
of the respondents and the RTC had the ministerial duty to issue a writ of execution enforcing a final and
executory decision.
The CA also stated that although a notice of hearing and affidavit of service in a motion are mandatory
requirements, the Spouses Co’s motion for execution of a final and executory judgment could be acted
upon by the RTC ex parte, and therefore, excused from the mandatory requirements of Sections 4, 5 and
6 of Rule 15 of the Rules of Court
they elevated the case to the supreme court
Position of the Spouses Co
The Spouses Co counter that the petition should be dismissed outright for raising both questions of facts
and law in violation of Section 1, Rule 45 of the Rules of Court. The Spouses Co aver that petitioner
attempts to resurrect the issue that PSB cheated him in their transaction and that the RTC committed a
"dagdag-bawas." According to the Spouses Co, these issues had long been threshed out by this Court.
At any rate, they assert that they have substantially complied with the requirements of notice and hearing
provided under Sections 4 and 5 of Rule 15 and Section 13, Rule 13 of the Rules of Court. Contrary to
petitioner’s allegations, a copy of the motion for the issuance of a writ of execution was given to petitioner
through his principal counsel, the Quasha Law Offices. At that time, the said law office had not formally
withdrawn its appearance as counsel for petitioner. Spouses Co argue that what they sought to be
executed was the final judgment of the RTC duly affirmed by the CA and this Court, thus, putting the issues
on the merits to rest. The issuance of a writ of execution then becomes a matter of right and the court’s
duty to issue the writ becomes ministerial.
Position of respondent PSB
PSB argues that the decision rendered by the RTC in Civil Case No. 44940 entitled "Douglas F. Anama v.
Philippine Savings Bank, et. al."3 had long become final and executory as shown by the Entry of Judgment
made by the Court on July 12, 2004. The finality of the said decision entitles the respondents, by law, to
the issuance of a writ of execution. PSB laments that petitioner relies more on technicalities to frustrate
the ends of justice and to delay the enforcement of a final and executory decision.
As to the principal issue, PSB points out that the notice of hearing appended to the motion for execution
filed by the Spouses Co substantially complied with the requirements of the Rules since petitioner’s then
counsel of record was duly notified and furnished a copy of the questioned motion for execution. Also,
the motion for execution filed by the Spouses Co was served upon and personally received by said counsel.
Issue:
Whether or not therewas compliance with the notice and hearing rule.
Ruling:
Elementary is the rule that every motion must contain the mandatory requirements of notice and
hearing and that there must be proof of service thereof. The Court has consistently held that a motion
that fails to comply with the above requ irements is considered a worthless piece of paper which should
not be acted upon. The rule, however, is not absolute. There are motions that can be acted upon by the
court ex parte if these would not cause prejudice to the other party. They are not strictly covered by the
rigid requirement of the rules on notice and hearing of motions.
The motion for execution of the Spouses Co is such kind of motion. It cannot be denied that the judgment
sought to be executed in this case had already become final and executory. As such, the Spouses Co have
every right to the issuance of a writ of execution and the RTC has the ministerial duty to enforce the same.
This right on the part of the Spouses Co and duty on the part of the RTC are based on Section 1 and Section
2 of Rule 39 of the 1997 Revised Rules of Civil Procedure.
Under Paragraph 1 of Section 1 of Rule 39 of the 1997 Revised Rules of Civil Procedure, the Spouses Co
can have their motion for execution executed as a matter of right without the needed notice and hearing
requirement to petitioner. This is in contrast to the provision of Paragraph 2 of Section 1 and Section 2
where there must be notice to the adverse party. In the case of Far Eastern Surety and Insurance
Company, Inc. v. Virginia D. Vda. De Hernandez, it was written:
It is evident that Section 1 of Rule 39 of the Revised Rules of Court does not prescribe that a copy of the
motion for the execution of a final and executory judgment be served on the defeated party, like litigated
motions such as a motion to dismiss (Section 3, Rule 16), or motion for new trial (Section 2, Rule 37), or a
motion for execution of judgment pending appeal (Section 2, Rule 39), in all of which instances a written
notice thereof is required to be served by the movant on the adverse party in order to afford the latter an
opportunity to resist the application.
It is not disputed that the judgment sought to be executed in the case at bar had already become final
and executory. It is fundamental that the prevailing party in a litigation may, at any time within five (5)
years after the entry thereof, have a writ of execution issued for its enforcement and the court not only
has the power and authority to order its execution but it is its ministerial duty to do so. It has also been
held that the court cannot refuse to issue a writ of execution upon a final and executory judgment, or
quash it, or order its stay, for, as a general rule, the parties will not be allowed, after final judgment, to
object to the execution by raising new issues of fact or of law, except when there had been a change in
the situation of the parties which makes such execution inequitable or when it appears that the
controversy has ever been submitted to the judgment of the court; or when it appears that the writ of
execution has been improvidently issued, or that it is defective in substance, or is issued against the
wrong party, or that judgment debt has been paid or otherwise satisfied; or when the writ has been
issued without authority. Defendant-appellant has not shown that she falls in any of the situations afore-
mentioned. Ordinarily, an order of execution of a final judgment is not appealable. Otherwise, as was said
by this Court in Molina v. de la Riva, a case could never end. Once a court renders a final judgment, all the
issues between or among the parties before it are deemed resolved and its judicial function as regards
any matter related to the controversy litigated comes to an end. The execution of its judgment is purely
a ministerial phase of adjudication. The nature of its duty to see to it that the claim of the prevailing party
is fully satisfied from the properties of the loser is generally ministerial.
In Pamintuan v. Muñoz, We ruled that once a judgment becomes final and executory, the prevailing party
can have it executed as a matter of right, and the judgment debtor need not be given advance notice of
the application for execution.
Also of the same stature is the rule that once a judgment becomes final and executory, the prevailing
party can have it executed as a matter of right and the granting of execution becomes a ministerial duty
of the court. Otherwise stated, once sought by the prevailing party, execution of a final judgment will just
follow as a matter of course. Hence, the judgment debtor need not be given advance notice of the
application for execution nor he afforded prior hearing.
Absence of such advance notice to the judgment debtor does not constitute an infringement of the
constitutional guarantee of due process.
However, the established rules of our system of jurisprudence do not require that a defendant who has
been granted an opportunity to be heard and has had his day in court should, after a judgment has been
rendered against him, have a further notice and hearing before supplemental proceedings are taken to
reach his property in satisfaction of the judgment. Thus, in the absence of a statutory requirement, it is
not essential that he be given notice before the issuance of an execution against his tangible property;
after the rendition of the judgment he must take "notice of what will follow," no further notice being
"necessary to advance justice." [Emphases and underscoring supplied]
Likewise, in the case of Leonardo Lim De Mesa v. Hon. Court of Appeals, it was stated:
In the present case, the decision ordering partition and the rendition of accounting had already become
final and executory. The execution thereof thus became a matter of right on the part of the plaintiffs,
herein private respondents, and is a mandatory and ministerial duty on the part of the court. Once a
judgment becomes final and executory, the prevailing party can have it executed as a matter of right, and
the judgment debtor need not be given advance notice of the application for execution nor be afforded
prior hearings thereon.
On the bases of the foregoing considerations, therefore, the Court of Appeals acted correctly in holding
that the failure to serve a copy of the motion for execution on petitioner is not a fatal defect.
In fact, there was no necessity for such service. [Emphases and underscoring supplied]
At any rate, it is not true that the petitioner was not notified of the motion for execution of the Spouses
Co. The records clearly show that the motion for execution was duly served upon, and received by,
petitioner’s counsel-of-record, the Quasha Ancheta Pena Nolasco Law Offices, as evidenced by a “signed
stamped received mark” appearing on said pleading.The records are bereft of proof showing any written
denial from petitioner’s counsel of its valid receipt on behalf of its client. Neither is there proof that the
Quasha Ancheta Pena Nolasco Law Offices has formally withdrawn its appearance as petitioner’s counsel-
of-record. Considering that there is enough proof shown on record of personal delivery in serving the
subject motion for execution, there was a valid compliance with the Rules, thus, no persuasive reason to
stay the execution of the subject final and executory judgment.
Moreover, this Court takes note that petitioner was particularly silent on the ruling of the CA that he was
notified, through his counsel, of the motion for execution of the Spouses Co when he filed a motion for
reconsideration of the RTC’s order dated June 28, 2005, holding in abeyance said motion pending the
resolution of petitioner’s pleading filed before this Court. He did not dispute the ruling of the CA either
that the alleged defect in the Spouses Co’s motion was cured when his new counsel was served a copy of
said motion for reconsideration of the RTC’s June 28, 2005 Order.
The three-day notice rule is not absolute. A liberal construction of the procedural rules is proper where
the lapse in the literal observance of a rule of procedure has not prejudiced the adverse party and has not
deprived the court of its authority. Indeed, Section 6, Rule 1 of the Rules of Court provides that the
Rules should be liberally construed in order to promote their objective of securing a just, speedy and
inexpensive disposition of every action and proceeding. Rules of procedure are tools designed to facilitate
the attainment of justice, and courts must avoid their strict and rigid application which would result in
technicalities that tend to frustrate rather than promote substantial justice.
In Somera Vda. De Navarro v. Navarro, the Court held that there was substantial compliance of the rule
on notice of motions even if the first notice was irregular because no prejudice was caused the adverse
party since the motion was not considered and resolved until after several postponements of which the
parties were duly notified.
Likewise, in Jehan Shipping Corporation v. National Food Authority, the Court held that despite the lack
of notice of hearing in a Motion for Reconsideration, there was substantial compliance with the
requirements of due process where the adverse party actually had the opportunity to be heard and had
filed pleadings in opposition to the motion. The Court held:
This Court has indeed held time and again, that under Sections 4 and 5 of Rule 15 of the Rules of Court,
mandatory is the requirement in a motion, which is rendered defective by failure to comply with the
requirement. As a rule, a motion without a notice of hearing is considered pro forma and does not affect
the reglementary period for the appeal or the filing of the requisite pleading.
As an integral component of the procedural due process, the three-day notice required by the Rules is not
intended for the benefit of the movant. Rather, the requirement is for the purpose of avoiding surprises
that may be sprung upon the adverse party, who must be given time to study and meet the arguments in
the motion before a resolution of the court. Principles of natural justice demand that the right of a party
should not be affected without giving it an opportunity to be heard.
The test is the presence of opportunity to be heard, as well as to have time to study the motion and
meaningfully oppose or controvert the grounds upon which it is based.[9] [Emphases and underscoring
supplied]
Likewise, in the case of KKK Foundation, Inc. v. Hon. Adelina Calderon-Bargas,[10] this Court stated:
Anent the second issue, we have consistently held that a motion which does not meet the requirements
of Sections 4 and 5 of Rule 15 of the Rules of Court is considered a worthless piece of paper, which the
Clerk of Court has no right to receive and the trial court has no authority to act upon. Service of a copy of
a motion containing a notice of the time and the place of hearing of that motion is a mandatory
requirement, and the failure of movants to comply with these requirements renders their motions fatally
defective. However, there are exceptions to the strict application of this rule. These exceptions are: (1)
where a rigid application will result in a manifest failure or miscarriage of justice especially if a party
successfully shows that the alleged defect in the questioned final and executory judgment is not apparent
on its face or from the recitals contained therein; (2) where the interest of substantial justice will be
served; (3) where the resolution of the motion is addressed solely to the sound and judicious discretion
of the court; and (4) where the injustice to the adverse party is not commensurate with the degree of his
thoughtlessness in not complying with the procedure prescribed.
A notice of hearing is an integral component of procedural due process to afford the adverse parties a
chance to be heard before a motion is resolved by the court. Through such notice, the adverse party is
given time to study and answer the arguments in the motion. Records show that while Angeles’s Motion
for Issuance of Writ of Execution contained a notice of hearing, it did not particularly state the date and
time of the hearing. However, we still find that petitioner was not denied procedural due process. Upon
receiving the Motion for Issuance of Writ of Execution, the trial court issued an Order dated September
9, 2002 giving petitioner ten (10) days to file its comment. The trial court ruled on the motion only after
the reglementary period to file comment lapsed. Clearly, petitioner was given time to study and comment
on the motion for which reason, the very purpose of a notice of hearing had been achieved.
The notice requirement is not a ritual to be followed blindly. Procedural due process is not based solely
on a mechanical and literal application that renders any deviation inexorably fatal. Instead, procedural
rules are liberally construed to promote their objective and to assist in obtaining a just, speedy and
inexpensive determination of any action and proceeding. [Emphases supplied]
At any rate, it is undisputed that the August 21, 1991 RTC Decision[11] in Civil Case No. 44940 is already
final and executory. Once a judgment becomes final and executory, all the issues between the parties are
deemed resolved and laid to rest. All that remains is the execution of the decision which is a matter of
right. The prevailing party is entitled to a writ of execution, the issuance of which is the trial court’s
ministerial duty.[12]
The Court agrees with the respondents that petitioner mainly relies on mere technicalities to frustrate the
ends of justice and further delay the execution process and enforcement of the RTC Decision that has
been affirmed by the CA and this Court. The record shows that the case has been dragging on for almost
30 years since petitioner filed an action for annulment of sale in 1982. From the time the Spouses Co
bought the house from PSB in 1978, they have yet to set foot on the subject house and lot.
To remand the case back to the lower court would further prolong the agony of the Spouses Co. The Court
should not allow this to happen.
The Spouses Co should not be prevented from enjoying the fruits of the final judgment in their favor. In
another protracted case, the Court wrote:
As a final note, it bears to point out that this case has been dragging for more than 15 years and the
execution of this Court’s judgment in PEA v. CA has been delayed for almost ten years now simply because
De Leon filed a frivolous appeal against the RTC’s order of execution based on arguments that cannot hold
water. As a consequence, PEA is prevented from enjoying the fruits of the final judgment in its favor. The
Court agrees with the Office of the Solicitor General in its contention that every litigation must come to
an end once a judgment becomes final, executory and unappealable. Just as a losing party has the right
to file an appeal within the prescribed period, the winning party also has the correlative right to enjoy the
finality of the resolution of his case by the execution and satisfaction of the judgment, which is the "life
of the law." To frustrate it by dilatory schemes on the part of the losing party is to frustrate all the efforts,
time and expenditure of the courts. It is in the interest of justice that this Court should write finis to this
litigation.
Title: Tan v. Court of Appeals, G.R. No. 130314, September 22, 1998
Topic: Construction
(Overview of Tan v. Court of Appeals, G.R. No. 130314)
Petitioner Annie Tan, doing business under the name and style “AJ & T Trading,” leased a portion of the
ground floor of her building, more specifically described as Stall No. 623, Carvajal Street, Binondo, Manila,
in favor of respondent Bloomberry Export Manufacturing, Inc. The lease was for a period of five years
starting on February 17, 1995 and ending on February 17, 2000, at a monthly rental of P20,000 for the
first three years.
For several alleged violations of the lease contract, Tan filed against Bloomberry a complaint for
ejectment. As its rental payment was refused by petitioner, Bloomberry instituted on July 13, 1995 a case
for consignation.
The two cases were consolidated. In due course, the Metropolitan Trial Court (MTC) of Manila, Branch I,
rendered on February 1, 1996 a Decision against Tan, dismissing her complaint while Bloomberry’s
complaint for consignation was allowed because Tan failed to appeal.
On appeal, the RTC affirmed the MTC in its decision dated July 18, 1996. Tan filed a motion for
reconsideration to the RTC’s decision but without notice of hearing. On August 23, 1996, Bloomberry filed
an ex-parte Motion for Entry of Judgment upon the ground that said motion for reconsideration is a mere
scrap of paper aside from being pro forma, hence it did not toll the period of appeal and the Decision
dated July 18, 1996, had become final and executory.
On September 3, 1996, [petitioner] filed a Motion to Set for Hearing the Motion for Reconsideration which
was vehemently opposed by [private respondent] on September 23, 1996.
On October 4, 1996, [the RTC] issued an Order granting the motion to set for hearing [petitioner’s] Motion
for Reconsideration and set[ting] the hearing [for] October 21, 1996, at 8:30 o’clock in the morning.
On October 20, 1996, [private respondent] filed a Motion for Reconsideration of the Order dated October
4, 1996, which was set for hearing on October 25, 1996. On November 11, 1996, [the RTC] issued an Order
denying [private respondent’s] Motion for Reconsideration.
Hence, Bloomberry filed a Petition for Certiorari and Prohibition with the Court of Appeals. Respondent
Court of Appeals reversed the trial court’s Order setting for hearing petitioner’s Motion for
Reconsideration. The Court of Appeals held that the trial court acted with grave abuse of discretion in
setting for hearing petitioner’s Motion for Reconsideration, notwithstanding the fact that said Motion
contained no notice of hearing.
Facts:
Petitioner Annie Tan, doing business under the name and style "AJ & T Trading," leased a portion
of the ground floor of her building, more specifically described as Stall No. 623, Carvajal Street, Binondo,
Manila, in favor of Bloomberry Export Manufacturing, Inc.
The lease was for a period of five years starting on February 17, 1995 and ending on February 17, 2000,
at a monthly rental of P20,000 for the first three years.
Dispute of the Case

For several alleged violations of the lease contract, petitioner filed against private respondent a complaint
for ejectment, docketed as Civil Case No. 148798-CV.4 As its rental payment was refused by petitioner,
private respondent instituted on July 13, 1995 a case for consignation, docketed as Civil Case No. 148814-
CV
Court where the case was consolidated, MTC Manila Branch 1

The two cases were consolidated. In due course, the Metropolitan Trial Court (MTC) of Manila, Branch I,
rendered on February 1, 1996
Ruling of MTC Manila Branch 1
in Civil Case No. 148798-CV for [b]reach of [c]ontract, failure to pay rentals on time, encroachment
on the adjacent premises without the consent of [petitioner], [she] failed to substantiate her case with
that degree of proof required by law. For this reason, except for the costs of suit, this Court hereby orders
the dismissal of the complaint of [petitioner]. The counterclaim and damages sought by [private
respondent are] likewise ordered dismissed. The case for consignation in Civil Case No. 148814-CV has
become moot and academic for failure of [petitioner] to appeal the decision of the Metropolitan [Trial]
court, Branch 15, Manila, allowing the [private respondent] to consign rental payments to the Court of
Manila. Besides, the [c]omplaint for consignation being in conformity with law, [private respondent] is
allowed to continue consigning with this Court all rentals that [may be] due.
Appeal; RTC Manila; Branch 2

On appeal, the Regional Trial Court (RTC) of Manila, Branch 2, in its Decision dated July 18, 1996,
affirmed the aforementioned MTC Decision thus:
WHEREFORE, finding no cogent reasons to disturb the joint decision dated February 1, 1996 of the
Metropolitan Trial Court of Manila, Branch 1, the Court sustains and affirms in toto the said decision.
Dispute of the Case in relation to the topic
[F]rom the Decision of the [RTC] dated July 18, 1996, [petitioner] filed a Motion for
Reconsideration of the aforesaid decision. The Motion for Reconsideration did not contain any notice of
hearing as required under Section 5, Rule 15 of the Revised Rule of Court
Court of Appeals; Ruling
Respondent Court held that the trial court acted with grave abuse of discretion in setting for
hearing petitioner's Motion for Reconsideration, notwithstanding the fact that said Motion contained no
notice of hearing.
Citing a litany of cases, it ruled that petitioner's failure to comply with the mandatory provisions of
Sections 4 and 5, Rule 15 of the Rules of Court, reduced her motion to a mere scrap of paper which did
not merit the attention of the court. Respondent Court also held that those cases in which the Court
allowed a motion for reconsideration that had not been set for hearing.
Hence present petition
Issue:
whether omission of Notice of Hearing is Fatal
Ruling: (the petition is hereby DENIED and the assailed Decision is AFFIRMED)
Petitioner admits the categorical and mandatory character of the directives in Sections 4 and 5 of
Rule 15 of the Rules of Court, which read:[15]
“SEC. 4. Hearing of motion.—Except for motions which the court may act upon without prejudicing the
rights of the adverse party, every written motion shall be set for hearing by the applicant.
“Every written motion required to be heard and the notice of the hearing thereof shall be served in such
a manner as to ensure its receipt by the other party at least three (3) days before the date of hearing,
unless the court for good cause sets the hearing on shorter notice.(4a)
“SEC. 5. Notice of hearing.—The notice of hearing shall be addressed to all parties concerned, and shall
specify the time and date of the hearing which must not be later than ten (10) days after the filing of the
motion.(5a)”
In De la Peña v. De la Peña,[16] the Court presented a resume of earlier decisions regarding the necessity
of the notice of hearing in motions for reconsideration:
“In Pojas v. Gozo-Dadole,[17] we had occasion to rule on the issue of whether a motion for reconsideration
without any notice of hearing tolls the running of the prescriptive period. In Pojas, petitioner received
copy of the decision in Civil Case No. 3430 of the Regional Trial Court of Tagbilaran on 15 April 1986. The
decision being adverse to him petitioner filed a motion for reconsideration. For failing to mention the date
when the motion was to be resolved as required in Sec. 5, Rule 15, of the Rules of Court, the motion for
reconsideration was denied.
A second motion for reconsideration met the same fate. On 2 July 1986 petitioner filed a notice of appeal
but the same was denied for being filed out of time as ‘the motion for reconsideration which the Court
ruled as pro forma did not stop the running of the 15-day period to appeal.’
“In resolving the issue of whether there was grave abuse of discretion in denying petitioner’s notice of
appeal, this Court ruled—
‘Section 4 of Rule 15 of the Rules of Court requires that notice of motion be served by the movant on all
parties concerned at least three (3) days before its hearing. Section 5 of the same Rule provides that the
notice shall be directed to the parties concerned, and shall state the time and place for the hearing of the
motion. A motion which does not meet the requirements of Section 4 and 5 of Rule 15 of the Rules of
Court is considered a worthless piece of paper which the clerk has no right to receive and the court has
no authority to act upon. Service of copy of a motion containing notice of the time and place of hearing
of said motion is a mandatory requirement and the failure of the movant to comply with said
requirements renders his motion fatally defective.’
“In New Japan Motors, Inc. v. Perucho,[20] defendant filed a motion for reconsideration which did not
contain any notice of hearing. In a petition for certiorari, we affirmed the lower court in ruling that a
motion for reconsideration that did not contain a notice of hearing was a useless scrap of paper. We held
further—
‘Under Sections 4 and 5 of Rule 15 of the Rules of Court, xxx a motion is required to be accompanied by a
notice of hearing which must be served by the applicant on all parties concerned at least three (3) days
before the hearing thereof. Section 6 of the same rule commands that “(n)o motion shall be acted upon
by the Court, without proof of service of the notice thereof xxx.” It is therefore patent that the motion for
reconsideration in question is fatally defective for it did not contain any notice of hearing. We have already
consistently held in a number of cases that the requirements of Sections 4, 5 and 6 of Rules 15 of the Rules
of Court are mandatory and that failure to comply with the same is fatal to movant’s cause.
“In Sembrano v. Ramirez, we declared that—

‘(A) motion without notice of hearing is a mere scrap of paper. It does not toll the running of the period
of appeal. This requirement of notice of hearing equally applies to a motion for reconsideration. Without
such notice, the motion is pro forma. And a pro forma motion for reconsideration does not suspend the
running of the period to appeal.’
“In In re Almacen,defendant lost his case in the lower court. His counsel then filed a motion for
reconsideration but did not notify the adverse counsel of the time and place of hearing of said motion.
The Court of Appeals dismissed the motion for the reason that ‘the motion for reconsideration dated July
5, 1966 does not contain a notice of time and place of hearing thereof and is, therefore a useless piece of
paper which did not interrupt the running of the period to appeal, and, consequently, the appeal was
perfected out of time.’ When the case was brought to us, we reminded counsel for the defendant that –
‘As a law practitioner who was admitted to the bar as far back as 1941, Atty. Almacen knew – or ought to
have known – that [for] a motion for reconsideration to stay the running of the period of appeal, the
movant must not only serve a copy of the motion upon the adverse party x x x but also notify the adverse
party of the time and place of hearing x x x.’
“Also, in Manila Surety and Fidelity Co., Inc. v. Bath Construction and Company,[24] we ruled--
‘The written notice referred to evidently is that prescribed for motions in general by Rule 15, Sections 4
and 5 (formerly Rule 26), which provide that such notice shall state the time and place of hearing and shall
be served upon all the parties concerned at least three days in advance. And according to Section 6 of the
same Rule no motion shall be acted upon by the court without proof of such notice. Indeed, it has been
held that in such a case the motion is nothing but a useless piece of paper. The reason is obvious; unless
the movant sets the time and place of hearing the court would have no way to determine whether that
party agrees to or objects to the motion, and if he objects, to hear him on his objection, since the Rules
themselves do not fix any period within [which] he may file his reply or opposition.'
“In fine, the abovecited cases confirm that the requirements laid down in Sec. 5 of Rule 15 of the Rules of
Court that the notice shall be directed to the parties concerned, and shall state the time and place for the
hearing of the motion, are mandatory. If not religiously complied with, they render the motion pro forma.
As such the motion is a useless piece of paper that will not toll the running of the prescriptive period.”
Petitioner pleads for liberal construction of the rule on notice of hearing, citing Tamargo, Galvez and Que.
In rebuttal, we adopt by reference the CA’s excellent disquisition, cited earlier, on why these cases are
inapplicable.
Respondent Court held that the facts in Galvez drastically differ from those in the present case. Galvez
involved a motion to withdraw the information -- not a motion for reconsideration -- that was filed ex
parte before the arraignment of the accused. In that case, the Court held that there was no imperative
need of notice and hearing because, first, the withdrawal of an information rests on the discretion of the
trial court; and, second, the accused was not placed in jeopardy. On the other hand, the subject of the
present controversy is a motion for reconsideration directed against the Decision of the RTC; thus, the
motion affects the period to perfect an appeal.
Que is not applicable, either. In said case, the trial court set the Motion for Reconsideration (MR) for
hearing, which was actually attended by the counsel for the adverse party. This was not so in the case at
bar; petitioner’s MR was set for hearing, because she belatedly moved for it upon the filing of private
respondent’s Motion for Entry of Judgment. Likewise, the present case differs from Tamargo, wherein the
application of the aforesaid mandatory provisions was suspended. The Court did so in order to give
substantial justice to the petitioner and in view of the nature of the issues raised which were found to be
highly meritorious.
Petitioner further alleges that, first, the nonadmission of her Motion for Reconsideration would result in
a miscarriage of justice, as the main case (ejectment), which was tried under summary procedure, had
been unnecessarily prolonged; and, second, the tenant lessee would be occupying the premises without
paying rentals. She also relies on People v. Leviste,] in which the Court held:
“While it is true that any motion that does not comply with the requirements of Rule 15, Rules of Court
should not be accepted for filing and, if filed, is not entitled to judicial cognizance, the Supreme Court has
likewise held that where rigid application of the rule will result in manifest failure or miscarriage of justice,
technicalities may be disregarded in order to resolve the case.”
Liberal construction of this rule has been allowed by this Court in the following cases: (1) where a rigid
application will result in a manifest failure or miscarriage of justice,[32] especially if a party successfully
shows that the alleged defect in the questioned final and executory judgment is not apparent on its face
or from the recitals contained therein;[33] (2) where the interest of substantial justice will be served
(3) where the resolution of the motion is addressed solely to the sound and judicious discretion of the
court;and
(4) where the injustice to the adverse party is not commensurate with the degree of his thoughtlessness
in not complying with the procedure prescribed.
Petitioner has failed to demonstrate that the case at bar falls under any of these exceptions.
Finally, petitioner claims that she will be deprived of property without due process, as private respondent
has accumulated P348,800 in unpaid rentals and accrued interests.
We disagree. Petitioner can obtain proper payment of rentals through a motion for execution in the case
below. The MTC may have dismissed her ejectment case, but it did not exculpate private respondent from
its liabilities. Petitioner is, therefore, not being deprived of her property without due process.
Indeed, there is no miscarriage of justice to speak of. Having failed to observe very elementary rules of
procedure which are mandatory, petitioner caused her own predicament. To exculpate her from the
compulsory coverage of such rules is to undermine the stability of the judicial process, as the bench and
bar will be confounded by such irritating uncertainties as when to obey and when to ignore the Rules. We
have to draw the line somewhere.
Title: Baylon v. Fact-finding Intelligence, G.R. No. 150870, December 11, 2002
Topic: Kinds of Action as to Place of Filing of Complaint, Sec. 6. Construction
Facts:
Dr. Honorata G. Baylon (petitioner), Head of the Division of Hematology and Transfusion
Medicine at the National Kidney and Transplant Institute (NKTI), was designated as Program
Manager of the governments National Voluntary Blood Donation Program (Blood Donation
Program) with NKTI as the lead agency in the implementation thereof.
The Blood Donation Program later became a component of the project STOP D.E.A.T.H
(Disasters, Epidemics, and Trauma for Health): Hospitals for Philippines 2000 which was
launched on February 18, 1994 by the Department of Health (DOH) headed by the then
Secretary Juan M. Flavier (Flavier). Petitioner remained at the helm of the Blood Donation
Program.
On February 24, 1994, Flavier publicly disclosed the results of the United States Agency for
International Development (USAID)-sponsored study on the safety of the country’s blood
banking system which found out that the Philippines blood transfusion service failed to
adequately meet the demand for safe blood and that the blood sourced from commercial blood
banks had a contamination rate of four percent.
Flavier thus ordered the closure of provincial retail outlets of commercial blood banks as a
result of which an acute shortage of transfused blood ensued because of the blood banks
refusal to sell blood in retaliation to the said closure order.
Flavier accordingly directed the full operation of the Blood Donation Program, which apparently
served as the then only viable system from which blood could be sourced.
On March 8 and 17, 1994, the NKTI, through petitioner, issued Requisition and Issue Vouchers
for the purpose of purchasing blood bags for immediate distribution to DOH hospitals or
medical centers where the system of voluntary blood donation would then be put in place. As
Terumo blood bags were believed to be the finest in the market, the NKTI obtained a quotation
therefor dated March 16, 1994 from their exclusive distributor.
Subsequently another quotation was later furnished by FVA with reduced prices
Petitioner signified her conformity to the second quotation. The NKTI subsequently purchased
Terumo blood bags from FVA.
The Auditor of the NKTI accordingly ordered the suspension of purchases of blood bags from
FVA and eventually disallowed the payment of blood bags amounting to P6,006,133.54.
A criminal complaint for violation of Section 3(e) and (g) of Republic Act (R. A.) No. 3019 (THE
ANTI-GRAFT AND CORRUPT PRACTICES ACT), was thus filed by the Office of the Ombudsman
against petitioner, Flavier, then DOH Undersecretaries Dr. Jaime Galvez-Tan and Dr. Juan R.
Naagas, NKTI Executive Director Dr. Filoteo A. Alano, NKTI Deputy Executive Director Dr. Aileen
R. Javier, NKTI Property Division Chief Diana Jean F. Prado and NKTI Accounting Division Chief
Maribel U. Estrella. At the same time, an administrative complaint for gross misconduct was
lodged against petitioner and the same respondents except Flavier and Galvez-Tan.
In March 1995, the Commission on Audit (COA) disallowed in post audit the sale
transactions entered into by the NKTI with FVA on the ground that the blood bags were
purchased without public bidding, contrary to the applicable laws or rules, thereby allegedly
resulting to overpricing. The COA found that FVA sold Terumo blood bags to the Philippine
National Red Cross (PNRC) and to blood banks Our Lady of Fatima and Mother Seaton at prices
lower than those at which it sold to the NKTI, leading to a consequent total loss to the
government in the amount of P1,964,304.70.

A criminal complaint for violation of THE ANTI-GRAFT AND CORRUPT PRACTICES ACT,
was thus filed by the Office of the Ombudsman against petitioner. At the same time, an
administrative complaint for gross misconduct was lodged against petitioner and the same
respondents except Flavier and Galvez-Tan.
Petitioner disclaimed administrative liability, petitioner claimed that the acquisition of
the blood bags via negotiated purchase came under the exceptions to public bidding as
provided for by law, citing the following pertinent provision of Executive Order No. 301
(DECENTRALIZING ACTIONS ON GOVERNMENT NEGOTIATED CONTRACTS, LEASE CONTRACTS
AND RECORDS DISPOSAL):
SECTION 1. Guidelines for Negotiated Contracts. Any provision of law, decree, executive order
or other issuances to the contrary notwithstanding, no contract for public services or for
furnishing supplies, materials and equipment to the government or any of its branches,
agencies or instrumentalities shall be renewed or entered into without public bidding, except
under any of the following situations:
b. Whenever the supplies are to be used in connection with a project or activity which cannot
be delayed without causing detriment to the public service;
c. Whenever the materials are sold by an exclusive distributor or manufacturer who does not
have sub-dealers selling at lower prices and for which no suitable substitute can be obtained
elsewhere at more advantageous terms to the government;
e. In cases where it is apparent that the requisition of the needed supplies through negotiated
purchase is most advantageous to the government to be determined by the Department Head
concerned;
Thus she explained: firstly, the blood bags were used in the Blood Donation Program which had
to be implemented immediately to address the scarcity of blood at the time; secondly, FVA was
the only exclusive distributor without sub dealers of Terumo blood bags; and thirdly, negotiated
purchase of the blood bags was most advantageous to the government for the prices at which
the NKTI obtained them from FVA were the lowest compared to those at which they were
acquired by other government hospitals.
In his December 3, 1999 sworn statement, Flavier declared that the negotiated purchase of the
blood bags was justified by the conditions obtaining at the time; the NKTIs transactions with
FVA were not tainted with any irregularities; petitioner and the other NKTI officials were
responsible for successfully implementing a 100% voluntary blood donation system in ten
regional hospitals and medical centers; and that were it not for petitioners work as Program
Manager of the Blood Donation Program, disastrous consequences would have befallen
patients, the DOH, and the Blood Donation Program itself
Petitioner submitted certifications from various medical establishments attesting to the
superior quality and features of Terumo blood bags which have made them the most widely
used among hospitals and blood banks.
Ombud’sman:
By Memorandum Review, Assistant Ombudsman Abelardo L. Aportadera recommended the
exoneration of the respondents Naagas and Estrella. Taking note, of the Ombudsmans finding
of probable cause to criminally hale petitioner and company into court, Aportadera
recommended, by the same Review Memorandum, that herein petitioner and the rest of her
co-respondents be held guilty of Grave Misconduct for which they should be meted a penalty of
SIX (6) MONTHS SUSPENSION.
Aportaderas recommendation was approved by the Ombudsman on June 16, 2000. A motion
for reconsideration of this June 16, 2000 approved Memorandum Review having been denied
by the Memorandum Review of July 19, 2000 which the Ombudsman approved on July 28,
2000, petitioner filed a petition with this Court for certiorari and prohibition with prayer for a
temporary restraining order (TRO) and/or writ of preliminary injunction seeking the nullification
of the Ombudsmans above-said Memorandum Reviews.
RTC:
By Resolution of October 16, 2000, this Court dismissed the petition for having been
brought to the wrong forum in light of the ruling in Fabian v. Desierto that appeals from the
decision of the Ombudsman should be made to the Court of Appeals by a petition for review
under Rule 43 of the 1997 Rules of Civil Procedure. Unlike the Fabian, this Court did not order
the transfer of the petition to the Court of Appeals for proper disposition pursuant to this
Courts Resolution in A. M. No. 99-2-02-SC dated February 9, 1999 declaring that any appeal
filed with this Court after March 15, 1999 from a decision, resolution or order of the
Ombudsman in an administrative case would no longer be referred to the Court of Appeals.
Petitioners Motion for Reconsideration of this Courts October 16, 2000 Resolution was denied
on January 22, 2001.
CA:
Petitioner thus elevated the Ombudsmans Memorandum Reviews to the Court of
Appeals by a petition for review. By Resolution of May 2, 2001, however, the Court of Appeals
dismissed the petition for having been filed beyond the fifteen-day reglementary period,
reckoned from petitioner’s receipt of the Ombudsmans second Memorandum Review.
Petitioner filed a Motion for Reconsideration of the May 2, 2001 Resolution of the Court of
Appeals. Pending resolution thereof or on July 6, 2001, petitioner filed a motion for leave to
submit a copy of the COA Decision which lifted the audit disallowance of the payments made
for the purchases by the NKTI of the Terumo blood bags from FVA. In said decision, the COA
held that the purchase of blood bags without public bidding was not violative of the law, was
not disadvantageous to the government, and did not accord undue preference to FVA. In a
Resolution of November 21, 2001, the Court of Appeals denied petitioners Motion for
Reconsideration.
SC:
Petitioner imputes to the Court of Appeals the commission of grave error in dismissing
her petition for review on a mere technicality. She invokes considerations of substantial justice
for this Court to give her petition due course and essentially prays that the Resolutions of the
Court of Appeals be set aside and that the Memorandum Reviews of the Ombudsman be
nullified. Petitioner submits that the dismissal by the Court of Appeals of her petition for review
by mere technicality would cause a miscarriage of justice for, so she contends, she has raised
meritorious arguments, adduced evidence, and presented special circumstances proving her
innocence of the charge of grave misconduct.
Issue:
Whether or not the court erred in rendering the decision
Ruling:
This Court finds that the Court of Appeals correctly dismissed petitioners petition for
review for having been filed beyond the reglementary period.
The correctness of the Court of Appeals dismissal of petitioner’s petition for review
notwithstanding, this Court cannot write finis to the case at bar by the strict application of the
rules of procedure governing appeals. For judicial cases do not come and go through the portals
of a court of law by the mere mandate of technicalities.
The allowance of the filing of appeals or actions even when everything is lost due to non-
compliance with rules or technicalities is not a novel phenomenon for this Court. In the case of
Cortes v. Court of Appeals, counsel for a party in a case before the trial court failed to withdraw
his appearance as such when he was appointed as judge of the Dumaguete Regional Trial Court
in January 1983. Thus, after the lower court rendered a decision on February 16, 1983, the
same was served on February 28, 1983 upon said counsel, who was then in his judicial station,
at his Cebu City address. Having learned of the decision only on March 8, 1983, he immediately
informed his client who learned of the adverse judgment a few days later after being out on
official business. On March 22, 1983, the concerned party’s new counsel accordingly filed a
notice of appeal which the lower court denied due course for having been filed beyond the 15-
day reglementary period. This Court ruled that the seven-day delay did not warrant the outright
dismissal of the appeal, considering the peculiar circumstances of the case and the appeals
ostensible merit.
On the suspension of the enforcement of procedural rules to give way to matters of greater
value, this Court could not have more eloquently defined its stance, thus:
In the interest of substantial justice, procedural rules of the most mandatory character in terms
of compliance, may be relaxed. In other words, if strict adherence to the letter of the law would
result in absurdity and manifest injustice or where the merit of a partys cause is apparent and
outweighs consideration of non-compliance with certain formal requirements, procedural rules
should definitely be liberally construed. A party-litigant is to be given the fullest opportunity to
establish the merits of his complaint or defense rather than for him to lose life, liberty, honor or
property on mere technicalities.
Prescinding from the foregoing, the Court resolved to give due course to the present petition
and set aside the challenged Resolutions of May 2, 2001 and November 21, 2001 of the Court
of Appeals. We will not, however, remand the case to the appellate court, a remand not being
necessary where, as in this case, We are in a position to resolve the dispute based on the
records before it and the ends of justice would not be subserved thereby.
While factual findings of administrative and quasi-judicial agencies are generally accorded not
only respect but at times finality, this holds true only when they are supported by substantial
evidence.
The Ombudsmans finding in its questioned Memorandum Reviews that petitioner is guilty of
grave misconduct was anchored principally on the fact that FVA sold the same Terumo blood
bags to PNRC and the Mother Seaton and Our Lady of Fatima blood banks at lower prices. Such
fact, however, cannot be regarded substantial evidence proving that petitioner is guilty of grave
misconduct.
WHEREFORE, the petition at bar is hereby GRANTED. The assailed May 2, 2001 and November
21, 2001 Resolutions of the Court of Appeals, as well as the June 16, 2000 and July 28, 2000-
approved Memorandum Reviews of the Ombudsman, are hereby SET ASIDE. The respondent is
hereby ABSOLVED from any administrative liability about the purchases in question.
Title: Republic v. Kenrick Development, G.R. No. 149576, August 8, 2006

Facts:
Kenrick built a concrete fence around some parts of the land behind the Civil Aviation
Training Center of the Air Transportation Office (ATO) claiming ownership over those lands. Its
encroachment resulted to the dispossession of ATO of some 30,228 square meters of prime land.
Kenrick justified its action by presenting TCTs issued in its name and which allegedly originated
from a TCT registered in the name of Alfonso Concepcion.
When ATO verified the TCTs, the Registrar of Deeds reported that it has no record of them and
that their ascendant title, allegedly in the name of Concepcion, was non-existent in their office.
Thus, the OSG filed a complaint for revocation, annulment and cancellation of certificates of title
in behalf of the Republic against Concepcion and Kenrick. Kenrick filed an answer which was
allegedly signed by its counsel Atty. Onofre Garlitos Jr. When Concepcion could not be located
and be served with summons, the trial court ordered the issuance of an alias summons by
publication against him.
While the case was pending, the Senate Blue Ribbon Committee and Committee on Justice and
Human Rights investigated Kenrick’s acquisition of fake titles. During the hearing, Atty. Garlitos
was summoned and testified that he prepared Kenrick’s answer and transmitted an unsigned
draft to Kenrick’s president, Victor Ong. Apparently, the signature appearing above Garlitos’
name was not his, he did not authorize anyone to sign it in his behalf, and he did not know who
finally signed it.
RTC:
It granted the Republic’s motion. It ruled Kenrick’s answer “to be a sham and false and
intended to defeat the purpose of the rules.” It also ordered that the answer be stricken from
the records, declared Kenrick in default and allowed the Republic to present its evidence ex parte.
CA:
It assailed the RTC’s decision. It granted Kenrick’s petition for certiorari and lifted the trial
court’s order of default against Kenrick Then, it ordered the trial court to proceed to trial with
dispatch. It ruled so because it found Atty. Garlitos’ statements in the legislative hearing to be
unreliable since they were not subjected to cross-examination. It also scrutinized Atty. Garlitos’
acts after the filing of the answer and concluded that he assented to the signing of the answer by
somebody in his stead.
SC:
On May 31, 2001, the Court of Appeals rendered the assailed decision. It found
Atty. Garlitos’ statements in the legislative hearing to be unreliable since they were not subjected
to cross-examination. The appellate court also scrutinized Atty. Garlitos’ acts after the filing of
the answer 6 and concluded that he assented to the signing of the answer by somebody in his
stead. This supposedly cured whatever defect the answer may have had. Hence, the appellate
court granted respondent’s petition for certiorari. It directed the lifting of the order of default
against respondent and ordered the trial court to proceed to trial with dispatch. The Republic
moved for reconsideration, but it was denied. Thus, this petition.
Issue:
Whether or not Kenrick failed to file a valid answer on the ground that its pleading was
unsigned by its counsel Atty. Garlitos.
Ruling:
Yes. Pursuant to Sec. 3, Rule 7, a pleading must be “signed by the party or counsel
representing him.” The law is clear, and the counsel’s duty and authority to sign a pleading is
personal to him and may not be delegated to just any person.
The signature of counsel constitutes an assurance by him that he has read the pleading; that, to
the best of his knowledge, information and belief, there is a good ground to support it; and that
it is not interposed for delay. Under the Rules of Court, it is counsel alone, by affixing his
signature, who can certify to these matters.
The preparation and signing of a pleading constitute legal work involving practice of law which
is reserved exclusively for the members of the legal profession. Counsel may delegate the signing
of a pleading to another lawyer but cannot do so in favor of one who is not.
The Code of Professional Responsibility provides:
Rule 9.01 ― A lawyer shall not delegate to any unqualified person the performance of any task
which by law may only be performed by a member of the Bar in good standing.
Moreover, a signature by agents of a lawyer amounts to signing by unqualified persons,

something the law strongly proscribes.
Therefore, the blanket authority respondent claims Atty. Garlitos entrusted to just anyone was
void. Any act taken pursuant to that authority was likewise void. There was no way it could have
been cured or ratified by Atty. Garlitos’ subsequent acts.
Moreover, the transcript of the November 26, 1998 Senate hearing shows that Atty. Garlitos
consented to the signing of the answer by another “as long as it conformed to his draft.” We give
no value whatsoever to such self-serving statement.
No doubt, Atty. Garlitos could not have validly given blanket authority for just anyone to sign the
answer. The trial court correctly ruled that respondent’s answer was invalid and of no legal effect
as it was an unsigned pleading. Respondent was properly declared in default and the Republic
was rightly allowed to present evidence ex parte.
Respondent insists on the liberal application of the rules. It maintains that even if it were true
that its answer was supposedly an unsigned pleading, the defect was a mere technicality that
could be set aside.
Procedural requirements which have often been disparagingly labeled as mere technicalities
have their own valid raison d’ etre in the orderly administration of justice. To summarily brush
them aside may result in arbitrariness and injustice.
The Court’s pronouncement in Garbo v. Court of Appeals is relevant:
Procedural rules are [tools] designed to facilitate the adjudication of cases. Courts and
litigants alike are thus [enjoined] to abide strictly by the rules. And while the Court, in some
instances, allows a relaxation in the application of the rules, this, we stress, was never intended
to forge a bastion for erring litigants to violate the rules with impunity. The liberality in the
interpretation and application of the rules applies only in proper cases and under justifiable
causes and circumstances. While it is true that litigation is not a game of technicalities, it is equally
true that every case must be prosecuted in accordance with the prescribed procedure to insure
an orderly and speedy administration of justice.
Like all rules, procedural rules should be followed except only when, for the most persuasive of
reasons, they may be relaxed to relieve a litigant of an injustice not commensurate with the
degree of his thoughtlessness in not complying with the prescribed procedure. In this case,
respondent failed to show any persuasive reason why it should be exempted from strictly abiding
by the rules.
Title: Building Care Corp. v. Macaraeg, G.R. No. 198357, December 10, 2012
Facts:
Petitioners are in the business of providing security services to their clients. They hired
respondent as a security guard beginning August 25, 1996, assigning her at Genato Building in
Caloocan City. However, on March 9, 2008 respondent was relieved of her post. She was
reassigned to Bayview Park Hotel from March 9,2008, but after said period, she was allegedly no
longer given any assignment. Thus, on September 9, 2008 respondent filed a complaint against
petitioners for illegal dismissal, underpayment of salaries, non-payment of separation pay and
refund of cash bond. Respondent claimed that petitioners failed to give her an assignment for
more than nine months, amounting to constructive dismissal. 0n the other hand, petitioners
alleged in their position paper that respondent was relieved from her post as requested by the
client because of her habitual tardiness, persistent borrowing of money from employees and
tenants of the client and sleeping on the job. Respondent then filled an administrative complaint
for illegal dismissal with the PNP-Security Agencies and Guard Supervision Division on June 18,
2008, but she did not attend the conference hearings for said case. Petitioners brought to the
conference hearings a new assignment order detailing respondent at the Ateneo de Manila
University but, due to her absence, petitioners failed to personally serve respondent said
assignment order. The Labor Arbiter dismissed the case for lack of merit. Respondent filed a
notice of appeal, but it was dismissed for having been filed out of time. CA however reversed the
NLRC decision and declared respondent to have been illegally dismissed.
Issue:
Whether or not the CA erred in reversing the NLRC decision
Held:
Yes. while procedural rules may be relaxed in the interest of justice, it is well settled that
these are tools designed to facilitate the adjudication of cases. The relaxation of procedural rules
in the interest of Justice has never intended to be a license for erring litigants to violate the rules
with impunity. The right to appeal is not a natural right or part of due process; it is merely a
statutory privilege and may be exercised only in the manner and in accordance with the
provisions of law. Thus, one who seeks to avail of the right to appeal must strictly comply with
the requirements of the rules, and failure to do so leads to the loss of the right to appeal.
clearly, allowing an appeal, even if belatedly filed, should never be taken lightly.
The judgment attains finality by the lapse of the period for taking an appeal without such
appeal or motion for reconsideration being filed.
When the Labor Arbiter’s decision became Final, petitioners attained a vested right to said
Judgment. They had the right to fully rely on the immutability of said decision. The court will not
override the finality and immutability of a judgment based only on the negligence of a party’s
counsel in timely taking all the proper recourses from the judgment. To justify an override, the
counsel’s negligence must not only be gross but must also be showed to have deprived the party
the right to due process.
Title: Uy v. Chua, G.R. No. 183965, September 18, 2009
Topic: Rule 2, Ordinary Civil Actions
Facts:
Facts:
Petitioner filed for the issuance of a decree of illegitimate filiation against respondent. She
alleged in her complaint that respondent, who was then married, had an illicit relationship with
Irene Surposa and that the respondent and Irene had two children namely, petitioner (Joanie)
and her brother, Allan. Respondent
attended at the birth of the latter instructed that petitioner’s birth certificate be filled out with
the following names: “ALFREDO F. SURPOSA” as father and “IRENE DUCAY” as mother. Alfredo
F.
Surposa was the name of Irene’s father, and Ducay was the maiden surname of Irene’s mother.
However,
respondent Chua financially supported petitioner and Allan and even provided employment for
her. He and Allan were introduced to each other and became k
nown in the Chinese community as respondent’s illegitimate children. During petitioner’s
wedding, respondent sent his brother Catalino Chua (Catalino) as his representative and
Respondent’s relatives even attended the baptism of petitioner’s daughter. Late
r, Respondent denied that he had an illicit relationship with Irene, and that petitioner was his
daughter. Hearings then ensued and petitioner presented documentary evidence to prove her
claim of illegitimate filiation. Petitioner had already filed a similar Petition for the issuance of a
decree of illegitimate affiliation against respondent. And latter filed a Demurrer to Evidence on
the ground that the Decision dated 21 February 2000 barred by res judicata. A Compromise
Agreement was made between the two parties prior where petitioner Joanie declares, admits
and acknowledges that there is no blood relationship or filiation between petitioner and her
brother Allan on one hand and the respondent, in exchange the latter paid the Two Million Pesos
each. The court ruled in favor of the respondent hence this appeal
Issue:
Whether or not the principle of res judicata is applicable to judgments predicated upon a
compromise agreement on cases enumerated in Article 2035 of the Civil Code of the Philippines;
Ruling:
Res judicata is based upon two grounds embodied in various maxims of the common law, namely
public policy and necessity, which makes it in the interest of the State that there should be an
end to litigation and that the hardship of the individual that he should be vexed twice for the
same cause. The requisites must also concur: (1) there must be a final judgment or order; (2) the
court rendering it must have jurisdiction over the subject matter and the parties; (3) it must be a
judgment or order on the merits; and (4) there must be, between the two cases, identity of
parties, subject matter, and causes of action. The court rules held that res judicata does not exist
in this case. The compromise agreement is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced. In Estate of the late
Jesus S. Yujuico v. Republic, the Court pronounced that a judicial compromise has the effect of
res judicata. A judgment based on a compromise agreement is a judgment on the merits. A
contract must have requisites and no according to Article 2035 of the Civil Code, one of the
requisites of such to be valid is that the compromise must not pertain to the Civil Status of a
person and the issue of Future Support and Future Legitime. The agreement in this case is
intended to settle the
question of petitioner’s status and filiation, i.e., whether she is an illegitimate child of
respondent. In
exchange for petitioner and her brother Allan acknowledging that they are not the children of
respondent, respondent would pay petitioner and Allan P2,000,000.00 each. Although
unmentioned, it was a
necessary consequence of said Compromise Agreement that petitioner also waived away her
rights to future support and future legitime as an illegitimate child of respondent. Evidently, the
Compromise Agreement dated 18 February 2000 between petitioner and respondent is covered
by the prohibition under Article 2035 of the Civil Code as espoused in the case of Advincula v.
Advincula. It is settled, then, in law and jurisprudence, that the status and filiation of a child
cannot be compromised. Public policy demands that there be no compromise on the status and
filiation of a child. Paternity and filiation or the lack of the same, is a relationship that must be
judicially established, and it is for the Court to declare its existence or absence. It cannot be left
to the will or agreement of the parties. Being contrary to law and public policy, the Compromise
Agreement dated 18 February 2000 between petitioner and respondent is void ab initio and vests
no rights and creates no obligations. It produces no legal effect at all. The void agreement cannot
be rendered operative even by the parties' alleged performance (partial or full) of their respective
prestations. Decision Reversed and Set Aside.
Title: Heirs of Ypon v. Ricaforte, G.R. No. 198680, July 8, 2013
Topic: Cause of Action, defined
FACTS:
On July 29, 2010, the Ypons filed a complaint for Cancellation of Title and Reconveyance with
Damages (subject complaint) against respondent Gaudioso Ponteras Ricaforte. In their
complaint, they alleged that Magdaleno Ypon (Magdaleno) died intestate and childless on June
28, 1968
Claiming to be the sole heir of Magdaleno, Gaudioso executed an Affidavit of Self-Adjudication
and caused the cancellation of the aforementioned certificates of title, leading to their
subsequent transfer in his name
In his Answer, Gaudioso alleged that he is the lawful son of Magdaleno as evidenced by: (a) his
certificate of Live Birth; (b) two (2) letters from Polytechnic School; and (c) a certified true copy
of his passport. Further, by way of affirmative defense, he claimed that: (a) petitioners have no
cause of action against him; (b) the complaint fails to state a cause of action; and (c) the case is
not prosecuted by the real parties-in-interest, as there is no showing that the petitioners have
been judicially declared as Magdaleno’s lawful heirs.
DECISION OF LOWER COURTS:

(1) RTC-Toledo: dismissed the case for lack of cause of action.
The Court also denied their motion for reconsideration due to the counsel’s failure to state the
date on which his Mandatory Continuing Legal Education Certificate of Compliance was issued.
Direct to the Supreme Court (pure questions of law)
ISSUE:
Whether or not the RTC’s dismissal of the case because the subject complaint failed to state a
cause of action was proper
RULING:
Yes, it was proper.
General Rule
The rule is that the determination of a decedent’s lawful heirs should be made in the
corresponding special proceeding precludes the RTC, in an ordinary action for cancellation of title
and reconveyance, from granting the same. In the case of Heirs of Teofilo Gabatan v. CA, the
Court, citing several other precedents, held that the determination of who are the decedent’s
lawful heirs must be made in the proper special proceeding for such purpose, and not in an
ordinary suit for recovery of ownership and/or possession, as in this case.
The trial court cannot make a declaration of heirship in the civil action for the reason that such a
declaration can only be made in a special proceeding.
Exception
By way of exception, the need to institute a separate special proceeding for the determination
of heirship may be dispensed with for the sake of practicality, as when the parties in the civil case
had voluntarily submitted the issue to the trial court and already presented their evidence
regarding the issue of heirship, and the RTC had consequently rendered judgment thereon, or
when a special proceeding had been instituted but had been finally closed and terminated, and
hence, cannot be re-opened.
In this case, none of the foregoing exceptions, or those of similar nature, appear to exist.
1. Cause of action is defined as the act or omission by which a party violates a right of another. It
is well-settled that the existence of a cause of action is determined by the allegations in the
complaint. In this relation, a complaint is said to assert a sufficient cause of action if, admitting
what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed
for. Accordingly, if the allegations furnish sufficient basis by which the complaint can be
maintained, the same should not be dismissed, regardless of the defenses that may be averred
by the defendants.
2. Under Section 3, Rule 1 of the 1997 Revised Rules of Court, a civil action is defined as one by
which a party sues another for the enforcement or protection of a right, or the prevention or
redress of a wrong while a special proceeding is a remedy by which a party seeks to establish a
status, a right, or a particular fact. It is then decisively clear that the declaration of heirship can
be made only in a special proceeding inasmuch as the petitioners here are seeking the
establishment of a status or right.
Title:
SWAGMAN HOTELS AND TRAVEL, INC., petitioner, vs. HON. COURT OF APPEALS, and NEAL B. CHRISTIAN,
respondents.
G.R. No. 161135. April 8, 2005
Topic:
Cause of Action, defined
Facts:
On 2 February 1999, private respondent Christian filed with the Regional Trial Court of Baguio City, Branch 59, a
complaint for a sum of money and damages against the petitioner corporation, Hegerty, and Atty. Infante. The
complaint alleged as follows: On 7 August 1996, 14 March 1997, and 14 July 1997, the petitioner, as well as its
president and vice-president obtained loans from him in the total amount of US$150,000 payable after three
years, with an interest of 15% per annum payable quarterly or every three months. For a while, they paid an
interest of 15% per annum every three months in accordance with the three promissory notes. However, starting
January 1998 until December 1998, they paid him only an interest of 6% per annum, instead of 15% per annum, in
violation of the terms of the three promissory notes. Thus, Christian prayed that the trial court order them to pay
him jointly and solidarily the amount of US$150,000 representing the total amount of the loans; US$13,500
representing unpaid interests from January 1998 until December 1998; P100,000 for moral damages; P50,000 for
attorneys fees; and the cost of the suit.
Petitioner Swagman Hotels and Travel, Inc’s defense is lack of cause of action and novation of principal obligations.
According to them, Christian had no cause of action because the three promissory notes were not yet due and
demandable. Christian agreed to waive the interest of of 15% per annum and accepts payments of the principal
loans in installment basis. The petitioner paid Christian capital repayment in the amount of US$750 per month
from January 1998 until the time the complaint was filed in February 1999. The petitioner and its co-defendants
then prayed that the complaint be dismissed and that Christian be ordered to pay P1 million as moral damages;
P500,000 as exemplary damages; and P100,000 as attorneys fees.
RTC:
The trial Court rendered a decision on 5 May 2000 declaring the first two promissory notes dated 7 August 1996
and 14 March 1997 as already due and demandable and that the interest on the loans had been reduced by the
parties from 15% to 6% per annum. It then ordered the petitioner corporation to pay Christian the amount of
$100,000 representing the principal obligation covered by the promissory notes dated 7 August 1996 and 14
March 1997, plus interest of 6% per month thereon until fully paid, with all interest payments already paid by the
defendant to the plaintiff to be deducted therefrom. The trial Court said that there was no novation of defendants
obligation to the plaintiff. Under Article 1292 of the Civil Code, there is an implied novation only if the old and the
new obligation be on every point incompatible with one another. In the instant case, the Court is of the view that
the parties merely intended to change the rate of interest from 15% per annum to 6% per annum when the
defendant started paying $750 per month which payments were all accepted by the plaintiff from January 1998
onward. The payment of the principal obligation, however, remains unaffected which means that the defendant
should still pay the plaintiff $50,000 on August 9, 1999, March 14, 2000 and July 14, 2000. When the instant case
was filed on February 2, 1999, none of the promissory notes was due and demandable. As of this date however,
the first and the second promissory notes have already matured. Hence, payment is already due. Under Section 5
of Rule 10 of the 1997 Rules of Civil Procedure, a complaint which states no cause of action may be cured by
evidence presented without objection. Thus, even if the plaintiff had no cause of action at the time he filed the
instant complaint, as defendants obligation are not yet due and demandable then, he may nevertheless recover on
the first two promissory notes in view of the introduction of evidence showing that the obligations covered by the
two promissory notes are now due and demandable.
CA:
On September 5, 2003, the Court of Appeals denied petitioners appeal and affirmed in toto the decision of the trial
court and said “In the case at bench, there is no incompatibility because the changes referred to by appellant
Swagman consist only in the manner of payment. . . . Appellant Swagmans interpretation that the three (3)
promissory notes have been novated by reason of appellee Christians acceptance of the monthly payments of
US$750.00 as capital repayments continuously even after the filing of the instant case is a little bit strained
considering the stiff requirements of the law on novation that the intention to novate must appear by express
agreement of the parties, or by their acts that are too clear and unequivocal to be mistaken. Under the
circumstances, the more reasonable interpretation of the act of the appellee Christian in receiving the monthly
payments of US$750.00 is that appellee Christian merely allowed appellant Swagman to pay whatever amount the
latter is capable of. This interpretation is supported by the letter of demand dated December 16, 1998 wherein
appellee Christian demanded from appellant Swagman to return the principal loan in the amount of US$150,000
plus unpaid interest in the amount of US$13,500.00”
Issues:
• Whether or not there is a cause of action.

