4. FLORES V.

LINDO

G.R. No. 183984, [April 13, 2011]

FACTS:

Respondent Edna Lindo obtained a loan from Petitioner Arturo Flores amounting to P400,000 and secured
it with a Deed of Real Estate Mortgage. The mortgage covered property in the name of Edna and her
husband, co-respondent Enrico Lindo, Jr. Edna likewise signed a Promissory Note and the Deed for herself
and for Enrico as his attorney-in-fact.

She issued three checks as partial loan payments, all of which were dishonored for insufficiency of funds.
Flores therefore filed a complaint for foreclosure of the mortgage with damages. The RTC ruled that
petitioner was not entitled to judicial foreclosure as the Deed was without consent and authority of Edna’s
husband. The Deed was executed on October 31, 1995, while the Special Power of Attorney was executed
by Enrico only on November 4, 1995. Accordingly, the mortgage is void pursuant to Article 96 of the
Family Code. The RTC, however, ruled that petitioner may still recover the loan through a
personal action against Edna, but that it had no jurisdiction over the said personal action which should be
filed where plaintiff or defendant resides.

Petitioner filed a complaint for sum of money and damages. The respondents alleged that Enrico was not
a party to the loan because it was contracted by Edna without Enrico’s signature. They also prayed for the
dismissal of the case on grounds of improper venue, res judicata and forum-shopping. The RTC ruled that
res judicata will not apply to rights, claims or demands which, though growing out of the same subject
matter, constitute separate or distinct causes of action.

The Court of Appeals set aside the RTC ruling. It noted that petitioner allowed the earlier decision of the
RTC to become final and executory without asking the courts for an alternative relief. The Court
of Appeals stated that petitioner merely relied on the declarations of these courts that he could file a
separate personal action and thus failed to observe the rules and settled jurisprudence on multiplicity of
suits, closing petitioner’s avenue for recovery of the loan.

ISSUES:

(2) Whether there remains an available remedy for petitioner

2) YES. In Chieng v. Santos, this Court ruled that a mortgage-creditor may institute against the mortgage-
debtor either a personal action for debt or a real action to foreclose the mortgage. The Court ruled that the
remedies are alternative and not cumulative and held that the filing of a criminal action for violation
of Batas Pambansa Blg. 22 was in effect a collection suit or a suit for the recovery of the mortgage-debt. In
that case, however, this Court pro hac vice, ruled that respondents could still be held liable for the balance
of the loan, applying the principle that no person may unjustly enrich himself at the expense of another.

The principle of unjust enrichment is provided under Article 22 of the Civil Code which provides:

Art. 22. Every person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground, shall return the
same to him.

There is unjust enrichment “when a person unjustly retains a benefit to the loss of another, or when a
person retains money or property of another against the fundamental principles of justice, equity and good
conscience.” The principle of unjust enrichment requires two conditions: (1) that a person is benefited
without a valid basis or justification, and (2) that such benefit is derived at the expense of another. The
main objective of the principle against unjust enrichment is to prevent one from enriching himself at the
expense of another without just cause or consideration. The principle is applicable in this case considering
that Edna admitted obtaining a loan from petitioners, and the same has not been fully paid without just
cause. The Deed was declared void erroneously at the instance of Edna, first when she raised it as a defense
before the RTC, Branch 33 and second, when she filed an action for declaratory relief before the
RTC, Branch 93. Petitioner could not be expected to ask the RTC, Branch 33 for an alternative remedy, as
what the Court of Appeals ruled that he should have done, because the RTC, Branch 33 already stated that
it had no jurisdiction over any personal action that petitioner might have against Edna.

Edna should not be allowed to unjustly enrich herself because of the erroneous decisions of the two trial
courts when she questioned the validity of the Deed.

16. PBCOM VS. LIM AND CALDERON

GR. No. 158138
April 12, 2005
FACTS: PBCom filed a complaint against respondents in the RTC of Manila for the collection of a
deficiency. Petitioner alleged therein that respondents obtained a loan from it and executed a continuing
surety agreement 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 respondent’s request. It was
expressly stipulated threrein 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…” Respondents allegedly failed to pay
said obligation upon maturity. Thus, petitioner foreclosed the real estate mortgage executed by respondents,
leaving a deficiency balance.
Respondents moved to dismiss the complaint on the ground of improper venue, invoking the
stipulation contained in the last paragraph of the promissory note with respect to the
restrictive/exclusive venue.
The trial court denied said motion asseverating that petitioner had separatecauses of action arising from the
promissory note and the continuing surety agreement. Thus, [under] Rule 4, Section 2, of the 1997 Rules of
Civil Procedure, as amended, x x x venue was properly laid in Manila. An MR of said order was
likewise denied.
On appeal, the CA ruled that respondents’ alleged debt was based on the Promissory Note, which had
provided an exclusionary stipulation on venue “to the exclusion of all other courts.” The parties’ Surety
Agreement, though silent as to venue, was an accessory contract that should have been interpreted in
consonance with the Promissory Note. Hence, this Petition

