KTG Study Notes
Civil Procedure
CONDITIONS PRECEDENT
Matters which must be complied with first before a cause
of action arises. When a claim is subject to a condition
precedent, the compliance of the same must be alleged in
the pleading.
Examples:
1. A tender of payment before consignation
2. Exhaustion of administrative remedies
3. Prior resort to barangay conciliation proceedings
4. Earnest efforts towards a compromise when a
suit is between members of a family, and if no
efforts were in fact made, the case must be
dismissed
5. Arbitration may be a condition precedent if the
contract stipulates that a arbitration must be held
first before litigation
MANNER OF MAKING ALLEATIONS IN A COMPLAINT
ULTIMATE FACTS VS. EVIDENTIARY FACTS VS.
CONCLUSIONS OF LAW
Ultimate facts are the important and substantial facts
which either directly form the basis of the plaintiff’s primary
right and duty, or directly make up the wrongful acts or
omissions by the defendant.
Evidentiary facts
Conclusions of law
BACOLOD-MURCIA MILLING CO. VS. FIRST
FARMERS MILLING CO.
Bacolod-Murcia Milling Co. (BMMC) filed an action for
injunction and prohibition with damages against First
Farmers Milling Co. (FFMC), various planters and Ramon
Nolan as the Administrator of the Sugar Quota
Administration.
Their complaint alleged that in 1964, FFMC established
and operated a sugar central known as the First Farmers
Sugar Central, and that for the crop years 1964-1965 and
1965-1966, the defendants transferred their quota “A”
allotments illegally to FFMC over the vigorous protests and
objects of BMMC, but with the “unwarranted, unjustified
and likewise illegal” approval of the Sugar Quota
Administration. (Note: allotments = harvests. It would seem
that BMMC wanted the planters to give their harvests to
them rather than to the FFMC.)
After the defendants filed their answers, the plaintiff filed a
Motion to Admit Amended and Supplemental Complaint.
As amended, the PNB and NIDC (National Investment and
Development Corporation) were included as new
defendants as they had become creditors of FFMC prior to
the institution of the amended complaint, and where thus
necessary parties.
NIDC and PNB had extended loans to FFMC in the amount
of P12.2Mn and P4Mn to assist in the “illegal creation and
operation of the mill” and were thus a joint tortfeasor (a
person who commits a tort) in the rights of BMMC.
BMMC prayed that the defendants be made to jointly and
severally pray not less than P1Mn in actual and exemplary
damages, and attorney’s fees in the amount of 10% of the
damages.
DEFENDANT’S ARGUMENTS
1) PNB and NDIC denied that they had participation in the
alleged illegal transaction of the defendant planters from
BMMC to FFMC, and thus, could not be held liable for
damage.
2) The PNB and NDIC likewise asserted that the granting
of loans to FFMC were done in the usual and ordinary
course of business, according to their charter, and did not
violate any rights of the plaintiff.
RTC RULING
The RTC dismissed the action of BMMC for lack of cause
of action.
CA RULING
None in the case.
ISSUE
Whether or not the allegations of the amended and
supplemental complaint of BMMC constituted a sufficient
cause of action against the PNB and NIDC.
RULING
No.
A complaint must contain a concise statement of the
ultimate facts constituting the plaintiff’s cause of action.
“Ultimate facts” are the important and substantial facts
which either directly form the basis of the plaintiff’s primary
right and duty, or directly make up the wrongful acts or
omissions by the defendant.
When the ground for dismissal is that the complaint has no
cause of action, the rules is that the sufficiency of the
complaint can only be determined by considering the facts
alleged in the complaint and no other. The Court may not
consider other matters outside the complaint.
Defenses averred by the defendant are not to be taken into
consideration in ruling on the motion. The allegations in the
complaint must be accepted as true, and it is not
permissible to go beyond and outside the facts.
In the case at hand, the Amended and Supplemental
Complaint of BMMC did not meet the test of sufficiency.
While it charges PNB and NDIC of assisting in the illegal
creation and operation in the defendant sugar mill, it is not
supported by well-pleaded averments of facts. Nowhere
did the complaint allege that PNB and NDIC had notice,
information or knowledge of any flaw, much less any
illegality in the FFMC’s actuations. This absence is fatal,
and boosts up the PNB-NDIC’s case that there is no action.
On the allegation of bad faith: there is no averment of facts
supporting it.

BMMC likewise alleged that PNB-NDIC were in bad faith,

but their complaint does not contain any averment of facts
showing that the acts done by the former were done in bad
faith. Bad faith is never presumed, and such a bare
statement neither establishes any right or cause of action
on the part of PNB-NDIC.

PHILIPPINE DAILY INQUIRER VS. ALMEDA

Wrong diagnosis.

FAR EAST MARBLE

Far East denied that repeated demands for payment were

made by BPI to it.

Defenses:
1. Prescription
2. Lack of cause of action

In the case at bar, the circumstances of BPI extending

loans and credits to Far East and the failure of the latter to
pay and discharge the same upon maturity are the only
ultimate facts which have to pleaded.

Prescription is a defense, not a fact.

FRAUD, MISTAKE, MALICE, OTHER CONDITIONS OF

THE MIND, OFFICIAL DOCUMENTS

1. The circumstances constituting such fraud or

mistake must be made with particularity.
2. The specific acts of fraud must be included in the
particulars. Not that under the Civil Code, there
are various trypes of fraud, each of which has its
own legal effects.
3. Malice and other conditions of the mind of a
person may be averred generally.
 It is difficult to state the particulars
constituting these matters.

ABAD VS. CFI PANGASINAN

Fraud is under the jurisdiction of the SEC.

Held:
CFI Pangasinan has jurisdiction.

Petitioners stress that the allegations of fraud do not alter

the nature of the actions as the same are mere incidents
to the contracts of investment sought to be enforced.

The same do not refer to the schemes or devices used or

employed by private respondents in its business in
general, but to specific
TIU VS. COURT OF APPEALS