• Whether or not there is a valid novation.
•
Ruling:
Cause of action, as defined in Section 2, Rule 2 of the 1997 Rules of Civil Procedure, is the act or omission by which
a party violates the right of another. Its essential elements are as follows:
1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;
2. An obligation on the part of the named defendant to respect or not to violate such right; and
3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of
the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages
or other appropriate relief.
It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff the right to
maintain an action in court for recovery of damages or other appropriate relief.
It is undisputed that the three promissory notes were for the amount of P50,000 each and uniformly provided for
(1) a term of three years; (2) an interest of 15 % per annum, payable quarterly; and (3) the repayment of the
principal loans after three years from their respective dates. However, both the Court of Appeals and the trial
court found that a renegotiation of the three promissory notes indeed happened in December 1997 between the
private respondent and the petitioner resulting in the reduction not waiver of the interest from 15% to 6% per
annum, which from then on was payable monthly, instead of quarterly. The term of the principal loans remained
unchanged in that they were still due three years from the respective dates of the promissory notes. Thus, at the
time the complaint was filed with the trial court on 2 February 1999, none of the three promissory notes was due
yet; although, two of the promissory notes with the due dates of 7 August 1999 and 14 March 2000 matured
during the pendency of the case with the trial court. Both courts also found that the petitioner had been religiously
paying the private respondent US$750 per month from January 1998 and even during the pendency of the case
before the trial court and that the private respondent had accepted all these monthly payments.
With these findings of facts, it has become glaringly obvious that when the complaint for a sum of money and
damages was filed with the trial court on 2 February 1999, no cause of action has as yet existed because the
petitioner had not committed any act in violation of the terms of the three promissory notes as modified by the
renegotiation in December 1997. Without a cause of action, the private respondent had no right to maintain an
action in court, and the trial court should have therefore dismissed his complaint.
Anent the issue of novation, this Court observes that the petitioner corporation argues the existence of novation
based on its own version of what transpired during the renegotiation of the three promissory notes in December
1997.
This Court finds to be contrary to the evidence on record the finding of both the trial court and the Court of
Appeals that the renegotiation in December 1997 resulted in the reduction of the interest from 15% to 6% per
annum and that the monthly payments of US$750 made by the petitioner were for the reduced interests.
It is worthy to note that the cash voucher dated January 1998 states that the payment of US$750 represents
INVESTMENT PAYMENT. All the succeeding cash vouchers describe the payments from February 1998 to
September 1999 as CAPITAL REPAYMENT. All these cash vouchers served as receipts evidencing private
respondents acknowledgment of the payments made by the petitioner: two of which were signed by the private
respondent himself and all the others were signed by his representatives. The private respondent even identified
and confirmed the existence of these receipts during the hearing. Significantly, cognizant of these receipts, the
private respondent applied these payments to the three consolidated principal loans in the summary of payments
he submitted to the court.
There was therefore a novation of the terms of the three promissory notes in that the interest was waived and the
principal was payable in monthly installments of US$750. Alterations of the terms and conditions of the obligation
would generally result only in modificatory novation unless such terms and conditions are considered to be the
essence of the obligation itself. The resulting novation in this case was, therefore, of the modificatory type, not the
extinctive type, since the obligation to pay a sum of money remains in force.
Thus, since the petitioner did not renege on its obligation to pay the monthly installments conformably with their
new agreement and even continued paying during the pendency of the case, the private respondent had no cause
of action to file the complaint. It is only upon petitioners default in the payment of the monthly amortizations that
a cause of action would arise and give the private respondent a right to maintain an action against the petitioner.
Title:
LUIS JOSEPH, petitioner
vs.
HON. CRISPIN V. BAUTISTA, PATROCINIO PEREZ, ANTONIO SIOSON, JACINTO PAGARIGAN, ALBERTO CARDENO and
LAZARO VILLANUEVA, respondents.
G.R. No. L-41423 February 23, 1989
Topic:
One suit for a single cause of action
Prayer:
Petitioner prays in this appeal by certiorari for the annulment and setting aside of the order, dated July 8, 1975,
dismissing petitioner's complaint, as well as the order, dated August 22, 1975, denying his motion for
reconsideration of said dismissal, both issued by respondent Judge Crispin V. Bautista of the former Court of First
Instance of Bulacan, Branch III.
Facts:
Respondent Patrocinio Perez is the owner of a cargo truck with Plate No. 25-2 YT Phil. '73 for conveying cargoes
and passengers for a consideration from Dagupan City to Manila. On January 12, 1973, said cargo truck driven by
defendant Domingo Villa was on its way to Valenzuela, Bulacan from Pangasinan. Petitioner, with a cargo of
livestock, boarded the cargo truck at Dagupan City after paying the sum of P 9.00 as one way fare to Valenzuela,
Bulacan. While said cargo truck was negotiating the National Highway proceeding towards Manila, defendant
Domingo Villa tried to overtake a tricycle likewise proceeding in the same direction. At about the same time, a
pick-up truck with Plate No. 45-95 B, supposedly owned by respondents Antonio Sioson and Jacinto Pagarigan,
then driven by respondent Lazaro Villanueva, tried to overtake the cargo truck which was then in the process of
overtaking the tricycle, thereby forcing the cargo truck to veer towards the shoulder of the road and to ram a
mango tree. As a result, petitioner sustained a bone fracture in one of his legs.
Petitioner filed a complaint for damages against respondent Patrocinio Perez, as owner of the cargo truck, based
on a breach of contract of carriage and against respondents Antonio Sioson and Lazaro Villanueva, as owner and
driver, respectively, of the pick-up truck, based on quasi-delict.
CFI:
On July 8, 1975, respondent judge issued the questioned order dismissing the case, and a motion for the
reconsideration thereof was denied. Hence, this appeal, petitioner contending that respondent judge erred in
declaring that the release of claim executed by petitioner in favor of respondents Sioson, Villanueva and Pagarigan
inured to the benefit of respondent Perez; ergo, it likewise erred in dismissing the case.
Issue:
Whether or not there was only one cause of action.
Ruling:
A cause of action is understood to be the delict or wrongful act or omission committed by the defendant in
violation of the primary rights of the plaintiff. It is true that a single act or omission can be violative of various
rights at the same time, as when the act constitutes juridically a violation of several separate and distinct legal
obligations. However where there is only one delict or wrong, there is but a single cause of action regardless of the
number of rights that may have been violated belonging to one person.
The singleness of a cause of action lies in the singleness of the- delict or wrong violating the rights of one person.
Nevertheless, if only one injury resulted from several wrongful acts, only one cause of action arises. In the case at
bar, there is no question that the petitioner sustained a single injury on his person. That vested in him a single
cause of action, albeit with the correlative rights of action against the different respondents through the
appropriate remedies allowed by law.
The trial court was, therefore, correct in holding that there was only one cause of action involved although the
bases of recovery invoked by petitioner against the defendants therein were not necessarily Identical since the
respondents were not identically circumstanced. However, a recovery by the petitioner under one remedy
necessarily bars recovery under the other. This, in essence, is the rationale for the proscription in our law against
double recovery for the same act or omission which, obviously, stems from the fundamental rule against unjust
enrichment.
The respondents having been found to be solidarity liable to petitioner, the full payment made by some of the
solidary debtors and their subsequent release from any and all liability to petitioner inevitably resulted in the
extinguishment and release from liability of the other solidary debtors, including herein respondent Patrocinio
Perez.
Title:
PHILIPPINE BANK OF, COMMUNICATIONS, petitioner, vs. ELENA LIM, RAMON CALDERON, and TRI-ORO
INTERNATIONAL TRADING & MANUFACTURING CORPORATION, respondents.
G.R. No. 158138. April 12, 2005
Topic:
One suit for a single cause of action
Facts:
On September 3, 1999, the Philippine Bank of Communications (hereinafter [petitioner]) filed a complaint against
[Respondents Elena Lim, Ramon Calderon and Tri-Oro International Trading & Manufacturing Corporation (Tri-Oro
for brevity)] with the Regional Trial Court of Manila for the collection of a deficiency amounting to P4,014,297.23
exclusive of interest. [Petitioner] alleged therein that [respondents] obtained a loan from it and executed a
continuing surety agreement dated November 16, 1995 in favor of [petitioner] for all loans, credits, etc., that were
extended or may be extended in the future to [respondents]. [Petitioner] granted a renewal of said loan upon
[respondents] request, the most recent being on January 21, 1998 as evidenced by Promissory Note Renewal BD-
Variable No. 8298021001 in the amount of P3,000,000.00. It was expressly stipulated therein that the venue for
any legal action that may arise out of said promissory note shall be Makati City, to the exclusion of all other courts
x x x. [Respondents allegedly] failed to pay said obligation upon maturity. Thus, [petitioner] foreclosed the real
estate mortgage executed by [respondents] valued at P1,081,600.00 leaving a deficiency balance of P4,014,297.23
as of August 31, 1999.
Issue:
Whether or not two or more suits can be instituted on the basis of the same cause of action.
Ruling:
Petitioner correctly argues that there are two causes of action contained in its Complaint. A cause of action is a
partys act or omission that violates the rights of the other. Only one suit may be commenced for a single cause of
action. If two or more suits are instituted on the basis of the same cause of action, only one case should remain
and the others must be dismissed.
As against Tri-Oro International Trading & Manufacturing Corporation, petitioners cause of action is the alleged
failure to pay the debt in violation of the PN; as against Elena Lim and Ramon Calderon, in violation of the SA.
Because of the variance between the causes of action, petitioner could have filed separate actions against
respondents to recover the debt, on condition that it could not recover twice from the same cause. It could have
proceeded against only one or all of them, as full payment by any one of them would have extinguished the
obligation. By the same token, respondents could have been joined as defendants in one suit, because petitioners
alleged right of relief arose from the same transaction or series of transactions that had common questions of fact.
To avoid a multiplicity of suits, joinder of parties is encouraged by the law.
The cause of action, however, does not affect the venue of the action. The vital issue in the present case is
whether the action against the sureties is covered by the restriction on venue stipulated in the PN. As earlier
stated, the answer is in the affirmative. Since the cases pertaining to both causes of action are restricted to Makati
City as the proper venue, petitioner cannot rely on Section 5 of Rule 2 of the Rules of Court.
Title:
FIDEL O. CHUA and FILIDEN REALTY AND DEVELOPMENT CORPORATION, Petitioners,
- versus –
METROPOLITAN BANK & TRUST COMPANY, ATTY. ROMUALDO CELESTRA, ATTY. ANTONIO V. VIRAY, ATTY. RAMON
MIRANDA and ATTY. POMPEYO MAYNIGO, Respondents.
Topic:
Splitting of single cause of action, effect of
Facts:
Sometime in 1988, petitioners obtained from respondent Metrobank a loan of P4,000,000.00, which was secured
by a real estate mortgage (REM) on parcels of land covered by Transfer Certificates of Title (TCTs) No.
(108020)1148, No. 93919, and No. 125185, registered in petitioner Chuas name (subject properties). Since the
value of the collateral was more than the loan, petitioners were given an open credit line for future loans. On 18
September 1995, 17 January 1996, 31 July 1996, 21 January 1997, and 12 October 1998, petitioners obtained other
loans from respondent Metrobank, and the real estate mortgages were repeatedly amended in accordance with
the increase in petitioners liabilities.
Having failed to fully pay their obligations, petitioners entered into a Debt Settlement Agreement with respondent
Metrobank on 13 January 2000, whereby the loan obligations of the former were restructured. The debt consisted
of a total principal amount of P79,650,000.00, plus unpaid interest of P7,898,309.02, and penalty charges of
P552,784.96. Amortization payments were to be made in accordance with the schedule attached to the
agreement.
When petitioners still failed to pay their loans, respondent Metrobank sought to extra-judicially foreclose the REM
constituted on the subject properties. Upon a verified Petition for Foreclosure filed by respondent Metrobank on 25
April 2001, respondent Atty. Romualdo Celestra (Atty. Celestra) issued a Notice of Sale dated 26 April 2001, wherein
the mortgage debt was set at P88,101,093.98, excluding unpaid interest and penalties (to be computed from 14
September 1999), attorneys fees, legal fees, and other expenses for the foreclosure and sale. The auction sale was
scheduled on 31 May 2001. On 4 May 2001, petitioners received a copy of the Notice of Sale.
On 28 May 2001, petitioner Chua, in his personal capacity and acting on behalf of petitioner Filiden, filed before
Branch 257 of the Regional Trial Court of Paraaque (RTC-Branch 257), a Complaint for Injunction with Prayer for
Issuance of Temporary Restraining Order (TRO), Preliminary Injunction and Damages, against respondents Atty.
Celestra, docketed as Civil Case No. CV-01-0207. Upon the motion of petitioners, RTC-Branch 257 issued a TRO
enjoining respondents Metrobank and Atty. Celestra from conducting the auction sale of the mortgaged properties
on 31 May 2001.
After the expiration of the TRO on 18 June 2001, and no injunction having been issued by RTC-Branch 257,
respondent Atty. Celestra reset the auction sale on 8 November 2001. On 8 November 2001, the rescheduled date
of the auction sale, RTC-Branch 257 issued an Order directing that the said sale be reset anew after 8 November
2001. The Order was served on 8 November 2001, on respondent Atty. Celestras daughter, Arlene Celestra, at a
coffee shop owned by the formers other daughter, Grace Celestra Aguirre. The auction sale, however, proceeded on
8 November 2001, and a Certificate of Sale was accordingly issued to respondent Metrobank as the highest bidder
of the foreclosed properties.
On 28 October 2005, petitioners filed with Branch 195 of the Regional Trial Court of Paraaque (RTC-Branch 195) a
Verified Complaint for Damages against responde
nts Metrobank, Atty. Celestra, and three Metrobank lawyers, namely, Atty. Antonio Viray, Atty. Ramon Miranda and
Atty. Pompeyo Maynigo. The Complaint was docketed as Civil Case No. CV-05-0402. Petitioners sought in their
Complaint the award of actual, moral, and exemplary damages against the respondents for making it appear that an
auction sale of the subject properties took place, as a result of which, the prospective buyers of the said properties
lost their interest and petitioner Chua was prevented from realizing a profit of P70,000,000.00 from the intended
sale.
Petitioners filed with RTC-Branch 195 a Motion to Consolidate dated 27 December 2005, seeking the consolidation
of Civil Case No. CV-05-0402, the action for damages pending before said court, with Civil Case No. CV-01-0207, the
injunction case that was being heard before RTC-Branch 258, based on the following grounds:
2. The above-captioned case is a complaint for damages as a result of the [herein respondents] conspiracy to
make it appear as if there was an auction sale conducted on November 8, 2001 when in fact there was none.
The properties subject of the said auction sale are the same properties subject of Civil Case No. 01-0207.
3. Since the subject matter of both cases are the same properties and the parties of both cases are almost the
same, and both cases have the same central issue of whether there was an auction sale, then necessarily,
both cases should be consolidated.
RTC:
On 3 January 2006, respondents filed with RTC-Branch 195 an Opposition to Motion to Consolidate with Prayer for
Sanctions, praying for the dismissal of the Complaint for Damages in Civil Case No. CV-05-0402, on the ground of
forum shopping.
In an Order dated 23 January 2006, RTC-Branch 195 granted the Motion to Consolidate, and ordered that Civil Case
No. CV-05-0402 be transferred to RTC-Branch 258, which was hearing Civil Case No. 01-0207.
After the two cases were consolidated, respondents filed two motions before RTC-Branch 258: (1) Motion for
Reconsideration of the Order dated 23 January 2006 of RTC-Branch 195, which granted the Motion to Consolidate
of petitioners; and (2) Manifestation and Motion raising the ground of forum shopping, among the affirmative
defenses of respondents. RTC-Branch 258 issued an Order on 3 July 2006, granting the first Motion of respondents,
thus, dismissing Civil Case No. CV-05-0402 on the ground of forum shopping, and consequently, rendering the second
Motion of respondents moot. RTC-Branch 258 declared that the facts or claims submitted by petitioners, the rights
asserted, and the principal parties in the two cases were the same.
CA:
In a Decision dated 31 January 2008, the Court of Appeals affirmed the 3 July 2006 Order of RTC-Branch 258. The
appellate court observed that although the defendants in the two cases were not identical, they represented a
community of interest. It also declared that the cause of action of the two cases, upon which the recovery of damages
was based, was the same, i.e., the feigned auction sale, such that the nullification of the foreclosure of the subject
properties, which petitioners sought in Civil Case No. CV-01-0207, would render proper the award for damages,
claimed by petitioners in Civil Case No. CV-05-0402. Thus, judgment in either case would result in res judicata. The
Court of Appeals additionally noted that petitioners admitted in their Motion for Consolidation that Civil Case No.
CV-01-0207 and Civil Case No. CV-05-0402 involved the same parties, central issue, and subject properties.
Issue:
Whether or not the first and the second case have the same objective.
Ruling:
Forum shopping exists when a party repeatedly avails himself of several judicial remedies in different courts,
simultaneously or successively, all substantially founded on the same transactions and the same essential facts and
circumstances, and all raising substantially the same issues either pending in or already resolved adversely by some
other court.
Ultimately, what is truly important in determining whether forum shopping exists or not is the vexation caused the
courts and party-litigant by a party who asks different courts to rule on the same or related causes and/or to grant
the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being
rendered by the different fora upon the same issue.
Forum shopping can be committed in three ways: (1) filing multiple cases based on the same cause of action and
with the same prayer, the previous case not having been resolved yet (where the ground for dismissal is litis
pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous case
having been finally resolved (where the ground for dismissal is res judicata); and (3) filing multiple cases based on
the same cause of action, but with different prayers (splitting of causes of action, where the ground for dismissal is
also either litis pendentia or res judicata).
In the present case, there is no dispute that petitioners failed to state in the Certificate of Non-Forum Shopping,
attached to their Verified Complaint in Civil Case No. CV-05-0402 before RTC-Branch 195, the existence of Civil Case
No. CV-01-0207 pending before RTC-Branch 258. Nevertheless, petitioners insist that they are not guilty of forum
shopping, since (1) the two cases do not have the same ultimate objective Civil Case No. CV-01-0207 seeks the
annulment of the 8 November 2001 public auction and certificate of sale issued therein, while Civil Case No. CV-05-
0402 prays for the award of actual and compensatory damages for respondents tortuous act of making it appear
that an auction sale actually took place on 8 November 2001; and (2) the judgment in Civil Case No. CV-01-0207, on
the annulment of the foreclosure sale, would not affect the outcome of Civil Case No. CV-05-0402, on the
entitlement of petitioners to damages. The Court, however, finds these arguments refuted by the allegations made
by petitioners themselves in their Complaints in both cases.
Petitioners committed forum shopping by filing multiple cases based on the same cause of action, although with
different prayers.
Sections 3 and 4, Rule 2 of the Rules of Court proscribe the splitting of a single cause of action:
Section 3. A party may not institute more than one suit for a single cause of action.
Section 4. Splitting a single cause of action; effect of.If two or more suits are instituted on the basis of the
same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for
the dismissal of the others.
Forum shopping occurs although the actions seem to be different, when it can be seen that there is a splitting of a
cause of action. A cause of action is understood to be the delict or wrongful act or omission committed by the
defendant in violation of the primary rights of the plaintiff. It is true that a single act or omission can violate
various rights at the same time, as when the act constitutes juridically a violation of several separate and distinct
legal obligations. However, where there is only one delict or wrong, there is but a single cause of action regardless
of the number of rights that may have been violated belonging to one person.
Petitioners would like to make it appear that Civil Case No. CV-01-0207 was solely concerned with the nullification
of the auction sale and certification of sale, while Civil Case No. CV-05-0402 was a totally separate claim for
damages. Yet, a review of the records reveals that petitioners also included an explicit claim for damages in their
Amended Complaint in Civil Case No. CV-01-0207.
Title:
CATALINA B. CHU,
THEANLYN B. CHU,
THEAN CHING LEE B.
CHU, THEAN LEEWN
B. CHU, and MARTIN LAWRENCE B. CHU,
Petitioners,
- versus -
SPOUSES FERNANDO C. CUNANAN and TRINIDAD

N. CUNANAN, BENELDA ESTATE DEVELOPMENT CORPORATION, and
SPOUSES AMADO E.
CARLOS and GLORIA
A. CARLOS,
Respondents.
Topic:
Facts:
On September 30, 1986, Spouses Manuel and Catalina Chu (Chus) executed a deed of sale with assumption of
mortgage involving their five parcels of land situated in Saguin, San Fernando City, Pampanga, registered under
Transfer Certificate of Title (TCT) No. 198470-R, TCT No. 198471-R, TCT No. 198472-R, TCT No. 198473-R, and TCT
No. 199556-R, all of the Office of the Registry of Deeds of the Province of Pampanga, in favor of Trinidad N.
Cunanan (Cunanan) for the consideration ofP5,161,090.00. They also executed a so-called side agreement,
whereby they clarified that Cunanan had paid only P1,000,000.00 to the Chus despite the Chus, as vendors, having
acknowledged receiving P5,161,090.00; that the amount of P1,600,000.00 was to be paid directly to Benito Co and
to Security Bank and Trust Company (SBTC) in whose favor the five lots had been mortgaged; and that Cunanan
would pay the balance of P2,561.90.00 within three months, with a grace period of one month subject to
3%/month interest on any remaining unpaid amount. The parties further stipulated that the ownership of the lots
would remain with the Chus as the vendors and would be transferred to Cunanan only upon complete payment of
the total consideration and compliance with the terms of the deed of sale with assumption of mortgage.
In February 1988, the Chus commenced Civil Case No. G-1936 in the RTC to recover the unpaid balance from
Spouses Fernando and Trinidad Cunanan (Cunanans). Five years later, on April 19, 1993, the Chus amended the
complaint to seek the annulment of the deed of sale with assumption of mortgage and of the TCTs issued pursuant
to the deed, and to recover damages. They impleaded Cool Town Realty and Development Corporation (Cool Town
Realty), and the Office of the Registry of Deeds of Pampanga as defendants in addition to the Cunanans.
Considering that the Carloses had meanwhile sold the two lots to Benelda Estate Development Corporation
(Benelda Estate) in 1995, the Chus further amended the complaint in Civil Case No. G-1936 to implead Benelda
Estate as additional defendant. In due course, Benelda Estate filed its answer with a motion to dismiss, claiming,
among others, that the amended complaint stated no cause of action because it had acted in good faith in buying
the affected lots, exerting all efforts to verify the authenticity of the titles, and had found no defect in them. After
the RTC denied its motion to dismiss, Benelda Estate assailed the denial on certiorari in the CA, which annulled the
RTCs denial for being tainted with grave abuse of discretion and dismissed Civil Case No. G-1936 as against Benelda
Estate. On March 1, 2001, the Court upheld the dismissal of Civil Case No. G-1936 in G.R. No. 142313 entitled Chu,
Sr. v. Benelda Estate Development Corporation.
On April 30, 2001, the petitioners herein (i.e., Catalina Chu and her children) brought another suit, Civil Case No.
12251, against the Carloses and Benelda Estate, seeking the cancellation of the TCTs of the two lots in the name of
Benelda Estate, and the issuance of new TCTs in their favor, plus damages. The petitioners amended their
complaint in Civil Case No. 12251 on February 4, 2002 to implead the Cunanans as additional defendants.
The Cunanans moved to dismiss the amended complaint based on two grounds, namely: (a) bar by prior judgment,
and (b) the claim or demand had been paid, waived, and abandoned. Benelda Estate likewise moved to dismiss the
amended complaint, citing as grounds: (a) forum shopping; (b) bar by prior judgment, and (c) failure to state a
cause of action. On their part, the Carloses raised affirmative defenses in their answer, namely: (a) the failure to
state a cause of action; (b) res judicata or bar by prior judgment; and (c) bar by statute of limitations.
RTC:
On April 25, 2002, the RTC denied both motions to dismiss, holding that the amended complaint stated a cause of
action against all the defendants; that the action was not barred by res judicata because there was no identity of
parties and subject matter between Civil Case No.12251 and Civil Case No. G-1936; and that the Cunanans did not
establish that the petitioners had waived and abandoned their claim or that their claim had been paid by virtue of
the compromise agreement, pointing out that the compromise agreement involved only the three parcels of land
registered in the name of Cool Town Realty.
CA:
On November 19, 2002, the CA promulgated its decision, granting the petition for certiorari and nullifying the
challenged orders of the RTC. The CA ruled that the compromise agreement had ended the legal controversy
between the parties with respect to the cause of action arising from the deed of sale with assumption of mortgage
covering all the five parcels of land; that Civil Case No. G-1936 and Civil Case No.12251 involved the violation by
the Cunanans of the same legal right under the deed of sale with assumption of mortgage; and that the filing of
Civil Case No.12251 contravened the rule against splitting of a cause of action, and rendered Civil Case No.12251
subject of a motion to dismiss based on bar by res judicata.
Issue:
Whether or not Civil Case No. 12251 barred by res judicata.
Ruling:
A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or
put an end to one already commenced. It encompasses the objects specifically stated therein, although it may
include other objects by necessary implication, and is binding on the contracting parties, being expressly
acknowledged as a juridical agreement between them. It has the effect and authority of res judicata upon the
parties.
The intent of the parties to settle all their claims against each other is expressed in the phrase any and all their
respective claims against each other as alleged in the pleadings they respectively filed in connection with this case,
which was broad enough to cover whatever claims the petitioners might assert based on the deed of sale with
assumption of mortgage.
Apparently, the petitioners were guilty of splitting their single cause of action to enforce or rescind the deed of
sale with assumption of mortgage. Splitting a single cause of action is the act of dividing a single or indivisible
cause of action into several parts or claims and instituting two or more actions upon them. A single cause of action
or entire claim or demand cannot be split up or divided in order to be made the subject of two or more different
actions. Thus, Section 4, Rule 2 of the Rules of Court expressly prohibits splitting of a single cause of action, viz:
Section 4. Splitting a single cause of action; effect of. If two or more suits are instituted on the basis of the same
cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for the dismissal
of the others.
The petitioners were not at liberty to split their demand to enforce or rescind the deed of sale with assumption of
mortgage and to prosecute piecemeal or present only a portion of the grounds upon which a special relief was
sought under the deed of sale with assumption of mortgage, and then to leave the rest to be presented in another
suit; otherwise, there would be no end to litigation. Their splitting violated the policy against multiplicity of suits,
whose primary objective was to avoid unduly burdening the dockets of the courts. Their contravention of the
policy merited the dismissal of Civil Case No. 12251 on the ground of bar by res judicata.
Yet, in order that res judicata may bar the institution of a subsequent action, the following requisites must concur:
(a) the former judgment must be final; (b) it must have been rendered by a court having jurisdiction of the subject
matter and the parties; (c) it must be a judgment on the merits; and (d) there must be between the first and
second actions (i) identity of parties, (ii) identity of the subject matter, and (iii) identity of cause of action.
The first requisite was attendant. Civil Case No. G-1936 was already terminated under the compromise agreement,
for the judgment, being upon a compromise, was immediately final and unappealable. As to the second requisite,
the RTC had jurisdiction over the cause of action in Civil Case No. G-1936 for the enforcement or rescission of the
deed of sale with assumption of mortgage, which was an action whose subject matter was not capable of
pecuniary estimation. That the compromise agreement explicitly settled the entirety of Civil Case No. G-1936 by
resolving all the claims of the parties against each other indicated that the third requisite was also satisfied.
There is identity of parties when the parties in both actions are the same, or there is privity between them, or they
are successors-in-interest by title subsequent to the commencement of the action litigating for the same thing and
under the same title and in the same capacity. The requirement of the identity of parties was fully met, because
the Chus, on the one hand, and the Cunanans, on the other hand, were the parties in both cases along with their
respective privies. The fact that the Carloses and Benelda Estate, defendants in Civil Case No. 12251, were not
parties in the compromise agreement was inconsequential, for they were also the privies of the Cunanans as
transferees and successors-in-interest. It is settled that the absolute identity of parties was not a condition sine
qua non for res judicata to apply, because a shared identity of interest sufficed. Mere substantial identity of
parties, or even community of interests between parties in the prior and subsequent cases, even if the latter were
not impleaded in the first case, was sufficient.
In fine, the rights and obligations of the parties vis--vis the five lots were all defined and governed by the deed of
sale with assumption of mortgage, the only contract between them. That contract was single and indivisible, as far
as they were concerned. Consequently, the Chus could not properly proceed against the respondents in Civil Case
No. 12251, despite the silence of the compromise agreement as to the Carloses and Benelda Estate, because there
can only be one action where the contract is entire, and the breach total, and the petitioners must therein recover
all their claims and damages. The Chus could not be permitted to split up a single cause of action and make that
single cause of action the basis of several suits.
Title:
PANTRANCO NORTH EXPRESS, INC., and ALEXANDER BUNCAN, petitioners, vs. STANDARD INSURANCE
COMPANY, INC., and MARTINA GICALE, respondents.
Topic:
Facts:
In the afternoon of October 28, 1984, Crispin Gicale was driving the passenger jeepney owned by his
mother Martina Gicale, respondent herein. It was then raining. While driving north bound along the
National Highway in Talavera, Nueva Ecija, a passenger bus, owned by Pantranco North Express, Inc.,
petitioner, driven by Alexander Buncan, also a petitioner, was trailing behind. When the two vehicles
were negotiating a curve along the highway, the passenger bus overtook the jeepney. In so doing, the
passenger bus hit the left rear side of the jeepney and sped away.
Crispin reported the incident to the Talavera Police Station and respondent Standard Insurance Co., Inc.
(Standard), insurer of the jeepney. The total cost of the repair was P21,415.00, but respondent Standard
paid only P8,000.00. Martina Gicale shouldered the balance of P13,415.00.
Thereafter, Standard and Martina, respondents, demanded reimbursement from petitioners Pantranco
and its driver Alexander Buncan, but they refused. This prompted respondents to file with the Regional
Trial Court (RTC), Branch 94, Manila, a complaint for sum of money.
In their answer, both petitioners specifically denied the allegations in the complaint and averred that it
is the Metropolitan Trial Court, not the RTC, which has jurisdiction over the case.
RTC:
On June 5, 1992, the trial court rendered a Decision in favor of respondents Standard and Martina and
ordered:
(1) to pay plaintiff Standard Insurance the amount of P8,000.00 with interest due thereon from
November 27, 1984 until fully paid;
(2) to pay plaintiff Martina Gicale the amount of P13,415.00 with interest due thereon from October 22,
1984 until fully paid;
(3) to pay the sum of P10,000.00 for attorneys fees;
(4) to pay the expenses of litigation and the cost of suit.or of respondents Standard a
CA:
The Court of Appeals, in a Decision dated July 23, 1999, affirmed the trial courts ruling, holding that the
appellants argue that appellee Gicales claim of P13,415.00 and appellee insurance companys claim of
P8,000.00 individually fell under the exclusive original jurisdiction of the municipal trial court. This is not
correct because under the Totality Rule provided for under Sec. 19, Batas Pambansa Bilang 129, it is the
sum of the two claims that determines the jurisdictional amount.
Issue:
Whether or not the RTC has jurisdiction.
Ruling:
To determine identity of cause of action, it must be ascertained whether the same evidence which is
necessary to sustain the second cause of action would have been sufficient to authorize a recovery in
the first. Here, had respondents filed separate suits against petitioners, the same evidence would have
been presented to sustain the same cause of action. Thus, the filing by both respondents of the
complaint with the court below is in order. Such joinder of parties avoids multiplicity of suit and ensures
the convenient, speedy and orderly administration of justice.
Corollarily, Section 5(d), Rule 2 of the same Rules provides:
Sec. 5. Joinder of causes of action. A party may in one pleading assert, in the alternative or otherwise, as
many causes of action as he may have against an opposing party, subject to the following conditions:
(d) Where the claims in all the causes of action are principally for recovery of money the aggregate
amount claimed shall be the test of jurisdiction.
The above provision presupposes that the different causes of action which are joined accrue in favor of
the same plaintiff/s and against the same defendant/s and that no misjoinder of parties is involved. The
issue of whether respondents claims shall be lumped together is determined by paragraph (d) of the
above provision. This paragraph embodies the totality rule as exemplified by Section 33 (1) of B.P. Blg.
129 which states, among others, that where there are several claims or causes of action between the
same or different parties, embodied in the same complaint, the amount of the demand shall be the
totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of
the same or different transactions.
As previously stated, respondents cause of action against petitioners arose out of the same transaction.
Thus, the amount of the demand shall be the totality of the claims.
Respondent Standards claim is P8,000.00, while that of respondent Martina Gicale is P13,415.00, or a
total of P21,415.00. Section 19 of B.P. Blg. 129 provides that the RTC has exclusive original jurisdiction
over all other cases, in which the demand, exclusive of interest and cost or the value of the property in
controversy, amounts to more than twenty thousand pesos (P20,000.00). Clearly, it is the RTC that has
jurisdiction over the instant case. It bears emphasis that when the complaint was filed, R.A. 7691
expanding the jurisdiction of the Metropolitan, Municipal and Municipal Circuit Trial Courts had not yet
taken effect. It became effective on April 15, 1994.
Title:
GEORGE LEONARD S. UMALE,

Petitioner,
- versus -
CANOGA PARK DEVELOPMENT CORPORATION,
Respondent.
Topic:
Facts:
On January 4, 2000, the parties entered into a Contract of Lease whereby the petitioner agreed to lease,
for a period of two (2) years starting from January 16, 2000, an eight hundred sixty (860)-square-meter
prime lot located in Ortigas Center, Pasig City owned by the respondent. The respondent acquired the
subject lot from Ortigas & Co. Ltd. Partnership through a Deed of Absolute Sale, subject to the following
conditions: (1) that no shopping arcades or retail stores, restaurants, etc. shall be allowed to be
established on the property, except with the prior written consent from Ortigas & Co. Ltd. Partnership
and (2) that the respondent and/or its successors-in-interest shall become member/s of the Ortigas
Center Association, Inc. (Association), and shall abide by its rules and regulations.
On October 10, 2000, before the lease contract expired, the respondent filed an unlawful detainer case
against the petitioner before the Metropolitan Trial Court (MTC)-Branch 68, Pasig City, docketed as Civil
Case No. 8084. The respondent used as a ground for ejectment the petitioners violation of stipulations
in the lease contract regarding the use of the property. Under this contract, the petitioner shall use the
leased lot as a parking space for light vehicles and as a site for a small drivers canteen, and may not
utilize the subject premises for other purposes without the respondents prior written consent. The
petitioner, however, constructed restaurant buildings and other commercial establishments on the lot,
without first securing the required written consent from the respondent, and the necessary permits
from the Association and the Ortigas & Co. Ltd. Partnership. The petitioner also subleased the property
to various merchants-tenants in violation of the lease contract.
The MTC-Branch 68 decided the ejectment case in favor of the respondent.
During the pendency of the petition for review, the respondent filed on May 3, 2002 another case for
unlawful detainer against the petitioner before the MTC-Branch 71, Pasig City. The case was docketed as
Civil Case No. 9210. This time, the respondent used as a ground for ejectment the expiration of the
parties lease contract.
On December 4, 2002, the MTC-Branch 71 rendered a decision in favor of the respondent.
On appeal, the RTC-Branch 68 reversed and set aside the decision of the MTC-Branch 71, and dismissed
Civil Case No. 9210 on the ground of litis pendentia. The petitioner, however, was still ordered to pay
rent in the amount of seventy-one thousand five hundred pesos (P71,500.00) per month beginning
January 16, 2002, which amount is the monthly rent stipulated in the lease contract.
Aggrieved by the reversal, the respondent filed a Petition for Review under Rule 42 of the Rules of Court
with the CA. The respondent argued that there exists no litis pendentia between Civil Case Nos. 8084
and 9210 because the two cases involved different grounds for ejectment, i.e., the first case was filed
because of violations of the lease contract, while the second case was filed due to the expiration of the
lease contract. The respondent emphasized that the second case was filed based on an event or a cause
not yet in existence at the time of the filing of the first case. The lease contract expired on January 15,
2002, while the first case was filed on October 10, 2000.
On August 20, 2004, the CA nullified and set aside the assailed decision of the RTC-Branch 68, and ruled
that there was no litis pendentia because the two civil cases have different causes of action. The
decision of the MTC- Branch 71 was ordered reinstated. Subsequently, the petitioners motion for
reconsideration was denied; hence, the filing of the present petition for review on certiorari.
Issue:
Whether or not there is litis pendentia.
Ruling:
Litis pendentia exists when the following requisites are present: identity of the parties in the two
actions; substantial identity in the causes of action and in the reliefs sought by the parties; and the
identity between the two actions should be such that any judgment that may be rendered in one case,
regardless of which party is successful, would amount to res judicata in the other.
In response to the petitioners contention that the similarity of Civil Case Nos. 8084 and 9210 rests on
the reiteration in the second case of the cause of action in the first case, we rule that the restatement
does not result in substantial identity between the two cases. Even if the respondent alleged violations
of the lease contract as a ground for ejectment in the second complaint, the main basis for ejecting the
petitioner in the second case was the expiration of the lease contract. If not for this subsequent
development, the respondent could no longer file a second complaint for unlawful detainer because an
ejectment complaint may only be filed within one year after the accrual of the cause of action, which, in
the second case, was the expiration of the lease contract.
Also, contrary to petitioners assertion, there can be no conflict between the decisions rendered in Civil
Case Nos. 8084 and 9210 because the MTC-Branch 71 decided the latter case on the sole issue of
whether the lease contract between the parties had expired. Although alleged by the respondent in its
complaint, the MTC-Branch 71 did not rule on the alleged violations of the lease contract committed by
the petitioner. We note that the damages awarded by the MTC-Branch 71 in Civil Case No. 9210 were
for those incurred after the expiration of the lease contract, not for those incurred prior thereto.
Similarly, we do not find the respondent guilty of forum shopping in filing Civil Case No. 9210, the
second civil case. To determine whether a party violated the rule against forum shopping, the test
applied is whether the elements of litis pendentia are present or whether a final judgment in one case
will amount to res judicata in another. Considering our pronouncement that not all the requisites of litis
pendentia are present in this case, the CA did not err in declaring that the respondent committed no
forum shopping.
Title: Spouses Plaza vs Lustiva, March 5, 2014
Topic: Splitting a Single Cause of Action; Effect of
Factual Antecedents
On August 28, 1997, the CA ruled that among the Plaza siblings, namely: Aureliano, Emiliana, Vidal,
Marciano, and Barbara, Barbara was the owner of the subject agricultural land. The decision became final
and executory and Barbara's successors, respondents Guillermo Lustiva, Eleodora Vda. de Martinez and
Vicky Sayson Goloseno, have continued occupying the property.
On September 14, 1999, Vidal’s son and daughter-in-law, the petitioners, filed a Complaint for Injunction,
Damages, Attorney’s Fees with Prayer for the Issuance of the Writ of Preliminary Injunction and/or Temporary
Restraining Order against the respondents and the City Government of Butuan. They prayed that the
respondents be enjoined from unlawfully and illegally threatening to take possession of the subject property.
According to the petitioners, they acquired the land from Virginia Tuazon in 1997; Tuazon was the sole bidder
and winner in a tax delinquency sale conducted by the City of Butuan on December 27, 1996.
In their answer, the respondents pointed out that they were never delinquent in paying the land taxes and
were in fact not aware that their property had been offered for public auction. Moreover, Tuazon, being a
government employee, was disqualified to bid in the public auction, as stated in Section 89 of the Local
Government Code of 1991.5 As Tuazon’s participation in the sale was void, she could have not transferred
ownership to the petitioners. Equally important, the petitioners merely falsified the property tax declaration
by inserting the name of the petitioners’ father, making him appear as a co-owner of the auctioned land.
Armed with the falsified tax declaration, the petitioners, as heirs of their father, fraudulently redeemed the
land from Tuazon. Nonetheless, there was nothing to redeem as the land was not sold. For these
irregularities, the petitioners had no right to the Writ of Preliminary Injunction and/or Temporary Restraining
Order prayed for against them.
RTC denied the prayer for a writ of preliminary injunction and ordered the possession and
occupation of the land be returned to the respondents due to irregularities found on the auction
sale conducted as the bidder, a government employee, was disqualified to bid. It also ruled that
petitioners were not buyers in good faith and they were in bad faith when they falsified the tax declaration to
redeem the property.
Petitioners appealed the RTC’s decision through Rule 65 to the Court of Appeals and decided to
upheld the RTC’s ruling of denying the prayer due to its similar conclusion that for being disqualified to
bid under Section 89 of the Local Government Code of 1991, Tuazon never obtained ownership over the
property; much less transmit any proprietary rights to the petitioners. Clearly, the petitioners failed to
establish any clear and unmistakable right enforceable by the injunctive relief. However, prior to this
decision and while this petition in the CA was pending, the petitioners filed an action for specific
performance against the City of Butuan and urging them to issue a certificate of sale since they acquired
possession of the disputed property through the auction conducted.
Hence, the petitioners filed a petition for review on certiorari under Rule 45 assailing the decision by the
Court of Appeals. The petitioners averred that they did not falsify the tax declaration in acquiring the
auctioned property and considering if Tuazon was disqualified from purchasing the property. Applying the
law, it is as if there was no bidder, for which the City Government of Butuan was to be considered the
purchaser of the land in auction. Also, the petitioners argue that they did not commit forum shopping, as
the reliefs prayed for in the present case and in the specific performance case are not the same.
Meanwhile, on August 8, 2013, the RTC dismissed the main action and ordered the petitioners to pay the
respondents’ attorney’s fees and litigation expenses.
Issue:
Whether or not petitioners are guilty of forum shopping through splitting of causes of action.
Ruling:
Yes, the petitioners are guilty of forum shopping through splitting of causes of action. Under prevailing
jurisprudence, in the case of of Heirs of Marcelo Sotto, etc., et al. v. Matilde S. Palicte,26 the Court laid
down the three ways forum shopping may be committed: 1) through litis pendentia — filing multiple cases
based on the same cause of action and with the same prayer, the previous case not having been resolved
yet; 2) through res judicata — filing multiple cases based on the same cause of action and the same
prayer, the previous case having been finally resolved; and 3) splitting of causes of action — filing multiple
cases based on the same cause of action but with different prayers — the ground to dismiss being either
litis pendentia or res judicata. The cause of action in the present case (and the main case) is the
petitioners’ claim of ownership of the land when they bought it, either from the City Government of Butuan
or from Tuazon. This ownership is the petitioners’ basis in enjoining the respondents from dispossessing
them of the property. On the other hand, the specific performance case prayed that the City Government of
Butuan be ordered to issue the petitioners the certificate of sale grounded on the petitioners’ ownership of
the land when they had bought it, either from the City Government of Butuan or from Tuazon. While it may
appear that the main relief prayed for in the present injunction case is different from what was prayed for in
the specific performance case, the cause of action which serves as the basis for the reliefs remains the
same — the petitioners’ alleged ownership of the property after its purchase in a public auction.
Thus, the petitioners' subsequent filing of the specific performance action is forum shopping of the third
kind-splitting causes of action or filing multiple cases based on the same cause of action, but with different
prayers. As the Court has held in the past, "there is still forum shopping even if the reliefs prayed for in the
two cases are different, so long as both cases raise substantially the same issues.
Title: Bayang vs Biong, February 27, 1987
Topic: Splitting a Single Cause of Action; Effect of
Factual Antecedents:
Sometime in November 1969, Juan Bayang filed a complaint for quieting of title with damages against
Benigno Biong in the Court of First Instance of Surigao del Norte, Branch 1, docketed as Civil Case
No. 1892. In 1970, while the case was pending, Biong succeeded in dispossessing the plaintiff of the land
in question and remained there until January 25, 1978. On February 21, 1972, the case was decided in
favor of Biong, but the Court of Appeals on December 8, 1977, reversed the trial court’s decision
declaring Bayang as owner of the property in litigation, and ordered defendant to pay appellant the
proceeds from the sale of the copra derived from the third harvest of coconuts from the same land, and
attorney's fees, and costs of litigation. This decision became final and executory on February 2, 1978.
On February 6, 1978, Bayang filed a second case, docketed as Civil Case No. 2589, with the CFI (now
RTC) of Surigao del Norte, Branch II, seeking to recover from Biong the incomes earned from the same
land from 1970 up to the quarterly incomes from 1978 until the said land was delivered to the plaintiff. At
the pre-trial, petitioner admitted that as of January 25, 1978, Biong had already surrendered possession of
the land in question to Bayang. On August 16, 1978, Biong filed a motion for summary judgment,
reiterating the affirmative defense of res judicata raised in his answer dated April 12, 1978, insofar as it
related to the incidents concerning the case prior to January 25, 1978. An opposition to this motion was
duly filed by Bayang.
RTC granted the motion and rendered a summary judgment and sustained by the Court of Appeals,
and Bayang seeking in this court in this petition for review by certiorari under Rule 45 of the Rules of Court.
Issue:
Whether or not the rendered judgment in Civil Case No. 1892 constitutes res judicata as to bar Civil Case
No. 2589.
Ruling:
Yes, the rendered judgment in Civil Case No. 1892 constitutes res judicata as to bar Civil Case No. 2589. A
long line of decisions has consistently held that for res judicata to apply: a) the former judgment must be final;
b) it must have been rendered by a court having jurisdiction over the subject matter and the parties; c) it must
be a judgment on the merits; and d) there must be between the first case and the second case identity of
parties, identity of subject matter and Identity of cause of action. Under the case at bar, The decision in Civil
Case No. 1892 became final and executory on February 2, 1978. The subsequent case filed was on February
6, 1978 which pertained and the income from that land being claimed in Civil Case No. 2589. But that is in
our view splitting hairs to split a cause of action. The subject-matter is essentially the same in both cases as
the income is only a consequence or accessory of the disputed property. Apparently, there was only one
cause of action found on this case. The claim for the income from the land was incidental to, and should
have been raised by Bayang in his earlier claim for, ownership of the land.
Title: De Larena vs Villanueva
Topic: Rule 2: Cause of Action, Section 4.
This case is a sequel to case G. R. No. 21706, Josefina Rubio de Larena vs. Hermenegildo Villanueva,
decided on March 26, 1924 in which the Supreme Court affirmed with the RTC’s decision ordering the
rescission of a lease of the Tacgajan Sugar Plantation and the payment by the defendant-lessee of the unpaid
balance of the rent for the agricultural year 1920-1922 and rent for the agricultural year 1921-1923. The
decision also provided that the possession of the leased land be delivered to the plaintiff.
A writ of execution was issued but before levy was made the parties came to an agreement, under which the
money judgment was to be satisfied by the payment and the transfer to the plaintiff of a dwelling house
situated in the municipality of Bais. In the meantime, the defendant had harvested the sugarcane crop
produced in the agricultural year 1922-1924, and after having satisfied the aforesaid money judgment, he
also continued in possession of the plantation long enough to appropriate to himself the following ratoon cane
crop. The present action was brought on April 13, 1925, but the last amended complaint, setting forth three
causes of action, was not filed until June 17, 1927.As her first cause of action the plaintiff, after a preliminary
statement of the origin of the controversy, alleges that while case G. R. No. 21706 was on appeal to the
Supreme Court, the defendant knew that there was lease was rescinded declared rescinded by the Court of
and that he, the defendant, also knew that he was not entitled to the possession of the hacienda that during
the agricultural year 1922-1924, he continued possessing the land in bad faith and appropriated and sold by
him the cane harvest for that year, , but that the defendant refuses to pay. Hence, the appellant asks
judgment for the sum of P21,827.26 upon the first cause of action. The second cause of action alleges that
under the contract of lease of the Tacgajan Hacienda, one of the obligations assumed by the defendant was
that he would use the care of a good father of the family in conserving the tools, agricultural implements, draft
animals, and other effects enumerated in an inventory made at the time the defendant entered in possession
under the lease. The third cause of action was that the plaintiff demands payment and alleges that the
harvest of sugar cane illegally made by the defendant in 1924 left ratoon sugar cane in the fields of the
hacienda, which sugar cane was the property of the plaintiff, and that during the year 1925, defendant sold it
for his benefit.
In his answer to the first and third causes of action, the defendants alleges that according to the pleadings in
case G. R. No. 21706, the two causes of action were included in that case and, therefore, must be considered
res adjudicata. In regard to the second cause of action the defendant pleads the general issue and sets up
as a special defense that assuming that the property referred to in said cause of action was missing, it loss
was due to its total extinction by ordinary use, for which the defendant could not be held responsible.
RTC sustained the defendant's special defense and absolved him from the complaint with the cost against
the plaintiff, hence whereupon the latter appealed to this court.
Issue:
Whether or not this case involved the doctrine of res judicata.
Ruling:
Properly speaking, this argument does not involve the doctrine of res judicata but rests on the well-known
an, in American law, firmly established principle that a party will not be permitted to split up a single cause
of action an make it the basis for several suits. But that is not this case. The rule is well established that
when a lease provides for the payment of the rent in separate installments, each installment is an
independent cause of action, though it has been held and is good law, that in an action upon such a lease
for the recovery of rent, the installments due at the time the action brought must be included in the
complaint and that failure to do so will constitute a bar to a subsequent action for the payment of that rent.
The aforesaid action, G. R. No. 21706, was brought on August 23, 1922, the plaintiff demanding payment
of then sue rent in addition to the rescission of the lease. The lease did not provide for payment of rent in
advance or at any definite time, and it appears plainly from the record that the rent for an agricultural year
was not considered due until the end of the corresponding year. It follows that the rent for the agricultural
year 1922-1924 ha not become sue time of the trial of the case and that consequently the trial court could
not render judgment therefore. The action referred to is, therefore, no bar to the first cause of action in the
present litigation.
Title: Danfoss vs Continental Cement, September 9, 2005
Topic: Rule 2: Cause of Action, Section 4.
Danfoss filed a petition for review on certiorari under Rule 45 of the 1997 Rules on Civil Procedure of the
February 11, 2000 decision[1] of the Court of Appeals in CA-G.R. No. SP-55645, and its resolution dated
June 7, 2000 denying petitioners motion for reconsideration.
On November 5, 1998, respondent Continental Cement Corporation (CCC) filed a complaint for damages
against petitioner DANFOSS and Mechatronics Instruments and Controls, Inc. (MINCI) before the Regional
Trial Court of Quezon City, Branch 80, alleging that; On 1 September 1997, Plaintiff CCC purchased from
defendant MINCI two (2) unit 132 KW Danfoss Brand Frequency Converter/Inverter for use in the Finish Mill
of its Cement Plant and is covered by a Purchase Order. The delivery of the two (2) unit Frequency Converter
are to be delivered within eight (8) to ten (10) weeks from the opening of the letter of credit. Defendant MINCI
immediately relayed the PO to Danfoss and forward it to their Asian Regional Office for the shipment and
thereafter, committed to CCC that Danfoss would deliver. Then, both parties were corresponding to every
information (mode of payment, status of item, point of origin) as regards to the ordered items and the flow of
the transaction went smoothly. However, CCC reiterated its demand that every delay in the shipment of the
two (2) unit Frequency Converter/Inverter will cause substantial losses in its operations and requested for the
early work out and the immediate shipment of the frequency converter to avoid further loss to the company.
Apparently, DANFOSS informed CCC that the reason why DANFOSS has delivery problems was that some
of the supplied components for the new VLT 5000 series did not meet the agreed quality standard. That
means that their factory was canvassing for another supplier. And at that moment, there was no clear
message when normal production will resume. Due to this information, CCC surmised hat defendants MINCI
and DANFOSS could not be able to deliver the two (2) unit Frequency Converter within the maximum period
of ten (10) weeks period from the opening of the Letter of Credit, as one of the conditions in the Purchase
Order dated 1 September 1997. Thereafter, no definite commitment was received by CCC regarding the
delivery of the ordered items and for the reason of delay, CCC informed MINCI of their intention to cancel
the order and averred that CCC had suffered substantial losses and CCC was compelled to look for another
supplier.
On February 17, 1999, petitioner DANFOSS filed a motion to dismiss the complaint on the ground that it did
not state a cause of action, however, despite of their contentions and arguments, RTC denied the motion
to dismiss.
Danfoss filed a motion for reconsideration of the order but it was denied. On appeal to the Court of Appeals,
the latter also denied Danfoss petition for lack of merit. The CA likewise denied petitioners motion for
reconsideration
Issue:
Whether or not the CA erred in affirming the denial by the court a quo of petitioners’ motion to dismiss the
complaint for damages on the ground that it failed to state a cause of action.
Ruling:
Yes, CA erred in affirming the denial by the court a quo of petitioners’ motion to dismiss the complaint for
damages on the ground that it failed to state a cause of action. In order to sustain a dismissal on the ground
of lack of cause of action, the insufficiency must appear on the face of the complaint. And the test of the
sufficiency of the facts alleged in the complaint to constitute a cause of action is whether or not, admitting the
facts alleged, the court can render a valid judgment thereon in accordance with the prayer of the complaint.
For this purpose, the motion to dismiss must hypothetically admit the truth of the facts alleged in the
complaint. Then respondent sued petitioner for damages, petitioner had not violated any right of respondent
from which a cause of action had arisen. Respondent only surmised that petitioner would not be able to
deliver the two units frequency converter/inverter on the date agreed upon by them. Based on this
apprehension, it cancelled its order six days prior to the agreed date of delivery. How could respondent hold
petitioner liable for damages (1) when petitioner had not yet breached its obligation to deliver the goods and
(2) after respondent made it impossible for petitioner to deliver them by cancelling its order even before the
agreed delivery date? Thus, the principle contemplates future periodic deliveries and a willful refusal to
comply therewith. Here, the obligation was single and indivisible to deliver two units of frequency
converter/inverter by November 19, 1997. The records do not show that petitioner refused to deliver the
goods on the date agreed upon. On the contrary, petitioner exerted efforts to make good its obligation by
looking for other suppliers who could provide it the parts needed to make timely delivery of the frequency
converter/inverter ordered by respondent.Furthermore, respondents complaint suffered from another fatal
infirmity. It was premature. The obligation of petitioner to respondent was not yet due and demandable at the
time the latter filed the complaint. The alleged violation of respondents right being no more than mere
speculation, there was no need to call for judicial intervention.
Title: LILIA B. ADA vs. FLORANTE BAYLON
Topic: Joinder of causes of action
FACTS
During the pendency of an action for partition, there was a donation made by Rita to Florante
without the consent of the other parties or the Court. When the other parties learned of the donation,
they filed a Supplemental Pleading seeking the rescission of the donation.
ISSUE: Can there be a joinder of these two (2) causes of action?
HELD: NO. There was a misjoinder of causes of action. The action for partition could not be
joined with action for the rescission of the said donation inter vivos in favor of Florante. Lest it be
overlooked, an action for partition is a special civil action governed by Rule 69 of the Rules of
Court while an action for rescission is an ordinary civil action governed by the ordinary rules of
civil procedure. The variance in the procedure in the special civil action of partition and in the
ordinary civil action precludes their joinder in one complaint or their being tried in a single
proceeding to avoid confusion in determining what rules shall govern the conduct of the
proceedings as well as in the determination of the presence of requisite elements of each particular
cause of action.
Nevertheless, misjoinder of causes of action is not a ground for dismissal.