ISSUE: WON the action against the sureties is covered by the restriction on venue stipulated in the PN
HELD: WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED.
YES; 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.
**

Section 2 of Rule 4 of the ROC provides that personal actions must be commenced and tried
(1) in the place where the plaintiff resides, or

(2) where the defendant resides, or

(3) in case of non-resident defendants, where they may be found, at the choice of the plaintiff.

This rule on venue does not apply when the law specifically provides otherwise, or when — before the
filing of the action — the contracting parties agree in writing on the exclusive venue thereof. Venue is
not jurisdictional and may be waived by the parties. A stipulation as to venue does not preclude the filing of
the action in other places, unless qualifying or restrictive words are used in the agreement.
**

In enforcing a surety contract, the “complementary-contracts-construed-together” doctrine finds

application. According to this principle, an accessory contract must be read in its entirety and together with
the principal agreement[ This principle is used in construing contractual stipulations in order to arrive at
their true meaning; certain stipulations cannot be segregated and then made to control. This no-segregation
principle is based on Article 1374 of the Civil Code, which we quote:
“Art. 1374. The various stipulations of a contract shall be interpreted together, attributing to the doubtful
ones that sense which may result from all of them taken jointly.”

The aforementioned doctrine is applicable to the present case. Incapable of standing by itself, the SA can be
enforced only in conjunction with the PN. The latter documents the debt that is sought to be collected in
the action against the sureties. The circumstances that related to the issuance of the PN and the SA are so
intertwined that neither one could be separated from the other. It makes no sense to argue that the parties to
the SA were not bound by the stipulations in the PN.

NOTES:
A cause of action is a party’s 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.

22. PHILTRANCO SERVICE ENTERPRISES, INC.,

Petitioner
vs. FELIX PARAS AND INLAND TRAILWAYS, INC.,
Respondents.

FACTS:
Respondent Felix Paras is one of the passengers injured from an accident met by the bus operated byInland
Trailways and a bus operated by petitioner Philtranco Service. Felix went through number operations
andwas unable to obtain sufficient financial assistance from Inland for the costs of his operations,
hospitalization,
doctors’ fees and other misc
ellaneous expenses, thus, on 31 July 1989, Paras filed a complaint for damages basedon breach of contract
of carriage against Inland. On 02 March 1990, upon leave of court, Inland filed a third-partycomplaint
against Philtranco and Apolinar Miralles. In this third-party complaint, Inland, sought for exoneration of
its liabilities to Paras, asserting that the latter’s cause of action should be directed against Philtranco
consideringthat the accident was caused by Miralles’ lack of care, negligence and rec
kless imprudence. The RTC then rendereda decision declaring Philtranco and Apolinar liable for moral and
actual damages. The said award of damages wasalso affirmed by the CA. Ultimately, Philtranco questions
the validity of awarding moral damages on the groundthat the basis of such award is based on a breach of
contract of carriage, which is not one of the enumerationprovided by the Civil Code.
ISSUE:
Whether or not the award of damages is proper
HELD:
Yes. Section 16, Rule 6 of the Revised Rules of Court defines a third party complaint as a "claim that
adefending party may, with leave of court, file against a person not a party to the action, called the
thirdpartydefendant, for contribution, indemnification, subrogation, or any other relief, in resp
ect of his opponent’s claim."
Under this Rule, a person not a party to an action may be impleaded by the defendant either (a) on an
allegation ofliability to the latter; (b) on the ground of direct liability to the plaintiff-; or, (c) both (a) and
(b). The situation in (a)is covered by the phrase "for contribution, indemnity or subrogation;" while (b) and
(c) are subsumed under the
catch all "or any other relief, in respect of his opponent’s claim."
The case at bar is one in which the third partydefendants are brought into the action as directly liable to the
plaintiffs upon the allegation that "the primary andimmediate cause as shown by the police investigation of
said vehicular collision between the above-mentionedthree vehicles was the recklessness and negligence
and lack of imprudence of the third-party defendant VirgilioEsguerra y Ledesma then driver of the
passenger bus." The effects are that "plaintiff and third party are at issue asto their rights respecting the
claim" and "the third party is bound by the adjudication as between him andplaintiff." It is not
indispensable in the premises that the defendant be first adjudged liable to plaintiff before thethird-party
defendant may be held liable to the plaintiff, as precisely, the theory of defendant is that it is the thirdparty
defendant, and not he, who isdirectly liable to plaintiff. The situation contemplated by appellants
wouldproperly pertain to situation (a) above wherein the third party defendant is being sued for
contribution, indemnityor subrogation, or simply stated, for a defendant's "remedy over".