A misjoined cause of action, if not severed upon motion of a party or by the Court sua sponte, may
be adjudicated by the court together with the other cause of action
Title: PANTRANCO North Express, Inc., and Alexander Buncan, versus
Standard Insurance Company, Inc., and Martina Gicale,
FACTS:
Crispin Gicale was driving the passenger jeepney owned by his mother Martina Gicale. Alexander
Buncan, on the other hand, was driving a bus owned by Pantranco North Express Inc. Both drivers
were travelling along the National Highway of Talavera, Nueva Ecija in a rainy afternoon. Buncan
was driving the bus northbound while Cripin was trailing behind. When the two vehicles were
negotiating a curve along the highway, the passenger bus overtook the jeepney. In so doing, thhe
passenger bus hit the left rear side of the jeepney and sped away.
Crispin reported the incident to the police and to the insurer of their jeepney, Standard Insurance
Co. The total cost of the repair amounted to P21, 415. Standard only paid P8,000 while Martina
Gicale shouldered the remaining P13,415. Thereafter, Standard and Martina demanded
reimbursements from Pantranco and Buncan, but the bus company and the driver refused. Thus,
Standard and Martina were prompted to file a complaint for sum of money with the RTC of Manila.
Pantranco and Buncan denied the allegations of the complaint and asserted that it is the MeTC
which has jurisdiction over the case.
RTC: The trial court ruled in favor of Standard and Martina, and ordered Pantranco and Buncan
to pay the former reimbursements with interests due thereon plus attorney's fees, and litigation
expenses.
Pantranco and Buncan: The RTC has no jurisdiction over the complaint.
1) Martina Gicale was claiming P13,415, while Standard was claiming P8,000. Their
individual claims are below P20,000. Thus, the case falls under the exclusive jurisdiction
of the MTC.
2) There was a misjoinder of parties.
CA: The appellate court affirmed the decision of the RTC.
1) Under the Totality Rule provided for under Sec. 19 of BP 129, it is the sum of the two claims
that determines the jurisdictional amount. At the time this case was heard, cases involving money
claims that amounts to more than P20,000 falls under the exclusive jurisdiction of the RTC.
2) Even assuming that there was a misjoinder of parties, it does not affect the jurisdiction of the
court nor is it a ground to dismiss the complaint. The claims of Gicale and Standard arose from
the same vehicular accident involving Pantranco's bus and Gicale's jeepney. Thus, there was a
question of fact common to all parties.
Pantranco and Buncan's motion for reconsideration was denied by the CA.
Gicale and Standard: There was no misjoinder of parties. Their individual claims arose from the
same vehicular accident and involve a common question of fact and law. Thus, the RTC has
jurisdiction over the case.
ISSUE: WON there was a misjoinder of parties in the case.
HELD: No. Sec. 6, Rule 3 of the Revised Rules of Court provides the following requirements for
a permissive joinder of parties: (a) the right to relief arises out of the same transaction or series of
transactions; (b) there is a question of law or fact common to all the plaintiffs or defendants; and
(c) such joinder is not otherwise proscribed by the provisions of the Rules on jurisdiction and
venue.
In this case, there is a single transaction common to all, that is, Pantranco’s bus hitting the rear
side of the jeepney. There is also a common question of fact, that is, whether petitioners are
negligent. There being a single transaction common to both respondents, consequently, they have
the same cause of action against petitioners.
To determine identity of cause of action, it must be ascertained whether the same evidence which
is necessary to sustain the second cause of action would have been sufficient to authorize a
recovery in the first. Here, had respondents filed separate suits against petitioners, the same
evidence would have been presented to sustain the same cause of action. Thus, the filing by both
respondents of the complaint with the court below is in order. Such joinder of parties avoids
multiplicity of suit and ensures the convenient, speedy and orderly administration of justice
There is NO MISJOINDER OF PARTIES if the money sought to be claimed is in favor of the

same plaintiff/s and against the same defendant/s.
On the issue of lumping together the claims of Gicale and Standard, Section 5(d), Rule 2 of the
same Rules provides:
“Sec. 5. Joinder of causes of action. – A party may in one pleading assert, in the alternative or
otherwise, as many causes of action as he may have against an opposing party, subject to the
following conditions:
amount claimed shall be the test of jurisdiction.”
Further, the Court reiterates the Totality rule exemplified by Sec. 33 (1) of BP 129: “where there
are several claims or causes of action between the same or different parties, embodied in the same
complaint, the amount of the demand shall be the totality of the claims in all the causes of action,
irrespective of whether the causes of action arose out of the same or different transactions.”
Title: Flores v. Mallare Philipps, 144 SCRA
Facts:
Abalos spouses sued to recover possession of a lot in Quezon City registered in their name. The
squatters, against whom the action was filed, lost the case in the QC RTC so they appealed to the
CA on the ground that the RTC erred in not dismissing the case for failure to comply w/ the
Katarungang Barangay conciliation procedure. CA granted.
Held: RTC had jurisdiction. When the Abalos spouses filed their complaint, they placed QC as
their address. But they were able to change it to Caloocan upon leave of ct. w/o the respondents
objecting. The requirement of conciliation cannot be enforced since the property is in QC, where
the respondents reside, while the Abalos spouses live in Caloocan (PD 1508 Sec. 20). Respondents
effectively waived their right when they failed to object to the correction of the Abalos’ residence
fr. QC to Caloocan participated in the trial on the merits. The fact that they argued their case &
adduced their evidence amounts to a waiver of this defense. Once a party submits to the jurisdiction
of the ct. & participates in the trial on the merits, he cannot thereafter, after an unfavorable
judgment, take a total turnabout & say that compliance w/ PD 1508 was not made.
Title: RODRIGO ENRIQUEZ, ET AL. VS. SOCORRO RAMOS, ET. AL.
FACTS:
Rodrigo Enriquez and the spouses Urbano Dizon and Aurea Dizon sold to Socorro Ramos 11
parcels of land located in Quezon City which are covered by their corresponding certificates of
title. The lands were sold to Ramos for the price of P101, 000 through a notarial deed. Ramos paid
P5,000 down, P2,500 cash, and P2,500 by check drawn against the PNB. Ramos agreed to pay the
remaining P96,000 balance within 90 days. For security, Ramos mortgaged the eleven parcels of
land in favor of the vendors in the same deed of sale. Additionally, Ramos, as attorney-in-fact of
her children and as judicial guardian of her minor child, executed another morgage on a lot situated
in Malinta.
Ramos failed to comply with some conditions of the mortgage so Enriquez and the spouses
Dizon filed an action for foreclosure of the mortgage. In response, Ramos moved to dismiss the
case on the ground that Enriquez and the spouses Dizon had previously filed an action against her
in the CFI of Manila for the recovery of P2,500 paid by check as part of the down payment accrued
and demandable. Enriquez and the spouses Dizon, then, are guilty of splitting a single cause of
action under sec. 4 of Rule 2 of the Rules of Court. The filing of the first action for P2,500 was a
defense that could be pleaded in abatement of the second suit.
Enriquez and the spouses Dizon opposed Ramos' motion to dismiss, which was granted by
the CFI of Quezon City. But, Ramos repleaded her aforementioned averments as a special defense
in her answer.
CFI: Its decision was against Ramos and she was ordered to pay P96,000 with 12% interest from
Feb. 24, 1959 ntil payment, 10% of the amount due as attorney's fees, and the costs of the suit; and
further decreed the foreclosure sale of the mortgaged properties in case of non-payment within
ninety (90) days.
RAMOS: She insists that the action should be dismissed on account of the alleged splitting of
appellee's cause of action, and that the obligation not having fixed a period, although one was
intended, the court below should have set first a date of maturity before ordering payment or
foreclosure.
ENRIQUEZ, ET.AL. : They did not split a single cause of action. They are correct in filing two
cases against Ramos. The first case they filed was for collection of the unsecured portion of the
consideration of the sale or collection of the check drawn by Ramos, while the second was to
foreclose the mortgage used as security on the balance.
ISSUE: WON the case filed by Enriquez, et. al. should be dismissed on the ground of splitting
their cause of action.
HELD: No, the Court finds no merit on this appeal.
An examination of the first complaint filed against appellant in the Court of First Instance of
Manila shows that it was based on appellants' having unlawfully stopped payment of the check for
P2,500.00 she had issued in favor of appellees; while the complaint in the present action was for
non-payment of the balance of P96,000.00 guaranteed by the mortgage. The claim for P2,500.00
was, therefore, a distinct debt not covered by the security; and since the mortgage was constituted
on lands situated in Quezon City, the appellees could not ask for its foreclosure in the Manila
courts. The two causes of action being different, section 4 of Rule 2 does not apply
Title: UNION GLASS & CONTAINER CORPORATION vs SEC
Facts;
This petition seeks to annul the Order of the Securities and Exchange Commission, upholding its
jurisdiction in SEC Case No. 2035, entitled "Carolina Hofileña, versus Development Bank of the
Philippines"
Hofileña, is a stockholder of Pioneer Glass w/c is engaged in the manufacture of glassware. Pioneer
Glass had obtained various loans from DBP. As security, Pioneer Glass mortgaged its assets to the
DBP. The proceeds were used in the construction of a glass plant in Rosario, Cavite, and the
operation of seven silica mining claims.
Through the conversion into equity of the accumulated unpaid interests amounting to P5.4 million
as of 1975, and subsequently increased by another P2.2 million in 1976, DBP was able to get three,
regular seats in the board of directors.
In March, 1978, suffering from liquidity problems, Pioneer Glass entered into a dacion en pago
agreement with DBP, in full satisfaction of the obligations in the amount of P59,000,000.00. Part
of the assets transferred was the glass plant in Cavite, which DBP sold to Union Glass.
On 1981, Hofileña filed a complaint before Securities and Exchange Commission against the DBP,
Union Glass and Pioneer Glass. Of the five causes of action, only the first cause of action
concerned Union Glass. Said first cause of action was based on the alleged illegality of the
aforesaid dacion en pago resulting from: [1] the supposed unilateral and unsupported
undervaluation of the assets of Pioneer Glass covered by the agreement; [2] the self-dealing
indulged in by
DBP, having acted both as stockholder/director and secured creditor of Pioneer Glass; and [3] the
wrongful inclusion by
DBP in its statement of account of P26M as due from Pioneer Glass when the same had already
been converted into equity.
SEC Hearing Officer Reyes granted the motion to dismiss for lack of jurisdiction. However, upon
motion for reconsideration, Hearing Officer Reyes reversed his original order by upholding the
SEC's jurisdiction.
…the present action is in the form of a derivative suit instituted by a stockholder for the
benefit of the corporation, …Pioneer Glass
…principally against another stockholder, Development Bank of the Philippines, for
alleged illegal acts and gross bad faith which resulted in the dacion en pagoarrangement.
Union Glass and Container Corporation, its inclusion as a party-respondent by virtue of its being
an indispensable party to the present action, it being in possession of the assets subject of the
dacion en pago and, therefore, situated in such a way that it will be affected by any judgment
thereon
Issue; WON SEC has jurisdiction
Held: None, reversed. Union Glass dropped from case w/o prejudice to a separate suit before a
regular court
In the ordinary course of things, Union Glass, should be joined as party-defendant under the
general rule which requires the joinder of every party who has an interest in or lien on the property
subject matter of the dispute. Such joinder of parties avoids multiplicity of suits.
But since petitioner Union Glass has no intra-corporate relation with either the complainant or the
DBP, its joinder as party-defendant brings the cause of action asserted against it outside the
jurisdiction of the respondent SEC.
The jurisdiction of the SEC is delineated by Section 5 of PD No. 902-A as follows:

Sec. 5. In addition to the regulatory and adjudicative function of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with it as
expressly granted under existing laws and devices, it shall have original and exclusive jurisdiction
to hear and decide cases involving:
a] Devices and schemes employed by or any acts, of the board of directors, business
associates, its officers or partners, amounting to fraud and misrepresentation which may be
detrimental to the interest of the public and/or the stockholders, partners, members of
associations or organizations registered with the Commission
b] Controversies arising out of intra-corporate or partnership relations, between and among
stockholders, members or associates; between any or all of them and the corporation,
partnership, or association of which they are stockholders, members or associates,
respectively; and between such corporation, partnership or association and the state insofar
as it concerns their individual franchise or right to exist as such entity;
c] Controversies in the election or appointments of directors, trustees, officers or managers
of such corporations, partnerships or associations.
Section 3 of PD No. 902-A confers upon the latter "absolute jurisdiction, supervision, and control
over all corporations, partnerships or associations, who are grantees of primary franchise and/or
license or permit issued by the government to operate in the Philippines ... "
The principal function of the SEC is the supervision and control over corporations, partnerships
and associations with the end in view that investment in these entities may be encouraged and
protected, and their activities pursued for the promotion of economic development. 5
Thus the law explicitly specified and delimited its jurisdiction to matters intrinsically connected
with the regulation of corporations, partnerships and associations and those dealing with the
internal affairs of such corporations, partnerships or associations.
Otherwise stated, in order that the SEC can take cognizance of a case, the controversy must pertain
to any of the following relationships:
[a] between the corporation, partnership or association and the public;
[b] between the corporation, partnership or association and its stockholders, partners,
members, or officers;
[c] between the corporation, partnership or association and the state in so far as its
franchise, permit or license to operate is concerned; and
[d] among the stockholders, partners or associates themselves.
The case should be tried and decided by the court of general jurisdiction, the Regional Trial Court.
This view is in accord with the rudimentary principle that administrative agencies, like the SEC,
are tribunals of limited jurisdiction and, as such, could wield only such powers as are specifically
granted to them by their enabling statutes.
While the Rules of Court, which applies suppletorily to proceedings before the SEC, allows the
joinder of causes of action in one complaint, such procedure however is subject to the rules
regarding jurisdiction, venue and joinder of parties.
But such action, if instituted, shall be suspended to await the final outcome of SEC Case No. 2035,
for the issue of the validity of the dacion en pago posed in the last mentioned case is a prejudicial
question.
AMON A. TARNATE VS LUCILO U. GARCIA and The Hon. VICTORIANO H. ENDAYA
Facts
On 17 August 1964 herein respondent Lucilo U. Garcia filed a complaint for forcible entry against
herein petitioner Ramon A. Tarnate in the Municipal Court of Batangas, Batangas, which
complaint was docketed as Civil Case No. 1083. On 10 September 1964 respondent Garcia filed
another complaint for forcible entry against the same defendant in the same court, which was
docketed as Civil Case No. 1091.
On 28 October 1964 Tarnate moved to dismiss the second case (No. 1091) on the ground of
pendency of another action between the same parties for the same cause. Garcia opposed the
motion.
On 23 December 1964 the municipal court denied the motion to dismiss because it did not find the
ground for dismissal to be indubitable.
Having failed to secure a reconsideration, petitioner Tarnate filed a petition for prohibition and
mandamus against the municipal court of Batangas and Lucilo U. Garcia in the Court of First
Instance of Batangas (Special Civil Case No. 1033), praying that the order of denial by the
municipal court be annulled and that the said court be commanded not to give due course to, but
to order the dismissal of Civil Case No. 1091.
Issue:
whether or not the municipal court abused its discretion in denying the motion to dismiss the
second complaint because the ground therefor, namely, pendency of another action between the
same parties for the same cause, was not indubitable
Held:
The court of first instance held that there was no abuse of discretion and that if the municipal court
committed an error it was an error of judgment, which was not correctible by certiorari or
prohibition.
In the court of first instance the parties stipulated in the course of the trial that Civil Case No. 1083
referred to "that portion of the old bed of the Calumpang River east of Lot 58" and that Civil Case
No. 1091 referred to the bed of the "old course of the Calumpang River east of Lot 57, 59 and 60."
While from the strictly technical viewpoint there was a splitting of the cause of action in pursuing
the same remedy in two separate complaints notwithstanding the fact that the alleged forcible entry
constituted one and the same act, still a realistic and practical approach dictated the action taken
by the municipal court. It should be remembered that the first complaint was commenced on 17
August 1964 and had not yet been tried when the second was filed about three weeks later. The
two cases could be tried together as one, or the second complaint could be treated as an amendment
of the first. Either way the entire controversy between the parties could be judicially settled,
disregarding unessential procedural niceties, especially in the light of the reasonable explanation
offered by the plaintiff below.
Genesis Investment v. Heirs of Ebarasabal,
TOPIC: Joinder of Causes of Action
FACTS:
Respondents are heirs and successors-in-interest of deceased Roman Ebarsabal who died on 07
September 1952 leaving a parcel of land located in Basdaku, Saavedra, Moalboal, Cebu with a
total assessed value of P11,990.00.
However, one child, Gil Ebarasabal and his children had executed among themselves a Deed of
Extrajudicial Settlement with Sale of Roman Ebarsabal's entire property described above, by virtue
of which they allegedly extrajudicially settled the same and, for P2,600,000.00 – although only the
sum of P950,000.00 was reflected in their Deed of Sale for reason only known to them, they sold
the whole property to defendants Genesis Investment Inc. represented by co-defendant Rhodora
B. Lim, the wife of Lambert Lim, without the knowledge of the other heirs. Genesis had the titles
registered to Cebu Jaya Realty.
RTC:
On November 12, 2003, herein respondents filed against herein petitioners a Complaint for
Declaration of Nullity of Documents, Recovery of Shares, Partition, Damages and Attorney's Fees.
The Complaint was filed with the Regional Trial Court (RTC) of Barili, Cebu.
On August 5, 2004, herein petitioners filed a Motion to Dismiss contending, among others, that
the RTC has no jurisdiction to try the case on the ground that, as the case involves title to or
possession of real property or any interest therein and since the assessed value of the subject
property does not exceed P20,000.00 (the same being only P11,990.00), the action falls within the
jurisdiction of the Municipal Trial Court (MTC). Later, the RTC granted petitioners' Motion to
Dismiss.
Respondents filed a Motion for Partial Reconsideration, arguing that their complaint consists of
several causes of action, including one for annulment of documents, which is incapable of
pecuniary estimation and, as such, falls within the jurisdiction of the RTC.
On March 17, 2005, the RTC issued an Order granting respondents' Motion for Partial
Reconsideration and reversing its earlier Order dated September 29, 2004.
Petitioners filed a Motion for Reconsideration, but the RTC denied it in its Order dated June 23,
2005.
Aggrieved, petitioners filed a petition for certiorari with the CA.
CA:
However, the CA dismissed the petition via its assailed Decision dated July 11, 2007, holding that
the subject matter of respondents' complaint is incapable of pecuniary estimation and, therefore,
within the jurisdiction of the RTC, considering that the main purpose in filing the action is to
declare null and void the documents assailed therein.
Petitioners' Motion for Reconsideration was, subsequently, denied in the CA Resolution dated
January 10, 2008.
Hence, the instant petition for review on certiorari raising the sole issue, to wit:
ISSUE:
Whether or not the Honorable Court of Appeals gravely erred in concluding that the Regional Trial
Court, Branch 60 of Barili, Cebu has jurisdiction over the instant case when the ALLEGATIONS
IN THE COMPLAINT clearly shows that the main cause of action of the respondents is for the
Recovery of their Title, Interest, and Share over a Parcel of Land, which has an assessed value of
P11,990.00 and thus, within the jurisdiction of the Municipal Trial Court
HELD:
NO. It is true that one of the causes of action of respondents pertains to the title, possession and
interest of each of the contending parties over the contested property, the assessed value of which
falls within the jurisdiction of the MTC. However, a complete reading of the complaint would
readily show that, based on the nature of the suit, the allegations therein, and the reliefs prayed for,
the action is within the jurisdiction of the RTC.
As stated above, it is clear from the records that respondents' complaint was for "Declaration of
Nullity of Documents, Recovery of Shares, Partition, Damages and Attorney's Fees." In filing their
Complaint with the RTC, respondents sought to recover ownership and possession of their shares
in the disputed parcel of land by questioning the due execution and validity of the Deed of
Extrajudicial Settlement with Sale as well as the Memorandum of Agreement entered into by and
between some of their co-heirs and herein petitioners.
Aside from praying that the RTC render judgment declaring as null and void the said Deed of
Extrajudicial Settlement with Sale and Memorandum of Agreement, respondents likewise sought
the following: (1) nullification of the Tax Declarations subsequently issued in the name of
petitioner Cebu Jaya Realty, Inc.; (2) partition of the property in litigation; (3) reconveyance of
their respective shares; and (3) payment of moral and exemplary damages, as well as attorney's
fees, plus appearance fees.
Clearly, this is a case of joinder of causes of action which comprehends more than the issue of
partition of or recovery of shares or interest over the real property in question but includes an
action for declaration of nullity of contracts and documents which is incapable of pecuniary
estimation.
As cited by the CA, this Court, in the case of Singson v. Isabela Sawmill, held that:
In determining whether an action is one the subject matter of which is not capable of pecuniary
estimation, this Court has adopted the criterion of first ascertaining the nature of the principal
action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and whether jurisdiction is in the municipal
courts or in the courts of first instance would depend on the amount of the claim. However,
where the basic issue is something other than the right to recover a sum of money, where the
money claim is purely incidental to, or a consequence of, the principal relief sought, this Court
has considered such actions as cases where the subject of the litigation may not be estimated in
terms of money, and are cognizable by courts of first instance [now Regional Trial Courts].
This rule was reiterated in Russell v. Vestil and Social Security System v. Atlantic Gulf and Pacific
Company of Manila Inc.
Contrary to petitioners contention, the principal relief sought by petitioners is the nullification
of the subject Extrajudicial Settlement with Sale entered into by and between some of their
co-heirs and respondents, insofar as their individual shares in the subject property are
concerned.
Thus, the recovery of their undivided shares or interest over the disputed lot, which were included
in the sale, simply becomes a necessary consequence if the above deed is nullified.
Hence, since the principal action sought in respondents Complaint is something other than the
recovery of a sum of money, the action is incapable of pecuniary estimation and, thus, cognizable
by the RTC. Well entrenched is the rule that jurisdiction over the subject matter of a case is
conferred by law and is determined by the allegations in the complaint and the character of the
relief sought, irrespective of whether the party is entitled to all or some of the claims asserted.
Moreover, it is provided under Section 5 (c), Rule 2 of the Rules of Court that where the causes of
action are between the same parties but pertain to different venues or jurisdictions, the joinder may
be allowed in the RTC provided one of the causes of action falls within the jurisdiction of said
court and the venue lies therein. Thus, as shown above, respondents complaint clearly falls within
the jurisdiction of the RTC.
Uniwide Holdings v. Cruz,
TOPIC: Section 4, Rule 4; Joinder of causes of action
FACTS:
Petitioner, Uniwide Holdings, Inc. (UHI), whose principal office is located in Parañaque City,
entered into a Franchise Agreement (the agreement) granting respondent, Alexander M. Cruz
(Cruz), a five-year franchise to adopt and use the “Uniwide Family Store System” for the
establishment and operation of a “Uniwide Family Store” along Marcos Highway, Sta. Cruz,
Cogeo, Marikina City.
It appears that Cruz had purchased goods from UHI’s affiliated companies First Paragon
Corporation (FPC) and Uniwide Sales Warehouse Club, Inc. (USWCI).
In August 2002, FPC and USWCI executed Deeds of Assignment in favor of UHI assigning all
their rights and interests over Cruz’s accounts payable to them.
As of August 13, 2002, Cruz had outstanding obligations with UHI, FPC, and USWCI in the total
amount of P1,358,531.89, drawing UHI to send him a letter of even date for the settlement thereof
in five days. His receipt of the letter notwithstanding, Cruz’s accounts remained unsettled.
Thus UHI filed a complaint for collection of sum of money before the Regional Trial Court (RTC)
of Parañaque docketed as Civil Case No. 04-0278 against Cruz on the following causes of action:
first, damages for non-payment of the monthly service fee for the Uniwide franchise; second,
damages as assignee of FPC; third, damages as assignee of USCWI’s rights and fourth, litigation
expenses and attorney’s fees.
To the complaint Cruz filed a motion to dismiss on the ground of improper venue, he invoking
Article 27.5 of the agreement which reads:
27.5 Venue Stipulation – The Franchisee consents to the exclusive jurisdiction of the courts
of Quezon City, the Franchisee waiving any other venue. (Emphasis supplied)
RTC:
Branch 258 of the Parañaque RTC, by Order of December 12, 2005, granted Cruz’s motion to
dismiss.
Hence, the present petition before this Court.
ISSUE:
WHETHER A CASE BASED ON SEVERAL CAUSES OF ACTION IS DISMISSIBLE ON THE
GROUND OF IMPROPER VENUE WHERE ONLY ONE OF THE CAUSES OF ACTION
ARISES FROM A CONTRACT WITH EXCLUSIVE VENUE STIPULATION.
HELD:
The petition is impressed with merit.
The general rule on venue of personal actions, as in petitioner’s complaint for collection of sum of
money, is embodied in Section 2, Rule 4 of the Rules of Court which provides:
Sec. 2. Venue of personal actions. – All other actions may be commenced and tried where
the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a nonresident defendant, where he may be
found, at the election of the plaintiff.
The afore-quoted provision is, however, qualified by Section 4 of the same rule which allows
parties, before the filing of the action, to validly agree in writing on an exclusive venue.
The forging of a written agreement on an exclusive venue of an action does not, however, preclude
parties from bringing a case to other venues.
Where there is a joinder of causes of action between the same parties one of which does not arise
out of the contract where the exclusive venue was stipulated upon, the complaint, as in the one at
bar, may be brought before other venues provided that such other cause of action falls within the
jurisdiction of the court and the venue lies therein.
Based on the allegations in petitioner’s complaint, the second and third causes of action are based
on the deeds of assignment executed in its favor by FPC and USWCI. The deeds bear no exclusive
venue stipulation with respect to the causes of action thereunder. Hence, the general rule on venue
applies – that the complaint may be filed in the place where the plaintiff or defendant resides.
It bears emphasis that the causes of action on the assigned accounts are not based on a breach of
the agreement between UHI and Cruz. They are based on separate, distinct and independent
contracts deeds of assignment in which UHI is the assignee of Cruz’s obligations to the assignors
FPC and USWCI.
Thus, any action arising from the deeds of assignment cannot be subjected to the exclusive venue
stipulation embodied in the agreement. So San Miguel Corporation v. Monasterio enlightens:
Exclusive venue stipulation embodied in a contract restricts or confines parties thereto
when the suit relates to breach of said contract. But where the exclusivity clause does not
make it necessarily encompassing, such that even those not related to the enforcement of
the contract should be subject to the exclusive venue, the stipulation designating exclusive
venues should be strictly confined to the specific undertaking or agreement. Otherwise, the
basic principles of freedom to contract might work to the great disadvantage of a weak
party-suitor who ought to be allowed free access to courts of justice.
In fine, since the other causes of action in petitioner’s complaint do not relate to a breach of the
agreement it forged with Cruz embodying the exclusive venue stipulation, they should not be
subjected thereto. As San Miguel, further enlightens:
Restrictive stipulations are in derogation of the general policy of making it more convenient for
the parties to institute actions arising from or in relation to their agreements. Thus, the restriction
should be strictly construed as relating solely to the agreement for which the exclusive venue
stipulation is embodied. Expanding the scope of such limitation on a contracting party will create
unwarranted restrictions which the parties might find unintended or worse, arbitrary and
oppressive.
Unicapital v. Consing
TOPIC: Cause of Action; Joinder of Causes of Action
FACTS:
The case are consolidated petitions.
the demands made against him by petitioners Unicapital and PBI to return to them the purchase
price they had paid for the subject property constituted harassment and oppression which severely
affected his personal and professional life. Consing claims for damages to the tune of around
P2,000,000.00 per month.
RTC:
dismiss holding that Consing, Jr.’s complaint sufficiently stated a cause of action for tort and
damages pursuant to Article 19 of the Civil Code. It equally refused to dismiss the action on the
ground of non-payment of docket fees, despite Consing, Jr.’s escalated claims for damages therein,
as jurisdiction was already vested in it upon the filing of the original complaint.
CA:
Aggrieved, petitioners elevated the denial of their motions to dismiss before the CA via a petition
for certiorari and prohibition which the CA dismissed. It ruled that while the payment of the
prescribed docket fee is a jurisdictional requirement, its non-payment will not automatically cause
the dismissal of the case. In this regard, it considered that should there be any deficiency in the
payment of such fees, the same shall constitute a lien on the judgment award. The CA also held
that the complaint alleges a cause of action and was principally one for damages over which the
RTC has jurisdiction, and, in turn, there lies no misjoinder of causes of action. Hence, the present
petitions for review on certiorari in G.R. Nos.175277 and 175285.
RTC:
Meanwhile, on August 4, 1999, Unicapital filed a complaint for sum of money with damages
against Consing, Jr. and Dela Cruz before the RTC-Makati City seeking to recover (a) the amount
of P42,195,397.16, representing the value of their indebtedness based on the Promissory Notes
(subject promissory notes) plus interests; (b) P5,000,000.00 as exemplary damages; (c) attorney's
fees; and (d) costs of suit which Consing loaned from Unicapital. PBI also filed a complaint for
damages and attachment against Consing, Jr. and Dela Cruz before the RTC of Manila PBI prayed
that it be allowed to recover the following: (a) P13,369,641.79, representing the total amount of
installment payments made as actual damages plus interests; (b) P200,000.00 as exemplary
damages; (c) P200,000.00 as moral damages; (d) attorney's fees; and (e) costs of suit. For his part,
Consing, Jr. filed a Motion to Dismiss and motion to consolidate which were, however, denied by
the RTC-Makati City.
CA:
and September 4, 2007 of the RTC-Makati City which denied Consing, Jr.’s motion for
consolidation. It held that consolidation is a matter of sound discretion on the part of the trial court
which could be gleaned from the use of the word "may" in Section 1, Rule38 of the Rules of Court.
Hence, the instant petition.
ISSUE:
The essential issues in these cases are as follows: (a) in G.R. Nos.175277 and 175285, whether or
not the CA erred in upholding the RTC-Pasig City’s denial of Unicapital, et al.’s motion to dismiss;
and (b) in G.R. No. 192073, whether or not the CA erred in upholding the RTC-Makati City’s
denial of Consing, Jr.’s motion for consolidation.
HELD:
Consing properly alleged a cause of action for damages under Articles 19 and 26 of the Civil
Code.
A cause of action is defined as the act or omission by which a party violates a right of another. It
is well-settled that the existence of a cause of action is determined by the allegations in the
complaint.
In this relation, a complaint is said to sufficiently assert a cause of action if, admitting what appears
solely on its face to be correct, the plaintiff would be entitled to the relief prayed for. Thus, if the
allegations furnish adequate basis by which the complaint can be maintained, then the same should
not be dismissed, regardless of the defenses that may be averred by the defendants.
As edified in the case of Pioneer Concrete Philippines, Inc. v. Todaro, citing Hongkong and
Shanghai Banking Corporation, Limited. v. Catalan (HSBC):
The elementary test for failure to state a cause of action is whether the complaint alleges facts
which if true would justify the relief demanded. Stated otherwise, may the court render a valid
judgment upon the facts alleged therein? The inquiry is into the sufficiency, not the veracity of the
material allegations.
If the allegations in the complaint furnish sufficient basis on which it can be maintained, it should
not be dismissed regardless of the defense that may be presented by the defendants. (Emphasis
supplied)
Stated otherwise, the resolution on this matter should stem from an analysis on whether or not the
complaint is able to convey a cause of action; and not that the complainant has no cause of action.
Lest it be misunderstood, failure to state a cause of action is properly a ground for a motion to
dismiss under Section 1(g), Rule 1668 of the Rules of Court(Rules), while the latter is not a ground
for dismissal under the same rule.
In this case, the Court finds that Consing, Jr.’s complaint in SCA No.1759 properly states a cause
of action since the allegations there sufficiently bear out a case for damages under Articles 19 and
26 of the Civil Code.
Records disclose that Consing, Jr.’s complaint contains allegations which aim to demonstrate the
abusive manner in which Unicapital and PBI, et al. enforced their demands against him. Among
others, the complaint states that Consing, Jr. "has constantly been harassed and bothered by
Unicapital and PBI, et al.; x x x besieged by phone calls from them; x x x has had constant meetings
with them variously, and on a continuing basis, such that he is unable to attend to his work as an
investment banker."69 In the same pleading, he also alleged that Unicapital and PBI, et al.’s act of
"demanding a postdated check knowing fully well that he does not have the necessary funds to
cover the same, nor is he expecting to have them is equivalent to asking him to commit a crime
under unlawful coercive force." Accordingly, these specific allegations, if hypothetically admitted,
may result into the recovery of damages pursuant to Article 19 of the Civil Code which states that
"every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith." As explained in the HSBC
case:
When a right is exercised in a manner which does not conform with the norms enshrined in Article
19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer
must beheld responsible. But a right, though by itself legal because it is recognized or granted by
law as such, may nevertheless become the source of some illegality. A person should be protected
only when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in
good faith; but not when he acts with negligence or abuse. There is an abuse of right when it is
exercised for the only purpose of prejudicing or injuring another. The exercise of a right must be
in accordance with the purpose for which it was established, and must not be excessive or unduly
harsh; there must be no intention to injure another. (Emphasis supplied)
Likewise, Consing, Jr.’s complaint states a cause of action for damages under Article 26 of the
Civil Code which provides that:
Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his
neighbors and other persons. The following and similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for damages, prevention and other relief:
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life, place of
birth, physical defect, or other personal condition.
The rationale therefor was explained in the case of Manaloto v. Veloso III, citing Concepcion v.
CA, to wit:
The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The
Code Commission stressed in no uncertain terms that the human personality must be exalted. The
sacredness of human personality is a concomitant consideration of every plan for human
amelioration. The touchstone of every system of law, of the culture and civilization of every
country, is how far it dignifies man. If the statutes insufficiently protect a person from being
unjustly humiliated, in short, if human
personality is not exalted - then the laws are indeed defective. Thus, under this article, the rights
of persons are amply protected, and damages are provided for violations of a person's dignity,
personality, privacy and peace of mind.
To add, a violation of Article 26 of the Civil Code may also lead to the payment of moral damages
under Article 2219(10)75 of the Civil Code.
No misjoinder of cause of action
Further, so as to obviate any confusion on the matter, the Court equally finds that the causes of
action in SCA No. 1759 were not – as Unicapital, et al. claim – misjoined even if Consing, Jr.
averred that Unicapital and PBI, et al. violated certain provisions of the Corporation Law and the
Revised Securities Act.
The rule is that a party’s failure to observe the following conditions under Section 5, Rule 2 of the
Rules results in a misjoinder of causes of action:
SEC. 5. Joinder of causes of action. - A party may in one pleading assert, in the alternative or
otherwise, as many causes of action as he may have against an opposing party, subject to the
following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) The joinder shall not include special civil actions governed by special rules;
(c) Where the causes of action are between the same parties but pertain to different venues or
jurisdictions, the joinder may be allowed in the Regional Trial Court provided one of the causes
of action falls within the jurisdiction of said court and the venue lies therein; and
amount claimed shall be the test of jurisdiction. (Emphasis supplied)
A careful perusal of his complaint discloses that Consing, Jr. did not seek to hold Unicapital and
PBI, et al. liable for any specific violation of the Corporation Code or the Revised Securities Act.
Rather, he merely sought damages for Unicapital and PBI, et al.’s alleged acts of making him sign
numerous documents and their use of the same against him. In this respect, Consing, Jr. actually
advances an injunction and damages case82 which properly falls under the jurisdiction of the RTC-
Pasig City.83 Therefore, there was no violation of Section 5, Rule 2 of the Rules, particularly,
paragraph (c) thereof. Besides, even on the assumption that there was a misjoinder of causes of
action, still, such defect should not result in the dismissal of Consing, Jr.’s complaint. Section 6,
Rule 2 of the Rules explicitly states that a "misjoinder of causes of action is not a ground for
dismissal of an action" and that "a misjoined cause of action may, on motion of a party or on the
initiative of the court, be severed and proceeded with separately."
Iniego v. Hon. Purganan, G.R. No. 166876, March 24, 2006
TOPIC: Quasi-Delict; Damages; Joinder of Causes of Action
FACTS:
On 1 March 2002, private respondent Fokker Santos filed a complaint for quasi-delict and damages
at the RTC, Branch 42, Manila against Jimmy T. Pinion, the driver of a truck involved in a traffic
accident, and against petitioner Artemio Iniego, as owner of the said truck and employer of Pinion.
The complaint stemmed from a vehicular accident that happened on 11 December 1999, when a
freight truck allegedly being driven by Pinion hit private respondent’s jitney which private
respondent was driving at the time of the accident.
RTC:
Iniego challenged the jurisdiction of the RTC in a motion to dismiss which was denied by
respondent Judge Purganan because the court has exclusive jurisdiction when the claim for
damages exceeds P400,000.00 and the cause of action is based on a quasi-delict which is incapable
of pecuniary estimation. The complaint prays for actual damages in the amount of P40,000.00,
moral damages in the amount of P300,000.00, and exemplary damages in the amount of
P150,000.00. Excluding attorney’s fees in the amount of P50,000.00, the total amount of damages
being claimed is P490,000.00.
On 7 November 2002, petitioner filed a Motion for Reconsideration of the Omnibus Order of 21
October2002. On 21 January 2003, public respondent issued an Order denying petitioner’s motion
for reconsideration reiterating that what the RTC referred to in its assailed Order as not capable of
pecuniary estimation is the cause of action, which is a quasi-delict, and not the amount of damage
prayed for.
CA:
Petitioner elevated the 21 October 2002 and 21 January 2003 Orders of the RTC to the Court of
Appeals on petition for certiorari under Rule 65 of the Rules of Court. On 28 October 2004, the
Court of Appeals promulgated the assailed Decision denying petitioner’s certiorari.
Iniego argues that actions for damages based on quasi-delict are actions that are capable of
pecuniary estimation and that the moral and exemplary damages claimed by private respondent
must be excluded from the computation of the total amount of damages for jurisdictional purposes
because the said moral and exemplary damages arose, not from the quasi-delict, but from the
petitioner’s refusal to pay the actual damages. If the moral and exemplary damages are not
excluded, then it would be the MTC who would have jurisdiction over the case since actual
damages claimed is only 40,000.
ISSUE:
WON actions arising from quasi delict are capable of pecuniary estimation and WON actual and
exemplary damages should be excluded from the computation.
HELD:
Actions for damages based on quasi-delicts are primarily and effectively actions for the recovery
of a sum of money for the damages suffered because of the defendant’s alleged tortious acts, and
are therefore capable of pecuniary estimation.
In a recent case, we did affirm the jurisdiction of a Municipal Circuit Trial Court in actions for
damages based on quasi-delict, although the ground used to challenge said jurisdiction was an
alleged forum shopping, and not the applicability of Section 19(1) of Batas Pambansa Blg. 129.
Respondent Judge’s observation is erroneous. It is crystal clear from B.P. Blg. 129, as amended
by Republic Act No. 7691, that what must be determined to be capable or incapable of pecuniary
estimation is not the cause of action, but the subject matter of the action. A cause of action is “the
delict or wrongful act or omission committed by the defendant in violation of the primary rights
of the plaintiff.” On the other hand, the “subject matter of the action” is “the physical facts, the
thing real or personal, the money, lands, chattels, and the like, in relation to which the suit is
prosecuted, and not the delict or wrong committed by the defendant.”
The case of Lapitan v. Scandia, Inc., et al.,has guided this Court time and again in determining
whether the subject matter of the action is capable of pecuniary estimation. In Lapitan, the Court
spoke through the eminent Mr. Justice Jose B.L. Reyes:
In determining whether an action is one the subject matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of first ascertaining the nature of the principal action
or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered
capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts
of first instance [now Regional Trial Courts] would depend on the amount of the claim. However,
where the basic issue is something other than the right to recover a sum of money, where the money
claim is purely incidental to, or a consequence of, the principal relief sought like suits to have the
defendant perform his part of the contract (specific performance) and in actions for support, or for
annulment of a judgment or to foreclose a mortgage, this court has considered such actions as cases
where the subject of the litigation may not be estimated in terms of money, and are cognizable
exclusively by courts of first instance [now Regional Trial Courts]. x x x.
Actions for damages based on quasi-delicts are primarily and effectively actions for the recovery
of a sum of money for the damages suffered because of the defendant’s alleged tortious acts. The
damages claimed in such actions represent the monetary equivalent of the injury caused to the
plaintiff by the defendant, which are thus sought to be recovered by the plaintiff. This money claim
is the principal relief sought, and is not merely incidental thereto or a consequence thereof. It bears
to point out that the complaint filed by private respondent before the RTC actually bears the caption
“for DAMAGES.”
Fault or negligence, which the Court of Appeals claims is not capable of pecuniary estimation, is
not actionable by itself. For such fault or negligence to be actionable, there must be a resulting
damage to a third person. The relief available to the offended party in such cases is for the
reparation, restitution, or payment of such damage, without which any alleged offended party has
no cause of action or relief. The fault or negligence of the defendant, therefore, is inextricably
intertwined with the claim for damages, and there can be no action based on quasi-delict without
a claim for damages.
We therefore rule that the subject matter of actions for damages based on quasi-delict is capable
of pecuniary estimation.
The amount of damages claimed is within the jurisdiction of the RTC, since it is the claim for all
kinds of damages that is the basis of determining the jurisdiction of courts, whether the claims for
damages arise from the same or from different causes of action.
Despite our concurrence in petitioner’s claim that actions for damages based on quasi-delict are
actions that are capable of pecuniary estimation, we find that the total amount of damages claimed
by the private respondent nevertheless still exceeds the jurisdictional limit of P400,000.00 and
remains under the jurisdiction of the RTC.
Petitioner argues that in actions for damages based on quasi-delict, claims for damages arising
from a different cause of action (i.e., other than the fault or negligence of the defendant) should
not be included in the computation of the jurisdictional amount. According to petitioner, the moral
and exemplary damages claimed by the respondents in the case at bar are not direct and proximate
consequences of the alleged negligent act. Petitioner points out that the complaint itself stated that
such moral and exemplary damages arose from the alleged refusal of defendants to honor the
demand for damages, and therefore there is no reasonable cause and effect between the fault or
negligence of the defendant and the claim for moral and exemplary damages. If the claims for
moral and exemplary damages are not included in the computation for purposes of determining
jurisdiction, only the claim for actual damages in the amount of P40,000.00 will be considered,
and the MeTC will have jurisdiction.
We cannot give credence to petitioner’s arguments. The distinction he made between damages
arising directly from injuries in a quasi-delict and those arising from a refusal to admit liability for
a quasi-delict is more apparent than real, as the damages sought by respondent originate from the
same cause of action: the quasi-delict. The fault or negligence of the employee and the juris tantum
presumption of negligence of his employer in his selection and supervision are the seeds of the
damages claimed, without distinction.
Even assuming, for the sake of argument, that the claims for moral and exemplary damages arose
from a cause of action other than the quasi-delict, their inclusion in the computation of damages
for jurisdictional purposes is still proper. All claims for damages should be considered in
determining the jurisdiction of the court regardless of whether they arose from a single cause of
action or several causes of action. Rule 2, Section 5, of the Rules of Court allows a party to assert
as many causes of action as he may have against the opposing party. Subsection (d) of said section
provides that where the claims in all such joined causes of action are principally for recovery of
money, the aggregate amount claimed shall be the test of jurisdiction.
Hence, whether or not the different claims for damages are based on a single cause of action or
different causes of action, it is the total amount thereof which shall govern. Jurisdiction in the case
at bar remains with the RTC, considering that the total amount claimed, inclusive of the moral and
exemplary damages claimed, is P490,000.00.
In sum, actions for damages based on quasi-delicts are actions that are capable of pecuniary
estimation.
As such, they fall within the jurisdiction of either the RTC or the municipal courts, depending on
the amount of damages claimed. In this case, the amount of damages claimed is within the
jurisdiction of the RTC, since it is the claim for all kinds of damages that is the basis of determining
the jurisdiction of courts, whether the claims for damages arise from the same or from different
causes of action.
Ada v. Baylon, G.R. No. 182435, August 13, 2012 (Supra.)
TOPIC: Misjoinder of Causes of Action
FACTS:
On July 3, 1996, the petitioners filed with the RTC a Complaint4 for partition, accounting and
damages against Florante, Rita and Panfila. The parties are either the heirs or successors-in-interest
of the Baylon siblings who are the heirs of the estate of spouses Florentino Baylon and Maximina
Elnas Baylon.
The petition alleged therein that Spouses Baylon, during their lifetime, owned 43 parcels of land
all situated in Negros Oriental. After the death of Spouses Baylon, they claimed that Rita took
possession of the said parcels of land and appropriated for herself the income from the same. Using
the income produced by the said parcels of land, Rita allegedly purchased two parcels of land, Lot
No. 47096 and half of Lot No. 4706,7 situated in Canda-uay, Dumaguete City. The petitioners
averred that Rita refused to effect a partition of the said parcels of land.
In their Answer, Florante, Rita and Panfila asserted that they and the petitioners co-owned 22 out
of the 43 parcels of land mentioned in the latter’s complaint, whereas Rita actually owned 10
parcels of land out of the 43 parcels which the petitioners sought to partition, while the remaining
11 parcels of land are separately owned by other siblings and relatives.
During the pendency of the case, Rita, through a Deed of Donation dated July 6, 1997, conveyed
Lot No. 4709 and half of Lot No. 4706 to Florante. On July 16, 2000, Rita died intestate and
without any issue.
Thereafter, learning of the said donation inter vivos in favor of Florante, the petitioners filed a
Supplemental Pleading17 dated February 6, 2002, praying that the said donation in favor of the
respondent be rescinded in accordance with Article 1381(4) of the Civil Code. They further alleged
that Rita was already sick and very weak when the said Deed of Donation was supposedly executed
and, thus, could not have validly given her consent thereto.
Florante and Panfila opposed the rescission of the said donation, asserting that Article 1381(4) of
the Civil Code applies only when there is already a prior judicial decree on who between the
contending parties actually owned the properties under litigation.
The RTC Decision

On October 20, 2005, the RTC rendered a Decision ordering partition over the co-owned lots and
that declared that the death of Rita during the pendency of the case without any issue had rendered
the issue of ownership insofar as parcels of land which she claims as her own moot since the parties
below are the heirs to her estate. Thus, the RTC regarded Rita as the owner of the said 10 parcels
of land and, accordingly, directed that the same be partitioned among her heirs. Nevertheless, the
RTC rescinded the donation inter vivos of Lot No. 4709 and half of Lot No. 4706 in favor of
Florante.
Florante sought reconsideration of the Decision dated October 20, 2005 of the RTC insofar as it
rescinded the donation of Lot No. 4709 and half of Lot No. 4706 in his favor. He asserted that, at
the time of Rita’s death on July 16, 2000, Lot No. 4709 and half of Lot No. 4706 were no longer
part of her estate as the same had already been conveyed to him through a donation inter vivos
three years earlier.
On July 28, 2006, the RTC issued an Order23 which denied the motion for reconsideration filed
by Florante.
The CA Decision
On appeal, the CA rendered a Decision dated October 26, 2007 reversing the rescission and
remanding the case to determine ownership of the donated lots holding that the rescission was
premature in the absence of a judicial decree that the contested lots were owned by the Spouses
Baylon. The CA held that an action for rescission should be filed by the parties concerned
independent of the proceedings below.
The petitioners sought reconsideration27 of the Decision dated October 26, 2007 but it was denied
by the CA in its Resolution dated March 6, 2008.
Hence, this petition.
ISSUE:
Whether the CA erred in ruling that the donation inter vivos of Lot No. 4709 and half of Lot No.
4706 in favor of Florante may only be rescinded if there is already a judicial determination that
the same actually belonged to the estate of Spouses Baylon.
HELD:
Procedural Matters Before resolving the lone substantive issue in the instant case, this Court deems
it proper to address certain procedural matters that need to be threshed out which, by laxity or
otherwise, were not raised by the parties herein.
Misjoinder of Causes of Action
The complaint filed by the petitioners with the RTC involves two separate, distinct and
independent actions – partition and rescission. First, the petitioners raised the refusal of their co-
heirs, Florante, Rita and Panfila, to partition the properties which they inherited from Spouses
Baylon. Second, in their supplemental pleading, the petitioners assailed the donation inter vivos of
Lot No. 4709 and half of Lot No. 4706 made by Rita in favor of Florante pendente lite.
The actions of partition and rescission cannot be joined in a single action.
By a joinder of actions, or more properly, a joinder of causes of action is meant the uniting of two
or more demands or rights of action in one action, the statement of more than one cause of action
in a declaration. It is the union of two or more civil causes of action, each of which could be made
the basis of a separate suit, in the same complaint, declaration or petition. A plaintiff may under
certain circumstances join several distinct demands, controversies or rights of action in one
declaration, complaint or petition.
The objectives of the rule or provision are to avoid a multiplicity of suits where the same parties
and subject matter are to be dealt with by effecting in one action a complete determination of all
matters in controversy and litigation between the parties involving one subject matter, and to
expedite the disposition of litigation at minimum cost. The provision should be construed so as to
avoid such multiplicity, where possible, without prejudice to the rights of the litigants.
Nevertheless, while parties to an action may assert in one pleading, in the alternative or otherwise,
as many causes of action as they may have against an opposing party, such joinder of causes of
action is subject to the condition, inter alia, that the joinder shall not include special civil actions
governed by special rules.
Here, there was a misjoinder of causes of action. The action for partition filed by the petitioners
could not be joined with the action for the rescission of the said donation inter vivos in favor of
Florante. Lest it be overlooked, an action for partition is a special civil action governed by Rule
69 of the Rules of Court while an action for rescission is an ordinary civil action governed by the
ordinary rules of civil procedure.
The variance in the procedure in the special civil action of partition and in the ordinary civil action
of rescission precludes their joinder in one complaint or their being tried in a single proceeding to
avoid confusion in determining what rules shall govern the conduct of the proceedings as well as
in the determination of the presence of requisite elements of each particular cause of action.
A misjoined cause of action, if not severed upon motion of a party or by the court sua sponte, may
be adjudicated by the court together with the other causes of action.
Nevertheless, misjoinder of causes of action is not a ground for dismissal. Indeed, the courts have
the power, acting upon the motion of a party to the case or sua sponte, to order the severance of
the misjoined cause of action to be proceeded with separately.33 However, if there is no objection
to the improper joinder or the court did not motu proprio direct a severance, then there exists no
bar in the simultaneous adjudication of all the erroneously joined causes of action. On this score,
our disquisition in Republic of the Philippines v. Herbieto is instructive, viz:
This Court, however, disagrees with petitioner Republic in this regard. This procedural lapse
committed by the respondents should not affect the jurisdiction of the MTC to proceed with and
hear their application for registration of the Subject Lots.
xxxx
Considering every application for land registration filed in strict accordance with the Property
Registration Decree as a single cause of action, then the defect in the joint application for
registration filed by the respondents with the MTC constitutes a misjoinder of causes of action and
parties. Instead of a single or joint application for registration, respondents Jeremias and David,
more appropriately, should have filed separate applications for registration of Lots No. 8422 and
8423, respectively.
Misjoinder of causes of action and parties do not involve a question of jurisdiction of the court to
hear and proceed with the case. They are not even accepted grounds for dismissal thereof. Instead,
under the Rules of Court, the misjoinder of causes of action and parties involve an implied
admission of the court’s jurisdiction. It acknowledges the power of the court, acting upon the
motion of a party to the case or on its own initiative, to order the severance of the misjoined cause
of action, to be proceeded with separately (in case of misjoinder of causes of action); and/or the
dropping of a party and the severance of any claim against said misjoined party, also to be
proceeded with separately (in case of misjoinder of parties).
It should be emphasized that the foregoing rule only applies if the court trying the case has
jurisdiction over all of the causes of action therein notwithstanding the misjoinder of the same. If
the court trying the case has no jurisdiction over a misjoined cause of action, then such misjoined
cause of action has to be severed from the other causes of action, and if not so severed, any
adjudication rendered by the court with respect to the same would be a nullity.
Here, Florante posed no objection, and neither did the RTC direct the severance of the petitioners’
action for rescission from their action for partition. While this may be a patent omission on the
part of the RTC, this does not constitute a ground to assail the validity and correctness of its
decision. The RTC validly adjudicated the issues raised in the actions for partition and rescission
filed by the petitioners.
Asserting a New Cause of Action in a Supplemental Pleading
In its Decision dated October 26, 2007, the CA pointed out that the said action for rescission should
have been filed by the petitioners independently of the proceedings in the action for partition. It
opined that the action for rescission could not be lumped up with the action for partition through a
mere supplemental pleading.
We do not agree.
A supplemental pleading may raise a new cause of action as long as it has some relation to the
original cause of action set forth in the original complaint.
Section 6, Rule 10 of the Rules of Court reads:

Sec. 6. Supplemental Pleadings. – Upon motion of a party the court may, upon reasonable notice
and upon such terms as are just, permit him to serve a supplemental pleading setting forth
transactions, occurrences or events which have happened since the date of the pleading sought to
be supplemented.
The adverse party may plead thereto within ten (10) days from notice of the order admitting the
supplemental pleading.
In Young v. Spouses Sy, this Court had the opportunity to elucidate on the purpose of a
supplemental pleading. Thus:
As its very name denotes, a supplemental pleading only serves to bolster or add something to the
primary pleading. A supplement exists side by side with the original. It does not replace that which
it supplements. Moreover, a supplemental pleading assumes that the original pleading is to stand
and that the issues joined with the original pleading remained an issue to be tried in the action. It
is but a continuation of the complaint. Its usual office is to set up new facts which justify, enlarge
or change the kind of relief with respect to the same subject matter as the controversy referred to
in the original complaint.
The purpose of the supplemental pleading is to bring into the records new facts which will enlarge
or change the kind of relief to which the plaintiff is entitled; hence, any supplemental facts which
further develop the original right of action, or extend to vary the relief, are available by way of
supplemental complaint even though they themselves constitute a right of action.
Thus, a supplemental pleading may properly allege transactions, occurrences or events which had
transpired after the filing of the pleading sought to be supplemented, even if the said supplemental
facts constitute another cause of action.
Admittedly, in Leobrera v. Court of Appeals, we held that a supplemental pleading must be based
on matters arising subsequent to the original pleading related to the claim or defense presented
therein, and founded on the same cause of action. We further stressed therein that a supplemental
pleading may not be used to try a new cause of action.
However, in Planters Development Bank v. LZK Holdings and Development Corp., we clarified
that, while a matter stated in a supplemental complaint should have some relation to the cause of
action set forth in the original pleading, the fact that the supplemental pleading technically states
a new cause of action should not be a bar to its allowance but only a matter that may be considered
by the court in the exercise of its discretion. In such cases, we stressed that a broad definition of
"cause of action" should be applied.
Here, the issue as to the validity of the donation inter vivos of Lot No. 4709 and half of Lot No.
4706 made by Rita in favor of Florante is a new cause of action that occurred after the filing of the
original complaint. However, the petitioners’ prayer for the rescission of the said donation inter
vivos in their supplemental pleading is germane to, and is in fact, intertwined with the cause of
action in the partition case. Lot No. 4709 and half of Lot No. 4706 are included among the
properties that were sought to be partitioned.
The petitioners’ supplemental pleading merely amplified the original cause of action, on account
of the gratuitous conveyance of Lot No. 4709 and half of Lot No. 4706 after the filing of the
original complaint and prayed for additional reliefs, i.e., rescission. Indeed, the petitioners claim
that the said lots form part of the estate of Spouses Baylon, but cannot be partitioned unless the
gratuitous conveyance of the same is rescinded. Thus, the principal issue raised by the petitioners
in their original complaint remained the same.
Limjoco v. Instestate Estate, G.R. No. L-770, April 27, 1948
TOPIC: Rule 2 Section 15; Estate of deceased
FACTS:
Petiioner Limjoco opposed the application of respondent in the Public Service Commission. The
application is for a certificate of public convenience to install, maintain and operate an ice plant in
San Juan, Rizal by the Intestate Estate of the deceased Pedro Fragante. The Commission authorized
said Intestate Estate through its Special or Judicial Administrator, appointed by the proper court
of competent jurisdiction, to maintain and operate an ice plant.
The commission declared in its decision that his estate was financially able to maintain and operate
the ice plant. The aforesaid right of Pedro O. Fragante to prosecute said application to its final
conclusion was one which by its nature did not lapse through his death. Hence, it constitutes a part
of the assets of his estate, for such a right was property despite the possibility that in the end the
commission might have denied the application.
In his argument petitioner contends that it was error on the part of the commission to allow the
substitution of the legal representative of the estate of Pedro O. Fragante for the latter as party
applicant in the case then pending before the commission, and in subsequently granting to said
estate the certificate applied for, which is said to be in contravention of law.
ISSUE:
WON the right to prosecute the application passes on to the estate; WON an estate is a person
HELD:
Rule 88, section 2, provides that the executor or administrator may bring or defend actions, among
other cases, for the protection of the property or rights of the deceased which survive, and it says
that such actions may be brought or defended "in the right of the deceased".
Rule 82, section 1, paragraph (a), mentions among the duties of the executor or administrator, the
making of an inventory of all goods, chattels, rights, credits, and estate of the deceased which shall
come to his possession or knowledge, or to the possession of any other person for him.
In his commentaries on the Rules of Court (Volume II, 2nd ed., pages 366, 367), the present Chief
Justice of this Court draws the following conclusion from the decisions cited by him:
"Therefore, unless otherwise expressly provided by law, any action affecting the property or rights
of a deceased person which may be brought by or against him if he were alive, may likewise be
instituted and prosecuted by or against the administrator, unless the action is for recovery of
money, debt or interest thereon, or unless, by its very nature, it cannot survive, because death
extinguishes the right. . .".
It is true that a proceeding upon an application for a certificate of public convenience before the
Public Service Commission is not an "action". But the foregoing provisions and citations go to
prove that the decedent's rights which by their nature are not extinguished by death go to make up
a part and parcel of the assets of his estate which, being placed under the control and management
of the executor or administrator, cannot be exercised but by him in representation of the estate for
the benefit of the creditors, devisees, or legatees, if any, and the heirs of the decedent. And if the
right involved happens to consist in the prosecution of an unfinished proceeding upon an
application for a certificate of public convenience of the deceased before the Public Service
Commission, it is but logical that the legal representative be empowered and entitled in behalf of
the estate to make the right effective in that proceeding.
Manresa (Vol. III, 6th ed., p. 11) says that No. 10 of article 334 and article 336 of the Civil Code,
respectively, consider as immovable and movable things rights which are not material. The same
eminent commentator says in the cited volume (p. 45) that article 336 of the Civil Code has been
deficiently drafted in that it is not sufficiently expressive of all incorporeal rights which are also
property for juridical purposes.
Corpus Juris (Vol. 50, p. 737) states that in the broad sense of the term, property includes, among
other things, "an option", and "the certificate of the railroad commission permitting the operation
of a bus line", and on page 748 of the same volume we read:
"However, these terms (real property, as estate or interest) have also been declared to include every
species of title, inchoate or complete, and embrace rights which lie in contract, whether executory
or executed."
Another important question raised by petitioner is whether the estate of Pedro O. Fragante is a
"person" within the meaning of the Public Service Act.
Words and Phrases, First Series, (Vol. 6, p. 5325), states the following doctrine in the jurisdiction
of the State of Indiana:
"As the estate of a decedent is in law regarded as a person, a forgery committed after the death of
the man whose name purports to be signed to the instrument may be prosecuted as with the intent
to defraud the estate. Billings vs. State, 107 Ind., 54, 55, 6 N. E. 914, 7 N. E. 763, 57 Am. Rep.
77."
The Supreme Court of Indiana in the decision cited above had before it a case of forgery committed
after the death of one Morgan for the purpose of defrauding his estate. The objection was urged
that the information did not aver that the forgery was committed with the intent to defraud any
person. The Court, per Elliott, J., disposed of this objection as follows:
". . . The reason advanced in support of this proposition is that the law does not regard the estate
of a decedent as a person. This intention (contention) cannot prevail. The estate of a decedent is a
person in legal contemplation. 'The word "person", says Mr. Abbot, 'in its legal signification, is a
generic term, and includes artificial as well as natural persons,' 2 Abb. Dict. 271; Douglas vs.
Pacific, etc., Co., 4 Cal. 304;
Planters', etc., Bank vs. Andrews, 8 Port (Ala.) 404. It is said in another work that 'persons are of
two kinds: natural and artificial. A natural person is a human being. Artificial persons include (1)
a collection or succession of natural persons forming a corporation; (2) a collection of property to
which the law attributes the capacity of having rights and duties. The latter class of artificial
persons is recognized only to a limited extent in our law. Examples are the estate of a bankrupt or
deceased person.' 2 Rapalje & L. Law Dict. 954. Our own cases inferentially recognize the
correctness of the definition given by the authors from whom we have quoted, for they declare that
it is sufficient, in pleading a claim against a decedent's estate, to designate the defendant as the
estate of the deceased person, naming him. Ginn vs. Collins, 43 Ind. 271. Unless we accept this
definition as correct, there would be a failure of justice in cases where, as here, the forgery is
committed after the death of the person whose name is forged; and this is a result to be avoided if
it can be done consistent with principle. We perceive no difficulty in avoiding such a result; for,
to our minds, it seems reasonable that the estate of a decedent should be regarded as an artificial
person. It is the creation of law for the purpose of enabling a disposition of the assets to be properly
made, and, although natural persons as heirs, devisees, or creditors, have an interest in the property,
the artificial creature is a distinct legal entity. The interest which natural persons have in it is not
complete until there has been a due administration; and one who forges the name of the decedent
to an instrument purporting to be a promissory note must be regarded as having intended to defraud
the estate of the decedent, and not the natural persons having diverse interests in it, since he cannot
be presumed to have known who those persons were, or what was the nature of their respective
interests. The fraudulent intent is against the artificial person, — the estate, — and not the natural
persons who have direct or contingent interests in it." (107 Ind. 54, 55, 6 N. E. 914-915.)
In the instant case there would also be a failure of justice unless the estate of Pedro O. Fragante is
considered a "person", for the quashing of the proceedings for no other reason than his death would
entail prejudicial results to his investment amounting to P35,000.00 as found by the commission,
not counting the expenses and disbursements which the proceeding can be presumed to have
occasioned him during his lifetime, let alone those defrayed by the estate thereafter. In this
jurisdiction there are ample precedents to show that the estate of a deceased person is also
considered as having legal personality independent of the heirs. Among the most recent cases
maybe mentioned that of "Estate of Mota vs. Concepcion, 56 Phil., 712, 717, wherein the principal
plaintiff was the estate of the deceased Lazaro Mota, and this Court gave judgment in favor of said
estate along with the other plaintiffs in these words:
". . . the judgment appealed from must be affirmed so far as it holds that defendants Concepcion
and Whitaker are indebted to the plaintiffs in the amount of P245,804.69 . . .."
Under the regime of the Civil Code and before the enactment of the Code of Civil Procedure, the
heirs of a deceased person were considered in contemplation of law as the continuation of his
personality by virtue of the provision of article 661 of the first Code that the heirs succeed to all
the rights and obligations of the decedent by the mere fact of his death. It was so held by this Court
in Barrios vs. Dolor, 2 Phil., 44, 46. However, after the enactment of the Code of Civil Procedure,
article 661 of the Civil Code was abrogated, as held in Suiliong & Co. vs. Chio-Taysan, 12 Phil.,
13 22. In that case, as well as in many others decided by this Court after the innovations introduced
by the Code of Civil Procedure in the matter of estates of deceased persons, it has been the constant
doctrine that it is the estate or the mass of property, rights and assets left by the decedent, instead
of the heirs directly, that becomes vested and charged with his rights and obligations which survive
after his demise.
The heirs were formerly considered as the continuation of the decedent's personality simply by
legal fiction, for they might not be even of his flesh and blood — the reason was one in the nature
of a legal exigency derived from the principle that the heirs succeeded to the rights and obligations
of the decedent. Under the present legal system, such rights and obligations as survive after death
have to be exercised and fulfilled only by the estate of the deceased. And if the same legal fiction
were not indulged, there would be no juridical basis for the estate, represented by the executor or
administrator, to exercise those rights and to fulfill those obligations of the deceased. The reason
and purpose for indulging the fiction is identical and the same in both cases. This is why according
to the Supreme Court of Indiana in Billings vs. State, supra, citing 2 Rapalje & L. Dictionary, 954,
among the artificial persons recognized by law figures "a collection of property to which the law
attributes the capacity of having rights and duties", as for instance, the estate of a bankrupt or
deceased person.
Petitioner raises the decisive question of whether or not the estate of Pedro O. Fragante can
be considered a "citizen of the Philippines" within the meaning of section 16 of the Public
Service Act, as amended, particularly the proviso thereof expressly and categorically limiting the
power of the commission to issue certificates of public convenience or certificates of public
convenience and necessity "only to citizens of the Philippines or of the United States or to
corporations, co-partnerships, associations, or joint-stock companies constituted and organized
under the laws of the Philippines", and the further proviso that sixty per centum of the stock or
paid-up capital of such entities must belong entirely to citizens of the Philippines or of the United
States.
Within the philosophy of the present legal system, the underlying reason for the legal fiction by
which, for certain purposes, the estate of a deceased person is considered a "person" is the
avoidance of injustice or prejudice resulting from the impossibility of exercising such legal rights
and fulfilling such legal obligations of the decedent as survived after his death unless the fiction is
indulged. Substantially the same reason is assigned to support the same rule in the jurisdiction of
the State of Indiana, as announced in Billings vs. State, supra, when the Supreme Court of said
State said:
". . . It seems reasonable that the estate of a decedent should be regarded as an artificial person. It
is the creation of law for the purpose of enabling a disposition of the assets to be properly made .
. .."
Within the framework and principles of the constitution itself, to cite just one example, under the
bill of rights it seems clear that while the civil rights guaranteed therein in the majority of cases
relate to natural persons, the term "person" used in section 1 (1) and (2) must be deemed to include
artificial or juridical persons, for otherwise these latter would be without the constitutional
guarantee against being deprived of property without due process of law, or the immunity from
unreasonable searches and seizures. We take it that it was the intendment of the framers to include
artificial or juridical, no less than natural, persons in these constitutional immunities and in others
of similar nature. Among these artificial or juridical persons figure estates of deceased persons.
Hence, we hold that within the framework of the constitution, the estate of Pedro O. Fragante
should be considered an artificial or juridical person for the purposes of the settlement and
distribution of his estate which, of course, include the exercise during the judicial administration
thereof of those rights and the fulfillment of those obligations of his which survived after his death.
One of those rights was the one involved in his pending application before the Public Service
Commission in the instant case, consisting in the prosecution of said application to its final
conclusion. As stated above, an injustice would ensue from the opposite course.
How about the point of citizenship? If by legal fiction his personality is considered extended so
that any debts or obligations left by, and surviving, him may be paid, and any surviving rights may
be exercised for the benefit of his creditors and heirs, respectively, we find no sound and cogent
reason for denying the application of the same fiction to his citizenship, and for not considering it
as likewise extended for the purposes of the aforesaid unfinished proceeding before the Public
Service Commission. The outcome of said proceeding, if successful, would in the end inure to the
benefit of the same creditors and the heirs. Even in that event petitioner could not allege any
prejudice in the legal sense, any more than he could have done if Fragante had lived longer and
obtained the desired certificate. The fiction of such extension of his citizenship is grounded upon
the same principle, and motivated by the same reason, as the fiction of the extension of his
personality. The fiction is made necessary to avoid the injustice of subjecting his estate, creditors
and heirs, solely by reason of his death, to the loss of the investment amounting to P35,000, which
he had already made in the ice plant, not counting the other expenses occasioned by the instant
proceeding, from the Public Service Commission to this Court.
We can perceive no valid reason for holding that within the intent of the Constitution (Article IV),
its provisions on Philippine citizenship exclude the legal principle of extension above adverted to.
If for reasons already stated our law indulges the fiction of extension of personality, if for such
reasons the estate of Pedro O. Fragante should be considered an artificial or juridical person herein,
we can find no justification for refusing to declare a like fiction as to the extension of his citizenship
for the purposes of this proceeding.
Pedro O. Fragante was a Filipino citizen, and as such, if he had lived, in view of the evidence of
record, he would have obtained from the commission the certificate for which he was applying.
The situation has suffered but one change, and that is, his death. His estate was that of a Filipino
citizen. And its economic ability to appropriately and adequately operate and maintain the service
of an ice plant was the same that it received from the decedent himself. In the absence of a contrary
showing, which does not exist here, his heirs may be assumed to be also Filipino citizens; and if
they are not, there is the simple expedient of revoking the certificate or enjoining them from
inheriting it.
Upon the whole, we are of opinion that for the purposes of the prosecution of said case No. 4572
of the Public Service Commission to its final conclusion, both the personality and citizenship of
Pedro O. Fragante must be deemed extended, within the meaning and intent of the Public Service
Act, as amended, in harmony with the constitution: it is so adjudged and decreed.
Title: Ventanilla Enterprises vs. Hon. Lazaro
Topic: Who may be parties; plaintiff and defendant
Facts:
Petitioner Oscar Ventanilla Ent. Corp., in these special civil actions of certiorari and
prohibition, seeks to restrain the enforcement against it of the judgment of the Court of First
Instance of Manila dated November 14, 1978 in the Civil Case No. 107607, entitled “ Emperor
Films Inc. vs. Broadway Theater”. It claimed to be the owner of the Broadway Theater located
at Burgos Ave., Cabanatuan City, which it leased to Ricardo Ventanilla for a ten year period
starting January 1, 1975. Emperor Films sued Broadway Theater (which was leased by Ricardo
Ventanilla) at the Court of First Instance. Empire Films and Ricardo entered into a compromise
agreement and Ricardo was obligated to pay Emperor Film International the sum of P12,662,
which he (Ricardo) promised to pay in installments. He agreed that in case of default in payment
of any installments, “execution shall immediately issue”.
RTC: Rendered judgment in accordance with the compromise agreement. Oscar

Ventanilla Ent. Corp. alleged that deputy sheriff of Branch XXXV of the CFI of Manila would
enforce against the Broadway the writ of execution in Civil Case 107607.
Court of Appeals: Dismissed the case, because the Court can issue the writs of certiorari
and prohibition only in aid of its appellate jurisdiction. Also, there was no more appeal to the Civil
Case 107607, lastly, it reasoned out that petitioner is not a party in Civil Case 107607.
Supreme Court: We hold that Oscar Ventanilla Ent. Corp. is entitled to the writ of
prohibition enjoining the sheriff from levying on the Broadway Theater for the satisfaction of the
judgment rendered against Ricardo C. Ventanilla who is a mere lessee of the theater. This incident
would not have arisen if Emperor Films International Phil. Had sued directly Ricardo Ventanilla
and not Broadway Theater and if respondent judge perceived anomaly that the defendant is not a
natural or juridical person and had orders substitution of Ricardo C Ventanilla for Broadway
Theater as the party in interest in Civil Case No. 107607. T he lower court and the sheriff is
ordered to desist from enforcing the judgment against the properties of the petitioner in the
Broadway Theater.
Title: Chiang Kai Shek vs. Court of Appeals
Topic: Who may be parties; plaintiff and defendant
Facts:
The original complaint was filed by Fausta F. Oh in the Court of First Instance of Sorsogon against
the Chiang Kai Shek School demanding separation pay, social security benefits, salary
differentials, maternity benefits and moral and exemplary damages after the school dismissed her.
Chiang Kai Shek School filed a motion to dismiss on the ground that it could not be sued. The
complaint was thus amended impleading school officials to make them solidarily liable with the
school.
Court of First Instance: Dismissed the case. (No reason was given).
Court of Appeals: Set aside the decision of the lower court. It held the school suable and liable
while absolving the other defendants. Denied the motion for reconsideration of the school. Hence
this case via petition for review on certiorari.
The issues raised in the petition are:

1. Whether or not a school that has not been incorporated may be sued by reason alone of
its long continued existence and recognition by the government.
2. Whether or not a complaint filed against persons associated under a common name will
justify a judgment against the association itself and not its individual members.
3. Whether or not the collection of tuition fees and book rentals will make a school profit-
making and not charitable.
4. Whether or not the Termination Pay Law then in force was available to the private
respondent who was employed on a year-to-year basis.
5. Whether or not the awards made by the respondent court were warranted.
Supreme Court: We hold against the petitioner on the first question. It is true that Rule 3, Section
1, of the Rules of Court clearly provides that "only natural or juridical persons may be parties in a
civil action." It is also not denied that the school has not been incorporated. However, this omission
should not prejudice the private respondent in the assertion of her claims against the school. As a
school, the petitioner was governed by Act No. 2706 as amended by C.A. No. 180, which provided
as follows:
“Unless exempted for special reasons by the Secretary of Public Instruction, any private school or
college recognized by the government shall be incorporated under the provisions of Act No. 1459
known as the Corporation Law, within 90 days after the date of recognition, and shall file with the
Secretary of Public Instruction a copy of its incorporation papers and by-laws. “
Having been recognized by the government, it was under obligation to incorporate under the
Corporation Law within 90 days from such recognition. It appears that it had not done so at the
time the complaint was filed notwithstanding that it had been in existence even earlier than 1932.
The petitioner cannot now invoke its own non-compliance with the law to immunize it from the
private respondent's complaint.
There should also be no question that having contracted with the private respondent every year for
thirty two years and thus represented itself as possessed of juridical personality to do so, the
petitioner is now estopped from denying such personality to defeat her claim against it. According
to Article 1431 of the Civil Code, "through estoppel an admission representation is rendered
conclusive upon the person making it and cannot be denied or disproved as against the person
relying on it."
As the school itself may be sued in its own name, there is no need to apply Rule 3, Section 15,
under which the persons joined in an association without any juridical personality may be sued
with such association. Besides, it has been shown that the individual members of the board of
trustees are not liable, having been appointed only after the private respondent's dismissal.
It is clear now that a charitable institution is covered by the labor laws although the question was
still unsettled when this case arose in 1968. At any rate, there was no law even then exempting
such institutions from the operation of the labor laws (although they were exempted by the
Constitution from ad valorem taxes). Hence, even assuming that the petitioner was a charitable
institution as it claims, the private respondent was nonetheless still entitled to the protection of the
Termination Pay Law, which was then in force.
While it may be that the petitioner was engaged in charitable works, it would not necessarily follow
that those in its employ were as generously motivated. Obviously, most of them would not have
the means for such charity. The private respondent herself was only a humble school teacher
receiving a meager salary of P180.00 per month.
At that, it has not been established that the petitioner is a charitable institution, considering
especially that it charges tuition fees and collects book rentals from its students. While this alone
may not indicate that it is profit-making, it does weaken its claim that it is a non-profit entity. The
Court, after considering the particular circumstances of Oh’s employment that she had become a
permanent employee of the school and entitled to security of tenure at the time of her dismissal.
Since no cause was shown and established at an appropriate hearing, and the notice then required
by law had not been given, such dismissal was invalid.
Title: Stronghold Insurance vs. Cuenca
Topic: Parties in interest
Facts:
On January 19, 1998, Marañon filed a complaint in the RTC against the Cuencas for the collection
of a sum of money and damages. His complaint, docketed as Civil Case No. 98-023, included an
application for the issuance of a writ of preliminary attachment. On January 26, 1998, the RTC
granted the application for the issuance of the writ of preliminary attachment conditioned upon the
posting of a bond of P1,000,000.00 executed in favor of the Cuencas. Less than a month later,
Marañon amended the complaint to implead Tayactac as a defendant.4 On February 11, 1998,
Marañon posted SICI Bond No. 68427 JCL (4) No. 02370 in the amount of P1,000,000.00 issued
by Stronghold Insurance. Two days later, the RTC issued the writ of preliminary attachment. The
sheriff served the writ, the summons and a copy of the complaint on the Cuencas on the same day.
The service of the writ, summons and copy of the complaint were made on Tayactac on February
16, 1998.6 Enforcing the writ of preliminary attachment on February 16 and February 17, 1998,
the sheriff levied upon the equipment, supplies, materials and various other personal property
belonging to Arc Cuisine, Inc. that were found in the leased corporate office-cum-commissary or
kitchen of the corporation.
On February 25, 1998, the Cuencas and Tayactac presented in the RTC a Motion to Dismiss and
to Quash Writ of Preliminary Attachment on the grounds that: (1) the action involved intra-
corporate matters that were within the original and exclusive jurisdiction of the Securities and
Exchange Commission (SEC); and (2) there was another action pending in the SEC as well as
criminal complaint in the Office of the City Prosecutor of Parañaque City. On March 5, 1998,
Marañon opposed the motion.
RTC: On August 10, 1988, the trial court denied the Motion to Dismiss and to Quash Writ of
Preliminary Attachment. Stating that the action being one for recovery of a sum of money and
damages, was within its jurisdiction. On September 3, 1988, the Cuencas and Tayactac moved for
the reconsideration of the denial of the said Motions. The reconsideration was still denied. Hence,
the appeal by Cuencas and Tayactac in the Court of Appeals, on certiorari and prohibition,
challenging the orders of the Regional Trial Court on the ground of grave abuse of discretion
(C.A.- G.R. SP No. 42988).
Court of Appeals: Grants the petition. Annulled and set aside the challenged orders, and
dismissed the amended complaint for lack of jurisdiction and ordered the return of the properties.
On the scheduled inventory of the properties (February 17, 2000) at the warehouse where Marañon
kept the seized articles, it was discovered that the properties were all gone and missing and there
was already a new tenant.
On April 6, 2000, the Cuencas and Tayactac filed a Motion to require Sheriff to Deliver Attached
Properties and to Set Case for Hearing, prayin that: (1) the Branch Sheriff be ordered to
immediately deliver the attached properties to them; (2) Stronghold Insurance be directed to pay
them the damages being sought in accordance with its undertaking under the surety bond for
P1,000,0000.00; (3) Marañon be held personally liable to them considering the insufficiency of
the amount of the surety bond; (4) they be paid the total of P1,721,557.20 as actual damages
representing the value of the lost attached properties because they, being accountable for the
properties, would be turning that amount over to Arc Cuisine, Inc.; and (5) Marañon be made to
pay P200,000.00 as moral damages, P100,000.00 as exemplary damages, and P100,000.00 as
attorney’s fees.
Stronghold Insurance filed its answer and opposition on April 13, 2000. In turn, the Cuencas and
Tayactac filed their reply on May 5, 2000.
On May 25, 2000, Marañon filed his own comment/opposition arguing that because the attached
properties belonged to Arc Cuisine, Inc. 50% of the stockholding of which he and his relatives
owned, it should follow that 50% of the value of the missing attached properties constituted
liquidating dividends that should remain with and belong to him. Accordingly, he prayed that he
should be required to return only P100,000.00 to the Cuencas and Tayactac. On June 5, 2000, the
RTC commanded Marañon to surrender all the attached properties to the RTC through the sheriff
within 10 days from notice; and directed the Cuencas and Tayactac to submit the affidavits of their
witnesses in support of their claim for damages.
On June 6, 2000, the Cuencas and Tayactac submitted their Manifestation and Compliance. After
trial, the RTC rendered its judgment on April 28, 2003, holding Marañon and Stronghold Insurance
jointly and solidarily liable for damages to the Cuencas and Tayactac.
Only Stronghold Insurance appealed to the CA. On January 31, 2006, the CA, finding no reversible
error, promulgated its decision affirming the judgment of the RTC.
Stronghold Insurance moved for reconsideration, but the CA denied its motion for reconsideration
on June 22, 2006. It argues that the Cuencas are not the owners of the properties attached and thus,
are not the proper parties to claim any purported damages arising therefrom.
Supreme Court: The personality of a corporation is distinct and separate from the personalities
of its stockholders. Hence, its stockholders are not themselves the real parties in interest to claim
and recover compensation for the damages arising from the wrongful attachment of its assets. Only
the corporation is the real party in interest for that purpose.
The petition for review is meritorious.
There is no question that a litigation should be disallowed immediately if it involves a person

without any interest at stake, for it would be futile and meaningless to still proceed and render a
judgment where there is no actual controversy to be thereby determined. Courts of law in our
judicial system are not allowed to delve on academic issues or to render advisory opinions. They
only resolve actual controversies, for that is what they are authorized to do by the Fundamental
Law itself, which forthrightly ordains that the judicial power is wielded only to settle actual
controversies involving rights that are legally demandable and enforceable.
To ensure the observance of the mandate of the Constitution, Section 2, Rule 3 of the Rules of
Court requires that unless otherwise authorized by law or the Rules of Court every action must be
prosecuted or defended in the name of the real party in interest. Under the same rule, a real party
in interest is one who stands to be benefited or injured by the judgment in the suit, or one who is
entitled to the avails of the suit. Accordingly, a person , to be a real party in interest in whose name
an action must be prosecuted, should appear to be the present real owner of the right sought to be
enforced, that is, his interest must be a present substantial interest, not a mere expectancy, or a
future, contingent, subordinate, or consequential interest.
Where the plaintiff is not the real party in interest, the ground for the motion to dismiss is lack of
cause of action. The reason for this is that the courts ought not to pass upon questions not derived
from any actual controversy. Truly, a person having no material interest to protect cannot invoke
the jurisdiction of the court as the plaintiff in an action. Nor does a court acquire jurisdiction over
a case where the real party in interest is not present or impleaded.
Indeed, considering that all civil actions must be based on a cause of action, defined as the act or
omission by which a party violates the right of another, the former as the defendant must be
allowed to insist upon being opposed by the real party in interest so that he is protected from further
suits regarding the same claim. Under this rationale, the requirement benefits the defendant
because "the defendant can insist upon a plaintiff who will afford him a setup providing good res
judicata protection if the struggle is carried through on the merits to the end."
The rule on real party in interest ensures, therefore, that the party with the legal right to sue brings
the action, and this interest ends when a judgment involving the nominal plaintiff will protect the
defendant from a subsequent identical action. Such a rule is intended to bring before the court the
party rightfully interested in the litigation so that only real controversies will be presented and the
judgment, when entered, will be binding and conclusive and the defendant will be saved from
further harassment and vexation at the hands of other claimants to the same demand.
But the real party in interest need not be the person who ultimately will benefit from the successful
prosecution of the action. Hence, to aid itself in the proper identification of the real party in interest,
the court should first ascertain the nature of the substantive right being asserted, and then must
determine whether the party asserting that right is recognized as the real party in interest under the
rules of procedure. Truly, that a party stands to gain from the litigation is not necessarily
controlling.
It is fundamental that the courts are established in order to afford reliefs to persons whose rights
or property interests have been invaded or violated, or are threatened with invasion by others’
conduct or acts, and to give relief only at the instance of such persons. The jurisdiction of a court
of law or equity may not be invoked by or for an individual whose rights have not been breached.
The remedial right or the remedial obligation is the person’s interest in the controversy. The right
of the plaintiff or other claimant is alleged to be violated by the defendant, who has the correlative
obligation to respect the right of the former. Otherwise put, without the right, a person may not
become a party plaintiff; without the obligation, a person may not be sued as a party defendant;
without the violation, there may not be a suit. In such a situation, it is legally impossible for any
person or entity to be both plaintiff and defendant in the same action, thereby ensuring that the
controversy is actual and exists between adversary parties. Where there are no adversary parties
before it, the court would be without jurisdiction to render a judgment.
There is no dispute that the properties subject to the levy on attachment belonged to Arc Cuisine,
Inc. alone, not to the Cuencas and Tayactac in their own right. They were only stockholders of Arc
Cuisine, Inc., which had a personality distinct and separate from that of any or all of them. The
damages occasioned to the properties by the levy on attachment, wrongful or not, prejudiced Arc
Cuisine, Inc., not them. As such, only Arc Cuisine, Inc. had the right under the substantive law to
claim and recover such damages. This right could not also be asserted by the Cuencas and Tayactac
unless they did so in the name of the corporation itself. But that did not happen herein, because
Arc Cuisine, Inc. was not even joined in the action either as an original party or as an intervenor.
The Cuencas and Tayactac were clearly not vested with any direct interest in the personal
properties coming under the levy on attachment by virtue alone of their being stockholders in Arc
Cuisine, Inc. Their stockholdings represented only their proportionate or aliquot interest in the
properties of the corporation, but did not vest in them any legal right or title to any specific
properties of the corporation. Without doubt, Arc Cuisine, Inc. remained the owner as a distinct
legal person.
Given the separate and distinct legal personality of Arc Cuisine, Inc., the Cuencas and Tayactac
lacked the legal personality to claim the damages sustained from the levy of the former’s
properties. According to Asset Privatization Trust v. Court of Appeals, even when the foreclosure
on the assets of the corporation was wrongful and done in bad faith the stockholders had no
standing to recover for themselves moral damages; otherwise, they would be appropriating and
distributing part of the corporation’s assets prior to the dissolution of the corporation and the
liquidation of its debts and liabilities.
While plaintiffs ask for remedy to which they are not entitled unless the requirement of section 16
of the Corporation Law be first complied with, we note that the action stated in their complaint is
susceptible of being converted into a derivative suit for the benefit of the corporation by a mere
change in the prayer. Such amendment, however, is not possible now, since the complaint has been
filed in the wrong court, so that the same has to be dismissed.
That Marañon knew that Arc Cuisine, Inc. owned the properties levied on attachment but he still
excluded Arc Cuisine, Inc. from his complaint was of no consequence now. The Cuencas and
Tayactac still had no right of action even if the affected properties were then under their custody
at the time of the attachment, considering that their custody was only incidental to the operation
of the corporation.
It is true, too, that the Cuencas and Tayactac could bring in behalf of Arc Cuisine, Inc. a proper
action to recover damages resulting from the attachment. Such action would be one directly
brought in the name of the corporation. Yet, that was not true here, for, instead, the Cuencas and
Tayactac presented the claim in their own names.
Title: Mayor Dagadag vs. Tongnawa
Facts:
Petitioner was formerly the mayor of the municipality of Tanudan, Province of Kalinga. Michael
Tongnawa and Antonio Gammod, respondents, are the municipal engineer and municipal planning
and development coordinator, respectively, of the said municipality.
On July 24, 1995, petitioner, while then the mayor of Tanudan, sent respondents a memorandum
ordering them to explain within 72 hours why they should not be administratively sanctioned for
acts unbecoming of public servants and failure to perform their duties. Respondents submitted to
petitioner their respective explanations.
On August 1, 1995, petitioner issued Executive Order No. 95-002 creating a Municipal Grievance
Committee to investigate the charges against respondents. Guilbert Dangpason, then the vice-
mayor of Tanudan, was designated Chairman.
After investigation, the Committee found respondents liable for insubordination, non-performance
of duties and absences without official leaves (AWOL).
On November 27, 1995, petitioner issued an order suspending respondents from their respective
positions for two months or from December 1, 1995 to February 28, 1996.
Respondents then appealed to the Civil Service Commission (CSC) contending that their right to
due process has been violated. On May 23, 1996, during the pendency of respondents’ appeal,
petitioner issued an order dropping them from the roll of employees effective May 28, 1996 by
reason of their unauthorized absences. Again, they appealed to the CSC.
Basically, petitioner alleges that his “suspension and dismissal orders against the respondents are
supported by substantial evidence.”[4] Moreover, the sworn declarations of William Tumbali and
Guilbert Dangpason, the designated Chairman of the Municipal Grievance Committee, that there
was actually no investigation conducted on petitioner’s charges, are “devoid of credibility.”
Civil Service Commission: Issued Resolution No. 974229 affirming petitioner’s order suspending
respondents from the service for two months. They moved for a reconsideration but was denied by
the CSC on May 31, 1999, prompting them to file with the Court of Appeals a petition for review,
docketed as CA-G.R. SP No. 54511.
Meanwhile, on June 29, 1999, the CSC issued Resolution No. 991136 affirming petitioner’s order
dropping respondents from the roll. When their motion for reconsideration was denied by the CSC,
respondents filed with the Court of Appeals a petition for review, docketed as CA-G.R. SP 57315.
Court of Appeals: Its Decision in CA-G.R. SP Nos. 54511 and 57315, granted respondents’
petitions for review, reversing the CSC challenged Resolutions and reinstating them to their
respective positions and ordering the payment of their corresponding backwages.
Petitioner filed a joint motion for reconsideration but was denied by the Court of Appeals. In
reversing the CSC, the Court of Appeals held:
As a general rule, findings of the CSC are not disturbed on appeal, but if there are substantial facts
which may alter the results of the case, this Court is tasked to evaluate and take them into
consideration.
Petitioners (now respondents) ascribed irregularities in the conduct of the Grievance Committee
hearing and submitted two Affidavits subscribed by one William Tumbali and by former Vice-
Mayor Guilbert Dangpason, then chairman of the said Grievance Committee. Dangpason attested
that while it is true that there was a meeting held, no investigation was actually conducted. The
Petitioners maintained that they were not given an opportunity to explain their side and prove their
defenses. They claimed that the minutes on which the suspension of the Petitioners was solely
based do not state the true proceedings, therefore, depriving them of their right to be heard.
None other than the Chairman of the Grievance Committee, assigned to investigate the alleged
negligence of the Petitioners, had renounced the contents of the minutes of the supposed
investigation. Dangpason who wish(ed) to set the record straightin fairness to all concerned
categorically declared that the Petitioners were not given an opportunity to defend themselves
since there was no actual investigation conducted and even expressed his willingness to testify and
confirm his declarations just to ascertain the truth. These declarations of Dangpason and Tumbali
were not denied by the Respondent. In the absence therefore of any showing of ill intent or bad
faith on the part of Dangpason and Tumbali, their Affidavits are to be afforded great weight and
credence.
In the light of this clear and convincing evidence, Petitioners were able to rebut or overcome the
presumption of regularity in the conduct of the Grievance Committee hearing. Accordingly, the
minutes cannot solely be the basis for Petitioners suspension. Suspension of the petitioners has no
factual basis.
Petitioner filed a joint motion for reconsideration but was denied by the Court of Appeals.
Supreme Court: The fundamental issue before us is: who may appeal from the Decision of the
Court of Appeals? In resolving the issue, the concept of real party in interest becomes relevant.
The established rule is that a real party in interest is one who would be benefited or injured by the
judgment, or one entitled to the avails of the suit. The word interest, as contemplated by the Rules,
means material interest or an interest in issue and to be affected by the judgment, as distinguished
from mere interest in the question involved or a mere incidental interest. Stated differently, the
rule refers to a real or present substantial interest as distinguished from a mere expectancy, or a
future, contingent, subordinate, or consequential interest. As a general rule, one who has no right
or interest to protect cannot invoke the jurisdiction of the court as party-plaintiff in an action.
We hold that the CSC and the mayor of Tanudan are real parties in interest in this case and,
therefore, can contest the assailed joint Decision of the Court of Appeals before us.
The CSC is the party adversely affected by the questioned Decision of the Court of Appeals
because it has been mandated by the Constitution to preserve and safeguard the integrity of our
civil service system.Thus, any transgression by herein respondents of the CSC rules and
regulations will adversely affect its integrity. Significantly, it has not challenged the assailed
Decision.
As regards the mayor of Tanudan, there are two (2) reasons why he may interpose such appeal.
The first is rooted in his power to appoint officials and employees of his municipality. Both
respondents were appointed by petitioner during his incumbency. here a municipal mayor orders
the suspension or dismissal of a municipal employee on grounds he believes to be proper, but his
order is reversed or nullified by the CSC or the Court of Appeals (as in this case), he has the right
to contest such adverse ruling. His right to appeal flows from the fact that his power to appoint
carries with it the power to remove. Being chief executive of the municipality, he possesses this
disciplinary power over appointive municipal officials and employees. To be sure, whenever his
order imposing administrative sanctions upon erring municipal personnel is challenged, he should
be allowed to defend his action considering that he is the appointing authority.
The second reason why the municipal mayor of Tanudan has legal personality to challenge the
Decision of the Court of Appeals is because the salaries of the respondents, being municipal
officials, are drawn from the municipal funds. Obviously, the mayor has real and substantial
interest in the outcome of the administrative cases against respondents.
Admittedly, however, petitioner, at the time he filed with this Court the instant petition assailing
the Appellate Court Decision, was no longer the mayor of Tanudan.
Section 17, Rule 3 of the 1997 Rules of Civil Procedure, as amended, is relevant, thus:
Sec. 17. Death or separation of a party who is a public officer. When a public officer is a party in
an action in his official capacity and during its pendency dies, resigns or otherwise ceases to hold
office, the action may be continued and maintained by or against his successor if, within thirty (30)
days after the successor takes office or such time as may be granted by the court, it is satisfactorily
shown to the court by any party that there is a substantial need for continuing or maintaining it and
that the successor adopts or continues or threatens to adopt or continue the action of his
predecessor. Before a substitution is made, the party or officer to be affected, unless expressly
assenting thereto, shall be given reasonable notice of the application therefor and accorded an
opportunity to be heard. The instant petition is hereby DENIED.
Title: Spouses Oca vs. Limbaring
Facts:
Sometime in 1996, Sabas Limbaring subdivided his Lot Sometime in 1996, Sabas Limbaring
subdivided his Lot and executed in favor of Jennifer Limbaring a Deed of Sale for one lot for
P60,000 and Sarah Jane Limbaring the other for P14,440. TCTs were issued correspondingly.
Sensing some irregularities in the transaction, Percita Oco, the daughter of Sabas Limbaring filed
a case of perjury and falsification of documents against respondent, Victor Limabaring, her uncle
who was the father of Jennifer and Sarah Jane. During the pre-litigation conference the parties
agreed that the two parcels of land should be reconveyed to Percita, who was to pay respondent all
the expenses that had been and would be incurred to transfer the titles to her name.
Pursuant to their agreement, respondent facilitated the transfer of the titles to her from the names
of his daughters. After the transfer had been effected on July 12, 1996, Percita left for Puerta
Princesa on July 17, 1996, without paying the P25,000. Several demands were made, but she
refused to pay.
On April 6, 1999, respondent filed against Spouses Anthony and Percita Oco a Complaint for the
rescission of the sales contracts, with recovery of possession and ownership of the two parcels of
land. Among others, he claimed 1) that he was the actual buyer of the lots, but the vendees whose
names appeared on the Deeds were his daughters; 2) that he initially refused to reconvey the
properties because he had paid for them with his hard-earned money, which was partly used by
Sabas Limbaring for medical expenses; 3) that Percita had prepared the two Deeds of Sale, which
his daughters signed despite receiving no consideration as stated in the Deeds; 4) that because she
refused to pay the P25,000, the Limbaring clan held a meeting on October 26, 1996, during which
it was agreed that P1,000 per month would be given to respondent from the rentals of Sabas
Limbaring’s house; and 5) that the agreement was not implemented, because Percita had failed to
cooperate.
On May 27, 1999, Spouses Oco filed a Motion to Dismiss on the ground that the plaintiff (herein
respondent) was not the real party in interest. On May 27, 1999, Spouses Oco filed a Motion to
Dismiss on the ground that the plaintiff (herein respondent) was not the real party in interest.
RTC: Spouses Oco filed a Demurrer to Evidence. On October 2, 2000, the RTC granted the
demurrer and dismissed the Complaint and Counterclaim,[20] on the ground that respondent was
not the real party in interest. The trial court also held that Jennifer and Sarah Jane had already
acknowledged receipt of the consideration for the reconveyance of the lots. It added that the
P25,000 was an independent obligation for the reimbursement of the expenses incurred for the
transfer of the titles.
Court of Appeals: The appellate court also ruled that the P25,000 was part of the consideration
for the reconveyance of the two parcels of land. The CA held that, since Percita had admitted her
failure to pay the amount, respondent had the right to rescind the contracts of reconveyance.
The assailed November 25, 2003 CA Resolution denied reconsideration. Hence, this Petition.
Supreme Court: This is an issue of real party in interest. Petitioners contend that respondent was
not a trustor, and therefore not the real party in interest and had no legal right to institute the suit.
The real parties in interest were Jennifer and Sarah Jane, to whom the subject properties had been
given as gifts.
The controversy centers on Rule 3 of the Rules of Court, specifically an elementary rule in
remedial law, which is quoted as follows:
Sec. 2. Parties in interest. A real party in interest is the party who stands to be benefited or injured
by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise
authorized by law or these Rules, every action must be prosecuted or defended in the name of the
real party in interest.
As applied to the present case, this provision has two requirements: 1) to institute an action,
the plaintiff must be the real party in interest; and 2) the action must be prosecuted in the name of
the real party in interest. [29] Necessarily, the purposes of this provision are 1) to prevent the
prosecution of actions by persons without any right, title or interest in the case; 2) to require that
the actual party entitled to legal relief be the one to prosecute the action; 3) to avoid a multiplicity
of suits; and 4) to discourage litigation and keep it within certain bounds, pursuant to sound public
policy.
Interest within the meaning of the Rules means material interest or an interest in issue to be affected
by the decree or judgment of the case, as distinguished from mere curiosity about the question
involved. One having no material interest to protect cannot invoke the jurisdiction of the court as
the plaintiff in an action.
When the plaintiff is not the real party in interest, the case is dismissible on the ground of lack of
cause of action.
Title: Barlin vs. Ramirez
Facts:
In January, 1904, the plaintiff Reverend Barlin, representative of the Roman Catholic Apostolic
Church in the diocese of Nueva Caceres, brought this action against the defendant, Ramirez, ex-
Rector of Roman Catholic Apostolic Parochial Church of Lagonoy and the Municipality of
Lagonoy.
Barlin, alleged in his amended complaint that the Roman Catholic Church was the owner of the
church building, the convent, cemetery, the books, money, and other property in Lagonoy which
Ramirez retained and refused to turn over.
The answer of the defendant, Ramirez, in addition to a general denial of the allegation of the
complaint, admitted that he was in the possession and administration of the property described
therein with the authority of the municipality of Lagonoy and of the inhabitants of the same, who
were the lawful owners of the said property. The church was built by the people of the pueblo
under the direction of the cabeza de barangay. Under the law then in force, each man in the pueblo
was required to work for the government, without compensation, for forty days every year. The
time spent in the reconstruction of these buildings was counted as a part of the forty days. The
material necessary was brought and paid for in part by the parish priest from the funds of the
church and in part was donated by certain individuals of the pueblo. Ramirez refused because the
town people had decided to separate from the Roman Catholic Church and join the Filipino
Church.
Lower Court: The answer of the defendant, Ramirez, in addition to a general denial of the
allegation of the complaint, admitted that he was in the possession and administration of the
property described therein with the authority of the municipality of Lagonoy and of the inhabitants
of the same, who were the lawful owners of the said property. After this answer had been presented,
and on the 1st day of November, 1904, the municipality of Lagonoy filed a petition asking that it
be allowed to intervene in the case and join with the defendant, Ramirez, as a defendant therein.
This petition been granted, the municipality of the 1st day of December filed an answer in which
it alleged that the defendant, Ramirez, was in possession of the property described in the complaint
under the authority and with the consent of the municipality of Lagonoy and that such municipality
was the owner thereof.
Plaintiff answered this complaint, or answer in intervention, and the case was tried and final
judgment in entered therein in favor of the plaintiff and against the defendants. The defendants
then brought the case here by a bill of exceptions.
Supreme Court: There are several grounds upon which this judgment must be affirmed.
(1) As to the defendant, Ramirez, it appears that he took possession of the property as the servant
or agent of the plaintiff. The only right which he had to the possession at the time he took it, was
the right which was given to him by the plaintiff, and he took possession under the agreement to
return that possession whenever it should be demanded of him. Under such circumstances he will
not be allowed, when the return of such possession is demanded by him the plaintiff, to say that
the plaintiff is not the owner of the property and is not entitled to have it delivered back to him.
The principle of law that a tenant can not deny his landlord's title, which is found in section 333,
paragraph 2, of the Code of Civil Procedure, and also in the Spanish law, is applicable to a case of
this kind. An answer of the defendant, Ramirez, in which he alleged that he himself was the owner
of the property at the time he received it from the plaintiff, or in which he alleged that the pueblo
was the owner of the property at that time, would constitute no defense. There is no claim made
by him that since the delivery of the possession of the property to him by the plaintiff he has
acquired the title thereto by other means, nor does he is own behalf make any claim whatever either
to the property or to the possession thereof.
(2) The municipality of Lagonoy, in its answer, claims as such, to be the owner of the property.
As we have said before, the evidence shows that it never was in the physical possession of the
property. But waiving this point and assuming that the possession of Ramirez, which he alleges in
his answer is the possession of the municipality, gives the municipality the rights of a possessor,
the question still arises, Who has the better right to the present possession of the property? The
plaintiff, in 1902, had been in the lawful possession thereof for more than thirty years and during
all that time its possession had never been questioned or disturbed. That possession has been taken
away from it and it has the right now to recover the possession from the persons who have so
deprived it of such possession, unless the latter can show that they have a better right thereto. This
was the preposition which was discussed and settled in the case of Bishop of Cebu vs. Mangaron,
1No. 1748, decided June 1, 1906. That decision holds that as against one who has been in
possession for the length of the plaintiff has been in possession, and who had been deprived of his
possession, and who can not produce any written evidence of title, the mere fact that the defendant
is in possession does not entitle the defendant to retain that possession. In order that he may
continue in possession, he must show a better right thereto.
The evidence in this case does not show that the municipality has, as such, any right of whatever
in the property in question. It has produced no evidence of ownership. Its claim of ownership is
rested in its brief in this court upon the following propositions: That the property in question
belonged prior to the treaty of Paris to the Spanish Government; that by the treaty of Paris the
ownership thereof passed to the Government of the United States; that by section 12 of the act of
Congress of July 1, 1902, such property was transferred to the Government of the Philippine
Islands, and that by the circular of that Government, dated November 11, 1902, the ownership and
the right to the possession of this property passed to the municipality of Lagonoy. If, for the
purposes of the argument, we should admit that the other propositions are true, there is no evidence
whatever to support the last proposition, namely that the Government of the Philippine Islands has
transferred the ownership of this church to the municipality of Lagonoy. We have found no circular
of the date above referred to. The one of February 10, 1903, which is probably the one intended,
contains nothing that indicates any such transfer. As to the municipality of Lagonoy, therefore, it
is very clear that it has neither title, ownership, nor right of possession.
(3) We have said that it would have no such title or ownership ever admitting that the Spanish
Government was the owner of the property and it has passed by the treaty of Paris to the American
Government. But this assumption is not true. As a matter of law, the Spanish Government at the
time the treaty of peace was signed, was not the owner of this property, nor of any other property
like it, situated in the Philippine Islands.
(4) It is suggested by the appellant that the Roman Catholic Church has no legal personality in the
Philippine Islands. This suggestion, made with reference to an institution which antedates by
almost a thousand years any other personality in Europe, and which existed "when Grecian
eloquence still flourished in Antioch, and when idols were still worshiped in the temple of Mecca,"
does not require serious consideration. In the preamble to the budget relating to ecclesiastical
obligations, presented by Montero Rios to the Cortes on the 1st of October 1871, speaking of the
Roman Catholic Church, he says:
Persecuted as an unlawful association since the early days of its existence up to the time of Galieno,
who was the first of the Roman emperors to admit it among the juridicial entities protected by the
laws of the Empire, it existed until then by the mercy and will of the faithful and depended for
such existence upon pious gifts and offerings. Since the latter half of the third century, and more
particularly since the year 313, when Constantine, by the edict of Milan, inaugurated an era of
protection for the church, the latter gradually entered upon the exercise of such rights as were
required for the acquisition, preservation, and transmission of property the same as any other
juridical entity under the laws of the Empire. (3 Dictionary of Spanish Administration, Alcubilla,
p. 211. See also the royal order of the 4th of December, 1890, 3 Alcubilla, 189.)
The judgment of the court below is affirmed, with the costs of this instance against the appellant.
After the expiration of twenty days from the date hereof let judgment be entered in accordance
herewith, and ten days thereafter the record be remanded to the court below for execution. So
ordered.
Uy v. Court of Appeals, G.R. No. 120465, September 9, 1999
TOPIC: Real parties-in-interest
FACTS:
Petitioners William Uy and Rodel Roxas are authorized agents sold eight parcels of land located
in Tuba, Tadiangan, Benguet to respondent National Housing Authority (NHA) to be utilized and
developed as a housing project.
The parties executed a Deed of Absolute Sale on February 4, 1989, with an area of 31.8231
hectares, at the cost of P23.867 million but only five parcels of land were paid. On 22 November
1991,the NHA cancelled the sale of the remaining three parcels of lands because of the report it
received from the Land Geosciences Bureau of the Department of Environment and Natural
Resources (DENR) that the remaining area is located at an active landslide area and therefore, not
suitable for development into a housing project and subsequently offered the amount of P1.225
million to the landowners as daos perjuicios.
RTC:
On 9 March 1992, petitioners filed before the Regional Trial Court (RTC) of Quezon City a
Complaint for Damages against NHA and its General Manager Robert Balao.
After trial, the RTC rendered a decision declaring the cancellation of the contract to be justified.
The trial court nevertheless awarded damages to plaintiffs in the sum of P1.255 million.
CA:
Upon appeal by petitioners, the Court of Appeals reversed the decision of the trial court and entered
a new one dismissing the complaint. It held that since there was sufficient justifiable basis in
cancelling the sale, it saw no reason for the award of damages. The Court of Appeals also noted
that petitioners were mere attorneys-in-fact and, therefore, not the real parties-in-interest in the
action before the trial court.
ISSUE: Whether or not the petitioners as agents are the real parties-in-interest of the action
Ruling:
NO.
Petitioners claim that they lodged the complaint not in behalf of their principles but in their own
name as agents directly damaged by the termination of the contract. The damages prayed for were
intended not for the benefit of their principals but to indemnify petitioners for the losses they
themselves allegedly incurred as a result of such termination. These damages consist mainly of
unearned income and advances. Petitioners, thus, attempt to distinguish the case at bar from those
involving agents or apoderados instituting actions in their own name but in behalf of their
principals. Petitioners in this case purportedly brought the action for damages in their own name
and in their own behalf.
Section 2, Rule 3 of the Rules of Court requires that every action must be prosecuted and defended
in the name of the real party-in-interest. The real party-in-interest is the party who stands to be
benefited or injured by the judgment or the party entitled to the avails of the suit. Interest, within
the meaning of the rule, means material interest, an interest in the issue and to be affected by the
decree, as distinguished from mere interest in the question involved, or a mere incidental
interest.Cases construing the real party-in-interest provision can be more easily understood if it is
borne in mind that the true meaning of real party-in-interest may be summarized as follows: An
action shall be prosecuted in the name of the party who, by the substantive law, has the right sought
to be enforced
The applicable substantive law in this case is Article 1311 of the Civil Code, which states:
Contracts take effect only between the parties, their assigns, and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by
stipulation, or by provision of law. x x x.
If a contract should contain some stipulation in favor of a third person, he may demand its
fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere
incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly
and deliberately conferred a favor upon a third person.
Petitioners are not parties to the contract of sale between their principals and NHA. They are mere
agents of the owners of the land subject of the sale. As agents, they only render some service or
do something in representation or on behalf of their principals.[8] The rendering of such service
did not make them parties to the contracts of sale executed in behalf of the latter. Since a contract
may be violated only by the parties thereto as against each other, the real parties-in-interest, either
as plaintiff or defendant, in an action upon that contract must, generally, either be parties to said
contract.[9]
In McMicking vs. Banco Espaol-Filipino,[10] we held that the rule requiring every action to be
prosecuted in the name of the real party-in-interest
x x x recognizes the assignments of rights of action and also recognizes that when one has a right
of action assigned to him he is then the real party in interest and may maintain an action upon such
claim or right. The purpose of [this rule] is to require the plaintiff to be the real party in interest,
or, in other words, he must be the person to whom the proceeds of the action shall belong, and to
prevent actions by persons who have no interest in the result of the same. xxx
Thus, an agent, in his own behalf, may bring an action founded on a contract made for his principal,
as an assignee of such contract. We find the following declaration in Section 372 (1) of the
Restatement of the Law on Agency (Second):[11]
Section 372. Agent as Owner of Contract Right
(1) Unless otherwise agreed, an agent who has or who acquires an interest in a contract which he
makes on behalf of his principal can, although not a promisee, maintain such action thereon as
might a transferee having a similar interest.
The Comment on subsection (1) states:
a. Agent a transferee. One who has made a contract on behalf of another may become an assignee
of the contract and bring suit against the other party to it, as any other transferee. The customs of
business or the course of conduct between the principal and the agent may indicate that an agent
who ordinarily has merely a security interest is a transferee of the principals rights under the
contract and as such is permitted to bring suit. If the agent has settled with his principal with the
understanding that he is to collect the claim against the obligor by way of reimbursing himself for
his advances and commissions, the agent is in the position of an assignee who is the beneficial
owner of the chose in action. He has an irrevocable power to sue in his principals name. x x x.
And, under the statutes which permit the real party in interest to sue, he can maintain an action in
his own name. This power to sue is not affected by a settlement between the principal and the
obligor if the latter has notice of the agents interest. x x x. Even though the agent has not settled
with his principal, he may, by agreement with the principal, have a right to receive payment and
out of the proceeds to reimburse himself for advances and commissions before turning the balance
over to the principal. In such a case, although there is no formal assignment, the agent is in the
position of a transferee of the whole claim for security; he has an irrevocable power to sue in his
principals name and, under statutes which permit the real party in interest to sue, he can maintain
an action in his own name.
Petitioners, however, have not shown that they are assignees of their principals to the subject
contracts. While they alleged that they made advances and that they suffered loss of commissions,
they have not established any agreement granting them the right to receive payment and out of the
proceeds to reimburse [themselves] for advances and commissions before turning the balance over
to the principal[s].
Finally, it does not appear that petitioners are beneficiaries of a stipulation pour autrui under the
second paragraph of Article 1311 of the Civil Code. Indeed, there is no stipulation in any of the
Deeds of Absolute Sale clearly and deliberately conferring a favor to any third person.
That petitioners did not obtain their commissions or recoup their advances because of the non-
performance of the contract did not entitle them to file the action below against respondent NHA.
Section 372 (2) of the Restatement of the Law on Agency (Second) states:
(2) An agent does not have such an interest in a contract as to entitle him to maintain an action at
law upon it in his own name merely because he is entilted to a portion of the proceeds as
compensation for making it or because he is liable for its breach.
The following Comment on the above subsection is illuminating:
The fact that an agent who makes a contract for his principal will gain or suffer loss by the
performance or nonperformance of the contract by the principal or by the other party thereto does
not entitle him to maintain an action on his own behalf against the other party for its breach. An
agent entitled to receive a commission from his principal upon the performance of a contract which
he has made on his principals account does not, from this fact alone, have any claim against the
other party for breach of the contract, either in an action on the contract or otherwise. An agent
who is not a promisee cannot maintain an action at law against a purchaser merely because he is
entitled to have his compensation or advances paid out of the purchase price before payment to the
principal. x x x.
As petitioners are not parties, heirs, assignees, or beneficiaries of a stipulation pour autrui under
the contracts of sale, they do not, under substantive law, possess the right they seek to enforce.
Therefore, they are not the real parties-in-interest in this case.
Petitioners not being the real parties-in-interest, any decision rendered herein would be pointless
since the same would not bind the real parties-in-interest.
Goco v. Court of Appeals, G.R. No. 157449, April 6, 2010
TOPIC: Errors of Jurisdiction and Real parties in interest
FACTS:
A parcel of land with lot number No. 2042 located in Calapan, Oriental Mindoro and covered by
Original Certificate of Title (OCT) No. 529 was registered in the name of Feliciano Alveyra
(Alveyra) but sometime in 1952, one-half interest over Lot No. 2042 was acquired by the
Municipality of Calapan in satisfaction of a judgment award in its favor against Alveyra. Upon
registration, however, the entire Lot No. 2042 was included in Transfer Certificate of Title (TCT)
No. 21306; OCT No. 529 was accordingly cancelled.
An action to quiet title[2] was instituted to determine the extent of Alveyra and the Municipality
of Calapan interest over the subject lot, which case eventually reached the Court of Appeals
(CA).[3] The CA, in a decision dated October 28, 1974, subdivided Lot No. 2042 into two lots:
one-half or Lot No. 2042-A (referring to the northern portion)was declared as the property of the
heirs of Alveyra who had since died, while the other half, Lot No. 2042-B (referring to the southern
portion), was declared owned by the Municipality of Calapan.
The heirs of Alveyra sold one half of the interest of the lot to respondent spouses Hicoblino and
Lourdes Catly (respondent Catlys). Respondent Catlys then filed a petition for judicial approval of
the subdivision plan of Lot No. 2042-A.[4] On July 31, 1996, the trial court approved the petition
and ordered the subdivision of Lot No. 2042-A to into four lots and the registration of four new
titles under the name of the respondents.[5]
In 1999, respondent Catlys alleged that a portion of their Lot No. 2042-A was being occupied by
the petitioners and sought to recover possession of the lot, initially, by instituting an ejectment case
against the petitioners. [6] When the ejectment case was dismissed,[7] respondent Catlys then filed
a complaint for recovery of possession[8] against the petitioners; the case is still pending decision
before the Regional Trial Court (RTC) of Calapan City, Branch 39.
Allegedly to defend themselves against the cases filed by respondent Catlys and to protect their
vested rights as lawful occupants of the land, the petitioners filed a complaint for declaration of
nullity of the four certificates of title issued in respondent Caltys names.[9] The petitioners claimed
they are occupants of the original Lot No. 2042 since 1946 and anchored their continued right to
occupy as lessees of the Municipality of Calapan. They also alleged that the titles issued in
respondent Catlys names (covering Lot No. 2042-A which were subdivided into four lots) included
portions that they claimed were part of Lot No. 2042-B which belonged to the Municipality of
Calapan.The petitioners consider the inclusion of these portions of Lot No. 2042-B prejudicial to
their interest as its actual occupants, hence, they questioned respondent Catlys titles.Respondent
Catlys, in turn, moved for the dismissal of the complaint asserting that it failed to state a cause of
action and that the petitioners (plaintiffs below) were not the real parties in interest.
RTC:
In its September 7, 1999 Order,[10] the Regional Trial Court (RTC) of Oriental Mindoro, Branch
39, ordered the dismissal of the complaint for declaration of nullity of respondent Catlys titles. It
found that the petitioners were in fact occupying portions of respondent Catlys Lot No. 2042-A.
Although the petitioners were asserting a legal right to occupy the land by virtue of a lease contract,
the lease covered only Lot No. 2042-B the southern portion which belonged to the Municipality
of Calapan. The trial court discovered that the petitioners were occupying areas outside those
covered by their lessors title and concluded they had no cause of action against respondent Catlys.
The relevant portion of the September 7, 1999 Order said:
Corollary to this, it declared that the petitioners were not the real parties in interest who could
assail and seek the annulment of the respondents title.
The petitioners move to have the September 7, 1999 Order reconsidered was denied by the RTC
in its March 30, 2000 Order.[12] They sought the reversal of the trial courts Orders by filing a
petition for certiorari under Rule 65 of the Rules of Court before the CA.
CA:
In a decision dated October 7, 2002,[13] CA dismissed the petition and affirmed the RTCs
dismissal of the complaint for annulment of respondent Catlys titles. It ruled that petitioners erred
in filing a certiorari petition under Rule 65 of the Rules of Court to assail an order of dismissal by
the trial court. An order sustaining a motion to dismiss is a final adjudication on the merits of the
case and the remedy of the plaintiff is to appeal the order. This procedural lapse notwithstanding,
the CA proceeded to consider the petition as an ordinary appeal filed under Rule 41.
Ruling on the merits of case, the CA agreed with the RTC that the petitioners have no cause of
action against respondent Catlys. The petitioners were assailing respondents Catlys titles which
were derived from TCT No. T-46154 covering Lot No. 2042-A. These titles, however, are separate
and distinct from the land that the petitioners are occupying which is registered as TCT No. T-
46155 covering Lot No. 2042-B in the name of the Municipality of Calapan. Thus, their claimed
vested rights in Lot No. 2042-B were not at all impaired by respondent Catlys titles. Even assuming
that a portion of respondent Catlys lot includes that belonging to the Municipality of Calapan, the
petitioners do not possess sufficient interest to assail respondent Catlys titles as they are mere
lessees.
The petitioners filed a motion for reconsideration of the CAs decision dated October 7, 2002.[14]
The CA denied the motion in a resolution dated March 6, 2003.[15] The petitioners now seek to
reverse these CA rulings before the Court via a petition for certiorari filed under Rule 65 of the
Rules of Court. The petitioners reiterate the same arguments they raised before the RTC and insist
that they have sufficient interest in praying for the annulment of respondent Catlys titles, as their
vested rights have been impaired.
ISSUE: Whether or not the petitioners are the real parties in interest
HELD:
NO.
The petitioners have twice erroneously availed of the remedy of a certiorari petition, first, before
the CA against the RTC order dismissing its complaint for annulment of title, and second, before
the Court against the CAs decision thereon.
Time and again, we have discussed the nature of a certiorari petition it is intended to correct only
errors of jurisdiction where the court or tribunal has acted with grave abuse of discretion. A writ
of certiorari cannot be used for any other purpose; it cannot be used to resolve questions or issues
beyond its competence such as errors of judgment. Certiorari will not be issued to cure errors by
the trial court in its appreciation of the evidence of the parties, its conclusions anchored on the said
findings, and its conclusions of law.[16]
The supervisory jurisdiction of a court over the issuance of a writ of certiorari cannot be exercised
for the purpose of reviewing the intrinsic correctness of a judgment of the lower court on the basis
either of the law or the facts of the case, or of the wisdom or legal soundness of the decision. Even
if the findings of the court are incorrect, as long as it has jurisdiction over the case, such correction
is normally beyond the province of certiorari. Where the error is not one of jurisdiction, but of an
error of law or fact - a mistake of judgment - appeal is the remedy.
In the two certiorari petitions the petitioners filed before the CA and before the Court, they assailed
rulings of the lower courts by claiming that the findings and conclusions of these courts were
merely speculative and based on misapprehension of facts. These assigned errors, however,
constitute an attack on the correctness or soundness of the decision assailed and does not at all
affect the jurisdiction of the court to issue such decision. In other words, they amount to no more
than errors of judgment correctible by an appeal, not by a writ of certiorari that will issue only
when there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of
law.[18]
But rather than dismissing outright the petition, the CA, in the interest of justice, decided to treat
it as an appeal filed under Rule 41 and consider the errors raised by the petitioners. As it turned
out, however, the CA still ruled for the petitions dismissal because it found that petitioners did not
have any cause of action against respondent Catlys and were not the real parties in interest.
As the petitioners now raise before this Court the same errors of judgment already raised before
and resolved by the CA, the dismissal of the present certiorari petition is in order for being the
wrong remedy. Errors of judgment committed by the CA are reviewable by this Court via a petition
for review on certiorari under Rule 45 of the Rules of Court.Erroneous findings and conclusion do
not render the appellate court vulnerable to the corrective writ of certiorari.[20]
The petitioners invocation of a liberal application of the rules of procedure is unavailing. Even if
the Court were to consider the present petition as an appeal filed under Rule 45, we would
ultimately order its dismissal for failing to find any reversible error committed by the CA.
An action for annulment of title, like any other civil action, must be instituted by the real party in
interest
Section 2, Rule 3 of the Rules of Court states:
Sec. 2. Parties in interest. A real party in interest is the party who stands to be benefited or injured
real party in interest.
This provision has two requirements: 1) to institute an action, the plaintiff must be the real party
in interest; and 2) the action must be prosecuted in the name of the real party in interest. Interest
within the meaning of the Rules of Court means material interest or an interest in issue to be
affected by the decree or judgment of the case, as distinguished from mere curiosity about the
question involved. One having no material interest to protect cannot invoke the jurisdiction of the
court as the plaintiff in an action.When the plaintiff is not the real party in interest, the case is
dismissible on the ground of lack of cause of action.[21]
An action for annulment of certificates of title to property into the issue of ownership of the land
covered by a Torrens title and the relief generally prayed for by the plaintiff is to be declared as
the lands true owner.[22] The real party in interest in such action therefore is the person claiming
title or ownership adverse to that of the registered owner. The case of Tankiko v. Cezar[23] has
illustrated for us the application of this principle in the following manner:
It is evident that respondents are not the real parties in interest. Because they admit that they are
not the owners of the land but mere applicants for sales patents thereon, it is daylight clear that the
land is public in character and that it should revert to the State. This being the case, Section 101 of
the Public Land Act categorically declares that only the government may institute an action to
recover ownership of a public land.
xxxx
Under Section 2, Rule 3 of the Rules of Court, every action must be prosecuted or defended in the
name of the real party in interest. It further defines a real party in interest as one who stands to be
benefited or injured by the judgment in the suit. x x x The interest of the party must be personal
and not one based on a desire to vindicate the constitutional right of some third and unrelated party.
Clearly, a suit filed by a person who is not a party in interest must be dismissed. Thus, in Lucas v.
Durian, the Court affirmed the dismissal of a Complaint filed by a party who alleged that the patent
was obtained by fraudulent means and, consequently, prayed for the annulment of said patent and
the cancellation of a certificate of title. The Court declared that the proper party to bring the action
was the government, to which the property would revert. Likewise affirming the dismissal of a
Complaint for failure to state a cause of action, the Court inNebrada v. Heirs of Alivio noted that
the plaintiff, being a mere homestead applicant, was not the real party in interest to institute an
action for reconveyance.
The petitioners demand the annulment of respondent Catlys titles because they allege that these
included portions belonging to the Municipality of Calapan. This allegation is a clear recognition
of the Municipalitys superior interest over the lot. In instituting the action for annulment of
respondent Catlys titles, what the petitioners are asserting is a right that is not personal to them,
but to that of the local government. That they are lessees who were granted by the Municipality of
Calapan the option to purchase the portion they occupy does not suffice to constitute as parties
with material interest to commence the action.
Tampico v. Intermediate Appellate Court, G.R. No. 76225, March 31, 1992
TOPIC: Real party-in-interest
FACTS:
Petitioner Espiridion Tanpingco filed a complaint against respondent Benedicto Horca, Sr on May
10, 1985, for payment of disturbance compensation damages with the Regional Trial Court of Palo,
Leyte.
Herein petitioner is the tenant-lessee in the respondent's parcel of agricultural riceland situated at
Brgy. Buenavista, Jaro, Leyte under a leasehold contract entered into sometime in April, 1976;
that in a letter dated April 9, 1985, the respondent through his representative informed him to desist
from working on the subject land, having already donated the same on February 3, 1985; that the
respondent openly ordered the petitioner to vacate the landholding and is determined to oust him
from the premises in violation of the law; that the petitioner is willing to accept payment of
disturbance compensation in an amount computed in accordance with law and in the alternative to
remain as tenant-lessee of the subject riceland.
On July 5, 1985, the case was called for pre-trial following which the trial court gave the
respondent until July 9, 1985 to file his answer. The respondent filed instead a Motion to Dismiss
alleging principally that the complaint states no cause of action because the respondent is not the
real party-in-interest having already donated the subject land to the Ministry of Education, Culture,
and Sports, Region VIII, as a school site of the Buenavista Barangay High School; and that the
donation not having in anyway benefited the respondent, no disturbance compensation is due the
petitioner since under Section 36 (1) of the Agrarian Reform Code as amended, disturbance
compensation holds true only in cases wherein the lessor-owner derives financial benefits from the
conversion of the agricultural land into non-agricultural purposes.
RTC:
The trial court granted the respondent's Motion to Dismiss and denied the petitioner's Motion for
Reconsideration.
IAC:
On June 20, 1986, the Intermediate Appellate Court rendered the decision now assailed with no
merit and hereby dismissed.
From the aforesaid decision, petitioner Esperidion Tanpingco interposed the present petition under
the following assignment of errors.
ISSUE: Whether or not respondents are the real parties-in-interest
HELD: YES.
Section 2, Rule 3 of the Rules of Court requires that every action must be prosecuted in the name
of the real party-in-interest. A corollary proposition to this rule is that an action must be brought
against the real party-in-interest, or against a party which may be bound by the judgment to be
rendered therein (Salonga v. Warner Barnes and Co., Ltd. supra citing Salmon and Pacific
Commercial Co., v. Tan Cuenco, 36 Phil. 556 [1917]). The real party-in-interest is one who stands
to be benefited or be injured by the judgment, or the party entitled to the avails of the suit
(Rebollido v. Court of Appeals, 170 SCRA 800 [1989] citing Samahan ng mga Nangungupahan
sa Azcarraga Textile Market, Inc., et al. v. Court of Appeals, 165 SCRA 598 [1988]). If the suit is
not brought against the real party-in-interest, a motion to dismiss may be filed on the ground that
the complaint states no cause of action (Section 1(g), Rule 16, Rules of Court).
The private respondent bolsters his claim that he is not the real party-in-interest on Section 10 of
Republic Act No. 3844 (Code of Agrarian Reforms of the Philippines) which provides that:
. . . In the case the agricultural lessor sells, alienates or transfers the legal possession of the
landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to
the obligation of the agricultural lessor.
In effect, the private respondent is of the view that the Ministry of Education, Culture and Sports,
as donee, became the new lessor of the agricultural lessee by operation of law and is therefore the
real party-in-interest against whom the claim for disturbance compensation should be directed.
We agree with the contentions of the private respondent. The petitioner should have impleaded the
Ministry of Education, Culture and Sports as the party-defendant for as stated in Roman Catholic
Archbishop of Manila v. Court of Appeals (198 SCRA 300 [1991]), a donation, as a mode of
acquiring ownership, results in an effective transfer of title over the property from the donor to the
donee and once a donation is accepted, the donee becomes the absolute owner of the property
donated.
Under Article 428 of the New Civil Code, the owner has the right to dispose of a thing without
other limitations than those established by law. As an incident of ownership therefore, there is
nothing to prevent a landowner from donating his naked title to the land. However, the new owner
must respect the rights of the tenant. Section 7 of R.A. No. 3844, as amended (Code of Agrarian
Reforms of the Philippines) gives the agricultural lessee the right to work on the landholding once
the leasehold relationship is established. It also entitles him to security of tenure on his
landholding. He can only be ejected by the court for cause. Time and again, this Court has
guaranteed the continuity and security of tenure of a tenant even in cases of a mere transfer of legal
possession. As elucidated in the case of Bernardo v. Court of Appeals (168 SCRA 439 [1988]),
security of tenure is a legal concession to agricultural lessees which they value as life itself and
deprivation of their landholdings is tantamount to deprivation of their only means of livelihood.
Also, under Section 10 of the same Act, the law explicitly provides that the leasehold relation is
not extinguished by the alienation or transfer of the legal possession of the landholding. The only
instances when the agricultural leasehold relationship is extinguished are found in Section 8, 28
and 36 of the Code of Agrarian Reforms of the Philippines. The donation of the land did not
terminate the tenancy relationship. However, the donation itself is valid.
Considering that the tenant in the case at bar is willing to accept payment of disturbance
compensation in exchange for his right to cultivate the landholding in question, the real issue is
who should pay the compensation. We rule that the Ministry of Education, Culture and Sports as
the new owner cannot oust the petitioner from the subject riceland and build a public high school
thereon until after there is payment of the disturbance compensation in accordance with Section
36 (1) of R.A. No. 3844, as amended.
In view of the foregoing, we are of the opinion and so hold that the trial court correctly dismissed
the complaint for payment of disturbance compensation because the private respondent is not the
real party-in-interest. And having arrived at this conclusion, we do not deem it necessary to pass
upon the other errors assigned by the petitioner for as stated in Filamer Christian Institute v. Court
of Appeals (190 SCRA 485 [1990]), a person who was not impleaded in the complaint could not
be bound by the decision rendered therein, for no man shall be affected by a proceeding to which
he is a stranger. The remedy then of the petitioner is to claim his disturbance compensation from
the new owner or whatever agency, local or national, is in a position to pay for it.
Salonga v. Wrner, Barnes, G.R. No. L-2246, January 31, 1951
Topic: Real Party-in-interest
Facts:
The case was taken to this court because it involves only questions of law.
On August 28, 1946, Westchester Fire Insurance Company of New York entered into a contract
with Tina J. Gamboa whereby said company insured one case of rayon yardage which said Tina J.
Gamboa shipped from San Francisco, California, on steamer Clovis Victory, to Manila,
Philippines and consigned to Jovito Salonga, plaintiff herein. The ship arrived in Manila on
September 10, 1946. On October 7, the shipment was examined by C. B. Nelson and Co., marine
surveyors, at the request of the plaintiff, and in their examination they found a shortage in the
shipment in the amount of P1,723,12. On October 9, plaintiff filed a claim for damages in the
amount of P1,723.12 against the American President Lines, agents of the ship Clovis Victory,
demanding settlement, and when apparently no action was taken on this claim, plaintiff demanded
payment thereof from Warner, Barnes and Co., Ltd., as agent of the insurance company in the
Philippines, and this agent having refused to pay the claim, on April 17, 1947, plaintiff instituted
the present action.
In the meantime, the American President Lines, in a letter dated November 25, 1946, settled the
liability in the amount of P1,021.25. As a result, the amount claimed in the complaint as the
ultimate liability of the defendant under the insurance contract was reduced to P717.82 only.
RTC:
After trial, at which both parties presented their respective evidence, the court denied the motion
for reconsideration filed by the defendant the case was appealed to this court.
ISSUE: Whether or not defendant is the real party-in-interest
Held: NO
Counsel next contends that Warner, Barnes and Co., Ltd., is not the ral party in interest against
whom the suit should be brought. It is claimed that this action should have been filed against its
principal, the Westchester Fire Insurance Company of New York. This point is also well taken.
Section 2, Rule 3 of the Rules of Court requires that "every action must be prosecuted in the name
of the real party in interest." A corollary proposition to this rule is that an action must be brought
against the real party in interest, or against a party which may be bound by the judgment to be
rendered therein (Salmon and Pacific Commercial Co. vs. Tan Cueco, 36 Phil., 556). The real party
in interest is the party who would be benefited or injured by the judgment, or the "party entitled to
the avails of the suit" (1 Sutherland, Court Pleading Practice and Forms, p. 11). And in the case at
bar, the defendant issued upon in its capacity as agent of Westchester Fire Insurance Company of
New York in spite of the fact that the insurance contract has not been signed by it. As we have
said, the defendant did not assume any obligation thereunder either as agent or as a principal. It
cannot, therefore, be made liable under said contract, and hence it can be said that this case was
filed against one who is not the real party in interest.
We agree with counsel for the appellee that the defendant is a settlement and adjustment agent of
the foreign insurance company and that as such agent it has the authority to settle all the losses and
claims that may arise under the policies that may be issued by or in behalf of said company in
accordance with the instructions it may receive from time to time from its principal, but we
disagree with counsel in his contention that as such adjustment and settlement agent, the defendant
has assumed personal liability under said policies, and, therefore, it can be sued in its own right.
An adjustment and settlement agent is no different from any other agent from the point of view of
his responsibility, for he also acts in a representative capacity. Whenever he adjusts or settles a
claim, he does it in behalf of his principal, and his action is binding not upon himself but upon his
principal. And here again, the ordinary rule of agency applies. The following authorities bear this
out:
An insurance adjuster is ordinarily a special agent for the person or company for whom he acts,
and his authority is prima facie coextensive with the business intrusted to him. . . .
An adjuster does not discharge functions of a quasi-judicial nature, but represents his employer, to
whom he owes faithful service, and for his acts, in the employer's interest, the employer is
responsible so long as the acts are done while the agent is acting within the scope of his
employment.
It, therefore, clearly appears that the scope and extent of the functions of an adjustment and
settlement agent do not include personal liability. His functions are merely to settle and adjusts
claims in behalf of his principal if those claims are proven and undisputed, and if the claim is
disputed or is disapproved by the principal, like in the instant case, the agent does not assume any
personal liability. The recourse of the insured is to press his claim against the principal.
. . . Section 114 of the Code of Civil Procedure requires an action to be brought in the name of the
real party in interest; and a corollary proposition requires that an action shall be brought against
the persons or entities which are to be bound by the judgment obtained therein. An action upon a
cause of action pertaining to his principal cannot be brought by an attorney-in-fact in his name
(Arroyo vs. Granada and Gentero, 18 Phil., 484); nor can an action based upon a right of action
belonging to a principal be brought in the name of his representative (Lichauco vs. Limjuco and
Gonzalo, 19 Phil., 12). Actions must be brought by the real parties in interest and against the
persons who are to be bound by the judgment obtained therein. (Salmon and Pacific Commercial
Co. vs. Tan Cueco, 36 Phil., 557-558.)
An action to set aside an instrument of transfer of land should be brought in the name of the real
party in interest. An apoderado or attorney in fact is not a real party. He has no interest in the
litigation and has absolutely no right to bring the defendant into court or to put him to the expense
of a suit, and there is no pro-vision of law permitting action to be brought in such manner. A
judgment for or against the apoderado in no way binds or affects the real party, and a decision in
the suit would be utterly futile. It would touch no interest, adjust no question, bind no one, and
settle no litigation. Courts should not be required to spend their time solemnly considering and
deciding cases where no one could be bound and no interest affected by such deliberation and
decision. (Arroyo vs. Granada and Gentero, 18 Phil., 484.)
Ang v. Ang, G.R. No. 186993, August 22, 2012
Topic: Venue of Action; Real party-in-interest
Facts:
Spouses Alan and Em Ang (respondents) obtained a loan in the amount of Three Hundred
Thousand U.S. Dollars (US$300,000.00) from Theodore and Nancy Ang (petitioners) and
executed a promissory note on September 2, 1992 in favor of the petitioners wherein they promised
to pay the latter the said amount, with interest at the rate of ten percent (10%) per annum, upon
demand.
However, despite repeated demands, the respondents failed to pay the petitioners.Thus, on August
28, 2006, the petitioners sent the respondents a demand letter asking them to pay their outstanding
debt which, at that time, already amounted to Seven Hundred Nineteen Thousand, Six Hundred
Seventy-One U.S. Dollars and Twenty-Three Cents (US$719,671.23), inclusive of the ten percent
(10%) annual interest that had accumulated over the years.
On August 6, 2006, the petitioners, executed their respective Special Powers of Attorney6 in favor
of Attorney Eldrige Marvin B. Aceron (Atty. Aceron) for the purpose of filing an action in court
against the respondents.
RTC:
On September 15, 2006, Atty. Aceron, in behalf of the petitioners, filed a Complaint7 for collection
of sum of money with the RTC of Quezon City against the respondents.
The respondents moved for the dismissal of the complaint on November 21, 2006 filed by the
petitioners on the grounds of improper venue and prescription.8 Insisting that the venue of the
petitioners’ action was improperly laid, the respondents asserted that the complaint against them
may only be filed in the court of the place where either they or the petitioners reside. They averred
that they reside in Bacolod City while the petitioners reside in Los Angeles, California, USA. Thus,
the respondents maintain, the filing of the complaint against them in the RTC of Quezon City was
improper.
On April 12, 2007, the RTC of Quezon, denied the respondents’ motion to dismiss and ruled that
venue of the action may lie where the plaintiff resides (in this case, Quezon City, address of Atty.
Aceron) as provided in Section 2, Rule 4 of the 1997 Rules of Civil Procedure.10
The respondents sought reconsideration of the RTC Order dated April 12, 2007, asserting that
there is no law which allows the filing of a complaint in the court of the place where the
representative, who was appointed as such by the plaintiffs through a Special Power of Attorney,
resides.11
The respondents’ motion for reconsideration was denied by the RTC of Quezon City in its Order12
dated August 27, 2007.
CA:
The respondents then filed with the CA a petition for certiorari13 alleging in the main that,
pursuant to Section 2, Rule 4 of the Rules of Court, the petitioners’ complaint may only be filed
in the court of the place where they or the petitioners reside.
On August 28, 2008, the CA rendered the herein Decision, which annulled and set aside the Orders
dated April 12, 2007 and August 27, 2007 of the RTC of Quezon City and, accordingly, directed
the dismissal of the complaint filed by the petitioners. The CA held that the complaint below
should have been filed in Bacolod City and not in Quezon City.
The petitioners sought a reconsideration of the Decision dated August 28, 2008, but it was denied
by the CA in its Resolution dated February 20, 2009.16
ISSUE:
WHETHER OR NOT THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF
LAW WHEN IT RULED THAT THE COMPLAINT MUST BE DISMISSED ON THE
GROUND THAT VENUE WAS NOT PROPERLY LAID.17
RULING:
No. Contrary to the CA’s disposition, the petitioners maintain that their complaint for collection
of sum of money against the respondents may be filed in the RTC of Quezon City. Invoking
Section 3, Rule 3 of the Rules of Court, they insist that Atty. Aceron, being their attorney-in-fact,
is deemed a real party in interest in the case below and can prosecute the same before the RTC.
Such being the case, the petitioners assert, the said complaint for collection of sum of money may
be filed in the court of the place where Atty. Aceron resides, which is the RTC of Quezon City.
On the other hand, the respondents in their Comment18 assert that the petitioners are proscribed
from filing their complaint in the RTC of Quezon City. They assert that the residence of Atty.
Aceron, being merely a representative, is immaterial to the determination of the venue of the
petitioners’ complaint.
The petitioners’ complaint should have been filed in the RTC of Bacolod City, the court of the
place where the respondents reside, and not in RTC of Quezon City.
It is a legal truism that the rules on the venue of personal actions are fixed for the convenience of
the plaintiffs and their witnesses. Equally settled, however, is the principle that choosing the venue
of an action is not left to a plaintiff’s caprice; the matter is regulated by the Rules of Court.19
The petitioners’ complaint for collection of sum of money against the respondents is a personal
action as it primarily seeks the enforcement of a contract. The Rules give the plaintiff the option
of choosing where to file his complaint. He can file it in the place (1) where he himself or any of
them resides, or (2) where the defendant or any of the defendants resides or may be found. The
plaintiff or the defendant must be residents of the place where the action has been instituted at the
time the action is commenced.20
However, if the plaintiff does not reside in the Philippines, the complaint in such case may only
be filed in the court of the place where the defendant resides. In Cohen and Cohen v. Benguet
Commercial Co., Ltd.,21 this Court held that there can be no election as to the venue of the filing
of a complaint when the plaintiff has no residence in the Philippines. In such case, the complaint
may only be filed in the court of the place where the defendant resides. Thus:
Section 377 provides that actions of this character "may be brought in any province where the
defendant or any necessary party defendant may reside or be found, or in any province where the
plaintiff or one of the plaintiffs resides, at the election of the plaintiff." The plaintiff in this action
has no residence in the Philippine Islands. Only one of the parties to the action resides here. There
can be, therefore, no election by plaintiff as to the place of trial. It must be in the province where
the defendant resides. x x x.22 (Emphasis ours)
Here, the petitioners are residents of Los Angeles, California, USA while the respondents reside
in Bacolod City. Applying the foregoing principles, the petitioners’ complaint against the
respondents may only be filed in the RTC of Bacolod City – the court of the place where the
respondents reside. The petitioners, being residents of Los Angeles, California, USA, are not given
the choice as to the venue of the filing of their complaint.
Thus, the CA did not commit any reversible error when it annulled and set aside the orders of the
RTC of Quezon City and consequently dismissed the petitioners’ complaint against the
respondents on the ground of improper venue.
In this regard, it bears stressing that the situs for bringing real and personal civil actions is fixed
by the Rules of Court to attain the greatest convenience possible to the litigants and their witnesses
by affording them maximum accessibility to the courts.23 And even as the regulation of venue is
primarily for the convenience of the plaintiff, as attested by the fact that the choice of venue is
given to him, it should not be construed to unduly deprive a resident defendant of the rights
conferred upon him by the Rules of Court.24
Atty. Aceron is not a real party in interest in the case below; thus, hisresidence is immaterial
to the venue of the filing of the complaint.
Contrary to the petitioners’ claim, Atty. Aceron, despite being the attorney-in-fact of the
petitioners, is not a real party in interest in the case below. Section 2, Rule 3 of the Rules of Court
reads:
Sec. 2. Parties in interest. – A real party in interest is the party who stands to be benefited or injured
real party in interest. (Emphasis ours)
Interest within the meaning of the Rules of Court means material interest or an interest in issue to
be affected by the decree or judgment of the case, as distinguished from mere curiosity about the
question involved.25 A real party in interest is the party who, by the substantive law, has the right
sought to be enforced.26
Applying the foregoing rule, it is clear that Atty. Aceron is not a real party in interest in the case
below as he does not stand to be benefited or injured by any judgment therein. He was merely
appointed by the petitioners as their attorney-in-fact for the limited purpose of filing and
prosecuting the complaint against the respondents. Such appointment, however, does not mean
that he is subrogated into the rights of petitioners and ought to be considered as a real party in
interest.
Being merely a representative of the petitioners, Atty. Aceron in his personal capacity does not
have the right to file the complaint below against the respondents. He may only do so, as what he
did, in behalf of the petitioners – the real parties in interest. To stress, the right sought to be
enforced in the case below belongs to the petitioners and not to Atty. Aceron. Clearly, an attorney-
in-fact is not a real party in interest.27
The petitioner’s reliance on Section 3, Rule 3 of the Rules of Court to support their conclusion that
Atty. Aceron is likewise a party in interest in the case below is misplaced. Section 3, Rule 3 of the
Rules of Court provides that:
Sec. 3. Representatives as parties. – Where the action is allowed to be prosecuted and defended by
a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the
title of the case and shall be deemed to be the real property in interest. A representative may be a
trustee of an expert trust, a guardian, an executor or administrator, or a party authorized by law or
these Rules. An agent acting in his own name and for the benefit of an undisclosed principal may
sue or be sued without joining the principal except when the contract involves things belonging to
the principal. (Emphasis ours)
Nowhere in the rule cited above is it stated or, at the very least implied, that the representative is
likewise deemed as the real party in interest. The said rule simply states that, in actions which are
allowed to be prosecuted or defended by a representative, the beneficiary shall be deemed the real
party in interest and, hence, should be included in the title of the case.
Indeed, to construe the express requirement of residence under the rules on venue as applicable to
the attorney-in-fact of the plaintiff would abrogate the meaning of a "real party in interest", as
defined in Section 2 of Rule 3 of the 1997 Rules of Court vis-à-vis Section 3 of the same Rule.28
On this score, the CA aptly observed that:
As may be unerringly gleaned from the foregoing provisions, there is nothing therein that expressly
allows, much less implies that an action may be filed in the city or municipality where either a
representative or an attorney-in-fact of a real party in interest resides. Sec. 3 of Rule 3 merely
provides that the name or names of the person or persons being represented must be included in
the title of the case and such person or persons shall be considered the real party in interest. In
other words, the principal remains the true party to the case and not the representative. Under the
plain meaning rule, or verba legis, if a statute is clear, plain and free from ambiguity, it must be
given its literal meaning and applied without interpretation. xxx29 (Citation omitted)
At this juncture, it bears stressing that the rules on venue, like the other procedural rules, are
designed to insure a just and orderly administration of justice or the impartial and even-handed
determination of every action and proceeding. Obviously, this objective will not be attained if the
plaintiff is given unrestricted freedom to choose the court where he may file his complaint or
petition. The choice of venue should not be left to the plaintiff's whim or caprice. He may be
impelled by some ulterior motivation in choosing to file a case in a particular court even if not
allowed by the rules on venue.30
Ching v. Court of Appeals, G.R. No. L-59731, January 11, 1990 (Supra.)
TOPIC: Jurisdiction over the person
FACTS
Spouses Maximo Nofuente and Dominga Lumandan owned a parcel of land with an area of 51,852
square meters situated at Sitio of Kay-Biga, San Dionisio, Municipality of Paranaque, Province of
Rizal. They reconveyed 5/6 portion of the property to Francisco, Regina, Perfects, Constancio and
Matilde all surnamed Nofuente and Transfer Certificate of Title No. 78633 was issued on August
10, 1960 accordingly. 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.
When Ching Leng died on October 19, 1965 in Boston, Massachusetts, United States of America,
his legitimate son Alfredo Ching was appointed administrator of Ching Leng's estate on December
28, 1965 The land covered by T.C.T. No. 91137 was among those included in the inventory
submitted to the court. Private respondent Pedro Asedillo filed a suit against Ching Leng after
thirteen (13) years of the his death on December 27, 1978 by 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.
RTC:
In a decision, 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. 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 who subsequently sold the property to Villa Esperanza Development, Inc.
on September 3..
On October 29, 1979 petitioner Alfredo Ching 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. 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.
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.
CA:
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
Private respondent Pedro Asedillo died on June 7, 1981 at Makati, Metro Manila during the
pendency of the case with the Court of Appeals.Hence, the instant petition.Private respondent's
comment was filed on June 1, 1982 in compliance with the resolution dated April 26, 1982
Petitioner filed a reply to comment on June 18, 1982 and the Court gave due course to the petition
in the resolution of June 28, 1982.
ISSUE:
WHETHER OR NOT THE TRIAL COURT ACQUIRED JURISDICTION OVER THE
SUBJECT MATTER AND THE PARTIES.
NO. 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).
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).
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 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]).
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 (Bailon-Casilao 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).
Topics: MIA v. Rivera Village, G.R. No. 143870, September 30, 2005
Topic: Representative as Parties
FACTS:
The then Civil Aeronautics Administration (CAA) was entrusted with the administration,
operation, management, control, maintenance and development of the Manila International Airport
(MIA), now the Ninoy Aquino International Airport. Among its powers was the power to enter
into, make and execute concessions and concession rights for purposes essential to the operation
of the airport.
On May 25, 1965, the CAA, through its Director, Capt. Vicente C. Rivera, entered into individual
lease contracts with its employees (lessees) for the lease of portions of a four (4)-hectare lot
situated in what is now known as Rivera Village located in Barangay 199 and 200 in Pasay City.
The leases were for a twenty-five (25)-year period to commence on May 25, 1965 up to May 24,
1990 at P20.00[3] per annum as rental.
On May 4, 1982, Executive Order No. (EO) 778 was issued (later amended by EO 903 on July 21,
1983), creating petitioner MIAA, transferring existing assets of the MIA to MIAA, and vesting the
latter with the power to administer and operate the MIA.
Sometime in January 1995, MIAA stopped issuing accrued rental bills and refused to accept rental
payments from the lessees. As a result, respondent Rivera Village Lessee Homeowners
Association, Inc. (homeowners association), purportedly representing the lessees, requested
MIAA to sell the subject property to its members, invoking the provisions of Presidential Decree
RTC Ruling
A preliminary hearing on MIAA’s affirmative defenses was conducted, after which the trial court
issued an Order dated October 12, 1998, denying the prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction and dismissing the petition for lack of merit.
The trial court held that PD 1818 bars the issuance of a restraining order, preliminary injunction
or preliminary mandatory injunction in any case, dispute or controversy involving infrastructure
projects of the government or any public utility operated by the government. It also ruled that the
petition failed to state a cause of action inasmuch as petitioner therein (respondent homeowners
association) is not the real party-in-interest, the individual members of the association being the
ones who have possessory rights over their respective premises. Moreover, the lease contracts have
already expired.
CA Ruling
Respondent filed an appeal with the Court of Appeals, interposing essentially the same arguments
raised before the trial court. The appellate court annulled and set aside the order of the trial court
and remanded the case for further proceedings. The appellate court foremost ruled that the case
can be construed as a class suit instituted by the Rivera Village lessees. The homeowners
association, considered as the representative of the lessees, merely instituted the suit for the benefit
of its members. It does not claim to have any right or interest in the lots occupied by the lessees,
nor seek the registration of the titles to the land in its name.
MIAA now seeks a review of the Decision of the Court of Appeals.
It argues that the petition filed by the homeowners association with the trial court fails to state a
cause of action because the homeowners association is not the real party-in-interest in the suit.
Allegedly, the Board Resolution presented by respondent shows that it was only the board of
directors of the association, as distinguished from the members thereof, which authorized
respondent to act as its representative in the suit.
ISSUE:
Did the petition filed by respondent with the trial court state a cause of action against petitioner?
Rulings
The 1997 Rules of Civil Procedure (Rules of Court) requires that every action must be prosecuted
or defended in the name of the real party-in-interest, i.e., the party who stands to be benefited or
injured by the judgment in the suit, or the party entitled to the avails of the suit.[15] A case is
dismissible for lack of personality to sue upon proof that the plaintiff is not the real party-in-
interest, hence grounded on failure to state a cause of action.[16]
The petition before the trial court was filed by the homeowners association, represented by its
President, Panfilo R. Chiutena, Sr., upon authority of a Board Resolution empowering the latter to
file
“[A]ll necessary action to the Court of Justice and other related acts necessary to have our
Housing Project number 4 land be titled to the members of the Association.”
Obviously, the petition cannot be considered a class suit under Sec. 12, Rule 3[17] of the Rules of
Court, the requisites therefor not being present in the case, notably because the petition does not
allege the existence and prove the requisites of a class suit, i.e., that the subject matter of the
controversy is one of common or general interest to many persons and the parties are so numerous
that it is impracticable to bring them all before the court, and because it was brought only by one
party.
There is, however, merit in the appellate court’s pronouncement that the petition should be
construed as a suit brought by the homeowners association as the representative of the members
thereof under
Sec. 3, Rule 3 of the Rules of Court, which provides:

Sec. 3. Representatives as parties.—Where the action is allowed to be prosecuted or
defended by a representative or someone acting in a fiduciary capacity, the beneficiary
shall be included in the title of the case and shall be deemed to be the real party in interest.
A representative may be a trustee of an express trust, a guardian, an executor or
administrator, or a party authorized by law or these Rules. An agent acting in his own name
and for the benefit of an undisclosed principal may sue or be sued without joining the
principal except when the contract involves things belonging to the principal. [ mphasis
supplied.]
It is a settled rule that every action must be prosecuted or defended in the name of the real party-
ininterest. Where the action is allowed to be prosecuted or defended by a representative acting in
a fiduciary capacity, the beneficiary must be included in the title of the case and shall be deemed
to be the real party-in-interest. The name of such beneficiaries shall, likewise, be included in the
complaint.[19]
Moreover, Sec. 4, Rule 8 of the Rules of Court provides that facts showing the capacity of a party
to sue or be sued, or the authority of a party to sue or be sued in a representative capacity must be
averred in the complaint.
In order to maintain an action in a court of justice, the plaintiff must have an actual legal existence,
that is, he or she or it must be a person in law and possessed of a legal entity as either a natural or
an artificial person. The party bringing suit has the burden of proving the sufficiency of the
representative character that he claims. If a complaint is filed by one who claims to represent a
party as plaintiff but who, in fact, is not authorized to do so, such complaint is not deemed filed
and the court does not acquire jurisdiction over the complaint. It must be stressed that an
unauthorized complaint
does not produce any legal effect.[20]
In this case, the petition filed with the trial court sufficiently avers that the homeowners
association, through its President, is suing in a representative capacity as authorized under the
Board Resolution attached to the petition. Although the names of the individual members of the
homeowners association who are the beneficiaries and real parties-in-interest in the suit were not
indicated in the title of the petition, this defect can be cured by the simple expedient of requiring
the association to disclose the names of the principals and to amend the title and averments of the
petition accordingly.
Essentially, the purpose of the rule that actions should be brought or defended in the name of the
real party-in-interest is to protect against undue and unnecessary litigation and to ensure that the
court will have the benefit of having before it the real adverse parties in the consideration of a case.
This rule, however, is not to be narrowly and restrictively construed, and its application should be
neither dogmatic nor rigid at all times but viewed in consonance with extant realities and
practicalities.
The Executive Secretary as representative of the President of the Philippines is, therefore, an
indispensable party in actions seeking to compel the sale or disposition of properties of the MIAA.
Title: Carandang v. Heirs of de Guzman, G.R. No. 160347, November 29, 2006
Topic: spouses as parties
FACTS:
[Quirino de Guzman] and [the Spouses Carandang] are stockholders as well as corporate
officers of Mabuhay Broadcasting System (MBS). The Spouses Carandang subscribed to
the increase of capital stock made by MBS on November 26, 1983 and March 3, 1984.
[De Guzman] claims that, part of the payment for these subscriptions were paid by him and
sent a demand letter to spouse carandang for the payment of said total amount.
[The spouses Carandang] refused to pay the amount, contending that a pre-incorporation
agreement was executed between, whereby the latter promised to pay for the stock
subscriptions of the former without cost, in consideration for technical expertise, therefore,
there is no indebtedness on their part.
On June 5, 1992, [de Guzman] filed his complaint, seeking to recover the ₱336,375
together with damages.
RTC
Rendered in favor of [de Guzman]. Accordingly, [the spouses Carandang] are ordered to
jointly and severally pay [de Guzman]
CA:
Affirmed the decision of RTC. The Motion for Reconsideration filed by the spouses
Carandang was similarly denied.
The spouses Carandang then filed before this Court the instant Petition for Review on Certiorari,
claiming that the said decision, having been rendered after the death of de Guzman, is void for
failing to comply with Section 16 Rules of Court, because there has been no valid substitution of
the heirs of de Guzman. They also contended that the case failed to state a cause of action because
de Guzman was not included as party plaintiff.
Issue: whether or not the parties are indispensable parties
SC:
Other than the indispensable and necessary parties, there is a third set of parties: the pro-forma
parties, which are those who are required to be joined as co-parties in suits by or against another
party as may be provided by the applicable substantive law or procedural rule.25 An example is
provided by Section 4, Rule 3 of the Rules of Court:
Sec. 4. Spouses as parties. – Husband and wife shall sue or be sued jointly, except as provided by
law.
Pro-forma parties can either be indispensable, necessary or neither indispensable nor necessary.
The third case occurs if, for example, a husband files an action to recover a property which he
claims to be part of his exclusive property. The wife may have no legal interest in such property,
but the rules nevertheless require that she be joined as a party.
Milagros de Guzman, being presumed to be a co-owner of the credits allegedly extended to the
spouses Carandang, seems to be either an indispensable or a necessary party. If she is an
indispensable party, dismissal would be proper. If she is merely a necessary party, dismissal is not
warranted, whether or not there was an order for her inclusion in the complaint.
Being co-owners of the alleged credit, Quirino and Milagros de Guzman may separately bring an
action for the recovery thereof. We therefore hold that Milagros de Guzman is not an indispensable
party in the action for the recovery of the allegedly loaned money to the spouses Carandang. As
such, she need not have been impleaded in said suit, and dismissal of the suit is not warranted by
her not being a party thereto.
The Court of Appeals is correct insofar as it held that when the spouses are sued for the
enforcement of the obligation entered into by them, they are being impleaded in their capacity as
representatives of the conjugal partnership and not as independent debtors. Hence, either of them
may be sued for the whole amount, similar to that of a solidary liability, although the amount is
chargeable against their conjugal partnership property.
Title: Flores v. Hon. Mallare-Philipps
Topic:: Permissive joinder of parties
Facts:
Petitioner Flores, in this case filed a complaint against respondent Ignacio Binongcal and Fernando
Calion for the payment of the tires that Ignacio Binongcal purchased in the amount of 11,000 and
the other is filed against Fernando for the non payment of 10, 212, both transactions were for the
purchase of the tires on separate dates. Petitioner filed a case joining Binongcal and Calion in one
complaint. Binongcal filed a motion to dismiss on the ground of lack of jurisdiction alleging that
the RTC does not have jurisdiction over the case since under BP 129, Section 19 Provides that the
regional trial court shall exercise exclusive original jurisdiction if the amount of the demand is
more than twenty thousand pesos (P20,000.00). It was further averred in said motion that although
another person, Fernando Calion, was allegedly indebted to petitioner in the amount of P10,212.00,
his obligation was separate and distinct from that of the other respondent.
Rulings:
The Court rules that the application of the totality rule under Section 33(l) of Batas Pambansa Blg.
129 and Section 11 of the Interim Rules is subject to the requirements for the permissive joinder
of parties under Section 6 of Rule 3 which provides as follows:
Permissive joinder of parties.-All persons in whom or against whom any right to

relief in respect to or arising out of the same transaction or series of transactions is
alleged to exist, whether jointly, severally, or in the alternative, may, except as
otherwise provided in these rules, join as plaintiffs or be joined as defendants in
one complaint, where any question of law or fact common to all such plaintiffs or
to all such defendants may arise in the action; but the court may make such orders
as may be just to prevent any plaintiff or defendant from being embarrassed or put
to expense in connection with any proceedings in which he may have no interest.
Under the present law, the totality rule is applied also to cases where two or more plaintiffs having
separate causes of action against a defendant join in a single complaint, as well as to cases where
a plaintiff has separate causes of action against two or more defendants joined in a single
complaint. However, the causes of action in favor of the two or more plaintiffs or against the two
or more defendants should arise out of the same transaction or series of transactions and there
should be a common question of law or fact, as provided in Section 6 of Rule 3.
The difference between the former and present rules in cases of permissive joinder of parties may
be illustrated by the two cases which were cited in the case of Vda. de Rosario vs. Justice of the
Peace (supra) as exceptions to the totality rule. In the case of Soriano y Cia vs. Jose (86 Phil. 523),
where twenty-nine dismissed employees joined in a complaint against the defendant to collect their
respective claims, each of which was within the jurisdiction of the municipal court although the
total exceeded the jurisdictional amount, this Court held that under the law then the municipal
court had jurisdiction. In said case, although the plaintiffs' demands were separate, distinct and
independent of one another, their joint suit was authorized under Section 6 of Rule 3 and each
separate claim furnished the jurisdictional test. In the case of International Colleges, Inc. vs.
Argonza (90 Phil. 470), where twenty-five dismissed teachers jointly sued the defendant for unpaid
salaries, this Court also held that the municipal court had jurisdiction because the amount of each
claim was within, although the total exceeded, its jurisdiction and it was a case of permissive
joinder of parties plaintiff under Section 6 of Rule 3.
Under the present law, the two cases above cited (assuming they do not fall under the Labor Code)
would be under the jurisdiction of the regional trial court. Similarly, in the abovecited cases
of Brillo vs. Buklatan and Gacula vs. Martinez (supra), if the separate claims against the several
defendants arose out of the same transaction or series of transactions and there is a common
question of law or fact, they would now be under the jurisdiction of the regional trial court.
In other words, in cases of permissive joinder of parties, whether as plaintiffs or as defendants,

under Section 6 of Rule 3, the total of all the claims shall now furnish the jurisdictional test.
Needless to state also, if instead of joining or being joined in one complaint separate actions are
filed by or against the parties, the amount demanded in each complaint shall furnish the
jurisdictional test.
Title: BOSTON EQUITY vs. CA
Topic: Compulsory joinder of indispensable parties
Facts:
Petitioner filed a complaint for sum of money with a prayer for the issuance of a writ of preliminary
attachment against the spouses Manuel and Lolita Toledo. Herein respondent filed an Answer
dated 19 March 1998 but on 7 May 1998, she filed a Motion for Leave to Admit Amended Answer
in which she alleged, among others, that Manuel Toledo (Manuel), is already dead. Petitioner filed
a motion, to require respondent to disclose the heirs of Manuel. This was granted by the Trial
Court. In compliance with the verbal order of the court during the hearing of the case, respondent
submitted the required names and addresses of the heirs. Petitioner then filed a Motion for
Substitution praying that Manuel be substituted by his children as party- defendants. It appears
that this motion was granted by the trial court.
Respondent instead filed a motion to dismiss the complaint, citing the following as grounds: (1)
that the complaint failed to implead an indispensable party or a real party in interest; hence, the
case must be dismissed for failure to state a cause of action; (2) that the trial court did not acquire
jurisdiction over the person of Manuel pursuant to Section 5, Rule 86 of the Revised Rules of
Court; (3) that the trial court erred in ordering the substitution of the deceased Manuel by his heirs;
and (4) that the court must also dismiss the case against Lolita Toledo in accordance with Section
6, Rule 86 of the Rules of Court.
The trial court denied the motion to dismiss and the CA in the appeal granted the petition.
Issue: WON the estate of Manuel Toledo is an indispensable party.
Ruling:
Rule 3, Section 7 of the 1997 Rules of Court states:

SEC. 7. Compulsory joinder of indispensable parties. – Parties-in-interest without whom no final
determination can be had of an action shall be joined either as plaintiffs or defendants.
An indispensable party is one who has such an interest in the controversy or subject matter of a
case that a final adjudication cannot be made in his or her absence, without injuring or affecting
that interest. He or she is a party who has not only an interest in the subject matter of the
controversy, but "an interest of such nature that a final decree cannot be made without affecting
that interest or leaving the controversy in such a condition that its final determination may be
wholly inconsistent with equity and good conscience. It has also been considered that an
indispensable party is a person in whose absence there cannot be a determination between the
parties already before the court which is effective, complete or equitable." Further, an
indispensable party is one who must be included in an action before it may properly proceed.44
On the other hand, a "person is not an indispensable party if his interest in the controversy or
subject matter is separable from the interest of the other parties, so that it will not necessarily be
directly or injuriously affected by a decree which does complete justice between them. Also, a
person is not an indispensable party if his presence would merely permit complete relief between
him or her and those already parties to the action, or if he or she has no interest in the subject
matter of the action." It is not a sufficient reason to declare a person to be an indispensable party
simply because his or her presence will avoid multiple litigations.45
Applying the foregoing pronouncements to the case at bar, it is clear that the estate of Manuel is
not an indispensable party to the collection case, for the simple reason that the obligation of Manuel
and his wife, respondent herein, is solidary.
Title: Malazarte vs. CA
Topic: Compulsory joinder of indispensable parties
Facts:
Petitioners Malazarte and Nieves filed a complaint for recovery of title to property with damages
before the RTC against respondents. Were in the property subject in this case is a parcel of land
were the tax declaration in the names of the petitioner Nieves. Revealed in the course of the trial
was that petitioner Nieves, contrary to her allegations in the complaint, was not the sole and
absolute owner of the land. After resting their case, respondents raised in their memorandum the
argument that the case should have been terminated at inception for petitioners’ failure to implead
indispensable parties, the other co-owners – Jose, Victor and
Victoria.
Respondents, for their part, denied petitioners’ allegation of ownership and possession of the
premises, and interposed, as their main defense, that the subject land was inherited by all the parties
from their common ancestor, Francisco Plasabas. The contention of the respondent is to dismiss
the argument because the they failed to implead the indispensable parties which are the co-owners.
Issue: WON the co-owners are indispensable parties.
Ruling:
Article 487 of the Civil Code provides that any one of the co-owners may bring an action for
ejectment. The article covers all kinds of actions for the recovery of possession, including
an accion publiciana and a reivindicatory action. A co-owner may file suit without necessarily
joining all the other co-owners as co-plaintiffs because the suit is deemed to be instituted for the
benefit of all. Any judgment of the court in favor of the plaintiff will benefit the other co-owners,
but if the judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-
owners.13
With this disquisition, there is no need to determine whether petitioners’ complaint is one for
ejectment or for recovery of title. To repeat, Article 487 of the Civil Code applies to both actions.
Thus, petitioners, in their complaint, do not have to implead their co-owners as parties. The only
exception to this rule is when the action is for the benefit of the plaintiff alone who claims to be
the sole owner and is, thus, entitled to the possession thereof. In such a case, the action will not
prosper unless the plaintiff impleads the other co-owners who are indispensable parties.14
Here, the allegation of petitioners in their complaint that they are the sole owners of the property
in litigation is immaterial, considering that they acknowledged during the trial that the property is
co-owned by Nieves and her siblings, and that petitioners have been authorized by the co-owners
to pursue the case on the latter’s behalf.15Impleading the other co-owners is, therefore, not
mandatory, because, as mentioned earlier, the suit is deemed to be instituted for the benefit of all.
In any event, the trial and appellate courts committed reversible error when they summarily
dismissed the case, after both parties had rested their cases following a protracted trial commencing
in 1974, on the sole ground of failure to implead indispensable parties. The rule is settled that the
non-joinder of indispensable parties is not a ground for the dismissal of an action. The remedy is
to implead the non-party claimed to be indispensable. Parties may be added by order of the court
on motion of the party or on its own initiative at any stage of the action and/or at such times as are
just. If petitioner refuses to implead an indispensable party despite the order of the court, the latter
may dismiss the complaint/petition for the plaintiff’s/petitioner's failure to comply therewith.16
TOPIC: JURISDICTION IS DETERMINED BY THE ALLEGATIONS IN THE COMPLAINT
TITLE: EDITHA PADLAN VS. ELENITA DINGLASAN AND FELICISIMO DINGLASAN
CITATION: G.R. NO. 180321 MARC H 20, 2013
FACTS: Elenita Dinglasan was the registered owner of a parcel of land with an aggregate area of 82,972
square meters. While on board a jeepney, Elenita’s mother, Lilia Baluyot, had a conversation with Maura
Passion regarding the sale of the said property. Believing that Maura was a real estate agent, Lilia
borrowed the owner’s copy of the TCT from Elenita and gave it to Maura. Maura then subdivided the
property into several lots under the name of Elenita and her husband Felicisimo Dinglasan
Through a falsified deed of sale bearing the forged signature of Elenita and her husband Felicisimo, Maura
was able to sell the lots to different buyers.
April 26, 1990- Maura sold Lot No. 625-K to Lorna Ong who later caused the issuance of TCT No.
134932 for the subject property under her name.
August 1990, Lorna sold the lot to petitioner Editha Padlan for ₱4,000.00. Thus, TCT No. 134932
was cancelled and TCT No. 137466 was issued in the name of petitioner.
After learning what had happened, respondents demanded petitioner to surrender possession of Lot No.
625-K, but the latter refused. Respondents were then forced to file a case before the Regional Trial Court
of Balanga, Bataan for the Cancellation of Transfer Certificate of Title No. 137466, docketed as Civil Case
No. 438-ML. Summons was, thereafter, served to petitioner through her mother, Anita Padlan.
December 13, 1999 - respondents moved to declare petitioner in default and prayed that they
be allowed to present evidence ex parte.
January 17, 2000 - petitioner, through counsel, filed an Opposition to Declare Defendant in
Default with Motion to Dismiss Case for Lack of Jurisdiction Over the Person of Defendant.
Petitioner claimed that the court did not acquire jurisdiction over her, because the summons was
not validly served upon her person, but only by means of substituted service through her mother.
Petitioner maintained that she has long been residing in Japan after she married a Japanese
national and only comes to the Philippines for a brief vacation once every two years.
April 5, 2001 - Charlie Padlan, the brother of petitioner, testified that his sister is still in Japan
April 5, 2001 - RTC issued an Order denying petitioner’s motion to dismiss and declared her in
default. Thereafter, trial ensued.
RTC Decision
July 1, 2005 – finds petitioner to be a buyer in good faith and, consequently, dismissed the
complaint.
.
CA
Decision – reversed and set aside the Decision of the RTC and ordered the cancellation of the TCT
issued in the name of Lorna and the petitioner, and the revival of respondents’ own title.
The CA found that petitioner purchased the property in bad faith from Lorna. The CA opined that
although a purchaser is not expected to go beyond the title, based on the circumstances
surrounding the sale, petitioner should have conducted further inquiry before buying the
disputed property. The fact that Lorna bought a 5,000-square-meter property for only ₱4,000.00
and selling it after four months for the same amount should have put petitioner on guard.
Motion for Recon was filed by the petitioner. Petitioner argued that not only did the complaint
lacks merit, the lower court failed to acquire jurisdiction over the subject matter of the case and
the person of the petitioner.
CA Resolution: denied the motion. The CA concluded that the rationale for the exception made
in the landmark case of Tijam v. Sibonghanoy was present in the case. It reasoned that when the
RTC denied petitioner’s motion to dismiss the case for lack of jurisdiction, petitioner neither
moved for a reconsideration of the order nor did she avail of any remedy provided by the Rules.
Instead, she kept silent and only became interested in the case again when the CA rendered a
decision adverse to her claim.
ISSUE: WON RTC has jurisdiction over the subject matter of the case.
RULING:
MTC and not the RTC has jurisdiction over the action
In order to determine which court has jurisdiction over the action, an examination of the complaint is
essential. Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred
by law and determined by the allegations in the complaint which comprise a concise statement of the
ultimate facts constituting the plaintiff's cause of action. The nature of an action, as well as which court
or body has jurisdiction over it, is determined based on the allegations contained in the complaint of the
plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims
asserted therein. The averments in the complaint and the character of the relief sought are the ones to
be consulted. Once vested by the allegations in the complaint, jurisdiction also remains vested irrespective
of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein.
What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the
allegations in the complaint. The averments therein and the character of the relief sought are the ones to
be consulted.
An action "involving title to real property" means that the plaintiff's cause of action is based on a claim
that he owns such property or that he has the legal rights to have exclusive control, possession,
enjoyment, or disposition of the same. Title is the "legal link between (1) a person who owns property
and (2) the property itself." "Title" is different from a "certificate of title" which is the document of
ownership under the Torrens system of registration issued by the government through the Register of
Deeds. While title is the claim, right or interest in real property, a certificate of title is the evidence of such
claim.
In the present controversy, before the relief prayed for by the respondents in their complaint can be
granted, the issue of who between the two contending parties has the valid title to the subject lot must
first be determined before a determination of who between them is legally entitled to the certificate of
title covering the property in question.
From the Complaint, the case filed by respondent is not simply a case for the cancellation of a particular
certificate of title and the revival of another. The determination of such issue merely follows after a court
of competent jurisdiction shall have first resolved the matter of who between the conflicting parties is the
lawful owner of the subject property and ultimately entitled to its possession and enjoyment. The action
is, therefore, about ascertaining which of these parties is the lawful owner of the subject lot, jurisdiction
over which is determined by the assessed value of such lot.
In no uncertain terms, the Court has already held that a complaint must allege the assessed value of the
real property subject of the complaint or the interest thereon to determine which court has jurisdiction
over the action. In the case at bar, the only basis of valuation of the subject property is the value alleged
in the complaint that the lot was sold by Lorna to petitioner in the amount of ₱4,000.00. No tax declaration
was even presented that would show the valuation of the subject property. In fact, in one of the hearings,
respondents’ counsel informed the court that they will present the tax declaration of the property in the
next hearing since they have not yet obtained a copy from the Provincial Assessor’s Office. However, they
did not present such copy.
Where the ultimate objective of the plaintiffs is to obtain title to real property, it should be filed in the
proper court having jurisdiction over the assessed value of the property subject thereof. Since the
amount alleged in the Complaint by respondents for the disputed lot is only ₱4,000.00, the MTC and
not the RTC has jurisdiction over the action. Therefore, all proceedings in the RTC are null and void.
TOPIC: RESIDUAL POWER / JURISDICTION
TITLE: AUGUSTUS GONZALES & SPOUSES RODRIGUEZ VS. QUIRICO PE
CITATION: G.R. NO. 167398 AUGUST 9, 2011
FACTS: Respondent Quirico Pe was engaged in the business of construction materials, and had been
transacting business with petitioner Spouses Nestor Victor Rodriguez and Ma. Lourdes Rodriguez. The
Department of Public Works and Highways awarded two contracts in favor of petitioner Nestor Rodriguez
for the following projects:
A. Construction of "Lanot-Banga Road (Kalibo Highway) km. 39 + 200 to km. 40 + 275 Section IV
(Aklan side)"
B. Concreting of "Laua-an Pandan Road (Tibial-Culasi Section), Province of Antique."
In 1998, respondent agreed to supply cement for the construction projects of petitioner Spouses
Rodriguez. Petitioner Nestor Rodriguez availed of the DPWH’s pre-payment program for cement
requirement regarding the Lanot-Banga Road, Kalibo Highway project (Kalibo project), wherein the DPWH
would give an advance payment even before project completion upon his presentment, among others, of
an official receipt for the amount advanced.
Petitioner Nestor Rodriguez gave Land Bank of the Philippines (LBP) Check No. 6563066 to respondent,
which was signed by co-petitioners (his wife Ma. Lourdes Rodriguez and his business partner Augustus
Gonzales), but leaving the amount and date in blank. The blank LBP check was delivered to respondent to
guarantee the payment of 15,698 bags of Portland cement valued at ₱1,507,008.00, covered by Official
Receipt No. 1175, issued by respondent (as owner of Antique Commercial), in favor of petitioner Nestor
Rodriguez (as owner of Greenland Builders). However, a year later, respondent filled up blank LBP Check
No. 6563066, by placing ₱2,062,000.00 and June 30, 1999, corresponding to the amount and date.
Petitioner
Filed an Amended Complaint for Declaration of Payment, Cancellation of Documents and Damages against
respondent with the RTC. The amended complaint alleged that they entrusted blank LBP Check No.
6563066 to respondent so as to facilitate the approval of the pre-payment application of petitioner Nestor
Rodriguez with the DPWH. They stated that the blank LBP check would "serve as collateral" to guarantee
the payment for 15,698 bags to be used for the Kalibo project, amounting to ₱1,507,008.00, and that after
payment of the said amount, respondent would return the LBP check. According to them, after having
paid respondent the amount of ₱2,306,500.00, which is ₱139,160.00 more than the amount of
₱2,167,340.00 (representing the value for 23,360 bags of cement taken for the Kalibo project), they were
cleared of any liability.
Allegation:
Petitioners allege that since respondent failed to pay the docket and other legal fees at the time he filed
the Notice of Appeal, his appeal was deemed not perfected in contemplation of the law. Thus, petitioners
pray that the CA decision be set aside and a new one be rendered dismissing the respondent’s appeal and
ordering the execution of the RTC Decision dated June 28, 2002.
Respondent
Filed an Answer to Amended Complaint, averring that he had so far delivered 40,360 bags of cement to
petitioners who remitted ₱2,306,500.00, thereby leaving an outstanding amount of ₱2,062,000.00. He
countered that when petitioners stopped the bank-to-bank online payments to him, he filled up the
amount of ₱2,062,000.00 and made the LBP check payable on June 30, 1999. The LBP check was
dishonored for being "drawn against insufficient funds (DAIF)." By way of compulsory counterclaim, he
sought recovery of the balance of ₱2,062,000.00, with interest at 24% from January 29, 1999 until fully
paid as actual damages.
Allegation:
His appeal has been perfected by the mere filing of the notice of appeal. Respondent theorizes that with
the perfection of his appeal, the trial court is now divested of jurisdiction to dismiss his appeal and,
therefore, only the CA has jurisdiction to determine and rule on the propriety of his appeal. He raises the
defense that his failure to pay the required docket and other legal fees was because the RTC Branch Clerk
of Court did not make an assessment of the appeal fees to be paid when he filed the notice of appeal.
RTC
Decision: Found that respondent’s subsequent filling up of LBP Check No. 6563066 in the amount
of ₱2,062,000.00 was not made strictly in accordance with the authority given to him by petitioner
Nestor Rodriguez, and that since one year had already lapsed, the same was not done within a
reasonable time. As to the 23,360 bags of cement for the Kalibo project, valued at ₱2,167,340.00
which was subject of previous transactions, the trial court ruled that the same had been fully paid
and considered a settled issue. Consequently, the RTC rendered judgment in favor of the
petitioners and against the respondent.
July 30, 2002 - Respondent filed a notice of appeal
August 5, 2002 - The trial court gave due course to respondent's appeal, and directed the Branch
Clerk of Court to transmit the entire records of the case to the CA.
August 26, 2002 - Petitioners filed a Motion for Reconsideration, to Dismiss Appeal, and for
Issuance of Writ of Execution, stating that respondent’s appeal should be dismissed as the same
was not perfected due to non-payment of docket and other lawful fees as required under Section
4, Rule 41 of the Rules of Court. Claiming that since the respondent’s appeal was not perfected
and, as a consequence, the RTC Decision dated June 28, 2002 became final and executory,
petitioners sought the issuance of a writ of execution for the implementation of the said RTC
Decision.
To buttress their motion, petitioners also appended a Certification dated August 19, 2002,
issued by the Clerk of Court of the Office of the Clerk of Court (OCC) of the RTC, Iloilo City,
certifying that no appeal fees in the case had been paid and received by the OCC.
September 23, 2002 - The trial court dismissed respondent's appeal and directed the issuance of
a writ of execution to implement the RTC Decision dated June 28, 2002.
October 2, 2002 - The Clerk of Court and Ex-officio Provincial Sheriff of Iloilo issued the Writ of
Execution directing the execution of the RTC Decision dated June 28, 2002.
October 7, 2002 - respondent filed a Petition for Certiorari and Prohibition with Application for
Writ of Preliminary Injunction and Prayer for Temporary Restraining Order, seeking to set aside
the RTC Order dated September 23, 2002 (which dismissed his appeal and directed the issuance
of a writ of execution to implement the RTC Decision dated June 28, 2002), and to enjoin the
implementation of the Writ of Execution dated October 2, 2002.
CA
Resolution dated October 9, 2002 - granted the respondents’ prayer for Temporary Restraining
Order
Resolution dated August 20, 2003 - approved the respondent’s injunction bond and directed the
Division Clerk of Court to issue the writ of preliminary injunction,thereby enjoining the
implementation of the Writ of Execution dated October 2, 2002.
Decision: In favor of respondents. The assailed order and writ of execution of the Regional Trial
Court was set aside.
Petitioners filed a motion for reconsideration which was denied by the CA.
ISSUE: WON payment of docket and other legal fees within the prescribed period is both mandatory and
jurisdictional.
RULING:
YES.
In cases of ordinary appeal, Section 2, Rule 41 of the Rules of Court provides that the appeal to the CA in
cases decided by the RTC in the exercise of its original jurisdiction shall be taken by filing a notice of appeal
with the RTC (the court which rendered the judgment or final order appealed from) and serving a copy
thereof upon the adverse party. Section 3 thereof states that the appeal shall be taken within fifteen (15)
days from notice of the judgment or final order appealed from. Concomitant with the filing of a notice of
appeal is the payment of the required appeal fees within the 15-day reglementary period set forth in
Section 4 of the said Rule. Thus,
SEC. 4. Appellate court docket and other lawful fees. – Within the period for taking an appeal, the
appellant shall pay to the clerk of the court which rendered the judgment or final order appealed
from, the full amount of the appellate court docket and other lawful fees. Proof of payment of
said fees shall be transmitted to the appellate court together with the original record or the record
on appeal.
In Far Corporation v. Magdaluyo, as with other subsequent cases of the same ruling, the Court explained
that the procedural requirement under Section 4 of Rule 41 is not merely directory, as the payment of the
docket and other legal fees within the prescribed period is both mandatory and jurisdictional. It bears
stressing that an appeal is not a right, but a mere statutory privilege. An ordinary appeal from a decision
or final order of the RTC to the CA must be made within 15 days from notice. And within this period, the
full amount of the appellate court docket and other lawful fees must be paid to the clerk of the court
which rendered the judgment or final order appealed from. The requirement of paying the full amount of
the appellate docket fees within the prescribed period is not a mere technicality of law or procedure. The
payment of docket fees within the prescribed period is mandatory for the perfection of an appeal.
Without such payment, the appeal is not perfected. The appellate court does not acquire jurisdiction over
the subject matter of the action and the Decision sought to be appealed from becomes final and
executory. Further, under Section 1 (c), Rule 50, an appeal may be dismissed by the CA, on its own motion
or on that of the appellee, on the ground of the non-payment of the docket and other lawful fees within
the reglementary period as provided under Section 4 of Rule 41. The payment of the full amount of the
docket fee is an indispensable step for the perfection of an appeal. In both original and appellate cases,
the court acquires jurisdiction over the case only upon the payment of the prescribed docket fees.
The CA took cognizance over the case, based on the wrong premise that when the RTC issued the Order
dated August 5, 2002 giving due course to respondent’s Notice of Appeal and directing the Branch Clerk
of Court to transmit the entire records of the case to the CA, it ipso facto lost jurisdiction over the case.
Section 9, Rule 41 of the Rules explains that the court of origin loses jurisdiction over the case only upon
the perfection of the appeal filed in due time by the appellant and the expiration of the time to appeal of
the other parties. Withal, prior to the transmittal of the original records of the case to the CA, the RTC
may issue orders for the protection and preservation of the rights of the prevailing party, as in this case,
the issuance of the writ of execution because the respondent’s appeal was not perfected.
Moreover, Section 13, Rule 41 of the Rules states that the CA may dismiss an appeal taken from the RTC
on the ground of non-payment of the docket and other lawful fees within the 15-day reglementary period:
SEC 13. Dismissal of appeal. — Prior to the transmittal of the original record or the record on
appeal to the appellate court, the trial court may motu proprio or on motion dismiss the appeal
for having been taken out of time, or for non-payment of the docket and other lawful fees within
the reglementary period. (As amended by A.M. No. 00-2-10-SC, May 1, 2000.)
Since respondent’s appeal was not perfected within the 15-day reglementary period, it was as if no appeal
was actually taken. Therefore, the RTC retains jurisdiction to rule on pending incidents lodged before it,
such as the petitioner’s Motion for Reconsideration, to Dismiss Appeal, and for Issuance of Writ of
Execution, filed on August 26, 2002, which sought to set aside its Order dated August 5, 2002 that gave
due course to respondent’s Notice of Appeal, and directed the issuance of a writ of execution. Having no
jurisdiction over the case, the prudent thing that the CA should have done was to dismiss the respondent’s
appeal for failure to pay the appeal fees, and declare that the RTC Decision dated June 28, 2002 has now
become final and executory.
One who seeks to avail of the right to appeal must strictly comply with the requirements of the rules, and
failure to do so leads to the loss of the right to appeal. The rules require that from the date of receipt of
the assailed RTC order denying one’s motion for reconsideration, an appellant may take an appeal to the
CA by filing a notice of appeal with the RTC and paying the required docket and other lawful fees with the
RTC Branch Clerk of Court, within the 15-day reglementary period for the perfection of an appeal.
Otherwise, the appellant's appeal is not perfected, and the CA may dismiss the appeal on the ground of
non-payment of docket and other lawful fees. As a consequence, the assailed RTC decision shall become
final and executory and, therefore, the prevailing parties can move for the issuance of a writ of execution.
While every litigant must be given the amplest opportunity for the proper and just determination of his
cause, free from the constraints of technicalities, the failure to perfect an appeal within the reglementary
period is not a mere technicality. It raises jurisdictional problem, as it deprives the appellate court of its
jurisdiction over the appeal. After a decision is declared final and executory, vested rights are acquired by
the winning party. Just as a losing party has the right to appeal within the prescribed period, the winning
party has the correlative right to enjoy the finality of the decision on the case.
TOPIC: DOCTRINE OF PRIMARY JURISDICTION
TITLE: ROSITO BAGUNU VS. SPOUSES FRANCISCO AGGABAO & ROSENDA ACERIT
CITATION: G.R. NO. 186487 AUGUST 15, 2011
FACTS: The present controversy stemmed from a protest filed by the spouses Francisco Aggabao and
Rosenda Acerit against the petitioner’s free patent application over a parcel of unregistered land located
in Caniogan, Sto. Tomas, Isabela, pending before the Department of Environment and Natural Resources,
Region II, Tuguegarao City, Cagayan.
The subject land was previously owned by Marcos Binag, who later sold it (first sale) to Felicisimo Bautista.
In 1959, Bautista, in turn, sold the subject land (second sale) to Atty. Samson Binag.
On December 12, 1961, Atty. Binag applied for a free patent over the subject land with the Bureau of
Lands. On November 24, 1987, Atty. Binag sold the subject land (third sale) to the petitioner, who
substituted for Atty. Binag as the free patent applicant. The parties’ deed of sale states that the land sold
to the petitioner is the same lot subject of Atty. Binag’s pending free patent application.
The deeds evidencing the successive sale of the subject land, the Bureau of Lands’ survey, and the free
patent applications uniformly identified the subject land as Lot 322. The deeds covering the second and
third sale also uniformly identified the boundaries of the subject land.
On December 28, 1992, the respondents filed a protest against the petitioner’s free patent application.
The respondents asserted ownership over Lot 322 based on the Deeds of Extrajudicial Settlement with
Sale, dated June 23, 1971 and April 15, 1979, executed in their favor by the heirs of one Rafael Bautista.
The Office of the Regional Executive Director of the DENR conducted an ocular inspection and formal
investigation. The DENR Regional Office found out that the petitioner actually occupies and cultivates "the
area in dispute including the area purchased by the respondents."
DENR Regional Office