43. United Coconut Planters Bank vs Roberto Ongpin

FACTS:
Philippine Apparel, Inc. (PAI) entered into a credit agreement with petitioner United Coconut Planters
Bank for a case-to-case credit line. Respondent, then controlling stockholder of PAI, signed as surety,
binding himself jointly and severally liable with PAI for the same amount. As PAI failed to pay its
obligations, petitioner filed a complaint against respondent Ongpin with the Regional Trial Court to enforce
his obligation as surety of PAI. Petitioner sought the issuance of a writ of preliminary attachment. the trial
court issued an order granting petitioner’s prayer for the issuance of a writ of preliminary attachment. A
writ of attachment and a notice of garnishment were issued by the trial court, addressed to the president and
corporate secretary of the Dominion Asian Equities garnishing 8,315,600 shares of stock belonging to
respondent.

Respondent, making a special appearance through counsel, moved to dismiss the complaint and to quash
the writ of attachment and garnishment on the ground that the trial court had no jurisdiction over the person
of the respondent, the summons prepared on October 30, 1995, having been unserved as of November 17,
1995. The trial court denied the urgent motion as well as respondent’s subsequent motion for
reconsideration.

On May 24, 1996, respondent filed a petition for certiorari in the Court of Appeals assailing the orders of
the trial court. During the pendency of the petition, on May 27, 1996, petitioner filed with the trial court a
Motion for Leave to Serve Summons through Publication. Its motion was granted, but the publication was
held in abeyance on October 2, 1996. On the same date, petitioner entered into an agreement with TODAY
for the publication of the summons on October 4, 11, and 18, 1996. Petitioner received the trial court’s
order at the close of office hours on October 3, 1996. Attempts to prevent the publication by requesting the
trial court through the telephone to inform the newspaper publisher of its order and informing the
newspaper itself of the same proved futile, as nobody in the court was contacted by petitioner while the
telephone lines of the newspaper were busy. As a result, TODAY published the summons on October 4,
1996. It was only on October 8, 1996, that petitioner was able to inform the newspaper of the October 2,
1996, order and to request the latter to hold in abeyance further publication of the summons.

CA: the issuance of a Writ of Attachment together with the Notice of Garnishment was validated: but the
implementation of the Writ of Attachment/Garnishment was prohibited until after the Court shall have
acquired jurisdiction over the person of the petitioner, either through voluntary appearance or service of
summons.
ISSUES:
1) whether or not respondent Ongpin’s continuous “special appearances” before the court for five years
may be deemed voluntary appearance as contemplated by the Revised Rules on Civil Procedure on the
acquisition of jurisdiction over the person of the defendant; and
(2) Whether or not the substituted service of summons on Anne V. Morallo, executive secretary of the
president of PILTEL, was valid.

RULING:
1. No, it cannot be deemed as voluntary appearance.

A party who makes a special appearance in court challenging the jurisdiction of the said court cannot be
considered to have submitted himself to the jurisdiction of the court.

In the present case, although respondent had indeed filed numerous pleadings, these pleadings were
precisely for the purpose of contesting the jurisdiction of the court over the person of respondent on the
ground that there was no valid service of summons on him. It would be absurd to hold that respondent, by
making such appearance, thereby submitted himself to the jurisdiction of the court.

Moreover, summons, in this case, was served on the executive secretary of the president of PILTEL, a
company which is not a party to the present action. Respondent Ongpin, through counsel, entered
“numerous special appearances” in court precisely to question the court’s jurisdiction over his person either
due to failure to serve the summons or to an invalid service of summons on him. Jurisdiction cannot be
acquired over the person of the respondent even if he knows of the case against him unless he is validly
served with the summons.

2. No, it is not valid.

Rule 14, §7 of the 1997 Revised Rules of Civil Procedure provides that if for justifiable causes, personal
service cannot be effected on defendant, service may be effected (a) by leaving copies of the summons at
the defendant’s residence with some person of suitable age and discretion residing therein, or (b) by leaving
the copies at defendant’s office or regular place of business with some competent person in charge thereof.