Decision: ruled that the petitioner wrongfully included Lot 322 in his free patent application since
this lot belongs to the respondents.
Motion For Reconsideration
Petitioner filed a Motion for Reconsideration which was subsequently denied by DENR Regional
Office ruling that in determining the identity of a lot, the boundaries – and not the lot number
assigned to it - are controlling. Since the boundaries indicated in the deed of sale in the
petitioner’s favor correspond to the boundaries of Lot 258, what the petitioner acquired was Lot
258, notwithstanding the erroneous description of the lot sold as Lot 322.
Appeal
The DENR Secretary affirmed the ruling of the DENR Regional Office. After noting the differences
in the boundaries stated in the parties’ respective Deeds of Sale, the DENR Secretary concluded
that the land claimed by the petitioner is, in fact, distinct from that claimed by the respondents.
The DENR Secretary ruled that based on the parties’ respective deeds of sale, the Subdivision Plan
of the lot sold to the petitioner and Atty. Binag’s affidavit - claiming that the designation of Lot
322 in the Deed of Sale in the petitioner’s favor is erroneous - what the petitioner really acquired
was Lot 258 and not Lot 322.
The petitioner appealed to the Court of Appeals.

CA
Decision: Affirmed the ruling of the DENR Secretary. Applying the doctrine of primary jurisdiction,
the CA ruled that since questions on the identity of a land require a technical determination by
the appropriate administrative body, the findings of fact of the DENR Regional Office, as affirmed
by the DENR Secretary, are entitled to great respect, if not finality.
ISSUE: WON the doctrine of primary jurisdiction is applicable in the case at bar.
RULING:
YES.
The present case stemmed from the protest filed by the respondents against the petitioner’s free patent
application. In resolving this protest, the DENR, through the Bureau of Lands, had to resolve the issue
of identity of the lot claimed by both parties. This issue of identity of the land requires a technical
determination by the Bureau of Lands, as the administrative agency with direct control over the
disposition and management of lands of the public domain. The DENR, on the other hand, in the exercise
of its jurisdiction to manage and dispose of public lands, must likewise determine the applicant’s
entitlement (or lack of it) to a free patent. Thus, it is the DENR which determines the respective rights of
rival claimants to alienable and disposable public lands; courts have no jurisdiction to intrude on matters
properly falling within the powers of the DENR Secretary and the Director of Lands, unless grave abuse of
discretion exists.
Under the doctrine of primary jurisdiction, courts must refrain from determining a controversy involving
a question which is within the jurisdiction of the administrative tribunal prior to its resolution by the latter,
where the question demands the exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal to determine technical and intricate
matters of fact.
It has been the jurisprudential trend to apply the doctrine of primary jurisdiction to cases involving matters
that demand the special competence of administrative agencies. It may occur that the Court has
jurisdiction to take cognizance of a particular case, which means that the matter involved is also judicial
in character. However, if the case is such that its determination requires the expertise, specialized skills
and knowledge of the proper administrative bodies because technical matters or intricate questions of
facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will
be supplied by the courts even though the matter is within the proper jurisdiction of a court. This is the
doctrine of primary jurisdiction. It applies "where a claim is originally cognizable in the courts, and comes
into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory
scheme, have been placed within the special competence of an administrative body, in such case the
judicial process is suspended pending referral of such issues to the administrative body for its view."
The application of the doctrine of primary jurisdiction, however, does not call for the dismissal of the case
below. It need only be suspended until after the matters within the competence of the Lands
Management Bureau are threshed out and determined. Thereby, the principal purpose behind the
doctrine of primary jurisdiction is salutarily served.
The resolution of conflicting claims of ownership over real property is within the regular courts’ area of
competence and, concededly, this issue is judicial in character. However, regular courts would have no
power to conclusively resolve this issue of ownership given the public character of the land, since under
C.A. No. 141, in relation to Executive Order No. 192, the disposition and management of public lands fall
within the exclusive jurisdiction of the Director of Lands, subject to review by the DENR Secretary.
TOPIC: DOCTRINE OF PRIMARY JURISDICTION
TITLE: VINCENT E. OMICTIN VS. HON. COURT OF APPEALS
CITATION: G.R. NO. 148004 JANUARY 22, 2007
FACTS: Petitioner Vincent E. Omictin, Operations Manager Ad Interim of Saag Phils., Inc., filed a complaint
for two counts of estafa with the Office of the City Prosecutor of Makati against private respondent
George I. Lagos. He alleged that private respondent, despite repeated demands, refused to return the two
company vehicles entrusted to him when he was still the president of Saag Phils., Inc.
The Public prosecutor recommended the indictment of private respondent, and on the same day,
respondent was charged with the crime of estafa under Article 315, par. 1(b) of the Revised Penal Code
before the Regional Trial Court.
On June 24, 1999, private respondent filed a motion to suspend proceedings on the basis of a prejudicial
question because of a pending petition with the Securities and Exchange Commission (SEC) involving the
same parties. Private respondent previously filed SEC Case No. 01-99-6185 for the declaration of nullity
of the respective appointments of Alex Y. Tan and petitioner as President Ad Interim and Operations
Manager Ad Interim of Saag Phils., Inc., declaration of dividends, recovery of share in the profits,
involuntary dissolution and the appointment of a receiver, recovery of damages and an application for a
temporary restraining order and injunction against Saag (S) Pte. Ltd., Nicholas Ng, Janifer Yeo, Tan and
petitioner. Private respondent averred that Saag (S) Pte. Ltd. is a foreign corporation organized and
existing under the laws of Singapore, and is fully owned by Saag Corporation (Bhd). On July 1, 1994, he
was appointed as Area Sales Manager in the Philippines by Thiang Shiang Hiang, Manager of Saag (S) Pte.
Ltd. Pursuant to his appointment, respondent was authorized to organize a local joint venture corporation
to be known as Saag Philippines, Inc. for the wholesale trade and service of industrial products for oil, gas
and power industries in the Philippines.
RTC
Decision: Denied respondent’s motion to suspend proceedings and motion to recuse.
Respondent filed with the CA a petition for certiorari.
CA
Decision: Ruled that prejudicial question exists stating that if the SEC should rule that the
dissolution of Saag Phils. is proper, or that the appointments of private respondents are invalid,
the criminal case will eventually be dismissed due to the absence of one of the essential elements
of the crime of estafa.
On January 18, 2001, the SEC case was transferred to the RTC of Mandaluyong City, pursuant to A.M. No.
00-11-03-SC implementing the Securities and Regulation Code (Republic Act No. 8799) enacted on July 19,
2000, vesting in the RTCs jurisdiction over intra-corporate disputes.
Decision (Motion for Recon): Private respondent’s motion for reconsideration of the decision
June 30, 2000 before this Court is NOTED for being moot and academic.
ISSUE: WON the doctrine of primary jurisdiction is applicable in the case at bar.
RULING:
NO.
The objective of the doctrine of primary jurisdiction is to guide a court in determining whether it should
refrain from exercising its jurisdiction until after an administrative agency has determined some question
or some aspect of some question arising in the proceeding before the court. The court cannot or will not
determine a controversy involving a question which is within the jurisdiction of the administrative tribunal
prior to resolving the same, where the question demands the exercise of sound administrative discretion
requiring special knowledge, experience and services in determining technical and intricate matters of
fact.
While the above doctrine refers specifically to an administrative tribunal, the Court believes that the
circumstances in the instant case do not proscribe the application of the doctrine, as the role of an
administrative tribunal such as the SEC in determining technical and intricate matters of special
competence has been taken on by specially designated RTCs by virtue of Republic Act No. 8799. Hence,
the RTC of Mandaluyong where the intra-corporate case is pending has the primary jurisdiction to
determine the issues under contention relating to the status of the domestic corporation, Saag Phils., Inc.,
vis-à-vis Saag Pte. Ltd.; and the authority of petitioner to act on behalf of the domestic corporation, the
determination of which will have a direct bearing on the criminal case. The law recognizes that, in place
of the SEC, the regular courts now have the legal competence to decide intra-corporate disputes.
TITLE: Phil. Women’s Christian Temperance Union v. Yangco
CITATION: G.R. No. 199595, April 2, 2014.
FACTS
Teodoro R. Yangco (2nd and 3rd Generation Heirs) Foundation, Inc. (TRY Foundation) filed before the RTC of Quezon
City, acting as a Land Registration Court, a Petition for the Issuance of New Title in Lieu of Transfer Certificate of Title
(TCT) No. 20970 T-22702 of the Office of the Register of Deeds of Quezon City.
The property was previously donated to PWCTUI with a condition that should the property be used for any other
purpose/s not specified, the gift shall become ipso facto null and void and property given shall automatically revert to
the donor, his heirs and assigns.
PWCTUI’s corporate term expired in September 1979. TRY Foundation claimed that the expiration of PWCTUI’s
corporate term in 1979 effectively rescinded the donation.
PWCTUI claimed, among others, that the RTC has no jurisdiction over the petition because PWCTUI is unaware of its
publication. – denied!
CA affirmed the RTC’s decision.
PWCTUI sought recourse with the Court thru a petition for review on certiorari.
ISSUE
Whether or not the RTC has acquired jurisdiction over the case
RULING
No.
RTC judgment in the land registration case and all proceedings taken in relation thereto were void because the RTC
did not acquire jurisdiction over the fundamental subject matter of TRY Foundation’s petition for the issuance of a title
which was in reality, a complaint for revocation of donation. No judgment proclaiming TRY Foundation as the absolute
owner of the property can be arrived at without declaring the deed of donation revoked. The issues embroiled in
revocation of donation are litigable in an ordinary civil proceeding which demands stricter jurisdictional requirements
than that imposed in a land registration case.
The payment of docket fees is another jurisdictional requirement for an action for revocation which was
absent in the suit filed by TRY Foundation. On the other hand, Section 111 of P.D. No. 1529 merely requires the
payment of filing fees and not docket fees.
Filing fees are intended to take care of court expenses in the handling of cases in terms of cost of supplies, use of
equipment, salaries and fringe benefits of personnel, etc., computed as to man hours used in handling of each case.
Docket fees, on the other hand, vest the trial court jurisdiction over the subject matter or nature of action.
The absence of the jurisdictional requirements for ordinary civil actions thus prevented the RTC, acting as a land
registration court, from acquiring the power to hear and decide the underlying issue of revocation of donation in the
land registration case.
TITLE: Allan Go v. Cordero
CITATION: G.R. No. 164703, May 4, 2010
TOPIC: Jurisdiction over the defendant - by voluntary appearance
FACTS
Mortimer F. Cordero, Vice-President of Pamana Marketing Corporation (Pamana), ventured into the business of
marketing inter-island passenger vessels.
After contacting various overseas fast ferry manufacturers from all over the world, he came to meet Tony Robinson,
an Australian national based in Brisbane, Australia, who is the Managing Director of Aluminium Fast Ferries Australia
(AFFA).
Robinson signed documents appointing Cordero as the exclusive distributor of AFFA catamaran and other fast ferry
vessels in the Philippines. As such exclusive distributor, Cordero offered for sale to prospective buyers the 25-meter
Aluminium Passenger catamaran known as the SEACAT 25.
After negotiations with the lawyers of Allan Go (owner/operator of ACG Express Liner of Cebu City), Cordero was able
to close a deal for the purchase of two (2) SEACAT 25.
However, Cordero later discovered that Go was dealing directly with Robinson when he was informed by Dennis Padua
of Wartsila Philippines that Go was canvassing for a second catamaran engine from their company which provided the
ship engine for the first SEACAT 25.
Cordero filed a case seeking to hold Robinson, Go, Tecson and Landicho liable jointly and solidarily for conniving and
conspiring together in violating his exclusive distributorship in bad faith and wanton disregard of his rights, thus
depriving him of his due commissions.
Robinson filed a motion to dismiss grounded on lack of jurisdiction over his person, among others. – denied!
RTC decided in favor of Cordero.
Defendants filed a petition for certiorari in the CA.
ISSUE
Whether or not the court has jurisdiction over the person of Robinson
RULING
Yes.
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint, while jurisdiction over the defendants in
a civil case is acquired either through the service of summons upon them in the manner required by law or through
their voluntary appearance in court and their submission to its authority.
A party who makes a special appearance in court challenging the jurisdiction of said court based on the ground of
invalid service of summons is not deemed to have submitted himself to the jurisdiction of the Court.
In this case, however, although the Motion to Dismiss filed by Robinson specifically stated as one of the grounds the
lack of "personal jurisdiction," it must be noted that he had earlier filed a Motion for Time to file an appropriate
responsive pleading even beyond the time provided in the summons by publication. (guys sorry wa jud ni sya sa facts ang
summons by publication) Such motion did not state that it was a conditional appearance entered to question the regularity
of the service of summons, but an appearance submitting to the jurisdiction of the court by acknowledging the
summons by publication issued by the court and praying for additional time to file a responsive pleading.
Consequently, Robinson having acknowledged the summons by publication and also having invoked the jurisdiction of
the trial court to secure affirmative relief in his motion for additional time, he effectively submitted voluntarily to the
trial court's jurisdiction. He is now estopped from asserting otherwise, even before this Court.
TTITLE: Lhuillier v. British Airways
CITATION: G.R. No. 171092. March 15, 2010.
TOPIC: Jurisdiction over the defendant - by voluntary appearance
FACTS
Petitioner Edna Diago Lhuillier took respondent's flight 548 from London to Rome. Once on board, she allegedly
requested Julian Halliday (Halliday), one of the respondent's flight attendants, to assist her in placing her hand-carried
luggage in the overhead bin. However, Halliday allegedly refused to help and assist her, and even sarcastically remarked
that "If I were to help all 300 passengers in this flight, I would have a broken back!"
Petitioner further alleged that when the plane was about to land in Rome another flight attendant, Nickolas Kerrigan
(Kerrigan), singled her out from among all the passengers in the business class section to lecture on plane safety.
Allegedly, Kerrigan made her appear to the other passengers to be ignorant, uneducated, stupid, and in need of
lecturing on the safety rules and regulations of the plane. Affronted, petitioner assured Kerrigan that she knew the
plane's safety regulations being a frequent traveler. Thereupon, Kerrigan allegedly thrust his face a mere few
centimeters away from that of the petitioner and menacingly told her that "We don't like your attitude."
Upon arrival in Rome, petitioner complained to respondent's ground manager and

demanded an apology. However, the latter declared that the flight stewards were "only doing their job."
Complaint
Petitioner filed a Complaint for damages against respondent British Airways before the RTC of Makati City.
Summons, together with a copy of the complaint, was served on the respondent through Violeta Echevarria, General
Manager of Euro-Philippine Airline Services, Inc.
Respondent’s Answer
Respondent, by way of special appearance through counsel, filed a Motion to Dismiss on grounds of lack of jurisdiction
over the case and over the person of the respondent.
Respondent alleged that only the courts of London, United Kingdom or Rome, Italy, have jurisdiction over the complaint
for damages pursuant to the Warsaw Convention, 5 Article 28 (1) of which provides:
An action for damages must be brought at the option of the plaintiff, either before the court of domicile of
the carrier or his principal place of business, or where he has a place of business through which the contract
has been made, or before the court of the place of destination.
Thus, since a) respondent is domiciled in London; b) respondent's principal place

of business is in London; c) petitioner bought her ticket in Italy; and d) Rome, Italy is petitioner's place of destination,
then it follows that the complaint should only be filed in the proper courts of London, United Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed for lack of jurisdiction over the person of the
respondent because the summons was erroneously served on Euro-Philippine Airline Services, Inc. which
is not its resident agent in the Philippines. – Granted! Basis: Our Courts have to apply the principles of
international law, and are bound by treaty stipulations entered into by the Philippines which form part of the law of the
land. One of this is the Warsaw Convention.
Petitioner filed an MR – denied! ; filed a certiorari in SC.
ISSUE
Whether or not the court has jurisdiction over the person of the defendant/respondent (British Airways)
RULING
No.
Respondent, in seeking remedies from the trial court through special appearance of counsel, is not deemed to have
voluntarily submitted itself to the jurisdiction of the trial court.
The second sentence of Sec. 20, Rule 14 of the Revised Rules of Civil Procedure clearly provides:
Sec. 20. Voluntary appearance. — The defendant's voluntary appearance in the action shall be equivalent to
service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over
the person of the defendant shall not be deemed a voluntary appearance.
In this case, the special appearance of the counsel of respondent in filing the Motion to Dismiss and other pleadings
before the trial court cannot be deemed to be voluntary submission to the jurisdiction of the said trial court.
Title: Mayor of Parañaque v. Ebio, G.R. No. 178411, June 23, 2010
TOPIC: Rule 3, Sec. 8 - Necessary Party
FACTS:
Respondent Mario D. Ebio filed an action for injunction to prevent the local government of Parañaque
City, herein Petitioner, from proceeding with the construction of an access road that will traverse through
a parcel of land (creek) which he claims is owned by his father-in-law Pedro Vitalez by virtue of acquisitive
prescription and later on passed unto him when he married Pedro’s daughter.
Petitioners, however, argue that since the creek, being a tributary of the river, is classified as part of the
public domain, any land that may have formed along its banks through time should also be considered as
part of the public domain, hence owned by the Republic of the Philippines, therefore petitioners should
have impleaded the Republic of the Philippines being an indispensable party to the case.
Agreement:
To prevent the local government of Parañaque City, herein Petitioner, from proceeding with the
construction of an access road that will traverse through a parcel of land (creek) which he claims is
owned by him.
The planned construction of an access road that will traverse through a parcel of land(creek) allegedly
owned by respondent.
Preliminary injunction against petitioners.
Ebio’s averments:
That by virtue of acquisitive prescription respondent’s grandfather owned the land which was passed
unto him.
That as owner of the lot, he has the standing to enjoin Petitioner to stop from proceeding with the
construction of an access road that will traverse through a parcel of land owned by him.
Ebio’s prayer:
That the Preliminary injunction against petitioners be approved.
RTC:
1. Respondents went to the RTC of Parañaque City on April 21, 2005 and applied for a writ of
preliminary injunction against petitioners.
2. The RTC issued an Order denying the petition for lack of merit. The trial court reasoned that
respondents were not able to prove successfully that they have an established right to the
property since they have not instituted an action for confirmation of title and their application
for sales patent has not yet been granted. Additionally, they failed to implead the Republic of
the Philippines, which is an indispensable party.
3. Respondents moved for reconsideration, but the same was denied.
CA:
1. The CA decided in favor of the respondents.
2. The subject of acquisitive prescription in the instant case is the accreted portion which [was] duly
proven by the Appellants. It is clear that since 1930, Appellants together with their predecessor-
in-interest, PEDRO VITALEZ have been in exclusive possession of the subject property and starting
1964 had introduced improvements thereon as evidenced by their construction permits.
3. The court denied petitioner’s motion for reconsideration.
SC:
Petitioners then proceeded to raise the matter to the SC asking again amongst other things that WON the
state is an indispensable party to the complaint.
ISSUE:
Whether the State is an indispensable party to respondents’ action for prohibitory injunction; and
RULING:
Petitioners argue that since the creek, being a tributary of the river, is classified as part of the public
domain, any land that may have formed along its banks through time should also be considered as part
of the public domain. And respondents should have included the State as it is an indispensable party to
the action.
The SC did not agree.
It is an uncontested fact that the subject land was formed from the alluvial deposits that have gradually
settled along the banks of Cut-cut creek. This being the case, the law that governs ownership over the
accreted portion is Article 84 of the Spanish Law of Waters of 1866, which remains in effect, in relation to
Article 457 of the Civil Code.
Article 84 of the Spanish Law of Waters of 1866 specifically covers ownership over alluvial deposits along
the banks of a creek. It reads:
ART. 84. Accretions deposited gradually upon lands contiguous to creeks, streams, rivers, and lakes,
by accessions or sediments from the waters thereof, belong to the owners of such lands.
Interestingly, Article 457 of the Civil Code states:
Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters.
It is therefore explicit from the foregoing provisions that alluvial deposits along the banks of a creek do
not form part of the public domain as the alluvial property automatically belongs to the owner of the
estate to which it may have been added. The only restriction provided for by law is that the owner of the
adjoining property must register the same under the Torrens system; otherwise, the alluvial property may
be subject to acquisition through prescription by third persons.
While it is true that a creek is a property of public dominion, the land which is formed by the gradual and
imperceptible accumulation of sediments along its banks does not form part of the public domain by clear
provision of law.
Moreover, an indispensable party is one whose interest in the controversy is such that a final decree
would necessarily affect his/her right, so that the court cannot proceed without their presence. In
contrast, a necessary party is one whose presence in the proceedings is necessary to adjudicate the
whole controversy but whose interest is separable such that a final decree can be made in their absence
without affecting them.
In the instant case, the action for prohibition seeks to enjoin the city government of Parañaque from
proceeding with its implementation of the road construction project. The State is neither a necessary nor
an indispensable party to an action where no positive act shall be required from it or where no
obligation shall be imposed upon it, such as in the case at bar. Neither would it be an indispensable
party if none of its properties shall be divested nor any of its rights infringed.
We also find that the character of possession and ownership by the respondents over the contested land
entitles them to the avails of the action.
Nemo dat quod dat non habet. No one can give what he does not have. Such principle is equally applicable
even against a sovereign entity that is the State.
TITLE: Carandang v. Heirs of de Guzman, G.R. No. 160347, November 29, 2006 (Supra.)
TOPIC: Non-joinder of necessary parties to be pleaded
FACTS:
Quirino de Guzman and the Spouses Carandang are stockholders as well as corporate officers of Mabuhay
Broadcasting System, with equities at fifty four percent (54%) and forty six percent (46%) respectively.
During the course of said business the Spouses Carandang owed Quirino de Guzman, the latter claiming
that, part when the capital stocks of MBS were increased part of the payment for these subscriptions were
paid by him in behalf of the Carandang spouses. Thus, de Guzman sent a demand letter to the spouses
Carandang for the payment of said total amount.
The spouses Carandang refused to pay the amount, contending that a pre-incorporation agreement was
executed between Arcadio Carandang and de Guzman, whereby the latter promised to pay for the stock
subscriptions of the former without cost, in consideration for Arcadio Carandang’s technical expertise, his
newly purchased equipment, and his skill in repairing and upgrading radio/communication equipment
therefore, there is no indebtedness on their part.
Before the RTC ruled on the case and after it was submitted for decision Mr. de Guzman died.

1. For failure of Spouses Carandang to pay Quirino de Guzman the amount due.
2. Mr. de Guzman, when he filed the original suit did not join his wife Mrs. De Guzman as a
party-plaintiff.
Case filed:
On June 5, 1992, [de Guzman] filed his complaint, seeking to recover the ₱336,375 together
with damages. Before the RTC ruled on the case and after it was submitted for decision Mr. de
Guzman died.
1. That Mrs. De Guzman should be considered as an indispensable party since three of the
four checks used to pay their stock subscriptions were issued in her name. The spouses
Carandang claim, the failure to join Mrs. de Guzman as a party-plaintiff should cause the
dismissal of the action.
2. The spouses Carandang claims that the Decision of the RTC, having been rendered after the
death of Quirino de Guzman, is void for failing to comply with Section 16, Rule 3 of the Rules
of Court.
1. Dismiss the case for failure to join an indispensable party (Sec 2 and 7, Rule 3).
2. Dismiss the case for failure to comply with Sec 16, Rule 3 after the death of Mr. de Guzman.
Nothing mentioned in the case filed
RTC:
- Ruled in favor of de Guzman and ordered the spouses Carandang to pay de Guzman
with interest.
- No basis mentioned
CA:
- Affirmed the decision of the RTC
- On the issue of the failure to join Mrs. De Guzman the court held that:
The joint account of spouses Quirino A de Guzman and Milagros de Guzman from which
the four (4) checks were drawn is part of their conjugal property and under both the
Civil Code and the Family Code the husband alone may institute an action for the
recovery or protection of the spouses’ conjugal property (since they were married
before the Family Code was effected and that no marriage settlement was made during
the married hence the New Civil Code shall govern their marriage). Under the New Civil
Code, the husband is the administrator of the conjugal partnership. In fact, he is the
sole administrator, and the wife is not entitled as a matter of right to join him in this
endeavor. The husband may defend the conjugal partnership in a suit or action without
being joined by the wife. (Docena vs. Lapesura).
ISSUE:
WON the Dismiss the case for failure to comply to Section 16, Rule 3 after de Guzman’s death.
WON the case should be dismissed for failure to join an indispensable party.
RULING:
On the issue of the death of de Guzman the SC held that:
“Nevertheless, the case at bar had already been submitted for decision before the RTC on 4 June 1998,
several months before the passing away of de Guzman on 19 February 1999. Hence, no further
proceedings requiring the appearance of de Guzman’s counsel were conducted before the
promulgation of the RTC Decision. Consequently, de Guzman’s counsel cannot be said to have no
authority to appear in trial, as trial had already ceased upon the death of de Guzman.
In sum, the RTC Decision is valid despite the failure to comply with Section 16, Rule 3 of the Rules of
Court, because of the express waiver of the heirs to the jurisdiction over their persons, and because
there had been, before the promulgation of the RTC Decision, no further proceedings requiring the
appearance of de Guzman’s counsel.”
Issue on the fact that Mrs. De Guzman was not joined as plaintiff to the case:
Petitioners erroneously interchange the terms "real party in interest" and "indispensable party." A real
party in interest is the party who stands to be benefited or injured by the judgment of the suit, or
the party entitled to the avails of the suit. On the other hand, an indispensable party is a party in
interest without whom no final determination can be had of an action, in contrast to a necessary party,
which is one who is not indispensable but who 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.
So now we come to the discussion concerning indispensable and necessary parties. When an
indispensable party is not before the court, the action should likewise be dismissed. The absence of
an indispensable party renders all subsequent actuations of the court void, for want of authority to
act, not only as to the absent parties but even as to those present. On the other hand, the non-joinder
of necessary parties do not result in the dismissal of the case. Instead, Section 9, Rule 3 of the Rules
of Court provides for the consequences of such non-joinder:
Sec. 9. Non-joinder of necessary parties to be pleaded. – Whenever in any pleading in which a

claim is asserted a necessary party is not joined, the pleader shall set forth his name, if known,
and shall state why he is omitted. Should the court find the reason for the omission
unmeritorious, it may order the inclusion of the omitted necessary party if jurisdiction over his
person may be obtained.
The failure to comply with the order for his inclusion, without justifiable cause, shall be deemed
a waiver of the claim against such party.
The non-inclusion of a necessary party does not prevent the court from proceeding in the action,
and the judgment rendered therein shall be without prejudice to the rights of such necessary
party.
Non-compliance with the order for the inclusion of a necessary party would not warrant the
dismissal of the complaint. This is an exception to Section 3, Rule 17 which allows the dismissal of the
complaint for failure to comply with an order of the court, as Section 9, Rule 3 specifically provides
for the effect of such non-inclusion: it shall not prevent the court from proceeding in the action, and
the judgment rendered therein shall be without prejudice to the rights of such necessary party.
Section 11, Rule 3 likewise provides that the non-joinder of parties is not a ground for the dismissal of
the action.
Since that the joint account of spouses Quirino A de Guzman and Milagros de Guzman from which the
four (4) checks were drawn is part of their conjugal property and under both the Civil Code and the
Family Code the husband alone may institute an action for the recovery or protection of the spouses’
conjugal property.
Being co-owners of the alleged credit, Quirino and Milagros de Guzman may separately bring an
action for the recovery thereof. In the fairly recent cases of Baloloy v. Hular and Adlawan v.
Adlawan, we held that, in a co-ownership, co-owners may bring actions for the recovery of co-owned
property without the necessity of joining all the other co-owners as co-plaintiffs because the suit is
presumed to have been filed for the benefit of his co-owners. In the latter case and in that of De Guia
v. Court of Appeals, we also held that Article 487 of the Civil Code, which provides that any of the co-
owners may bring an action for ejectment, covers all kinds of action for the recovery of possession.
In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant
to Article 487 of the Civil Code and relevant jurisprudence, any one of them may bring an action,
any kind of action, for the recovery of co-owned properties. Therefore, only one of the co-owners,
namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable
party thereto. The other co-owners are not indispensable parties. They are not even necessary
parties, for a complete relief can be accorded in the suit even without their participation, since the
suit is presumed to have been filed for the benefit of all co-owners.
We therefore hold that Milagros de Guzman is not an indispensable party in the action for the
recovery of the allegedly loaned money to the spouses Carandang. As such, she need not have been
impleaded in said suit, and dismissal of the suit is not warranted by her not being a party thereto.
Title: Emata v. IAC, G.R. No. L-72714, June 29, 1989

TOPIC: Unwilling co-plaintiff
FACTS:
The factual antecedents culminating in and constituting the bases of both decisions had their inchoation
in petitioner's purchase of a car on installment from Violago Motor Sales Corporation (Violago, for brevity)
with a down payment of P 14,982.00. Petitioner likewise executed in favor of the seller a promissory note
and a chattel mortgage over the car as security for the payment of the note.
The total amount that the petitioner was supposed to pay was P 72,186.00, with P 57,204.00 as the
balance after deducting the down payment. The total amount payable was P 22,246.00 more than the
"list cash price" of P 49,940.00 for said vehicle.
After the execution of said documents, Violago endorsed the promissory note and assigned the chattel
mortgage to Filinvest Credit Corporation (hereafter, Filinvest for short) upon payment by the latter of P
34,958.00, the unpaid balance of the list cash price of the car. Three years later, Filinvest assigned to
private respondent Servicewide Specialists, Inc. the remaining installment balance due on and
corresponding to the period from February 25, 1981 to August 25, 1981.
Petitioner however was not able to pay the remaining installments to Servicewide. He alleged that he was
defrauded by Filinvest Credit Corporation after the promissory note was endorsed and the chattel
mortgage was assigned to it. Because as he found out he had already paid Filinvest the actual balance of
P34,958.00, in fact according to him his payment exceeded P9,000.
Hence, when Servicewide brought the matter to court, Petitioner Emata on his own accord filed a Motion
to Implead Filinvest Credit Corporation on the theory that "for all legal purposes the corporation sought
to be impleaded is the real party in interest" because it retained interest over the balance of the
petitioner's account in spite of its assignment to private respondent. An opposition thereto was filed by
private respondent’s corporation on January 18, 1982.
Agreement:
Petitioner to pay the remaining balance of P 1,332.40 with 14% interest per annum to Servicewide
Specialists, Inc.
Cause the dispute:
Non-payment of the remaining balance.

Private respondent (Servicewide) initiated the case in the trial court for a writ of replevin to effect the
seizure of the car or, alternatively, for the payment by petitioner of the sum of P 1,332.40, with
interest thereon of fourteen percent (14%) per annum from July 10, 1981 until fully paid and,
additionally, for attorney's fees and costs of suit.
However this case was held in abeyance the pre-trial hearing of the case since, "(u)pon motion of Atty.
Melecio Virgilio Emata," said petitioner was given a "Period of fifteen (15) days to file the third-party
complaint against the third party defendant (Filinvest)." Petitioner, however, did not file any third-
party complaint, hence the trial court set the case for pre-trial on May 3, 1983, it being understood
that petitioner was no longer interested in impleading the herein private respondent as a third-party
defendant therein.
Plaintiff’s averments upon his motion to implead Filinvest:

1. That Filinvest is the real party in interest" because it retained interest over the balance of the
petitioner's account in spite of its assignment to private respondent.
2. That he has paid, and even overpaid, Filinvest by P 9,388.22.
Plaintiff’s prayer against Filinvest:

A counterclaim against Filinvest for various items of damages and attorney's fees all amounting
to more than P 1,100,000.00.
Defendant’s Answer:
Not mentioned in the case.
RTC:
- Petitioner’s motion to Implead was dismissed since petitioner was not able to file a complaint
against Filinvest.
CA:
- Affirmed the decision of the trial court and ordered petitioner to pay the amount due to
Servicewide
SC:
Petitioner raises both procedural and substantive issues. Initially, he complains that the trial court
erred in requiring him to file a third- party complaint against Filinvest, instead of impleading the latter
either as party plaintiff or defendant. He insists that Filinvest is the real party in interest in the
present case and it should be impleaded under Rule 3 of the Rules of Court which provides:
Sec. 10. Unwilling co-plaintiff. -If the consent of any party who should be joined as plaintiff can
not be obtained, he may be made a defendant and the reason therefor shall be stated in the
complaint.
Sec. 11. Misjoinder and non-joinder of parties. -Misjoinder of parties is not ground for dismissal
of an action. Parties may be dropped or added by order of the court on motion of any party or
on its own initiative at any stage of the action and on such terms as are just. Any claim against
a party may be severed and proceeded with separately.
which he complements with a provision in Rule 6, to wit:

Sec. 14. Bringing new parties. When the presence of parties other than those to the original
action is required for the granting of complete relief in the determination of a counterclaim or
cross-claim, the court shall order them to be brought in as defendants if jurisdiction over them
can be obtained.
ISSUE:
Whether or not Filinvest can be made a party to the case.
RULING:
Concededly, additional parties may be brought in under the above-quoted provisions of the Rules. A third-
party complaint, however, is not to be eschewed or disregarded in the procedural scheme since it may, in
fact, be the very vehicle for impleading a third person as a party to the case. Thus, for purposes of Section
14 of Rule 6, above quoted, the court may authorize the filing of the proper third-party complaint to
implead the other parties not included in the original complaint, in keeping with the injunction that "all
pleadings shall be liberally construed so as to do substantial justice."
We reject petitioner's complaint that the order of the court a quo requiring the filing of a third-party
complaint is improper. A third- party complaint is "a claim that a defending party may, with leave of court,
file against a person not a party to the action, called the third- party defendant, for contribution,
indemnity, subrogation or any other relief in respect of his opponent's claim." Obviously, a third-party
complaint against Filinvest, had petitioner filed the same, would be a claim in respect of the plaintiffs claim
since the former arises from the same transaction on which the plaintiffs claim is based, that is, the
promissory note which was eventually assigned to private respondent. Although the petitioner did not
admit in his answer that any amount is due from the corporation sought to be impleaded, that is not
indicative of nor does it support his thesis of the alleged impropriety of a third-party complaint.
Apparently, petitioner failed to take into consideration that the remedy is also applicable where the
defendant seeks "any other relief in respect of his opponent's claim," a remedial grant of power broad
enough to include the relief he seeks in the case at bar.
Petitioner cannot rely on the provisions of Section 10, Rule 3 which envisages a party who should be
joined as a plaintiff but who does not assent to such joinder. Obviously and necessarily, such unwilling
party must be a real party in interest. In the case at bar, Filinvest's position and the evidence thereon
was that it was not a real party in interest, as it was no longer entitled to the avails of the suit by reason
of the anterior assignment it made in favor of private respondent.
Nor can the general rule in Section 11, Rule 3, on the power to order the addition or dropping of a party
at any stage of action, be of solace to the petitioner. This is a power addressed to the sound discretion of
the court to be exercised on such terms as are just, and by this is meant that it must be just to all the other
parties. Obviously, given the facts of this case, the trial court wisely exercised its discretion in refusing to
give in to the unjustified importuning of petitioner.
Petitioner should be reminded that the courts, as the arbiters of the rights of the parties, stand in a better
position and are clothed with ample authority to rule on the procedural measures that are proper in cases
before them. If a party believes that the order of the court is not in accordance with law, he is not without
other alternative remedial avenues. If, on the other hand, the order does not suffer from any legal
infirmities, the same is binding on the parties and to this they must submit with grace. We cannot but be
displeased with petitioner's unseemly motivation and stance when he "adopted an attitude of inaction
and completely ignored" the order of the trial court requiring the filing of a third-party complaint,
especially in view of the factual finding that it was he who manifested on April 26, 1982 that he would file
said third party complaint.
Apart from all these considerations, the inclusion of Filinvest would at any rate have been a useless
recourse in the light of the fact that the arguments on which this petition is moored are bereft of merit
IN VIEW OF THE FOREGOING, no reversible error having been committed by respondent court, its assailed
decision is hereby AFFIRMED.
TITLE: Boston Equity v. Court of Appeals, G.R. No. 173946, June 19, 2013 (Supra.)
TOPIC: Misjoinder and non-joinder of parties
FACTS:
Spouses Manuel and Lolita Toledo borrowed money from Boston Equity Resources, Inc. in which Lolita
Toledo, herein respondent, was the maker and her husband as Co-maker.
On 24 December 1997, petitioner filed a complaint for sum of money with a prayer for the issuance of a
writ of preliminary attachment against the spouses Manuel and Lolita Toledo. Herein respondent alleged,
among others, that her husband and co-defendant, Manuel Toledo (Manuel), is already dead. As a result,
petitioner filed a motion to require respondent to disclose the heirs of Manuel. In compliance with the
verbal order of the court during the hearing of the case, respondent submitted the required names and
addresses of the heirs. Petitioner then filed a Motion for Substitution, praying that Manuel be substituted
by his children as party-defendants. It appears that this motion was granted by the trial court.
During trial, respondent filed a motion to dismiss the complaint.
Agreement:
For respondents to pay the borrowed amount.
Cause of the Dispute:

Non-payment of borrowed money.

Petitioner filed a complaint for sum of money with a prayer for the issuance of a writ of preliminary
attachment against the spouses Manuel and Lolita Toledo, and with Manuel’s death,
Petitioner then filed a Motion for Substitution, dated 18 January 2000, praying that Manuel be
substituted by his children as party-defendants.
Respondent’s averments in her motion:

1. That the complaint failed to implead an indispensable party or a real party in interest; hence, the
case must be dismissed for failure to state a cause of action;
2. That the trial court did not acquire jurisdiction over the person of Manuel pursuant to Section 5,
Rule 86 of the Revised Rules of Court;
3. That the trial court erred in ordering the substitution of the deceased Manuel by his heirs; and
4. That the court must also dismiss the case against Lolita Toledo in accordance with Section 6, Rule
86 of the Rules of Court.
Not mentioned
That the complaint failed to implead an indispensable party or a real party in interest; hence, the case
must be dismissed for failure to state a cause of action;
RTC:
The trial court denied the motion to dismiss for having been filed out of time, citing Sec 1, Rule 16
which states that: “Within the time for but before filing the answer to the complaint or pleading
asserting a claim, a motion to dismiss may be made xxx.”
Respondent’s motion for reconsideration of the order of denial was likewise denied on the ground
that “defendants’ attack on the jurisdiction of this Court is now barred by estoppel by laches” since
respondent failed to raise the issue despite several chances to do so.
CA:
Aggrieved, respondent filed a petition for certiorari with the Court of Appeals alleging that the trial
court seriously erred and gravely abused its discretion in denying her motion to dismiss despite
discovery, during the trial of the case, of evidence that would constitute a ground for dismissal of the
case.
The CA granted the petition based on the following grounds:
The court a quo could not have acquired jurisdiction over the person of Manuel S. Toledo since he is
already deceased.
Issue on jurisdiction may be raised at any stage of the proceeding, even for the first time on appeal.
By timely raising the issue on jurisdiction in her motion to dismiss x x x respondent is not estopped
from raising the question on jurisdiction.
Moreover, when issue on jurisdiction was raised by respondent, the court a quo had not yet decided
the case, hence, there is no basis for the court a quo to invoke estoppel to justify its denial of the
motion for reconsideration;
It should be stressed that when the complaint was filed, defendant Manuel S. Toledo was already
dead. The complaint should have impleaded the estate of Manuel S. Toledo as defendant, not only
the wife, considering that the estate of Manuel S. Toledo is an indispensable party, which stands to
be benefited or be injured in the outcome of the case. x x x
ISSUES:
1. WON the estate of Manuel is an indispensable party;

2. WON inclusion of Manuel as party-defendant is a mere misjoinder of party not warranting the
dismissal of the case before the lower court; and
RULING:
On whether or not the estate of Manuel Toledo is an indispensable party.

Rule 3, Section 7 of the 1997 Rules of Court states:
SEC. 7. Compulsory joinder of indispensable parties. – Parties-in-interest without whom no final

determination can be had of an action shall be joined either as plaintiffs or defendants.
An indispensable party is one who has such an interest in the controversy or subject matter of a case that
a final adjudication cannot be made in his or her absence, without injuring or affecting that interest. He
or she is a party who has not only an interest in the subject matter of the controversy, but "an interest of
such nature that a final decree cannot be made without affecting that interest or leaving the controversy
in such a condition that its final determination may be wholly inconsistent with equity and good
conscience. It has also been considered that an indispensable party is a person in whose absence there
cannot be a determination between the parties already before the court which is effective, complete or
equitable." Further, an indispensable party is one who must be included in an action before it may
properly proceed.
On the other hand, a "person is not an indispensable party if his interest in the controversy or subject
matter is separable from the interest of the other parties, so that it will not necessarily be directly or
injuriously affected by a decree which does complete justice between them. Also, a person is not an
indispensable party if his presence would merely permit complete relief between him or her and those
already parties to the action, or if he or she has no interest in the subject matter of the action." It is not a
sufficient reason to declare a person to be an indispensable party simply because his or her presence will
avoid multiple litigations.
Applying the foregoing pronouncements to the case at bar, it is clear that the estate of Manuel is not an
indispensable party to the collection case, for the simple reason that the obligation of Manuel and his
wife, respondent herein, is solidary.
The contract between petitioner, on the one hand and respondent and respondent’s husband, on the
other, states:
FOR VALUE RECEIVED, I/We jointly and severally (in solemn) promise to pay
BOSTON EQUITY RESOURCES, INC. x x x the sum of PESOS: [ONE MILLION FOUR
HUNDRED (₱1,400,000.00)] x x x.
The provisions and stipulations of the contract were then followed by the respective signatures of
respondent as "MAKER" and her husband as "CO-MAKER." Thus, pursuant to Article 1216 of the Civil Code,
petitioner may collect the entire amount of the obligation from respondent only.
In other words, the collection case can proceed and the demands of petitioner can be satisfied by
respondent only, even without impleading the estate of Manuel. Consequently, the estate of Manuel is
not an indispensable party to petitioner’s complaint for sum of money.
On whether or not the inclusion of Manuel as party defendant is a misjoinder of party.
Section 11 of Rule 3 of the Rules of Court states that "neither misjoinder nor non-joinder of parties is
ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of
any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against
a misjoined party may be severed and proceeded with separately."
Based on the last sentence of the afore-quoted provision of law, a misjoined party must have the capacity
to sue or be sued in the event that the claim by or against the misjoined party is pursued in a separate
case. In this case, therefore, the inclusion of Manuel in the complaint cannot be considered a misjoinder,
as in fact, the action would have proceeded against him had he been alive at the time the collection case
was filed by petitioner. This being the case, the remedy provided by Section 11 of Rule 3 does not obtain
here. The name of Manuel as party-defendant cannot simply be dropped from the case. Instead, the
procedure taken by the Court in Sarsaba v. Vda. de Te,52whose facts, as mentioned earlier, resemble those
of this case, should be followed herein. There, the Supreme Court agreed with the trial court when it
resolved the issue of jurisdiction over the person of the deceased Sereno in this wise:
As correctly pointed by defendants, the Honorable Court has not acquired jurisdiction over the
person of Patricio Sereno since there was indeed no valid service of summons insofar as Patricio
Sereno is concerned. Patricio Sereno died before the summons, together with a copy of the
complaint and its annexes, could be served upon him.
However, the failure to effect service of summons unto Patricio Sereno, one of the defendants
herein, does not render the action DISMISSIBLE, considering that the three (3) other defendants,
x x x, were validly served with summons and the case with respect to the answering defendants
may still proceed independently. Be it recalled that the three (3) answering defendants have
previously filed a Motion to Dismiss the Complaint which was denied by the Court.
Hence, only the case against Patricio Sereno will be DISMISSED and the same may be filed as a
claim against the estate of Patricio Sereno, but the case with respect to the three (3) other
accused [sic] will proceed. (Emphasis supplied.)53
As a result, the case, as against Manuel, must be dismissed.
WHEREFORE, the petition is GRANTED.
TITLE: Leonis Navigation v. Villamater, G.R. No. 179169, March 3, 2010

TOPIC: Misjoinder and non-joinder of parties
FACTS:
Private respondent Catalino U. Villamater was hired as Chief Engineer for the ship MV Nord Monaco,
owned by petitioner World Marine Panama, S.A., through the services of petitioner Leonis Navigation Co.,
Inc. (Leonis), as the latter’s local manning agent.
Sometime in October 2002, around four (4) months after his deployment, Villamater was severely stricken
with illness and had to undergo chemotherapy and continuous supportive treatment, such as pain-killers
and blood transfusion in Germany, where he was hospitalized.
As soon as he arrived in the Philippines, Villamater was referred to company-designated physicians.

However, Dr. Kelly Siy Salvador, one of the company-designated physicians, opined that Villamater’s
condition "appears to be not work-related," but suggested a disability grading of 1.
In the course of his chemotherapy, when no noticeable improvement occurred, Villamater filed a
complaint before the Arbitration Branch of the National Labor Relations Commission (NLRC) for payment
of permanent and total disability.
Cause of dispute:
The fact that respondent was stricken with Colon cancer.

Villamater filed a complaint before the Arbitration Branch of the National Labor Relations Commission
(NLRC) for payment of permanent and total disability benefits.
Villamater’s averments:
Villamater asserts that his illness was totally work related as opposed to what the company-designated
physicians had said.
Villamater’s prayer:
For payment of permanent and total disability benefits in the amount of US$80,000.00, reimbursement
of medical and hospitalization expenses in the amount of ₱11,393.65, moral damages in the sum of
₱1,000,000.00, exemplary damages in the amount of ₱1,000,000.00, as well as attorney’s fees.
Not mentioned.
NLRC:
The Labor Arbiter rendered a decision in favor of Villamater, and ordered respondents Leonis to pay
respondent the amount of $60,000, but denying his claim for moral and exemplary damages.
Appeals were made by both parties but before the NLRC made their decision on the appeal, Villamater
died.
The NLRC denied both appeal.
Moreover, by reason of the finality of the June 15, 2004 NLRC resolution, the Labor Arbiter issued 4 a Writ
of Execution. Consequently, Leonis voluntarily paid Villamater’s widow, Sonia M. Villamater (Sonia), the
amount of ₱3,649,800.00. Following the complete satisfaction of the judgment award, the Labor Arbiter
closed the case.
CA:
The Court of Appeals held that final and executory decisions or resolutions of the NLRC render appeals to
superior courts moot and academic.
The CA denied petitioner’s petition for certiorari on the ground that the non-joinder of indispensable
parties warrant the outright dismissal of the Petition for Review on Certiorari. (It should be noted that
petitioners impleaded only the then deceased Villamater as respondent to the petition, excluding his heirs)
ISSUE:
WON the case became moot and academic
WON the Court of Appeals erred in holding that non-joinder of indispensable parties warrant the outright
dismissal of the Petition.
RULING:
On the first issue:
SECTION 6. EFFECT OF FILING OF PETITION FOR CERTIORARI ON EXECUTION. – A petition for certiorari
with the Court of Appeals or the Supreme Court shall not stay the execution of the assailed decision unless
a temporary restraining order is issued by the Court of Appeals or the Supreme Court.
Simply put, the execution of the final and executory decision or resolution of the NLRC shall proceed
despite the pendency of a petition for certiorari, unless it is restrained by the proper court. In the present
case, petitioners already paid Villamater’s widow, Sonia, the amount of ₱3,649,800.00, representing the
total and permanent disability award plus attorney’s fees, pursuant to the Writ of Execution issued by the
Labor Arbiter. Thereafter, an Order was issued declaring the case as "closed and terminated." However,
although there was no motion for reconsideration of this last Order, Sonia was, nonetheless, estopped
from claiming that the controversy had already reached its end with the issuance of the Order closing and
terminating the case. This is because the Acknowledgment Receipt she signed when she received
petitioners’ payment was without prejudice to the final outcome of the petition for certiorari pending
before the CA.
On the second issue:

We agree with petitioners in their position that the CA erred in dismissing outright their petition for
certiorari on the ground of non-joinder of indispensable parties. It should be noted that petitioners
impleaded only the then deceased Villamater as respondent to the petition, excluding his heirs.
Rule 3, Section 7 of the Rules of Court defines indispensable parties as those who are parties in interest
without whom there can be no final determination of an action. They are those parties who possess such
an interest in the controversy that a final decree would necessarily affect their rights, so that the courts
cannot proceed without their presence. A party is indispensable if his interest in the subject matter of the
suit and in the relief sought is inextricably intertwined with the other parties’ interest.
Unquestionably, Villamater’s widow stands as an indispensable party to this case.

Under Rule 3, Section 11 of the Rules of Court, neither misjoinder nor non-joinder of parties is a ground
for the dismissal of an action, thus:
Sec. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor non-joinder of parties is ground
for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party
or on its own initiative at any stage of the action and on such terms as are just. Any claim against a
misjoined party may be severed and proceeded with separately.
The proper remedy is to implead the indispensable party at any stage of the action. The court, either
motu proprio or upon the motion of a party, may order the inclusion of the indispensable party or give
the plaintiff an opportunity to amend his complaint in order to include indispensable parties. If the plaintiff
ordered to include the indispensable party refuses to comply with the order of the court, the complaint
may be dismissed upon motion of the defendant or upon the court's own motion. Only upon unjustified
failure or refusal to obey the order to include or to amend is the action dismissed.
The SC sustained that the Labor Arbiter and the NLRC in granting total and permanent disability benefits
in favor of Villamater, as it was sufficiently shown that his having contracted colon cancer was, at the very
least, aggravated by his working conditions, taking into consideration his dietary provisions on board, his
age, and his job as Chief Engineer, who was primarily in charge of the technical and mechanical operations
of the vessels to ensure voyage safety. Jurisprudence provides that to establish compensability of a non-
occupational disease, reasonable proof of work-connection and not direct causal relation is required.
Probability, not the ultimate degree of certainty, is the test of proof in compensation proceedings.
WHEREFORE, the petition is DENIED
TITLE: Heirs of Mesina v. Heirs of Fian, G.R. No. 201816, April 8, 2013
Topic: Misjoinder and non-joinder of parties.

The late spouses Faustino and Genoveva Mesina (spouses Mesina), during their lifetime, bought from the
spouses Domingo Fian Sr. and MariaFian (spouses Fian) two parcels of land on installment.
Upon the death of the spouses Fian, their heirs––whose names do not appear on the records, claiming
ownership of the parcels of land and taking possession of them––refused to acknowledge the payments
for the lots and denied that their late parents sold the property to the spouses Mesina. Meanwhile, the
spouses Mesina passed away.
Notwithstanding repeated demands, the Heirs of Fian refused to vacate the lots.
The heirs of Mesina instituted a case to quiet the title plus damages against the heirs of Fian represented
by Theresa Fian. In turn, respondent filed a motion to dismiss alleging that the "Heirs of Mesina" could
not be considered as a juridical person or entity authorized by law to file a civil action. Neither could the
"Heirs of Fian" be made as defendant, not being a juridical person as well. She added that since the names
of all the heirs of the late spouses Mesina and spouses Fian were not individually named, the complaint is
infirmed, warranting its dismissal.
Agreement:
For the heirs of Fian to vacate the lots and to turn possession over to the heirs of the spouses.

The refusal of the heirs of Mesina to acknowledge the payments for the lots and denied that their late
parents sold the property to the spouses Mesina
The refusal of the heirs of Mesina to vacate the lots.

Filed an action for quieting of title and damages before the Regional Trial Court (RTC), against the Heirs of
Fian.
That they are the rightful owner of the lots being the legitimate heirs of the late Spouses Mesina who
during their lifetime bought from the parents of respondents.
For the title to be quieted.
Respondent’s answer:
She claims that the "Heirs of Mesina" could not be considered as a juridical person or entity authorized
by law to file a civil action. Neither could the "Heirs of Fian" be made as defendant, not being a juridical
person as well. She added that since the names of all the heirs of the late spouses Mesina and spouses
Fian were not individually named, the complaint is infirmed, warranting its dismissal.
Ruling of the RTC:
- Granted the motion and dismissed the complaint, ruling that the Rules of Court is explicit that
only natural or juridical persons or entities authorized by law may be parties in a civil action.
- Petitioners moved for reconsideration. The next day, respondent Theresa filed her Vehement
Opposition to the motion for reconsideration.
- The RTC denied the motion for reconsideration.
- Aggrieved, petitioners appealed to the CA
Ruling of the CA:
- In affirming the RTC, the CA ruled that all the heirs of the spouses Fian are indispensable parties
and should have been impleaded in the complaint.
- The appellate court explained that this failure to implead the other heirs of the late spouses Fian
is a legal obstacle to the trial court’s exercise of judicial power over the case and any order or
judgment that would be rendered is a nullity in view of the absence of indispensable parties.
- WHEREFORE, in view of all the foregoing, the appeal of petitioners is DENIED for lack of merit.
ISSUE:
WON all the heirs of Fian are indispensable parties and should have been impleaded in the complaint.
RULING:
The petition is meritorious.
As regards the issue on failure to state a cause of action, the CA ruled that the complaint states no cause
of action because all the heirs of the spouses Fian are indispensable parties; hence, they should have been
impleaded in the complaint.
Failure to state a cause of action refers to the insufficiency of the pleading. A complaint states a cause of
action if it avers the existence of the three essential elements of a cause of action, namely:
(a) The legal right of the plaintiff;
(b) The correlative obligation of the defendant; and
(c) The act or omission of the defendant in violation of said right.
By a simple reading of the elements of a failure to state a cause of action, it can be readily seen that the
inclusion of Theresa’s co-heirs does not fall under any of the above elements. The infirmity is, in fact, not
a failure to state a cause of action but a non-joinder of an indispensable party.
Non-joinder means the "failure to bring a person who is a necessary party or in this case an
indispensable party into a lawsuit." An indispensable party, on the other hand, is a party-in-interest
without whom no final determination can be had of the action, and who shall be joined either as plaintiff
or defendant.
As such, this is properly a non-joinder of indispensable party, the indispensable parties who were not
included in the complaint being the other heirs of Fian, and not a failure of the complaint to state a cause
of action.
Thus, the dismissal of the case for failure to state a cause of action is improper. What the trial court should
have done is to direct petitioner Norman Mesina to implead all the heirs of Domingo Fian, Sr. as
defendants within a reasonable time from notice with a warning that his failure to do so shall mean
dismissal of the complaint.
WHEREFORE, premises considered, the petition is GRANTED. Resolution of the RTC, Branch 14 in Baybay,
Leyte, dismissing the complaint in Civil Case No. 8-05-08-20, are hereby REVERSED and SET ASIDE.
Petitioner Norman Mesina is ORDERED to implead all the Heirs of Domingo Fian, Sr. as defendants in said
civil case within thirty (30) days from notice of finality of this Decision. Failure on the part of petitioner
Mesina to comply with this directive shall result in the dismissal of Civil Case No. B-05-08-20. Upon
compliance by petitioner Mesina with this directive, the RTC, Branch 14 in Baybay, Leyte is ORDERED to
undertake appropriate steps and proceedings to expedite adjudication of the case.
TITLE: Juana Complex v. Fil-Estate Land, G.R. No. 152272, March 5, 2012
Topic: Class Suit
FACTS:
On January 20, 1999, Juana Complex I Homeowners Association, Inc. (JCHA), together with individual
residents of Juana Complex I and other neighboring subdivisions (collectively referred as JCHA, et. al.),
instituted a complaint for damages, in its own behalf and as a class suit representing the regular
commuters and motorists of Juana Complex I and neighboring subdivisions who were deprived of the use
of La Paz Road, against Fil-Estate Land, Inc. (Fil-Estate), Fil-estate Ecocentrum Corporation (FEEC), La Paz
Housing & Development Corporation (La Paz), and Warbird Security Agency and their respective officers
(collectively referred as Fil-Estate, et al.).
The complaint alleged that JCHA, et al. were regular commuters and motorists who constantly travelled
towards the direction of Manila and Calamba; that they used the entry and exit toll gates of South Luzon
Expressway (SLEX) by passing through right-of-way public road known as La Paz Road; that they had been
using La Paz Road for more than ten (10) years; that in August 1998, Fil-estate excavated, broke and
deliberately ruined La Paz Road that led to SLEX so JCHA, et al. would not be able to pass through the said
road; that La Paz Road was restored by the residents to make it passable but Fil-estate excavated the road
again; that JCHA reported the matter to the Municipal Government and the Office of the Municipal
Engineer but the latter failed to repair the road to make it passable and safe to motorists and pedestrians;
that the act of Fil-estate in excavating La Paz Road caused damage, prejudice, inconvenience, annoyance,
and loss of precious hours to them, to the commuters and motorists because traffic was re-routed to
narrow streets that caused terrible traffic congestion and hazard; and that its permanent closure would
not only prejudice their right to free and unhampered use of the property but would also cause great
damage and irreparable injury.
Agreement:
To stop respondents from preventing, coercing, intimidating or harassing the commuters and motorists
from using the La Paz Road.
Fil-estate excavated, broke and deliberately ruined La Paz Road that led to SLEX so JCHA, et al. would not
be able to pass through the said road.
The act of Fil-estate in excavating La Paz Road caused damage, prejudice, inconvenience, annoyance, and
loss of precious hours to them,
JHCA instituted a complaint for damages, in its own behalf and as a class suit representing the regular
commuters and motorists of Juana Complex I and neighboring subdivisions who were deprived of the use
of La Paz Road, against Fil-Estate Land, Inc. et al.
JCHA, et al. also prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a writ of
preliminary injunction (WPI) to enjoin Fil-Estate, et al. from stopping and intimidating them in their use of
La Paz Road.
1. That Fil-estate excavated, broke and deliberately ruined La Paz Road that led to SLEX so JCHA, et
al. would not be able to pass through the said road;
2. That La Paz Road was restored by the residents to make it passable but Fil-estate excavated the
road again;
3. That JCHA reported the matter to the Municipal Government and the Office of the Municipal
Engineer but the latter failed to repair the road to make it passable and safe to motorists and
pedestrians;
4. That the act of Fil-estate in excavating La Paz Road caused damage, prejudice, inconvenience,
annoyance, and loss of precious hours to them, to the commuters and motorists because traffic
was re-routed to narrow streets that caused terrible traffic congestion and hazard; and
5. That its permanent closure would not only prejudice their right to free and unhampered use of
the property but would also cause great damage and irreparable injury.
That they be paid damages,
Immediate issuance of a Temporary Restraining Order (TRO) or a writ of preliminary injunction (WPI) to
enjoin Fil-Estate, et al. from stopping and intimidating them in their use of La Paz Road.
Fil-Estate, et al. filed a motion to dismiss arguing that the complaint failed to state a cause of action and
that it was improperly filed as a class suit.
RTC:
TRO was issued ordering Fil-Estate, et al, for a period of twenty (20) days, to stop preventing, coercing,
intimidating or harassing the commuters and motorists from using the La Paz Road.
Fil-Estate, et al. filed a motion to dismiss arguing that the complaint failed to state a cause of action and
that it was improperly filed as a class suit.
RTC issued an Order granting the WPI and required JCHA, et al. to post a bond.
Fil-Estate, et al. filed a motion for reconsideration.
The RTC dismissed the motion
Not satisfied, Fil-Estate, et al. filed a petition for certiorari and prohibition before the CA. They contended
that the complaint failed to state a cause of action and that it was improperly filed as a class suit.
CA:
The CA rendered the decision partially granting the petition.

The CA ruled that the complaint sufficiently stated a cause of action when JCHA, et al. alleged in their
complaint that they had been using La Paz Road for more than ten (10) years and that their right was
violated when Fil-Estate closed and excavated the road. It sustained the RTC ruling that the complaint was
properly filed as a class suit as it was shown that the case was of common interest and that the individuals
sought to be represented were so numerous that it was impractical to include all of them as parties.
ISSUE:
1. Whether or not the complaint states a cause of action;
2. Whether the complaint has been properly filed as a class suit;
RULING:
The question of whether the complaint states a cause of action is determined by its averments regarding
the acts committed by the defendant. Thus, it must contain a concise statement of the ultimate or
essential facts constituting the plaintiff’s cause of action. To be taken into account are only the material
allegations in the complaint; extraneous facts and circumstances or other matters aliunde are not
considered.
The test of sufficiency of facts alleged in the complaint as constituting a cause of action is whether or not
admitting the facts alleged, the court could render a valid verdict in accordance with the prayer of said
complaint. Stated differently, if the allegations in the complaint furnish sufficient basis by which the
complaint can be maintained, the same should not be dismissed regardless of the defense that may be
asserted by the defendant.
In the present case, the Court finds the allegations in the complaint sufficient to establish a cause of action.
First, JCHA, et al.’s averments in the complaint show a demandable right over La Paz Road. These are: (1)
their right to use the road on the basis of their allegation that they had been using the road for more than
10 years; and (2) an easement of a right of way has been constituted over the said roads. There is no other
road as wide as La Paz Road existing in the vicinity and it is the shortest, convenient and safe route towards
SLEX Halang that the commuters and motorists may use. Second, there is an alleged violation of such right
committed by Fil-Estate, et al. when they excavated the road and prevented the commuters and motorists
from using the same. Third, JCHA, et al. consequently suffered injury and that a valid judgment could have
been rendered in accordance with the relief sought therein.
With respect to the issue that the case was improperly instituted as a class suit, the Court finds the
opposition without merit.
Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:
Sec. 12. Class suit. – When the subject matter of the controversy is one of common or general interest to
many persons so numerous that it is impracticable to join all as parties, a number of them which the court
finds to be sufficiently numerous and representative as to fully protect the interests of all concerned may
sue or defend for the benefit of all. Any party in interest shall have the right to intervene to protect his
individual interest.
The necessary elements for the maintenance of a class suit are:
1. The subject matter of controversy is one of common or general interest to many persons;
2. The parties affected are so numerous that it is impracticable to bring them all to court; and
3. The parties bringing the class suit are sufficiently numerous or representative of the class and
can fully protect the interests of all concerned.
In this case, the suit is clearly one that benefits all commuters and motorists who use La Paz Road. As
succinctly stated by the CA:
The subject matter of the instant case, i.e., the closure and excavation of the La Paz Road, is initially shown
to be of common or general interest to many persons. The records reveal that numerous individuals have
filed manifestations with the lower court, conveying their intention to join private respondents in the suit
and claiming that they are similarly situated with private respondents for they were also prejudiced by
the acts of petitioners in closing and excavating the La Paz Road. Moreover, the individuals sought to be
represented by private respondents in the suit are so numerous that it is impracticable to join them all as
parties and be named individually as plaintiffs in the complaint. These individuals claim to be residents of
various barangays in Biñan, Laguna and other barangays in San Pedro, Laguna.
WHEREFORE, the petitions are DENIED. Decision of CA affirmed.
TITLE: Saligumba v. Palanog, G.R. No. 143365, December 4, 2008
TOPIC: Death of party, duty of counsel (Sec. 16, Rule 3)
Nature of the Case:

This is an appeal to the decision of the RTC Kalibo, Aklan against the Saligumbas in a petition for revival of
an earlier judgment that was also ruled against them. This case in an offshoot of the action for Quieting
of Title with Damages in Civil Case No. 2570.
FACTS:
Spouses Monica and Avelino Palanog (Spouses Palanog) filed a complaint for Quieting of Title with
Damages against spouses Valeria Saligumba and Eliseo Saligumba, Sr. (Spouses Saligumba) in the Regional
Trial Court of Kalibo, Aklan. In the said complaint, Spouses Palanog alleged that they have been in actual,
open, adverse and continuous possession as owners for more than 50 years of a parcel of land in Nabas,
Aklan. Spouses Saligumba allegedly prevented Spouses Palanog from entering and residing on the said
property and had destroyed the barbed wires enclosing the land.
Spouses Saligumba were represented by Atty. Edilberto Miralles (Atty. Miralles).
During the course of the proceedings, Atty. Miralles was appointed as Municipal Circuit judge. However,
he continued represent as Spouses Saligumbas’ counsel. On the other hand, Eliseo Saligumba Sr. died in
1984, while Valeria Saligumba also passed away the following year. However, the Atty. Miralles failed to
inform the court of the Spouses Saligumba’s death nor was there a motion for the substitution of the
spouses filed or an order issued for the substitution of the deceased Spouses Saligumbas despite notices
sent to them to appear.
After a lapse of more than two years, the trial court rendered a judgment declaring Spouses Palanog as
the lawful owners of the subject land. The court then ruled that the decision rendered on August 7, 1987
could no longer be executed by mere motion since more than five (5 years) has already elapsed after the
date of the decision’s finality.
On May 9, 1997, Monica Palanog (Monica), who is now a widow, filed an action to revive and enforce the
RTC decision on 1987 which she claimed has not been barred by the statute of limitations. Consequently,
Monica also impleaded in the said action Eliseo Saligumba Jr. and Eduardo Saligumba, heirs and children
of spouses Saligumba.
Decision of the RTC on Monica Palanog’s action to revive and enforce the August 7, 1987
judgment:
1. The RTC rendered a decision in favor of Monica Palanog ordering the revival of judgment
 Non-substitution of the deceased spouses did not have any legal significance.
2. Non-substitution of the deceased defendant was solely due to the negligence of counsel.
 When defendant Valeria Saligumba died, her lawyer, Atty. Miralles, did not inform the
court of the death of his client
SC:
Heirs of Spouses Saligumba elevated the matter directly to the Supreme Court.
Petitioner’s averment:
1. The August 1987 decision to Civil Case No. 2570 should be rendered void since there was no
proper substitution of the deceased Spouses Saligumbas despite the trial court's knowledge that
the deceased spouses Saligumbas were no longer represented by counsel. Thus, they were
deprived of due process.
2. That the trial court even acknowledged the fact of the death of the Spouses Saligumba but
justified the validity of the decision rendered in that case despite lack of substitution because of
the negligence or fault of their counsel.
3. That the relation of attorney and client was already terminated by the appointment of counsel on
record, Atty. Miralles, as MCTC Judge even before the deaths of the Spouses Saligumba.
4. That they have never taken part in the proceedings of the case which was decided on August 7,
1987, therefore, “it’s unfair to bind them in a decision rendered against their deceased parents.”
ISSUE:
Whether or not the contention of the Heirs of Spouses Saligumba is meritorious.
RULING:
The Court finds NO MERIT to the petition of the heirs of Spouses Saligumba.
Petitioners should have questioned immediately the validity of the proceedings absent any formal
substitution. Yet, despite the court’s alleged lack of jurisdiction over the persons of petitioners, petitioners
never bothered to challenge the same, and in fact allowed the proceedings to go on until the trial court
rendered its decision. There was no motion for reconsideration, appeal or even an action to annul the
judgment in Civil Case No. 2570
As for the duty of the counsel upon the death of a party, Section 16, Rule 3 of the Rules of Court
explicitly provides:
Sec. 16. Death of Party; duty of counsel. – Whenever a party to a pending action dies, and the claim is not
thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after
such death of the fact thereof, and to give the name and address of his legal representative or
representatives. Failure of counsel to comply with this duty shall be a ground for disciplinary action.
XxxxxxX
It is the duty of counsel for the deceased to inform the court of the death of his client. The failure of
counsel to comply with his duty under Section 16 to inform the court of the death of his client and the
non-substitution of such party will not invalidate the proceedings and the judgment thereon if the action
survives the death of such party. The decision rendered shall bind the party’s successor-in-interest.
The rules operate on the presumption that the attorney for the deceased party is in a better position than
the attorney for the adverse party to know about the death of his client and to inform the court of the
name and address of his legal representative.
Atty. Miralles continued to represent the deceased spouses even after the latter’s demise. Acting on their
behalf, Atty. Miralles even asked for postponement of the hearings and did not even confirm the death
of his clients nor his appointment as Municipal Circuit Trial Court judge. These clearly negate petitioners’
contention that Atty. Miralles ceased to be spouses Saligumbas’ counsel.
When Valeria Saligumba died on February2, 1985, Atty. Miralles again did not inform the trial court of the
death of Valeria Saligumba. There was no formal substitution nor submission of proof of death of Valeria
Saligumba. Atty. Miralles was remiss in his duty under Section 16, Rule 3 of the Revised Rules of Court.
The counsel of record is obligated to protect his client’s interest until he is released from his professional
relationship with his client. For its part, the court could recognize no other representation on behalf of
the client except such counsel of record until a formal substitution of attorney is effected.
XxxxxxX
WHEREFORE, the Court DENIES the petition; AFFIRMS the Decision of the Regional Trial Court, Branch 5,
Kalibo, Aklan; and ORDERS the petitioner to pay the costs of suit.
TITLE: Hon. Sumaljag v. Spouses Literato, G.R. No. 149787, June 18, 2008
FACTS:
On October 15, 1971, Josefa D. Maglasang (Josefa) sold a parcel of land (lot 1220-D) she inherited to
spouses Diosdidit and Menendez Literato (spouses Literato). Josefa was the sister of Menendez
Maglasang Literato (Menendez). They were two (2) of the six (6) heirs who inherited equal parts of a
6.3906-hectare property (Lot 1220) passed on to them by their parents Cristito and Inecita Diano
Maglasang. Lot 1220-D was partitioned to Josefa, while Lot 1220-E was given to Menendez.

1. Alleged deed of sale of Lot 1220-D is spurious;
2. Petitioner occupied Lot 1220-D and Lot 1220-E without the consent of the spouses Literato;
Cases originally filed:

1. Josefa filed a complaint for the nullity of the deed of sale of real property alleging that such deed
was spurious (Civil Case No. B-1239)
2. Menendez filed a case for the declaration of the inexistence of (lease of contract entered by Josefa
and Petitioner Sumaljag), recovery of the possession of land and damages against petitioner. (Civil
Case No. B-1281)
Meanwhile, Josefa died during the pendency of civil cases.
Spouses Literato’s averment:

1. Denied that the deed of sale was falsified;
2. That Josefa, who had previously sold Lot 1220-D to Menendez, leased it, together with Lot 1220-
E, to the petitioner.
3. That the petitioner and Josefa were in bad faith in entering their contract of lease as they both
knew that Josefa did not own the leased lots. (It turned out that petitioner prepared and notarized
the contract of lease over the whole of Lot 1220 between the Maglasang Heirs (excluding Josefa)
and a certain Vicente Tolo)
Spouses Literato’s averment:

Menendez prayed, among others, that this lease contract between Josefa and the petitioner be declared
null and void.
Upon the death of Josefa, Atty. Zenen A. Puray (Atty. Puray) - the petitioner's and Josefa's common
counsel – filed with the RTC a notice of death and substitution of party (Judge Sumaljag).
Petitioner’s contention (thru his counsel) on his substitution:

Prior to Josefa’s death, she executed a Quitclaim Deed over Lot 1220-D in favor of Remismundo D.
Maglasang who in turn sold this property to the petitioner which in turn makes the petitioner a party to
the case.
Respondent’s counterclaims:
1. Objected the proposed substitution alleging Atty. Puray filed the notice of death and substitution
of party beyond the thirty-day period provided under Section 16, Rule 3 of the 1997 Rules of Civil
Procedure, as amended;
2. That instead Josefa be substituted by Michaeles Maglasang Rodrigo, Josefa’s full-blood sister.
RTC:
1. Denied Atty. Puray's motion for substitution and instead ordered the appearance of Michaeles as
representative of the deceased Josefa.
2. Petitioner filed a motion for reconsideration but was denied by the Court.
CA:
Petitioner filed a petition for certiorari.
1. CA dismissed the petition

Basis/reason: Petition lack merit.
2. CA also denied the petitioner’s motion for reconsideration
SC:
Aggrieved of the CA’s decision, petitioner essentially claims that the CA erred in dismissing his petition
since:
1. The property under litigation was no longer part of Josefa’s estate since she was no longer its
owner at the time of her death;
2. The petitioner had effectively been subrogated to the rights of Josefa over the property under
litigation at the time she died;
3. Without an estate, the heir who was appointed by the lower court no longer had any interest to
represent;
4. The notice of death was seasonably submitted by the counsel of Josefa to the RTC within the
extended period granted; and
5. The petitioner is a transferee pendente lite who the courts should recognize pursuant to Rule 3,
Section 20 of the Rules of Court.
ISSUE:
Whether or not the petitioner’s claims are meritorious.
RULING:
The Court resolved to deny the petition for lack of merit.
The rule on substitution in case of death of a party is governed by Section 16, Rule 3 of the 1997 Rules of
Civil Procedure, as amended, which provides:
Section 16. Death of a party; duty of counsel. Whenever a party to a pending action dies, and the
claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty
(30) days after such death of the fact thereof, and to give the name and address of his legal
representative or representatives. Failure of counsel to comply with this duty shall be a ground
for disciplinary action.
The heirs of the deceased may be allowed to be substituted for the deceased, without requiring
the appointment of an executor or administrator and the court may appoint a guardian ad litem
for the minor heirs.
The court shall forthwith order said legal representative or representatives to appear and be
substituted within a period of thirty (30) days from notice.
If no legal representative is named by the counsel for the deceased party, or if the one so named
shall fail to appear within the specified period, the court may order the opposing party, within a
specified time, to procure the appointment of an executor or administrator for the estate of the
deceased, and the latter shall immediately appear for and on behalf of the deceased. The court
charges in procuring such appointment, if defrayed by the opposing party, may be recovered as
costs. (Emphasis ours)
Application of the governing rule:

a. Survival of the pending action
A question preliminary to the application of the above provision is whether Civil Case
Nos. B-1239 and B-1281are actions that survive the death of Josefa. The Court ruled in Gonzalez
v. Pagcor:
The criteria for determining whether an action survives the death of a plaintiff or petitioner was
elucidated upon in Bonilla v. Barcena (71 SCRA 491 (1976). as follows:
. . . The question as to whether an action survives or not depends on the nature of the action and
the damage sued for. In the causes of action which survive, the wrong complained [of] affects
primarily and principally property and property rights, the injuries to the person being merely
incidental, while in the causes of action which do not survive, the injury complained of is to the
person, the property and rights of property affected being incidental. . . .
b. Duty of Counsel under the Rule

The duty of counsel under the aforecited provision is to inform the court within thirty (30)
days after the death of his client of the fact of death, and to give the name and address of the
deceased’s legal representative or representatives. Incidentally, this is the only representation
that counsel can undertake after the death of a client as the fact of death terminated any further
lawyer-client relationship.
The reporting issue that goes into the core of this case is whether counsel properly gave
the court the name and address of the legal representative of the deceased that Section 16, Rule
3 specifies. The Court ruled that he did not properly gave the court the required details of the
deceased.
Moreover, the legal representatives that the provision speaks of, refer to those
authorized by law the administrator, executor or guardian who, under the rule on settlement of
estate of deceased persons, is constituted to take over the estate of the deceased. Section 16,
Rule 3 likewise expressly provides that the heirs of the deceased may be allowed to be substituted
for the deceased, without requiring the appointment of an executor or administrator
Significantly, the person now the present petitioner - that counsel gave as substitute was
not one of those mentioned under Section 16, Rule 3. Rather, he is a counterclaim co-defendant
of the deceased whose proffered justification for the requested substitution is the transfer to him
of the interests of the deceased in the litigation prior to her death.
Both the lower court and the CA were legally correct in not giving effect to counsels suggested substitute:
1. The petitioner is not one of those allowed by the Rules to be a substitute.

2. The Notice that counsel filed in fact reflects a claim against the interest of the deceased through
the transfer of her remaining interest in the litigation to another party. Interestingly, the transfer
is in favor of the very same person who is suggested to the court as the substitute.
(The suggested substitution effectively brings to naught the protection that the Rules intend; plain
common sense tells us that the transferee who has his own interest to protect, cannot at the same
time represent and fully protect the interest of the deceased transferor.)
3. Counsel could have validly manifested to the court the transfer of Josefa’s interests in the subject
matter of litigation since the counsel has every authority to manifest to the court changes in
interest that transpire in the course of litigation.
XxxxxxX
WHEREFORE, the Court DENIES the petition for lack of merit and AFFIRMS the Court of Appeals decision
that the surviving heirs of the deceased Josefa namely Michaelis M. Rodrigo; Maria M. Cecilio; Zosima D.
Maglasang; Consolacion M. Bag-aw; and the children of Lourdes M. Lumapas, namely Manuel Lumapas,
Cesar Lumapas, Huros Lumapas and Regulo Maquilan should be her substitutes and are hereby so ordered
to be substituted for her in Civil Case Nos. B-1239 and B-1281.
TITLE: Carandang v. Heirs of de Guzman, G.R. No. 160347, November 29, 2006 (supra)
Nature of the case:

This is a Petition for Review on Certiorari assailing the Court of Appeals Decision and Resolution affirming
the Regional Trial Court (RTC) Decision rendering herein petitioners jointly and severally liable for their
loan to Quirino A. de Guzman.
FACTS:
Arcadio and Luisa Carandang (Spouses Carandang) and the decedent Quirino de Guzman (Quirino) were
stockholders and corporate officers of Mabuhay Broadcasting System (MBS). Spouses Carandang have
equities at 54 % while Quirino has 46%.
When the capital stock of MBS was increased on November 26, 1983, the spouses subscribed P345,000
from it, P293,250 from the said amount was loaned by Quirino to Spouses Carandang In the subsequent
increase in MBS’ capital stock on March 3, 1989, the Spouses Carandang subscribed again to the increase
in the amount of P93,750. But, P43,125 out of the mentioned amount was again loaned by Quirino.

Spouses Carandang’s refusal to pay de Guzman despite demand letter sent by the latter.
Spouses Carandang’s averment:

1. They contended that a pre-incorporation agreement was executed between Arcadio Carandang
and Quirino, whereby Quirino promised to pay for the stock subscriptions of the Arcadio without
cost, in consideration for Arcadio’s technical expertise, his newly purchased equipment, and his
skill in repairing and upgrading radio/communication equipment and therefore, there is no
indebtedness on the part of the Spouses Carandang
Quirino’s action:
1. Upon refusal of the spouses to pay the loan, Quirino filed a complaint seeking to recover the
P336,375 total amount of the loan together with damages.
RTC:
1. The RTC rendered its judgment in favor of Quirino and accordingly, ordered the Spouses
Carandang to jointly pay and severally pay de Guzman.
CA:
1. On April 22, 2003, the CA affirmed the decision rendered by the RTC.
2. Spouses Carandang filed a motion for reconsideration but denied the motion and affirmed its
earlier decision.
SC:
The spouses Carandang then filed before this Court the instant Petition for Review on Certiorari.
ISSUE:
Whether or not the RTC decision is void for failing to comply with Section 16, Rule of the Rules of Court.
RULING:
NO. The RTC decision is valid despite the failure to comply with Section 16, Rule 3 of the Rules of Court,
because of the express waiver of the heirs to the jurisdiction over their persons, and because there had
been, before the promulgation of the RTC Decision, no further proceedings requiring the appearance of
de Guzman’s counsel.
Spouses Carandang posits that such failure to comply with Section 16, Rule 3 renders void the decision of
the RTC, in adherence to the following pronouncements in Vda. de Haberer v. Court of Appeals and
Ferreria v. Vda. de Gonzales:
“It has been held that when a party dies in an action that survives and no order is issued by the
court for the appearance of the legal representative or of the heirs of the deceased in substitution of the
deceased, and as a matter of fact no substitution has ever been effected, the trial held by the court without
such legal representatives or heirs and the judgment rendered after such trial are null and void because
the court acquired no jurisdiction over the persons of the legal representatives or of the heirs upon whom
the trial and judgment would be binding.”
In the present case, there had been no court order for the legal representative of the deceased to appear,
nor had any such legal representative appeared in court to be substituted for the deceased; neither had
the complainant ever procured the appointment of such legal representative of the deceased, including
appellant, ever asked to be substituted for the deceased. As a result, no valid substitution was effected,
consequently, the court never acquired jurisdiction over appellant for the purpose of making her a party
to the case and making the decision binding upon her, either personally or as a representative of the
estate of her deceased mother.
However, unlike jurisdiction over the subject matter which is conferred by law and is not subject to the
discretion of the parties, jurisdiction over the person of the parties to the case may be waived either
expressly or impliedly. Implied waiver comes in the form of either voluntary appearance or a failure to
object.
In the cases cited by the spouses Carandang, the Court held that there had been no valid substitution by
the heirs of the deceased party, and therefore the judgment cannot be made binding upon them. In the
case at bar, not only do the heirs of de Guzman interpose no objection to the jurisdiction of the court over
their persons; they are actually claiming and embracing such jurisdiction. In doing so, their waiver is not
even merely implied (by their participation in the appeal of said Decision), but express (by their explicit
espousal of such view in both the Court of Appeals and in this Court). The heirs of de Guzman had no
objection to being bound by the Decision of the RTC.
Thus, lack of jurisdiction over the person, being subject to waiver, is a personal defense which can only be
asserted by the party who can thereby waive it by silence.
XxxxxxX
WHEREFORE, the Decision of the Court of Appeals, affirming the judgment rendered against the spouses
Carandang, is hereby AFFIRMED xxx
(Note: The CivPro aspect is not the main issue of the case)
TITLE: Commissioner Rufus B. Rodriguez and Associate Commissioner Allan Roullo Yap v.
Jardin, G.R. No. 141834, July 30, 2007
TOPIC: Death or separation of a party who is a public officer
FACTS:
In the evening of May 8, 1999, Intelligence Agents of the Bureau of Immigration (BI), Edgardo D. Cabrrera,
Gerardo R. Gorrospe and Dorotea T. Hiyas, saw respondent Samuel A. Jardin (Jardin), chief of the BI's Law
and Intelligence Division, with three unidentified male companions, including a Japanese national who
arrived on board a flight from Osaka, Japan, at the arrival area of the Ninoy Aquino International Airport
(NAIA).
Upon noticing that the Japanese national's fifth finger on the left hand was missing, the BI closely watched
and his companions as this aroused the suspicion that the is one of the members of the Yakuza.
The BI agents Mizutano Ryoichiro (Ryoichiro) as an undesirable alien who was prohibited from entering
the Philippines. Thereafter, they immediately apprehended him and sent him back to Japan pursuant to
an exclusion order.

Spot report filed by the BI agents that included Jardin who was seen to be in the company of the deported
Ryoichiro.
Petitioner’s action:
1. Petitioner Rufus Rodgriguez (then immigration commissioner at that time) ordered Associate
Commissioner, Ma. Luisa Ylagan-Cortez, to investigate the allegation in the sport report.
 Accordingly, Ylagan-Cortez ordered respondent to file his sworn explanation within which
the respondent denied the allegations against him.
2. On June 4, 1999, Ylagan-Cortez ordered the preventive suspension of Jardin for 90 days.
Respondent’s defense:
1. He averred that his relatives requested his assistance in welcoming his niece's fiancé in the person
of Mizutani Ryoichiro
2. Jardin further claimed that, although he was aware that a Mizutani Ryoichiro had been declared
an undesirable alien, he was informed that the blacklisted Ryoichiro was born in 1988 while his
niece told him that her fiancé was in his fifties.
3. Furthermore, respondent Jardin reasoned that the accusations against Ryoichiro were unfounded
because neither a conviction nor a police report linking Ryoichiro to the Yakuza was ever
presented.

An administrative case was filed against the respondent then referred to petitioner, Alan Roullo Yap, an
associate commissioner at that time, for formal investigation and reception of evidence.
Respondent’s answer:
1. He moved for the suspension of proceedings and reconsideration.
2. On July 8, 1999, respondent sought the review of the order by the Secretary of Justice.
3. Consequently, he also filed a special civil action for certiorari with the CA, pending the resolution
of his appeal with the Secretary of Justice.
CA:
1. CA nullified the order and directed the petitioners to reinstate respondent in his position
2. It also denied the petitioner’s motion for reconsideration.
3. On July 8, 1999, respondent sought the review of the June 4, 1999 order by the Secretary of
Justice.
SC:
Petitioners in their official capacities filed this appeal.
ISSUE:
Where or not the CA erred in granting respondent's petition for certiorari and in annulling the June 4,
1999 order.
RULING:
The CA did not err in the decisions in promulgated. Further, we agree with the contention of the
respondent declaring the petition moot but purely on technicality.
Respondent averred that petitioner Rodriguez had in the meantime been replaced by Andrea D. Domingo
as immigration commissioner while petitioner Yap had been appointed to the Office of the Government
Corporate Counsel. Despite the lapse of 30 days, no substitution was effected pursuant to Section 17, Rule
3 of the Rules of Court which provides:
Section 17. Death or separation of a party who is a public officer. — When a public officer is a
party in an action in his official capacity and during its pendency dies, resigns, or otherwise ceases to hold
office, the action may be continued and maintained by or against his successor if within thirty (30) days
after the successor takes office or such time as may be granted by the court, it is satisfactorily shown to
the court by any party that there is a substantial need for continuing or maintaining it and that the
successor adopts or continues or threatens to continue or adopt the action of his predecessor. Before a
substitution is made, the party or officer affected, unless expressly assenting thereto, shall be given
reasonable notice of the application therefor and accorded an opportunity to be heard.
Moreover, the Office of the Solicitor General (OSG) manifested that Andrea D. Domingo had indeed been
appointed the new immigration commissioner replacing petitioner Rodriguez. It also stated that
Commissioner Domingo was not adopting the position of her predecessor, petitioner Rodriguez.
Well-settled is the rule that failure to make a substitution pursuant to Section 17, Rule 3 of the Rules of
Court is a ground for the dismissal of an action. For the valid substitution of a public officer who has sued
or has been sued in his or her official capacity, the following requisites must be satisfied:
1. Satisfactory proof by any party that there is substantial need for continuing or maintaining the
action;
2. The successor adopts or continues or threatens to adopt or continue the acts of his or her
predecessor;
3. Substitution must be effected within 30 days after the successor assumes office or within the
time granted by the court; and,
4. Notice of the application to the other party.
Petitioner Rodriguez's successor categorically expressed her lack of interest in pursuing this appeal, hence,
the failure to effect a substitution.
WHEREFORE, the petition is hereby DENIED.

TITLE: Associated Bank v. Spouses Pronstroller, G.R. No. 148444, September 3, 2009
TOPIC: Transfer of Interest
Nature of the case:

For resolution are the Motion for Reconsideration filed by petitioner Associated Bank (now United
Overseas Bank [Phils.]) and Motion for Leave to Intervene filed by Spouses Eduardo and Ma. Pilar Vaca
(spouses Vaca).
FACTS:
The controversy stems from the Motion for Leave to Intervene filed by spouses Vaca who owned a
foreclosed property and the bidding of which was subsequently won by the Associated Bank. The latter
then sold the property to spouses Rafael and Monaliza Ponstroller (spouses Ponstroller) for P7.5m with
10% downpayment.
Agreement:
The petitioner, thru Atty. Soluta, and the respondents executed a Letter-Agreement allowing the
respondents to pay the balance upon receipt of the final order.

The petitioner sold the subject land back to Spouses Vaca.

Spouses Ponstroller filed a Complaint for Specific Performance before the RTC and they likewise caused
the annotation of a notice of lis pendens in the petitioner’s title.
RTC:
The RTC rendered its decision in favor of respondent, spouses Ponstroller.
CA:
1. CA dismissed the petitioner’s petition for review on certiorari
Basis/Reason: Factual findings of the Court of Appeals (CA) were supported by the
evidences on record and the appellate court did not err its decision in favor of the spouses
Ponstroller. Conclusions of law that the appellate court drew from those facts are likewise
accurate and convincing.
SC:
The Supreme Court denied the motion for reconsideration of the petitioner Associate Bank which
rendered its decision on July 14, 2008.
Consequently, spouses Vaca filed a Motion for Leave to Intervene within which they averred the following:
1. That they are the registered owners of the subject property and are thus real parties-in-interest.
2. That they stand to be deprived of their family home without having been given their day in court.
3. They also contend that the Court should order petitioner to reimburse the spouses Vaca the
amount received from the latter.
ISSUE:
Whether or not Spouses Vaca should be allowed the motion for leave to intervene.
RULING:
The spouses Vaca’s motion for leave to intervene before this Court was belatedly filed. And therefore,
should not be granted.
The purpose of intervention is to enable a stranger to an action to become a party to protect his interest,
and the court, incidentally, to settle all conflicting claims. The spouses Vaca are not strangers to the action.
Their legal interest in the litigation springs from the sale of the subject property by petitioner in their favor
during the pendency of this case. As transferee pendente lite, spouses Vaca are the successors-in-interest
of the transferor, the petitioner, who is already a party to the action. Thus, the applicable provision is
Section 19, Rule 3 of the Rules of Court, governing transfers of interest pendente lite, which provides:
SEC. 19. Transfer of interest. – In case of any transfer of interest, the action may be continued by
or against the original party, unless the court upon motion directs the person to whom the interest is
transferred to be substituted in the action or joined with the original party.
In Natalia Realty, Inc. v. Court of Appeals, citing Santiago Land Development Corporation v. Court of
Appeals, we have ruled that:
[A] transferee pendente lite of the property in litigation does not have a right to intervene. We
held that a transferee stands exactly in the shoes of his predecessor-in-interest, bound by the proceedings
and judgment in the case before the rights were assigned to him. It is not legally tenable for a transferee
pendente lite to still intervene.
Essentially, the law already considers the transferee joined or substituted in the pending action,
commencing at the exact moment when the transfer of interest is perfected between the original party-
transferor and the transferee pendente lite.
It is noteworthy that a notice of lis pendens was timely annotated on petitioner’s title. This was done prior
to the sale of the property to the spouses Vaca, the cancellation of petitioner’s title, and the issuance of
the new Transfer Certificate of Title in the name of the spouses. By virtue of the notice of lis pendens, the
spouses Vaca are bound by the outcome of the litigation subject of the lis pendens. Their interest is subject
to the incidents or results of the pending suit, and their Certificate of Title will afford them no special
protection.
XxxxxX
Wherefore, the Court DENIES the petitioner’s motion for and the Spouses Vaca’s Motion for Intervention.
TITLE: Melencio Gabriel, represented by surviving spouse, Flordeliza Gabriel v. Pagaygay,

et.al, G.R. No. 146989, February 7, 2007
TOPIC: Action on contractual and money claims
FACTS:
Ernesto Pagaygay, Nelson Bilon and Angel Brazil (Pagaygay, et.al) were jeepney drivers of jeepneys owned
by Melencio Gabriel. They are paying P400/day for their boundary. Later, the drivers were required to pay
an additional P50.00 to cover police protection, car wash, deposit fee, and garage fees.

Dismissal of the respondents without factual and legal basis.
Case Originally Filed:

Pagaygay, et. al filed a complaint for illegal dismissal against their employer Melencio, Gabriel.
Respondents’ allegations:
1. That they were regular drivers of Gabriel Jeepney under a boundary system of ₱400 per day,
plying Baclaran to Divisoria via Tondo, and vice versa, driving five days a week, with average daily
earnings of ₱400;
2. That they were required/forced to pay additional ₱55.00 per day for the following: a) ₱20.00
police protection; b) ₱20.00 washing; c) ₱10.00 deposit; and [d)] ₱5.00 garage fees;
3. That there is no law providing the operator to require the drivers to pay police protection, deposit,
washing, and garage fees.
4. That on April 30, 1995, petitioner told them not to drive anymore, and when they went to the
garage to report for work the next day, they were not given a unit to drive; and
5. That the boundary drivers of passenger jeepneys are considered regular employees of the jeepney
operators. Being such, they are entitled to security of tenure.
Petitioner’s counterclaims:
1. He does not remember if the respondents were ever under his employ as drivers of his passenger
jeepneys.
2. He made sure that none of the jeepneys would stay idle even for a day so he could collect his
earnings; hence, it had been his practice to establish a pool of drivers
3. Respondents’ claim that certain amounts, as enumerated in the complaint, were deducted from
their day’s earnings is preposterous. Indeed, there were times when deductions were made from
the day’s earnings of some drivers, but such were installment payments for the amount previously
advanced to them.
Labor Arbiter:
LA Ricardo Nora rendered judgment of rendering the dismissal of Pagaygay, et. al. and ordered the
petitioner Gabriel to pay the respondents the amount of P 1,034,000.00 representing backwages and
separation pay.
Incidentally, the petitioner passed away on April 4, 1997. A copy of the decision was delivered personally
to. According to respondents, petitioner’s surviving spouse, Flordeliza Gabriel, and their daughter, after
reading the contents of the decision and after they had spoken to their counsel, refused to receive the
same. Nevertheless, a copy of the decision was left with petitioner’s wife and her daughter but they both
refused to sign and acknowledge receipt of the decision.
Petitioner filed an appeal of the decision of the Labor Arbiter on June 5, 1997.
NLRC:
1. NLRC reversed and set aside the decision of the Labor Arbiter.
Basis/Reason: The case was dismissed lack of employer-employee relationship between
petitioner Gabriel and Pagaygay, et. al.
2. Respondents filed a motion for reconsideration positing that the timeliness of the appeal was not
discussed in the decision. However, the NRLC dismissed such motion. It also set aside and vacated
the decision of the Labor Arbiter.
Basis/Reason: Melencio Gabriel was not represented by counsel during the pendency of
the case. The Labor Arbiter rendered the decision on March 17, 1997, before the demise of the
petitioner. However, petitioner did not received a copy of the decision in his lifetime.
The decision was only served on April 18, 1997 when he was no longer around to receive the
same. His surviving spouse and daughter cannot automatically substitute themselves as party
respondents. The requirement of leaving a copy at the party’s residence is not applicable in the
instant case because this presupposes that the party is still living and is just not available to receive
the decision and the surviving heirs are not in the position to receive them.
Aggrieved by the NLRC’s decision, the respondents filed an appeal by way of petition for certiorari.
CA:
1. CA reversed and set aside the decision of the NLRC. It, consequently, reinstated the decision of
the Labor Arbiter subject to the modification hat the private respondent is ordered to
immediately reinstate Pagaygay, et. al. to their former position without loss of seniority rights and
privileges, with full back wages from the date of their dismissal until their actual reinstatement.
Basis/ Reason: We disagree with the ratiocination of the NLRC that the death of the private
respondent on April 4, 1997 ipso facto negates recovery of the money claim against the successors-in-
interest …. Rather, this situation comes within the aegis of Section 3, Rule 3 of the NLRC Manual on
Execution of Judgment, which provides:
SECTION 3. Execution in Case of Death of Party. – Where a party dies after the finality of the
decision/entry of judgment of order, execution thereon may issue or one already issued may be
enforced in the following cases:
a. x x x ;
b. In case of death of the losing party, against his successor-in-interest, executor or administrator;
c. In case of death of the losing party after execution is actually levied upon any of his property,
the same may be sold for the satisfaction thereof, and the sheriff making the sale shall account
to his successor-in-interest, executor or administrator for any surplus in his hands.
2. Petitioner filed a motion for reconsideration but was dismissed.
SC:
ISSUE:
Whether the money claims survives notwithstanding the death of the losing party.
RULING:
Yes. The money claims survives and must be filed against the estate of petitioner Melencio Gabriel.
The Court ruled that with regard to espondents’ monetary claim, the same shall be governed by Section
20, Rule 3 of the Rules of Court which provides:
SEC. 20. Action on contractual money claims. – When the action is for recovery of money arising
from contract, express or implied, and the defendant dies before entry of final judgment in the
court in which the action was pending at the time of such death, it shall not be dismissed but shall
instead be allowed to continue until entry of final judgment. A favorable judgment obtained by
the plaintiff therein shall be enforced in the manner provided in these Rules for prosecuting claims
against the estate of a deceased person. (21a)
In relation to this, Section 5, Rule 86 of the Rules of Court states:
SEC. 5. Claims which must be filed under the notice. If not filed, barred; exceptions. – All claims for
money against the decedent arising from contract, express or implied, whether the same be due,
not due, or contingent, ... and judgment for money against the decedent, must be filed within the
time limited in the notice; otherwise they are barred forever, except that they may be set forth as
counterclaims in any action that the executor or administrator may bring against the claimants….
TITLE: Hyatt Elevators vs Goldstar G.R. No. 161026, October 24, 2005
TOPIC: Rule 4, Sec. 2. Venue of personal actions
FACTS:
Petitioner [herein Respondent] Goldstar is a domestic corporation primarily engaged in the business of
marketing, distributing, selling, importing, installing, and maintaining elevators and escalators, with
address at 6th Floor, Jacinta II Building, 64 EDSA, Guadalupe, Makati City.
Private respondent [herein petitioner] HYATT is a domestic corporation similarly engaged in the business
of selling, installing and maintaining/servicing elevators, escalators and parking equipment, with address
at the 6th Floor, Dao I Condominium, Salcedo St., Legaspi Village, Makati, as stated in its Articles of
Incorporation.
HYATT filed a Complaint for unfair trade practices and damages against LG Industrial Systems Co. Ltd.
(LGISC) and LG International Corporation (LGIC), alleging that: in 1988, it was appointed by LGIC and LGISC
as the exclusive distributor of LG elevators and escalators in the Philippines under a Distributorship
Agreement. LGISC, in the latter part of 1996, made a proposal to change the exclusive distributorship
agency to that of a joint venture partnership, however, in the middle of the negotiations, LGISC and LGIC
terminated the Exclusive Distributorship Agreement.
Cause of Dispute:
In the middle of negotiations, LGISC and LGIC terminated the Exclusive Distributorship
Agreement.

Hyatt filed a complaint for unfair trade practices and damages in the RTC Mandaluyong Branch.
LGISC and LGIC filed a Motion to Dismiss raising the following grounds:
(1) Lack of jurisdiction over the persons of defendants, summons not having been served
on its resident agent; (2) improper venue; and (3) failure to state a cause of action.
The trial court denied the said motion.
LGISC and LGIC filed an Answer with Compulsory Counterclaim ex abundante cautela. Thereafter,
they filed a Motion for Reconsideration and to Expunge Complaint which was denied.
HYATT filed a motion for leave of court to amend the complaint, it learned that LGISC transferred all its
organization, assets and goodwill, as a consequence of a joint venture agreement with Otis Elevator
Company of the USA, to LG OTIS. Thus, LGISC was to be substituted or changed to LG OTIS, its successor-
in-interest. Likewise, the motion averred that GOLDSTAR was being utilized by LG OTIS and LGIC in
perpetrating their unlawful and unjustified acts against HYATT. Hence, in the Amended Complaint, HYATT
impleaded GOLDSTAR as a party-defendant, and all references to LGISC were correspondingly replaced
with LG OTIS.
LG OTIS and LGIC opposed Hyatt motion to amend the complaint arguing that this would lead to a change
in the theory of the case and the motion was at that time dilatory since Hyatt is aware of the existence of
Hyatt.
The trial court admitted the Amended Complaint. LG OTIS (LGISC) and LGIC filed a motion for
reconsideration but was denied.
GOLDSTAR filed a Motion to Dismiss the amended complaint, raising the following grounds: (1) the venue
was improperly laid, as neither HYATT nor defendants reside in Mandaluyong City, where the original
case was filed; and (2) failure to state a cause of action against respondent.
RTC Decision:
The trial court denied the motion to dismiss.
Basis/Reason:
The court held that complaint sufficiently states a cause of action and that the
venue is properly laid. In the amended complaint, the same allegations are adopted as in
the original complaint with respect to the Goldstar Philippines to enable this court to
adjudicate a complete determination or settlement of the claim subject of the action it
appearing preliminarily as sufficiently alleged in the plaintiffs pleading that said Goldstar
Elevator Philippines Inc., is being managed and operated by the same defendants LG-OTIS
Elevator Company and LG International Corporation.
GOLDSTAR filed a motion for reconsideration thereto and was denied. It filed a petition for certiorari
before the Court of Appeals.
CA’s Decision:
The trial court committed error in denying respondents motions to dismiss. The appellate court
held that the venue was improper because none of the litigants resided in Mandaluyong City,
where the case is filed.
Basis/Reason: Since Makati was the principal place of business of both respondent and petitioner,
as stated in the latter’s Articles of Incorporation, that place was controlling for purposes of
determining the proper venue. The fact that petitioner had abandoned its principal office in
Makati years prior to the filing of the original case did not affect the venue where personal actions
could be commenced and tried.
Hence, this Petition.
ISSUE:
WHETHER OR NOT CA committed grave abuse of discretion, in holding that venue was improper.
RULING:
The Petition has no merit.
Section 2 of Rule 4 of the 1997 Revised Rules of Court:
Sec. 2. Venue of personal actions. All other actions may be commenced and tried where the plaintiff or
any of the principal plaintiff resides, or where the defendant or any of the principal defendant resides, or
in the case of a non-resident defendant where he may be found, at the election of the plaintiff.
Since both parties to this case are corporations, there is a need to clarify the meaning of residence. The
law recognizes two types of persons: (1) natural and (2) juridical.
Residence is vital when dealing with venue. A corporation has no residence in the same sense in which
this term is applied to a natural person. This is precisely the reason why the Court in Young Auto Supply
Company v. Court of Appeals ruled that for practical purposes, a corporation is in a metaphysical sense a
resident of the place where its principal office is located as stated in the articles of incorporation. It has
already been established that the residence of a corporation is the place where its principal office is
established.
Under Section 14(3) of the Corporation Code, the place where the principal office of the corporation is to
be located is one of the required contents of the articles of incorporation, which shall be filed with the
Securities and Exchange Commission (SEC).
The petitioner principal place of business is Makati, as indicated in its Articles of Incorporation. Since the
principal place of business of a corporation determines its residence or domicile, then the place indicated
in petitioners articles of incorporation becomes controlling in determining the venue for this case.
The requirement to state in the articles the place where the principal office of the corporation is to be
located is not a meaningless requirement. That proviso would be rendered nugatory if corporations were
to be allowed to simply disregard what is expressly stated in their Articles of Incorporation.
Inconclusive are the bare allegations of petitioner that it had closed its Makati office and relocated to
Mandaluyong City, and that respondent was well aware of those circumstances. Assuming arguendo that
they transacted business with each other in the Mandaluyong office of petitioner, the fact remains that,
in law, the latter’s residence was still the place indicated in its Articles of Incorporation. The appellate
court was clear enough in its ruling that the Complaint was dismissed because the venue had been
improperly laid, not because of the failure of petitioner to amend the latter’s Articles of Incorporation.
The rules on venue, like the other procedural rules, are designed to insure a just and orderly
administration of justice or the impartial and even handed determination of every action and proceeding.
Obviously, this objective will not be attained if the plaintiff is given unrestricted freedom to choose the
court where he may file his complaint or petition.
WHEREFORE, the Petition is hereby DENIED, and the assailed Decision and Resolution AFFIRMED.
Costs against petitioner.
Title: Time, Inc vs Reyes (as Judge of the Court of First Instance of Rizal), GR No. L-28882 May 31, 1971
Topic: Rule 4, Sec. 3. Venue of against non-residents
FACTS:
Petitioner’s Prayer:
Petition for certiorari and prohibition, with preliminary injunction, to annul certain orders of the
respondent Court of First Instance of Rizal, issued in its Civil Case No. 10403, entitled "Antonio J. Villegas
and Juan Ponce Enrile vs. Time, Inc., and to prohibit the said court from further proceeding with the said
civil case.
The petition alleges that petitioner Time, Inc., is an American corporation with principal offices at
Rocketfeller Center, New York City, N. Y., and is the publisher of "Time" magazine; the petition, does not
allege the petitioner's legal capacity to sue in the courts of the Philippine.
Prior Case:
In the Civil Case No. 10403, therein plaintiffs (herein respondents) Antonio J. Villegas and Juan Ponce
Enrile seek to recover from the herein petitioner damages upon an alleged libel arising from a publication
of Time magazine of an essay, entitled "Corruption in Asia", which reads as follows:
The problem of Manila's mayor, ANTONIO VILLEGAS, is a case in point. When it was
discovered last year that the mayor's coffers contained far more pesos than seemed
reasonable in the light of his income, an investigation was launched. Witnesses who had
helped him out under curious circumstance were asked to explain in court. One
government official admitted lending Villegas P30,000 pesos ($7,700) without interest
because he was the mayor's compadre. An assistant declared he had given Villegas loans
without collateral because he regarded the boss as my own son. A wealthy Manila
businessman testified that he had lent Villegas' wife 15,000 pesos because the mayor was
like a brother to me. With that, Villegas denounced the investigation as an invasion of his
family's privacy. The case was dismissed on a technicality, and Villegas is still mayor.
More specifically, the plaintiffs' complaint alleges, inter alia that:
Defendants, conspiring and confederating, published a libelous article, publicly, falsely

and maliciously imputing to plaintiffs the commission of the crimes of graft, corruption
and nepotism; that said publication particularly referred to Plaintiff Mayor Antonio J.
Villegas as a case in point in connection with graft, corruption and nepotism in Asia; that
said publication without any doubt referred to co-plaintiff Juan Ponce Enrile as the high
government official who helped under curious circumstances Plaintiff Mayor Antonio J.
Villegas in lending the latter approximately P30,000.00 ($7,700.00) without interest
because he was the Mayor's compadre; that the purpose of said Publications is to cause
the dishonor, discredit and put in public contempt the Plaintiffs, particularly Plaintiff
Mayor Antonio J. Villegas.
Petitioner received the complaint at its offices in New York and. It filed a motion to dismiss the complaint
for lack of jurisdiction and improper venue, relying upon the provisions of Republic Act 4363.
Private respondents opposed the motion. Respondent court withheld the determination of the motion to
dismiss until after trial of the case on the merits, the court having considered that the grounds relied upon
in the motion do not appear to be certain.
Petitioner moved for reconsideration of the deferment private respondents again opposed.
Respondent judge issued an order re-affirming the previous order of deferment for the reason that "the
rule laid down under Republic Act. No. 4363, is not applicable to actions against non-resident defendants,
and because questions involving harassment and inconvenience, as well as disruption of public service do
not appear indubitable.
Petitioner filed the instant petition for certiorari and prohibition.
There is no dispute that at the time of the publication of the allegedly offending essay, private respondents
Antonio Villegas and Juan Ponce Enrile were the Mayor Of the City of Manila and Undersecretary of
Finance and concurrently Acting Commissioner of Customs, respectively, with offices in the City of
Manila.
ISSUES:
1. Whether or not, under Republic Act No. 4363 the respondent Court of First Instance of Rizal has
jurisdiction of the civil suit for damages arising from an libellous publication, considering that the action
was instituted by public officers whose offices were in the City of Manila at the time of the publication;
2. Whether or not the said act is applicable to action against a foreign corporation or non-resident
defendant.
RULING:
Issue No. 1
NO. Under Republic Act No. 4363, actions for damages by public officials for libelous publications against
them can only be filed in the courts of first instance of the city or province where the offended functionary
held office at the time of the commission of the offense, in case the libelous article was first printed or
published outside the Philippines.
Provisions of Republic Act No. 4363, which are relevant to the resolution of the foregoing issues, read, as
follows:
ART. 360. Persons responsible. — Any person who shall publish, exhibit, or cause the publication or
exhibition of any defamation in writing or by similar means, shall be responsible for the same xxx xxx The
criminal and civil action for damages in cases of written defamations as provided for in this chapter, shall
be filed simultaneously or separately with the court of first instance of the province or city where the
libelous article is printed and first published or where any of the offended parties actually resides at the
time of the commission of the offense;
Provided, however, That where one of the offended parties is a public officer whose office is in the City of
Manila at the time of the commission of the offense, the action shall be filed in the Court of First Instance
of the City of Manila or of the city or province where the libelous article is printed and first published, and
in case such public officer does not hold office in the City of Manila, the action shall be filed in the Court of
First Instance of the province or city where he held office at the time of the commission of the offense or
where the libelous article is printed and first published and in case one of the offended parties is a private
individual, the action shall be filed in the Court of First Instance of the province or city where he actually
resides at the time of the commission of the offense or where the libelous matter is printed and first
published;
Provided,further, That the civil action shall be filed in the same court where the criminal action is filed and
vice versa; Provided, furthermore, That the court where the criminal action or civil action for damages is
first filed, shall acquire jurisdiction to the exclusion of other courts;
And provided finally, That this amendment shall not apply to cases of written defamations, the civil and/or
criminal actions which have been filed in court at the time of the effectivity of the law.
The complaint lodged in the court of Rizal by respondents does not allege that the libelous article was
printed and first published in the province of Rizal and, since the respondents-plaintiffs are public officers
with offices in Manila at the time of the commission of the alleged offense, it is clear that the only place
left for them wherein to file their action, is the Court of First Instance of Manila.
Issue 2:
NO. The action of a court in refusing to rule, or deferring its ruling, on a motion to dismiss for lack of
jurisdiction over the subject matter, or for improper venue, is in excess of jurisdiction and correctable by
writ of prohibition or certiorari sued out in the appellate Court, even before trial on the merits is had.
The dismissal of the present petition is asked on the ground that the petitioner foreign corporation failed
to allege its capacity to sue in the courts of the Philippines. Petitioner's failure to aver its legal capacity to
institute the present petition is not fatal, for...
A foreign corporation may, by writ of prohibition, seek relief against the wrongful assumption of
jurisdiction. And a foreign corporation seeking a writ of prohibition against further maintenance of a suit,
on the ground of want of jurisdiction in which jurisdiction is not bound by the ruling of the court in which
the suit was brought, on a motion to quash service of summons, that it has jurisdiction.
It is also advanced that the present petition is premature, since respondent court has not definitely ruled
on the motion to dismiss, nor held that it has jurisdiction, but only argument is untenable. The motion to
dismiss was predicated on the respondent court's lack of jurisdiction to entertain the action; and the
rulings of this Court are that writs of certiorari or prohibition, or both, may issue in case of a denial or
deferment of action on such a motion to dismiss for lack of jurisdiction.
WHEREFORE, the writs applied for are granted: the respondent Court of First Instance of Rizal is declared
without jurisdiction to take cognizance of its Civil Case No. 10403; and its orders issued in connection
therewith are hereby annulled and set aside,. Respondent court is further commanded to desist from
further proceedings in Civil case No. 10403 aforesaid. Costs against private respondents, Antonio J.
Villegas and Juan Ponce Enrile. The writ of preliminary injunction heretofore issued by this Supreme Court
is made permanent.
Title: Union Bank vs Maunland Homes GR No. 190071 August 15, 2012
Topic: Rule 4, Sec 4. When Rule not applicable (Venue of Actions)
FACTS:
Union Bank is the owner of a commercial complex located in Malolos, Bulacan, known as the Maunlad
Shopping Mall. Union Bank, as seller, and respondent Maunlad Homes as buyer, entered into a contract
to sell involving the Maunlad Shopping Mall.
Agreement:
The contract set the purchase price at P151 million, P2.4 million of which was to be paid by
Maunlad Homes as down payment payable on or before July 5, 2002, with the balance to be
amortized over the succeeding 180-month period. Under the contract, Union Bank authorized
Maunlad Homes to take possession of the property and to build or introduce improvements
thereon.
The parties also agreed that if Maunlad Homes violates any of the provisions of the contract, all
payments made will be applied as rentals for the use and possession of the property. In the
event of rescission due to failure to pay or to comply with the terms of the contract, Maunlad
Homes will be required to immediately vacate the property and must voluntarily turn possession
over to Union Bank.
Cause of Dispute:
Maunlad Homes failed to pay the monthly amortization, Union Bank sent the former a Notice of Rescission
of Contract demanding payment of the installments due otherwise, it shall rescind the contract. Maunlad
Homes failed to comply. Hence, Union Bank sent Maunlad Homes a letter demanding payment of the
rentals due and to vacate and to turn over the property. Maunlad continued to refuse; Union Bank
instituted an ejectment suit before the Metropolitan Trial Court (MeTC) of Makati City,
Maunlad Homes resisted the suit by claiming that it is the owner of the property as Union Bank did not
reserve ownership of the property under the terms of the contract. By virtue of its ownership, Maunlad
Homes claimed that it has the right to possess the property.
MeTC:
The MeTC dismissed Union Bank’s ejectment complaint.
Basis/Reason: Union Bank’s cause of action was based on a breach of contract and that both parties are
claiming a better right to possess the property based on their respective claims of ownership of the
property. The MeTC ruled that the appropriate action to resolve these conflicting claims was an accion
reivindicatoria, over which it had no jurisdiction.
RTC:
On appeal, RTC of Makati City, Branch affirmed MeTC decision.
Basis/Reason: That the issues raised in the complaint extend beyond those commonly involved in an
unlawful detainer suit. The RTC declared that the case involved a determination of the rights of the parties
under the contract. Additionally, the RTC noted that the property is located in Malolos, Bulacan, but the
ejectment suit was filed by Union Bank in Makati City, based on the contract stipulation that “the venue
of all suits and actions arising out or in connection with the Contract to Sell shall be in Makati City.” The
RTC ruled that the proper venue for the ejectment action is in Malolos, Bulacan, pursuant to the second
paragraph of Section 1, Rule 4 of the Rules of Court, which states:
Section 1. Venue of real actions. - Actions affecting title to or possession of real property, or interest
therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the
real property involved, or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the
municipality or city wherein the real property involved, or a portion thereof, is situated.
The RTC declared that Union Bank cannot rely on the waiver of venue provision in the contract because
ejectment is not an action arising out of or connected with the contract.
CA:
The CA affirmed the RTC decision.
Basis/Reason: The CA determined that Union Bank’s cause of action is premised on the interpretation
and enforcement of the contract and the determination of the validity of the rescission, both of which
are matters beyond the jurisdiction of the MeTC. Therefore, it ruled that the dismissal of the ejectment
suit was proper. The CA, however, made no further ruling on the issue of venue of the action.
ISSUE:
Whether or not the filing of unlawful detainer action in Makati City was proper.
RULING:
YES. The venue was proper pursuant to the stipulation of the contract.
Maunlad Homes questioned the venue of Union Bank’s unlawful detainer action which was filed in Makati
City while the contested property is located in Malolos, Bulacan. Citing Section 1, Rule 4 of the Rules of
Court, Maunlad Homes claimed that the unlawful detainer action should have been filed with the
municipal trial court of the municipality or city where the real property involved is situated.
Union Bank, on the other hand, justified the filing of the complaint with the MeTC of Makati City on the
venue stipulation in the contract which states that “the venue of all suits and actions arising out of or
in connection with this Contract to Sell shall be at Makati City.”
While Section 1, Rule 4 of the Rules of Court states that ejectment actions shall be filed in “the municipal
trial court of the municipality or city wherein the real property involved x x x is situated” Section 4 of the
same Rule provides that the rule shall not apply “where the parties have validly agreed in writing before
the filing of the action on the exclusive venue thereof.” Precisely, in this case, the parties provided for a
different venue. Since the unlawful detainer action is connected with the contract, Union Bank rightfully
filed the complaint with the MeTC of Makati City.
WHEREFORE, we hereby GRANT the petition and SET ASIDE the decision dated October 28, 2009 of the
Court of Appeals in CA-G.R. SP No. 107772. Respondent Maunlad Homes, Inc. is ORDERED .TO VACATE
the Maunlad Shopping Mall, the property subject of the case, immediately upon the finality of this
Decision. Respondent Maunlad Homes, Inc. is further
Title: Pilipino Telephone vs Tecson GR No. 156966 May 07, 2004

FACTS:
Tecson applied for 6 cellular phone subscriptions with petitioner Pilipino Telephone Corporation (PILTEL),
a company engaged in the telecommunications business, which applications were each approved and
covered, respectively, by six mobiline service agreements.
Respondent filed with the RTC of Iligan City, Lanao Del Norte, a complaint against petitioner for a Sum of
Money and Damages. Petitioner moved for the dismissal of the complaint on the ground of improper
venue, citing a common provision in the mobiline service agreements to the effect that –
Venue of all suits arising from this Agreement or any other suit directly or indirectly arising from the
relationship between PILTEL and subscriber shall be in the proper courts of Makati, Metro Manila.
Subscriber hereby expressly waives any other venues.
RTC:
1. RTC Iligan City denied petitioners motion to dismiss and required it to file an answer Petitioner.
2. PILTEL filed a motion for the reconsideration which the trial court denied.
CA:
Affirmed RTC’s decision.
1. Petitioner filed a petition for certiorari
2. The CA saw no merit in the petition and affirmed the assailed orders of the trial court. Petitioner
moved for reconsideration, but the appellate court denied the motion.
ISSUE:
Whether or not venue is improper.
RULING:
YES. The venue is improper.
Section 4, Rule 4, Rules of Civil Procedure allows the parties to agree and stipulate in writing, before the
filing of an action, on the exclusive venue of any litigation between them. Such an agreement would be
valid and binding provided that the stipulation on the chosen venue is exclusive in nature or in intent, that
it is expressed in writing by the parties thereto, and that it is entered into before the filing of the suit. The
provision contained in paragraph 22 of the Mobile Service Agreement, a standard contract made out by
petitioner PILTEL to its subscribers, apparently accepted and signed by respondent, states that the
venue of all suits arising from the agreement, or any other suit directly or indirectly arising from the
relationship between PILTEL and subscriber, shall be in the proper courts of Makati, Metro Manila. The
added stipulation that the subscriber expressly waives any other venue should indicate the intent of the
parties to consider the venue stipulation as being preclusive in character.
WHEREFORE, the instant petition is GRANTED, and the questioned decision and resolution of the Court
of Appeals in CA-G.R. SP No. 68104 are REVERSED and SET ASIDE. Civil Case No. 5572 pending before the
Regional Trial Court of Iligan City, Branch 4, is DISMISSED without prejudice to the filing of an appropriate
complaint by respondent against petitioner with the court of proper venue. No costs.
SO ORDERED.
Title: Ochoa vs China Bank GR No. 192877 March 23, 2011 (Supra)

FACTS:
For resolution is petitioners’ motion for reconsideration denying their petition for review on certiorari
for failing to sufficiently show any reversible error in the assailed judgment of the CA.
Petitioners insist that it was error for the CA to rule that the stipulated exclusive venue of Makati City is
binding only on petitioners’ complaint for Annulment of Foreclosure, Sale, and Damages filed before the
RTC of Parañaque City, but not on respondent bank’s Petition for Extrajudicial Foreclosure of Mortgage,
which was filed with the same court.
ISSUE:
Whether or not Rule 4, Sec. 4 may apply to extrajudicial foreclosure.
RULING:
No. The exclusive venue of Makati City, as stipulated by the parties and sanctioned by Section 4, Rule 4 of
the Rules of Court cannot be made to apply to the Petition for Extrajudicial Foreclosure filed by
respondent bank because the provisions of Rule 4 pertain to venue of actions, which an extrajudicial
foreclosure is not.
Hagans v. Wislizenus states that
"An 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. x x x." 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. 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 of the province where the sale is to be made. The
office of the sheriff cannot 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 exercises
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.
Verily then, with respect to the venue of extrajudicial foreclosure sales, Act No. 3135, as amended, applies,
it being a special law dealing particularly with extrajudicial foreclosure sales of real estate mortgages, and
not the general provisions of the Rules of Court on Venue of Actions.
Consequently, the stipulated exclusive venue of Makati City is relevant only to actions arising from or
related to the mortgage, such as petitioners’ complaint for Annulment of Foreclosure, Sale, and Damages.
WHEREFORE, premises considered, the motion for reconsideration is hereby DENIED.
Title: Republic vs Glasgow Credit GR No. 170281 January 18, 2008

FACTS:
This is a petition for review of the RTC of Manila dismissing the complaint for forfeiture filed by the
Republic against respondents Glasgow Credit.
The Republic filed a complaint in the RTC Manila for civil forfeiture of assets against the bank deposits
maintained by Glasgow in CSBI. The case, filed pursuant to RA 9160 (the Anti-Money Laundering Act of
2001).
The summons to Glasgow was returned unserved as it could no longer be found at its last known address.
The Republic filed a verified omnibus motion for (a) issuance of alias summons and (b) leave of court to
serve summons by publication. The trial court directed the issuance of alias summons but no mention of
the motion to serve summons by publication. The case was archived for failure of the Republic to serve
the alias summons. The Republic filed an ex parte omnibus motion to reinstate the case and resolve its
pending motion for leave of court to serve summons by publication.
Later, the trial court ordered the reinstatement of the case and directed the Republic to serve
the alias summons on Glasgow. However, it did not resolve the Republics motion for leave of court to
serve summons by publication.
Still, the Republic a copy of the sheriff’s return stating that the alias summons was returned unserved as
Glasgow was no longer holding office at the given address and left no forwarding address.
Meanwhile, the Republics motion for leave of court to serve summons by publication remained
unresolved. Thus, Republic filed a motion to resolve its motion for leave of court to serve summons by
publication.
Finally, the OSG received a copy of Glasgows Motion to Dismiss. It alleged that the court had no jurisdiction
over its person as summons had not yet been served on it. The Republic opposed Glasgows motion to
dismiss. It contended that its suit was an action quasi in rem where jurisdiction over the person of the
defendant was not a prerequisite to confer jurisdiction on the court.
RTC:
Dismiss the case.
Basis/Reason: The trial court dismissed the case on ground of improper venue as it should have been filed
in the RTC of Pasig where CSBI, the depository bank of the account sought to be forfeited, was located.
Raising questions of law, the Republic filed this petition.
ISSUE:
Whether the complaint for civil forfeiture was correctly dismissed on ground of improper venue
RULING:
NO. The complaint was filed in the proper venue.
In its assailed order, the trial court cited the ground that this court has no jurisdiction over the person of
Glasgow raise by the latter in support of its motion to dismiss.
Glasgow never questioned the venue of the Republics complaint for civil forfeiture against it, how could
the trial court have dismissed the complaint for improper venue, this Court ruled:
The motu proprio dismissal of petitioner’s complaint by the trial court on the ground of improper
venue is plain error.
Section 3, Title II (Civil Forfeiture in the Regional Trial Court) of the Rule of Procedure in Cases of Civil
Forfeiture provides:
Sec. 3. Venue of cases cognizable by the regional trial court. A petition for civil forfeiture
shall be filed in any regional trial court of the judicial region where the monetary
instrument, property or proceeds representing, involving, or relating to an unlawful
activity or to a money laundering offense are located; provided, however, that where all
or any portion of the monetary instrument, property or proceeds is located outside the
Philippines, the petition may be filed in the regional trial court in Manila or of the judicial
region where any portion of the monetary instrument, property, or proceeds is located,
at the option of the petitioner
Under this provision, the venue of civil forfeiture cases is any RTC of the judicial region where the
monetary instrument, property or proceeds representing, involving, or relating to an unlawful activity or
to a money laundering offense are located. Pasig City, where the account sought to be forfeited in this
case is situated, is within the National Capital Judicial Region (NCJR). Clearly, the complaint for civil
forfeiture of the account may be filed in any RTC of the NCJR. Since the RTC Manila is one of the RTCs of
the NCJR, it was a proper venue of the Republics complaint for civil forfeiture of Glasgows account.
WHEREFORE, the petition is hereby GRANTED.

TITLE: Newsweek, Inc. v. IAC, G.R NO. L-63559, May 30, 1986
TOPIC: Class Suit
FACTS:
The complaint alleged that petitioner and the other defendants committed libel against them by
the publication of the article "An Island of Fear" in the February 23, 1981 issue of petitioner's
weekly news magazine Newsweek. The article supposedly portrayed the island province of Negros
Occidental as a place dominated by big landowners or sugarcane planters who not only exploited
the impoverished and underpaid sugarcane workers/laborers, but also brutalized and killed them
with imprunity.

Complainants therein alleged that said article, taken as a whole, showed a deliberate and malicious
use of falsehood, slanted presentation and/or misrepresentation of facts intended to put them
(sugarcane planters) in bad light, expose them to public ridicule, discredit and humiliation here in
the Philippines and abroad, and make them objects of hatred, contempt and hostility of their
agricultural workers and of the public in general.

On March 5, 1981, private respondents, incorporated associations of sugarcane planters in Negros
Occidental claiming to have 8,500 members and several individual sugar planters, filed Civil Case
No. 15812 in their own behalf and/or as a class suit in behalf of all sugarcane planters in the
Regional Trial Court of the province of Negros Occidental.
On November 5, 1981, petitioner filed a motion to dismiss on the grounds that ;
(1) the printed article sued upon is not actionable in fact and in law; and
(2) the complaint is bereft of allegations that state, much less support a cause of action. It pointed
out the non-libelous nature of the article and, consequently, the failure of the complaint to state
a cause of action.
Petitioner, Newsweek, Inc., pray in special action for certiorari, prohibition with preliminary
injunction, seeks to annul the decision of the Intermediate Appellate Court dated December 17,
1982 sustaining the Order of the then Court of First Instance of Bacolod City which denied
petitioner's Motion to Dismiss the complaint for libel filed by private respondents (Civil Case No.
15812), and the Resolution dated March 10, 1983 which denied its Motion for Reconsideration.
Respondents alleged that said article, "An Island of Fear" in the February 23, 1981 issue of
petitioner's weekly news magazine Newsweek is libellous because taken as a whole, showed a
deliberate and malicious use of falsehood, slanted presentation and/or misrepresentation of facts
intended to put them (sugarcane planters) in bad light, expose them to public ridicule, discredit
and humiliation here in the Philippines and abroad, and make them objects of hatred, contempt
and hostility of their agricultural workers and of the public in general.
They prayed that defendants be ordered to pay them PlM as actual and compensatory damages,
and such amounts for moral, exemplary and corrective damages as the court may determine, plus
expenses of litigation, attorney's fees and costs of suit. A photo copy of the article was attached
to the complaint.
RTC:
On March 17, 1982, the trial court denied the motion to dismiss.
Basis/Reasons:
RTC states that the grounds on which the motion to dismiss are predicated are not indubitable as
the complaint on its face states a valid cause of action; and the question as to whether the printed
article sued upon its actionable or not is a matter of evidence. Petitioner's motion for
reconsideration was denied on May 28, 1982.
CA:
The Court of Appeals affirmed the Regional Trial Court's Orders in a Decision dated
December 17, 1982 and ordered the case to be tried on the merits.
Basis/Reasons:
On the grounds that ;
(1) the complaint contains allegations of fact which called for the presentation of
evidence; and
(2) certiorari under Rule 65 cannot be made to substitute for an appeal where an appeal
would lie at a proper time. Subsequently, on March 10, 1983, the respondent Court
denied petitioner's Motion for Reconsideration of the aforesaid decision
SC:
Petitioner, Newsweek, Inc., a foreign corporation licensed to do business in the Philippines, in this
special action for certiorari, prohibition with preliminary injunction, seeks to annul the decision of
the Intermediate Appellate Court dated December 17, 1982 sustaining the Order of the then Court
of First Instance of Bacolod City which denied petitioner's Motion to Dismiss the complaint for libel
filed by private respondents (Civil Case No. 15812), and the Resolution dated March 10, 1983
which denied its Motion for Reconsideration.
First, petitioner argues that private respondents' complaint failed to state a cause of action
because the complaint made no allegation that anything contained in the article complained of
regarding sugarcane planters referred specifically to any one of the private respondents; that libel
can be committed only against individual reputation; and that in cases where libel is claimed to
have been directed at a group, there is actionable defamation only if the libel can be said to reach
beyond the mere collectivity to do damage to a specific, individual group member's reputation.
ISSUE
WHETHER OR NOT THE PRIVATE RESPONDENTS’ COMPLAINT FAILED TO STATE A CAUSE OF
ACTION.
RULING
YES, RESPONDENTS FAILED TO STATE A CAUSE OF ACTION.
In the case of Corpus vs. Cuaderno, Sr. (16 SCRA 807) this Court ruled that;
"in order to maintain a libel suit, it is essential that the victim be identifiable (People vs. Monton,
L-16772, November 30, 1962), although it is not necessary that he be named (19 A.L.R. 116)." In
an earlier case, this Court declared that" ... defamatory matter which does not reveal the Identity
of the person upon whom the imputation is cast, affords no ground of action unless it be shown
that the readers of the libel could have Identified the personality of the individual defamed."
This principle has been recognized to be of vital importance, especially where a group or class of
persons, as in the case at bar, claim to have been defamed, for it is evident that the larger the
collectivity, the more difficult it is for the individual member to prove that the defamatory remarks
apply to him.
In the case of Uy Tioco vs. Yang Shu Wen , 32 Phil. 624, this Court held as follows:
“Defamatory remarks directed at a class or group of persons in general language only, are not
actionable by individuals composing the class or group unless the statements are sweeping; and it
is very probable that even then no action would lie where the body is composed of so large a
number of persons that common sense would tell those to whom the publication was made that
there was room for persons connected with the body to pursue an upright and law abiding course
and that it would be unreasonable and absurd to condemn all because of the actions of a part.”
It is evident from the above ruling that where the defamation is alleged to have been directed at
a group or class, it is essential that the statement must be so sweeping or all-embracing as to apply
to every individual in that group or class, or sufficiently specific so that each individual in the class
or group can prove that the defamatory statement specifically pointed to him, so that he can bring
the action separately, if need be.
Private respondents filed a "class suit" in representation of all the 8,500 sugarcane planters of
Negros Occidental. Petitioner disagrees and argues that the absence of any actionable basis in the
complaint cannot be cured by the filing of a class suit on behalf of the aforesaid sugar planters.
The case at bar is not a class suit. It is not a case where one or more may sue for the benefit of all
(Mathay vs. Consolidated Bank and Trust Company, 58 SCRA 559) or where the representation of
class interest affected by the judgment or decree is indispensable to make each member of the
class an actual party (Borlaza vs. Polistico, 47 Phil. 348). We have here a case where each of the
plaintiffs has a separate and distinct reputation in the community. They do not have a common or
general interest in the subject matter of the controversy.
Petitioner's motion to dismiss is based on the ground that the complaint states no cause of action
against it by pointing out the non-libelous nature of the article sued upon. There is no need of a
trial in view of the conclusion of this Court that the article in question is not libelous. The specific
allegation in the complaint, to the effect that the article attributed to the sugarcane planters the
deaths and brutalization of sugarcane workers, is not borne out by a perusal of the actual text.
The complaint contains a recital of the favorable working conditions of the agricultural workers in
the sugar industry and the various foundations and programs supported by planters' associations
for the benefit of their workers. Undoubtedly, the statements in the article in question are
sweeping and exaggerated; it would be unreasonable and absurd to condemn the majority of the
sugarcane planters, who have at heart the welfare of their workers, because of the actions of a
part. Nonetheless, articles such as the one in question may also serve to prick the consciences of
those who have but are not doing anything or enough for those who do not have.
On the other hand, petitioner would do well to heed the admonition of the President to media
that they should check the sources of their information to ensure the publication of the truth.
Freedom of the press, like all freedoms, should be exercised with responsibility.
WHEREFORE, the decision of the Intermediate Appellate Court is reversed and the complaint in
Civil Case No. 15812 of the Court of First Instance of Negros Occidental is dismissed, without
pronouncement as to costs.
TITLE: Mathay v. Consolidated Bank, G.R. No. L-23136, August 26, 1974
TOPIC: Class Suit
FACTS:
Samuel Mathay, et.al. were former stockholders of Consolidated Mines Inc. (CMI).Petitioners
filed a case for a class suit against CMI containing six causes of action. Petitioners
alleged that in violation of the Board resolution, the defendants unlawfully acquired
stockholdings in the defendant Bank in excess of what they were lawfully entitled, hence depriving
the petitioners of their right to subscribe at par value, in proportion to their equities established
under their respective "Pre-Incorporation Agreements to Subscribe" to the capital stock and that
the Articles of Incorporation were fraudulently amended by the defendants.

Articles of Incorporation were fraudulently amended by the defendants.
That the execution of said Articles of Incorporation was "in violation of law and in breach of trust
and contractual agreement as a means to gain control of Defendant Bank by Defendant Individuals
and persons or entities chosen by them and for their personal profit or gain in disregard of the
rights of Plaintiffs and other CMI Subscribing Stockholders";

The case was instituted originally in Regional Trial Court.
Appellants contended in the first three assigned errors that ;
1. the trial court erred in holding that the present suit could not be maintained as a class suit,
and in support thereof argued that the propriety of a class suit should be determined by
the common interest in the subject matter of the controversy;
2. that in the instant case there existed such common interest which consisted not only in
the recovery of the shares of which the appellants were unlawfully deprived, but also in
divesting the individuals-defendants-appellees and the persons or entities chosen by them
of control of the appellee Bank;
3. that the complaint showed that besides the four plaintiffs-appellants of record, and the
four movant-intervenors-appellants there were in the appellee Bank many other
stockholders who, though in the appellee Bank many other stockholders who, though
similarly situated as the appellants, did not formally include themselves as parties on
record in view of the representative character of the suit; that the test, in order to
determine the legal standing of a party to institute a class suit, was not one of number, but
whether or not the interest of said party was representative of the persons in whose behalf
the class suit was instituted;
4. that granting arguendo, that the plaintiffs-appellants were not sufficiently numerous and
representative, the court should not have dismissed the action, for insufficiency of number
in a class suit was not a ground for a motion to dismiss, and the court should have treated
the suit as an action under Rule 3, Section 6, of the Rules of Court which permits a joinder
of parties.
Plaintiff prays to reverse the decision of RTC dismissing the case.
Defendants-appellees, on the contrary, stressed that the instant suit was instituted as a class suit
and the plaintiffs-appellants did not sue in their individual capacities for the protection of their
individual interests; that the plaintiffs-appellants of record could not be considered numerous and
representative, as said plaintiffs-appellants were only four out of 1,500 stockholders, and owned
only 8 shares out of the 80,000 shares of stock of the appellee Bank;
RTC:
March 21, 1964, the trial court granted the motion to dismiss,
Basis/ Reason
On the ground that the class suit could not be maintained because of the absence of a showing in
the complaint that the plaintiffs-appellants were sufficiently numerous and representative, and
that the complaint failed to state a cause of action.
CA:
CA affirmed decision pf RTC.
SC:
In this appeal, appellants-plaintiffs and movants-intervenors, seek the reversal of the order dated
March 21, 1964 of the Court of First Instance of Manila dismissing the complaint together with all
other pending incidents in Civil Case No. 55810.
The complaint in this case, filed on December 24, 1963 as a class suit, under Section 12, Rule 3, of
the Rules of Court.
Appellants insisted that non-compliance with Section 12, Rule 3, not being one enumerated in
Rules 16 and 17, was not a ground for dismissal; that the requirements for a class had been
complied with; that the required common interest existed even if the interests were several for
there was a common question of law or fact and a common relief was sought; that the common
or general interest could be in the object of the action, in the result of the proceedings, or in the
question involved in the action, as long as there was a common right based on the same essential
facts.
ISSUE
WHETHER OR NOT THE INSTANT ACTION COULD BE MAINTAINED AS A CLASS

SUIT.
RULING
NO, IT COULD NOT BE MAINTAINED AS A CLASS SUIT.
The governing statutory provision for the maintenance of a class suit is Section 12 of Rule 3 of
the Rules of Court, which reads as follows.
"Sec. 12. Class suit. When the subject matter of the controversy is one of common or general
interest to many persons, and the parties are so numerous that it is impracticable to bring them
a]] before the court, one or more may sue or defend for the benefit of all. But in such case the court
shall make sure that the parties actually before it are sufficiently numerous and representative so
that all interests concerned are fully protected. Any party in interest shall have a right to intervene
in protection of his individual interest."
The necessary elements for the maintenance of a class suit are accordingly:
(1) that the subject matter of the controversy is one of common or general interest to many
persons, and
(2) that such persons be so numerous as to make it impracticable to bring them all to the court.
The statute requires that the complaint should allege the existence of the necessary facts, the
existence of a class and the number of members in the said class so as to enable the court to
determine whether the members of the said class are so numerous as to make it impractical to
bring them all to court. The complaint in the instant case failed to state the number of said CMI
subscribing stockholders that the trial court could not infer nor make sure that the parties are
indeed so numerous that they cannot practically appear in court and that the plaintiffs are
representative of the other stockholders. The statute also requires that the subject-matter of the
controversy be of common interest to numerous persons.
In the instant case, the interest that appellants, plaintiffs and intervenors, and the CMI
stockholders had in the subject matter of this suit was several, not common or general in the sense
required by the statute. Each one of the appellants and the CMI stockholders had determinable
interest; each one had a right, if any, only to his respective portion of the stocks. No one of them
had any right to, or any interest in, the stock to which another was entitled.
WHEREFORE, the instant appeal is dismissed, and the order dated March 21,1964 of the Court of
First Instance of Manila dismissing the complaint in Civil Case No. 55810 is affirmed, with costs in
this instance against appellants. IT IS SO ORDERED.
TITLE: Borlasa v. Polistico, G.R. No. L-22909, January 28, 1925
TOPIC: Class Suit
FACTS:
In the month of April, 1911, the plaintiffs and defendants, together with several hundred other
persons, formed an association under the name of Turuhan Polistico & Co. Vicente Polistico, the
principal defendant herein, was elected president and treasurer of the association, and his house
in Lilio, Laguna, was made its principal place of business. The life of the association was fixed at
fifteen years, and under the by-laws each member obligated himself to pay to Vicente Polistico,
as president-treasurer, before 3 o'clock in the afternoon of every Sunday the sum of 50 centavos,
except that on every fifth Sunday the amount was P1, if the president elected to call this amount,
as he always did.
It is alleged that from April, 1911, until April, 1917, the sums of money mentioned above were
paid weekly by all of the members of the society with few irregularities. The inducement to these
weekly contributions was found in provisions of the by-laws to the effect that a lottery should be
conducted weekly among the members of the association and that the successful member should
be paid the amount collected each week, from which, however, the president-treasurer of the
society was to receive the sum of P200, to be held by him as funds of the society.
It is further alleged that by virtue of these weekly lotteries Vicente Polistico, as president-treasurer
of the association, received sums of money amounting to P74,000, more or less, in the period
stated, which he still retains in his power or has applied to the purchase of real property largely in
his own name and partly in the names of others. The defendants in the complaint are the members
of the board of directors of the association, including Vicente Polistico, as president-treasurer,
Alfonso Noble, secretary, Felix Garcia and Vivencio Zulaybar, as promoter (propagandistas), and
Afroniano de la Peña and Tomas Orencia, as members (vocales) of the board.

This action was instituted in the Court of First Instance (now RTC) of Laguna on July 25, 1917, by
Victoriano Borlasa and others against Vicente Polistico and others, chiefly for the purpose of
securing the dissolution of a voluntary association named Turuhan Polistico & Co., and to compel
the defendants to account for and surrender the money and property of the association in order
that its affairs may be liquidated and its assets applied according to law.
The plaintiffs excepted to this order, but acquiesced to the extent of amending their complaint by
adding as additional parties plaintiff some hundreds of persons, residents of Lilio, said to be
members of the association and desirous of being joined as plaintiffs. Some of these new plaintiffs
had not been named in the list submitted by the defendants with their amended answer; and on
the other hand many names in said list were here omitted, it being claimed by the plaintiffs that
the persons omitted were not residents of Lilio but residents of other places and that their relation
to the society, so far as the plaintiffs could discover, was fictitious.
Petitioner, Newsweek, Inc., pray in special action for certiorari, prohibition with preliminary
injunction, seeks to annul the decision of the Intermediate Appellate Court dated December 17,
1982 sustaining the Order of the then Court of First Instance of Bacolod City which denied
petitioner's Motion to Dismiss the complaint for libel filed by private respondents (Civil Case No.
15812), and the Resolution dated March 10, 1983 which denied its Motion for Reconsideration.
In an amended answer the defendants raised the question of lack of parties and set out a list of
some hundreds of persons whom they alleged should be brought in as parties defendant on the
ground, among others, that they were in default in the payment of their dues to the association.
RTC:
The cause was dismissed. RTC have sustained a demurrer for defect of parties and the plaintiffs
electing not to amend.
Basis/Reasons:
On November 28, 1922, the court made an order requiring the plaintiffs to amend their complaint
within a stated period so as to include all of the members of the Turnuhan Polistico & Co. either
as plaintiffs or defendants. The trial judge appears to have supposed that all the members of
the Turnuhan Polistico & Co. should be brought in either plaintiffs or defendants.
ISSUE
WHETHER OR NOT THE TRIAL COURT IS CORRECT IN MAKING ORDER REQUIRING THE PLAINTIFFS
TO AMEND THEIR COMPLAINT WITHIN A STATED PERIOD SO AS TO INCLUDE ALL OF THE MEMBERS
OF THE TURNUHAN POLISTICO & CO. EITHER AS PLAINTIFFS OR DEFENDANTS.
RULING
NO. THE TRIAL COURT IS NOT CORRECT.

The situation involved is precisely the one contemplated in section 118 of the Code of Civil
Procedure, where one or more may sue for the benefit of all. It is evident from the showing made
in the complaint, and from the proceedings in the court below, that it would be impossible to
make all of the persons in interest parties to the cases and to require all of the members of the
association to be joined as parties would be tantamount to a denial of justice.
The general rule with reference to the making of parties in a civil action requires, of course, the
joinder of all necessary parties wherever possible, and the joinder of all indispensable parties under
any and all conditions, the presence of those latter being a sine qua non of the exercise of judicial
power. The class suit contemplates an exceptional situation where there are numerous persons all
in the same plight and all together constituting a constituency whose presence in the litigation is
absolutely indispensable to the administration of justice. Here the strict application of the rule as
to indispensable parties would require that each and every individual in the class should be present.
But at this point the practice is so far relaxed as to permit the suit to proceed, when the class is
sufficient represented to enable the court to deal properly and justly with that interest and with all
other interest involved in the suit. In the class suit, then, representation of a class interest which
will be affected by the judgment is indispensable; but it is not indispensable to make each member
of the class an actual party.
The addition of some hundreds of persons to the number of the plaintiffs, made in the amendment
to the complaint of December 13, 1922, was unnecessary, and as the presence of so many parties
is bound to prove embarrassing to the litigation from death or removal, it is suggested that upon
the return of this record to the lower court for further proceedings, the plaintiff shall again amend
their complaint by dismissing as to unnecessary parties plaintiffs, but retaining a sufficient number
of responsible persons to secure liability for costs and fairly to present all the members of the
association.
There is another feature of the complaint which makes a slight amendment desirable, which is,
that the complaint should be made to show on its face that the action is intended to be litigated
as a class suit. We accordingly recommend that the plaintiffs further amend by adding after the
names of the parties plaintiffs the words, "in their own behalf and in behalf of other members
of Turuhan Polistico & Co."
The order appealed from is reversed, the demurrer of the defendants based upon supposed lack
of parties is overruled, and the defendants are required to answer to the amended complaint
within the time allowed by law and the rules of the court. The costs of this appeal will be paid by
the defendants. So ordered.
TITLE: Ibañez v. Roman Catholic Church, 12 Phil. 227

TOPIC: Class Suit (No class suit if interest of those who filed the action conflicts with those
sought to be represented.)
FACTS:
The history of the image of the Holy Child of Ternate (Santo Niño de Ternate), to which this case
relates.
The Mardicas (men of the sea), a race very friendly to the Spaniards, accompanied the latter to
Manila, taking with them to their new country the Holy Child of Ternate, patron of their town,
whose image they held in great veneration. Land was assigned to them in Maragondon, Province
of Cavite, where they established the town of Ternate, the present inhabitants of which are the
descendants of those loyal islanders.
It appears clearly from a certain documents that the image of Sto. Nino was in those days in the
parish church of Maragondon and not in the hamlet of Ternate. At least as late as 1803 the Santo
Niño was kept in the parish church of Maragondon. There is some doubt as to the custom relating
to the celebration of the festival of the saint with reference to the number of days during which it
was exhibited in Ternate.
About 1863 a church was built in Ternate and the image was immediately located therein, where
it remained until 1896. At the outbreak in Cavite of the rebellion against Spain of that year, the
parish priest, a native of the Islands, filed to the mountains and from that retreat ordered the
president of the pueblo of Ternate to take the image from the church and bring it to the
mountains. This was done and it there remained until the amnesty of 1897, when it was returned
to the church of Ternate.

The image remained in Ternate until 1903, when a party of men, among whom were some of the
plaintiffs, entered the church during the absence of the priest, seized the image, carried it out and
placed it in a chapel of the Independent Filipino Church in the same pueblo of Ternate. Under
orders of the executive branch of the Government it was taken therefrom by a military force of
scouts, placed in the church of Maragondon, and the persons taking it from the church of Ternate
were prosecuted for robbery. That case was dismissed, and the image ordered to remain in the
custody of the Roman Catholic priest of Maragondon in the church of that pueblo until the right
thereto could be determined in a civil judicial proceeding.
The claim of the plaintiffs is that the persons who were at the time of the presentation of the
complaint the inhabitants of Ternate were the owners in common of the image considered as a
piece of personal property. There is no evidence to show that the present plaintiffs, or any one of
the present inhabitants of Ternate, were the heirs or in any way related to any of the two
hundred Mardicas who came to the Philippines nearly two hundred and fifty years ago.
The plaintiffs rely upon article 118 of the Code of Civil Procedure, which is as follows:
When the subject-matter of the controversy is one of common or general interest to many
persons, and the parties are so numerous that it is impracticable to bring them all before the court,
one or more may sue or defend for the benefit of all. But in such case any party in interest shall
have a right to intervene in protection of his individual interests, and the court shall make sure
that the parties actually before it are sufficiently numerous and representative so that all interests
concerned are fully protected.
ISSUE
WHETHER OR NOT THE ACTION WAS A CLASS SUIT.
RULING
NO, THE ACTION COULD NOT BE MAINTAINED AS A CLASS SUIT.
In the case of Smith vs. Swormstedt, above cited, the court said, at page 303:
“In all cases where exception to the general rule are allowed, and a few are permitted to sue and
defend on behalf of the many, by representation, care must be taken that persons are brought on
the record fairly representing the interest or right involved, so that it may be fully and honestly
tried.”
In Macon and Birmingham Railroad vs. Gibson, above cited, the court said:
“It is true that as only two of the citizens have become parties, it is rather a small representation
of the whole community; but considering the publicity of the case and of the interest involved in
it, and the fact that the suit is located in Upson County and will be tried (if tried at all) at the county
town, which is the town whose citizens are interested, there can be no cause to apprehend that
the two plaintiffs on the face of the petition will be disposed, or if so disposed, allowed to
misrepresent the community in whose behalf they have brought this suit. No doubt it is somewhat
discretionary with a court of equity as to how many representatives of a class will, or ought to be,
regarded as a fair representation of the whole class in the given instance.”
It is sufficiently appears from the record in this case that it is a controversy between the Roman
Catholic Church on one side and the Independent Filipino Church on the other. That it is the
purpose of the plaintiffs, if they secure possession of the image, to place it in the chapel of the
Independent Church is also very clear.
What number of the inhabitants of the town (2,460 according to the census) are members of the
Roman Catholic Church and what part are members of the Independent Filipino Church does not
appear. But it is very apparent that many of the inhabitants are opposed to the transfer of the
image from the Roman Catholic Church. Under the circumstances, the thirteen plaintiffs do not
fairly represent all of the inhabitants of the town.
Their interest and the interests of some of the others are diametrically opposed. For this reason
this action can not be maintained.
TITLE: Llana v. NLRC, G.R. No. 111014, May 31, 1996
TOPIC: Class Suit
FACTS:
LIANAs SUPERMARKET, as its name implies, is a departmentized self-service retail market selling
foods, convenience goods, and household merchandise with business outlets in Sucat, Paraaque,
and Pasig City.
Sometime in 1980, 1981 and 1982 it employed as sales ladies, cooks, packers, cashiers,
electricians, warehousemen, etc., members of private respondent National Labor Union.
However in the course of their employment they were allegedly underpaid and required, among
others, to work more than eight (8) hours a day without overtime pay and deprived of legal holiday
pay and monthly emergency allowance.
Starting late 1982 and early 1983 they aired their grievances to petitioner through Peter Sy, its
General Manager, and Rosa Sy, its Consultant, but were only scolded and threatened with outright
dismissal.
Consequently, they formed a labor union and affiliated it with respondent National Labor
Union. Thereafter they demanded from petitioner recognition and compliance with existing labor
laws.
On 30 April 1983 petitioner entered into a three-year contract with Warner Laputt, owner of
BAVSPIA International Services, to supply petitioner with laborers.
About November and December 1984 Rosa Sy met with the employees individually and told them
to quit their membership with the union under pain of being suspended, dismissed or criminally
prosecuted. When they refused, many were dismissed without any charges and others were given
memorandum on concocted offenses and violations.
Meanwhile in March and April 1984 petitioner through Peter Sy and Rosa Sy required the other
employees to resign from employment and to accomplish information sheets and/or application
forms with BAVSPIA otherwise they would be dismissed and/or not paid their salaries. With some
degree of reluctance they complied. Nonetheless, they were allowed to continue working with
petitioner under the same terms and conditions of their previous employment.
BAVSPIA participated during the initial stages of the hearings but later moved to have its name
dropped as co-respondent when it noted, after complainants have rested, that the evidence
formally offered was directed only against petitioner.

When petitioner learned of the charges before the Labor Arbiter it demanded the resignation of
the employees from the Union and withdrawal of their cases or face criminal charges. It also
threatened to withhold their wages and even to dismiss them from their employment. Since they
refused to resign petitioner dismissed them. Hence, charges of unfair labor practice and illegal
dismissal were added as causes of action in their complaints.
On 24 March 1984 respondent Union on behalf of its members filed a complaint against petitioner
and/or Peter Sy, Rosa Sy, BAVSPIA and Warner Laputt before the Labor Arbiter for underpayment
of wages, nonpayment of overtime pay, monthly emergency allowance, legal holiday pay, service
incentive leave pay and 13th month pay (NLRC-NCR Case No. 3-1270-84). On 24 May 1984 the
complaint was amended since respondent Union manifested through its authorized
representative that it was intended as a class suit. Subsequently the four (4) cases were
consolidated.
Respondent National Labor Union submitted two (2) lists of one hundred thirty-six (136) workers,
seventy-three (73) assigned at Sucat and sixty-three (63) at Pasig City. There were eighty-
five (85) original complainants in the lists. However sixteen (16) complainants later filed motions
to withdraw with prejudice and five (5) were found to be non-employees of petitioner. On 27
January 1987 three (3) other complainants settled with petitioner and moved to dismiss their
complaints. Thus, a total of twenty-four (24) complainants were dropped from the lists thereby
reducing the number to sixty-one (61).
But twenty-seven (27) more employees submitted their sworn statements thus increasing again
the number of complainants to eighty-eight (88).
Petitioner contended that there was no unfair labor practice because there was no ongoing union
activity before the alleged illegal dismissals; but even if there were, the dismissals were not
effected by petitioner as complainants were not its employees but of BAVSPIA. If what were
referred to as illegal dismissals were those of complainants who resigned, there can be no unfair
labor practice as their resignations were voluntary and their applications with BAVSPIA were of
their own volition.
On 6 February 1987, after the consolidated cases were submitted for decision, petitioner filed
what was purportedly a compromise agreement between itself and the local chapter of
respondent Union. It appeared to have been signed by representatives of petitioner and the
President, Vice President and another officer of the local chapter of respondent Union with a
prayer that the consolidated cases be dismissed.
In an amended answer the defendants raised the question of lack of parties and set out a list of
some hundreds of persons whom they alleged should be brought in as parties defendant on the
ground, among others, that they were in default in the payment of their dues to the association.
Labor Arbiter:
On 28 February 1989 the Labor Arbiter held that ;
(1) petitioner was the employer of complainants with BAVSPIA being engaged in labor-only
contracting;
(2) complainants were illegally dismissed;
(3) Peter Sy and Rosa Sy were not personally liable; and,
(4) the charge of unfair labor practice and all labor standards claims were unsubstantiated by
evidence.
Corollarily, petitioner was ordered to reinstate all the complainants and to pay them backwages
and all benefits reckoned from the date of their respective dismissals until actual reinstatement
but not to exceed three (3) years, and if reinstatement was no longer feasible the complainants
should be granted separation pay equivalent to one-half month salary for every year of service, a
fraction of at least six (6) months to be considered as one (1) whole year.
NLRC:
On 30 June 1993 public respondent National Labor Relations Commission affirmed the ruling of
the Labor Arbiter.
SC:
The petitioner now asks how many individual complainants are there in these cases, whether
seven (7) or eighty-five (85); whether these complainants were illegally dismissed; and, whether a
compromise agreement with a motion to dismiss filed by a local chapter of respondent Union may
be given legal effect.
Petitioner claims that there are only seven (7) individual complainants in these cases whose names
appear in the captions of the decision of the Labor Arbiter. Anent thereto, petitioner argues that
Sec. 3, Rule 6, of the Rules of Court clearly provides that the names and residences of the parties
plaintiff and defendant must be stated in the complaint; similarly, Sec. 1, Rule III, of the New Rules
of Procedure of respondent NLRC states that the full names of all the real parties in interest,
whether natural or juridical persons or entities authorized by law, shall be stated in the caption of
the complaint or petition as well as in the decision, award or judgment. Moreover, according to
petitioner, these cases do not fall under the term class suit as defined in Sec. 12, Rule 3, of the
Rules of Court because the parties are not so numerous that it would be impracticable to bring
them all before the court. It is further the position of petitioner that BAVSPIA is the true employer
of the complainants and the resignations of certain employees were voluntary. Petitioner still
further argues that the compromise agreement duly signed by the officers of the local chapter of
respondent Union and filed while the case was still pending before the Labor Arbiter is binding on
all the complainants.
ISSUE
WHETHER OR NOT THE COMPLAINT IS A CLASS SUIT.
RULING
NO. THE COMPLAINT IS NOT A CLASS SUIT.

This is a representative suit as distinguished from class suit defined in Sec. 12, Rule 3, of the Rules
of Court
-Sec. 12. Class suit.
When the subject matter of the controversy is one of common or general interest to many persons,
and the parties are so numerous that it is impracticable to bring them all before the court, one or
more may sue or defend for the benefit of all. But in such case the court shall make sure that the
parties actually before it are sufficiently numerous and representative so that all interests
concerned are fully protected. Any party in interest shall have a right to intervene in protection of
his individual interest.
What is contemplated, as will be noted, is that ;
(a) the subject matter in controversy is of common or general interest to many persons, and
(b) those persons are so numerous as to make it impracticable to bring them all before the court
xxx
What makes the situation a proper case for a class suit is the circumstance that there is only one
right or cause of action pertaining or belonging in common to many persons (Italics supplied), not
separately or severally to distinct individuals x x x
The object of the suit is to obtain relief for or against numerous persons as a group or as an integral
entity, and not as separate, distinct individuals whose rights or liabilities are separate from and
independent of those affecting the others x x x The other factor that serves to distinguish the rule
on class suits x x x is x x x the numerousness of parties involved x x x The rule is that for a class suit
to be allowed, it is needful inter alia that the parties be so numerous that it would be impracticable
to bring them all before the court.
In the present case, there are multiple rights or causes of action pertaining separately to several,
distinct employees who are members of respondent Union. Therefore, the applicable rule is that
provided in Sec. 3, Rule 3, of the Rules of Court on representative parties, which states;
Sec. 3. Representative parties. - A trustee of an express trust, a guardian, executor or

administrator, or a party authorized by statute (Italics supplied), may sue or be sued
without joining the party for whose benefit the action is presented or defended; but
the court may, at any stage of the proceedings, order such beneficiary to be made a
party x x x.
In Itogon-Suyoc Mines, Inc. v. Sangilo-Itogon Workers Union,;6
the Court held that the aforementioned provision authorizes a union to file a
representative suit for the benefit of its members in the interest of avoiding an
otherwise cumbersome procedure of joining all union members in the complaint, even
if they number by the hundreds.
The Court further rationalized that to hold otherwise and compel the 57 union
members-employees to file 57 separate cases on their own individual and respective
causes of action before the municipal court rather than through the
present single collective action filed by petitioner union on their behalf and for their
benefit would be to unduly clog the court dockets and slow down the prompt and
expeditious determination of cases by the sheer number, time and volume of paper
work that would be involved and required in disposing of 57 identical cases that could
be adjudged in a single case such as that filed before the lower court.
In inLa Carl ota Sugar Central v. Court of industrial Relations,8;
the Court emphasized that it would be an unwarranted impairment of the right to self-
organization through formation of labor associations if thereafter such collective entities would
be barred from instituting action in their representative capacity.
A representative suit is akin to a class suit in the limited sense that the phrases found
in Sec. 12 of Rule 3, one or more may sue or defend for the benefit of all, and the parties
actually before it are sufficiently numerous and representative, are similar to the
phrase may sue or be sued witho ut joining the party for whose benefit the action is
presented or defended found in Sec. 3 of the same Rule. In other words, both suits are
always filed in behalf of another or others. That is why the two terms are sometimes
used interchangeably. Apparently respondent Union, the Labor Arbiter and
respondent Commission merely denominated the suit, although erroneously, as a
class suit when, in reality, it is a representative suit.
WHEREFORE, the resolution of the National Labor Relations Commission dated 30

June 1993 affirming the decision of the Labor Arbiter dated 28 February 1989 is
AFFIRMED, subject to the modification that the separation pay granted as an
alternative relief shall be equivalent to one-month salary for every year of service, a
fraction of at least six (6) months to be considered one (1) whole year. Costs against
petitioner. SO ORDERED.
TITLE: Insurance Company v. US Lines, G.R. No. L-21839 April 30, 1968
TOPIC: Alternative Defendants
FACTS:
On October 10, 1960, there were loaded on "SS Pioneer Mart" at the port of New York 12 cases of
cinematograph film, shipped by the Eastman Kodak Co. and consigned to the order of the
Prudential Bank & Trust Co., Manila. The shipment had an invoice value of $8,685.36, and the
cargo was insured with plaintiff insurance company against the risk of loss and damage. The "SS
Pioneer Mart" was operated by defendant United States Lines Co., a foreign corporation licensed
to do business in the Philippines and operating under the name of American Pioneer Lines.
The shipment arrived in Manila on November 6, 1960, and the last package thereof was discharged
on November 7, 1960 into defendant Manila Port Service, a subsidiary of defendant Manila
Railroad Company, which was the arrastre operator at the Port of Manila. Upon the presentation
of the pertinent documents and payment of the arrastre service fees the broker of the consignee
made demand for the delivery of the shipment from the Manila Port Service. Of the 12 cases
constituting the shipment, only nine cases were first delivered. Later, two cases were found, one of which
was found short of its contents. One case was missing and could not be delivered to the consignee.

Of the 12 cases constituting the shipment, only nine cases were first delivered. Later, two cases
were found, one of which was found short of its contents. One case was missing and could not be
delivered to the consignee.
On November 14, 1960, within the 15-day period from the date of discharge of the last package
of the shipment, the broker of the consignee filed a provisional claim for loss and damage with the
Manila Port Service for one case missing and one case partly short of its contents. The consignee
filed its claim against the United States Lines Co., as operator of the carrying vessel, and against
the plaintiff insurance company through the Eastman Kodak Co. for the insurance. The insurance
was paid by the plaintiff to the consignee, in the sum of $1,228.48, and the plaintiff insurance
company thereby became subrogated to all the rights of the consignee to recover the value of the
loss. Plaintiff made demands upon the United States Lines Co. and with the Manila Port Service
for the payment of the sum equivalent to what was paid to the consignee as insurance of the
goods that were lost.

Upon refusal by the United States Lines Co. and the Manila Port Service to make payment, plaintiff
filed an action against the said parties, including the Manila Railroad Co., in the Court of First
Instance of Manila, (now RTC) for the recovery of the sum of $1,228.48 or its peso equivalent at
the current rate of exchange, with legal interest from the date of the filing of the complaint plus
the costs of the suit. The Manila Railroad Company was made party defendant because the Manila
Port Service is a subsidiary of the railroad company.
The action filed by the plaintiff against the defendants was an alternative one — an action in
admiralty against the United States Lines Co. on its liability as a carrier, and against the Manila Port
Service and/or the Manila Railroad Company on their liability is the arrastre operator of the Port
of Manila.
Plaintiff-appellant maintains that the lower court erred:
(1) when it ruled that plaintiff's alternative action against defendant operator of the carrying vessel
and the defendant arrastre operator as separable;
(2) when it ruled that plaintiff's action ceased to be admiralty after the evidence had established
that the shipment had been discharged to the defendant arrastre operator complete and in good
order; and
(3) in not rendering judgment against defendant Manila Port Service and/or Manila Railroad
Company as arrastre operator.
Reverse the decision of RTC.
United States Lines Co. and the Manila Port Service refuse to play plaintiff.
RTC:
But while the lower court had declared that defendant Manila Port Service was responsible for the
loss, it nevertheless dismissed the case.
Basis/ Reason
Upon the ground that it had no jurisdiction over the action of the plaintiff against defendants
Manila Port Service and Manila Railroad Company, it appearing that the value of the claim of the
plaintiff against said defendants was less than P5,000.00 so that the action was well within the
exclusive jurisdiction of the Municipal Court of Manila.
SC:
Appeal by plaintiff Insurance Company of North America from the decision of the Court of First
Instance of Manila (now RTC) dismissing the action in Civil Case No. 48660.
ISSUE
WHETHER OR NOT THE RTC IS CORRECT IN DISMISSING THE CASE ON GROUNDS THAT IT HAS NO
JURISDICTION OVER THE CASE.
RULING
NO, RTC IS NOT CORRECT. IT HAS JURISDICTION OVER THE CASE.
The complaint in this case named as alternative defendants under alternative causes of action;
(1) C. F. Sharp & Co., Inc., for breach of contract of carriage by sea, and
(2) Manila Port Service and Manila Railroad Company, for violation of arrastre contract.
The cause of action against C. F. Sharp & Co., Inc., being in admiralty, comes within the jurisdiction
of the Court of First Instance whereas, the cause of action against the Manila Port Service and
Manila Railroad Company comes within the exclusive original jurisdiction of the municipal court
inasmuch as the amount of the demand is less than P5,000.00.
At the time the complaint was filed, plaintiff did not know at what precise stage of the series of
transactions the loss complained of occurred. If the loss took place in transit, C. F. Sharp & Co.,
Inc. would be liable therefor, but if the loss occurred after the goods were landed and discharged
from the carrying vessel, the Manila Port Service would bear the loss. Hence, the joinder of causes
of action and parties defendants in the alternative which is permitted by Section 5 of Rule 2 of the
Rules of Court, quoted hereunder:
SEC. 5. Joinder of causes of action. — Subject to rules regarding jurisdiction, venue and joinder of
parties, a party may in one pleading state, in the alternative or otherwise, as many causes of action
as he may have against an oppossing party (a) if the said causes of action arise out of the same
contract, transaction or relation between the parties, or (b) if the causes of action are for demands
for money, or are of the same nature and character.
In the cases falling under clause (a) of the preceding paragraph, the action shall be filed in the
inferior court unless any of the causes joined falls within the jurisdiction of the Court of First
Instance, in which case it shall be filed in the latter court.
In the cases falling under clause (b) the jurisdiction shall be determined by the aggregate amount
of the demands, if for money or by their nature and character, if otherwise.
And, since one of the causes of action is cognizable by the Court of First Instance the suit should
be filed, as was correctly done by the plaintiff, in said court, notwithstanding that the other cause
of action — if standing alone — would fall within the jurisdiction of the municipal court, by reason
of the amount of the demand. In International Harvester Co. of the Philippines v. Judge Aragon,
where a similar action was filed with the municipal court, we held that the municipal court lacked
jurisdiction over the case inasmuch as one of the alternative causes of action, against the shipping
firm, was an action in admiralty, cognizable by the Court of First Instance.
The subsequent dismissal of the cases against C. F. Sharp & Co., Inc. did not bring the case within
the exclusive original jurisdiction of the municipal court nor deprive the Court of First Instance of
Manila of the jurisdiction it had already acquired over the case when the complaint was filed. It is
well settled that jurisdiction once acquired is not lost but continues until the case is finally
terminated.
WHEREFORE, the decision appealed from should be, as it is hereby, reversed and the defendants-
appellees, Manila Port Service and/or Manila Railroad Co., are ordered to pay plaintiff-appellant
Insurance Company of North America the sum of $1,266.13, or its peso equivalent at the current
rate of exchange, with legal interest from the date of the filing of the complaint until payment is
made; with costs against the said defendants-appellees. It is so ordered.

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TITLE: fortune motors vs. CA OCT.

Case originally filed:

TITLE: makasaet Petitioner vs FRANCISCO R. CO, JR Respondent

Cause of the dispute:

Case originally filed:

2. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY SUSTAINING THE INCLUSION OF

TITLE: chua Petitioner vs. total office Defendant SEPT 30 2005

Cause of the dispute:

WHETHER AN ACTION TO ANNUL A LOAN AND MORTGAGE CONTRACT DULY ALLEGED AS

Cause of the dispute:

Case originally filed:

TITLE: dela cruz vs el seminario jan 28 1911

Cause of the dispute:

Case originally filed:

Cause of the dispute:

Case originally filed:

TOPIC: ACTION IN PERSONAM

Cause of the dispute:

1.ETHER OR NOT AN ACTION FOR RECONVEYANCE OF PROPERTY AND CANCELLATION OF TITLE IS

Cause of the dispute:

Case originally filed:

NOTE: The respondent spouses DID NOT PERSONALLY RECEIVED THE

In contrast, an action in personam is an action against a person on the basis of his

Case: Lucas v Lucas, June 6, 2011

Thus, the petition.

Hence, this petition.

Based on the foregoing, the petitioner spouses cannot be considered as innocent

Proceeding in personam is to enforce personal rights and obligations and is based on

In action in personam where the defendant is non-resident, personal service of summons

The plaintiff filed the present petition for review.

"Sec. 389. Commencement of actions. Civil actions must be commenced by filing a

TOPIC: Payment of filing/docket fees- jurisdictional

(Overview of the case Manchester Development vs Court of Appeals;)

Facts: (Present case)

Difference between Magaspi Case and the present case as to:

Nature of the action:

Ruling: (The M.R was denied for lack of merit)

TITLE: Nestle Phils. v. FY Sons, G.R. No. 150780, May 5, 2006

(Overview of the case Nestle Phils. vs. FY Sons)

Area Covered by the Agreement:

Initial Actions before dispute arises:

2. The amount of P100,000.00 as exemplary damages;

3. The amount of P100,000.00 as attorney’s fees;

Second court; an appeal made to the C.A

Conclusions of both court (CA & RTC)

TOPIC: Payment of filing/docket fees- jurisdictional

Court 1st filed (Petitioner; RTC Makati metro manila)

Court 1st filed (Private respondent ; RTC Quezon City)

Administrative Circular for reassessment

WHEREFORE, judgment is hereby rendered:

(a) denying petitioners' motion to dismiss the complaint, as amended, and

Main Contention;filed before S.C

Ruling: (The Petition was dismissed of lack of merit)

TOPIC: Payment of filing/docket fees- jurisdictional

(Overview Phil. First Insurance v. Paramount Gen. Insurance)

Pyramid's Contention; Court 1st filed; RTC Makati

2. The costs of suit[;]3 (Underscoring supplied)

and for other reliefs just and equitable in the premises.

Assessment of docket fees; in relation to the cause of dispute

Petitioners basis as to the cause of dispute

Petitioners cited Manchester Development Corporation v. Court of Appeals which held:

Second Motion for Reconsidiration was also denied.

TOPIC: Payment of filing/docket fees- jurisdictional