In the case at bar, the corporation (PILTEL), where the substituted summons was served and of which
respondent was the chairman of the board, was not even a party to the present suit. Respondent was sued in
his personal capacity as surety for PAI. Even from the initial inquiries made by the sheriff and petitioner’s
representative in the office of PILTEL, it was evident that respondent was not holding office there. Indeed,
Morallo, executive secretary of the PILTEL, had to call respondent’s secretary at the BA Lepanto Building,
Paseo de Roxas, to find out whether he was attending the board meeting to be held on that day. Thus, the
process server already knew that respondent was not holding office at the PILTEL office but somewhere
else.

As the PILTEL office is not respondent’s regular place of business, it cannot, therefore, be said that Anne
V. Morallo, the person who received the service of summons in behalf of respondent, was authorized to
receive service of process on behalf of the respondent.

64. Sales v. Sabino G.R. No. 133154, December 9, 2005

Facts:
Respondent Cyril A. Sabino filed an amended complaint for damagesagainst Jowel Sales, driver of the
vehicle involved in the accident whichultimately caused the death of respondent's son, Elbert. Before any
responsivepleading could be filed, plaintiff notified the defendants that he will take thedeposition of one
Buaneres Corral. The deposition on oral examination ofBuaneres Corral was taken before the Clerk of
Court of Pasig, in the presence andwith the active participation of petitioner's counsel, Atty. Roldan
Villacorta, whoeven lengthily cross-examined the deponent. In the course of trial, respondenthad the
deposition of Buaneres Corral. Upon conclusion of her evidentiarypresentation, respondent made a Formal
Offer of Exhibits. Petitioner opposedthe admission of exhibits and even asked that they be expunged from
the recordson the ground that the jurisdictional requirements for their admission underSection 4, Rule 23 of
the Rules of Court were not complied with. The trial courtadmitted the exhibits. Petitioner went on
certiorari to the CA when the trial courtdenied his motion for reconsideration, which CA denied explaining
thatpetitioner's active participation, through counsel, during the taking of subjectdeposition and adopting it
as his own exhibits, has thereby estopped him fromassailing the admissibility thereof as part of respondent's
evidence.
Issue:
Whether or not the respondent satisfied the requirements of Section 3,Rule 24 of the Rules of Court, when
it presented a certification attesting to the fact that deponent has left the country but silent as to whether or
not at the time his deposition was offered in evidence is in the Philippines.
Ruling:
While depositions may be used as evidence in court proceedings, they are generally not meant to be a
substitute for the actual testimony in open court of a party or witness. Stated a bit differently, a deposition
is not to be used when the deponent is at hand. Indeed, any deposition offered during a trial to prove the
facts therein set out, in lieu of the actual oral testimony of the deponent in open court, may be opposed and
excluded on the ground of hearsay. However, depositions may be used without the deponent being called to
the witness standby the proponent, provided the existence of certain conditions is first satisfactorily
established. Among the exceptions for the admissibility of a deposition is when the witness is out of the
country.Trial court had determined that deponent Bueneres Corral was abroad when the offer of his
deposition was made. This factual finding of absence or unavailability of witness to testify deserves
respect, having been adequately substantiated. As it were, the certification by the Bureau of Immigration
providesthat evidentiary support. Accordingly, the attribution of grave abuse of discretion on the part of the
trial court must be struck down. It has been said tobe customary for courts to accept statements of parties as
to the unavailability ofa witness as a predicate to the use of depositions. Had deponent Buaneres Corral
indeed returned to the Philippines subsequent to his departure, petitioner could have presented evidence to
show that such was the case. As it is, however, the petitioner does not even assert the return as a fact, only
offering it as a possibility since no contrary proof had been adduced.

67. EAGLERIDGE DEVELOPMENT CORPORATION v. CAMERON GRANVILLE 3 ASSET

MANAGEMENT, GR No. 204700, 2013-04-10
Facts:
Petitioners Eagleridge Development Corporation (EDC), and sureties Marcelo N. Naval (Naval) and
Crispin I. Oben (Oben) are the defendants in a collection suit initiated by Export and Industry Bank (EIB)
through a Complaint[6] dated February 9, 2005, and... currently pending proceedings before the Regional
Trial Court (RTC), Branch 60, Makati City[7].
By virtue of a Deed of Assignment[8] dated August 9, 2006, EIB transferred EDC's outstanding loan
obligations... o respondent Cameron Granville 3 Asset Management, Inc. (Cameron)
Thereafter, Cameron filed its Motion to Substitute/Join EIB... which was granted by the trial court.
petitioners filed a Motion for Production/Inspection[10] of the Loan Sale and Purchase Agreement
(LSPA)... eferred to in the Deed... referred to in the Deed of Assignment.
Respondent Cameron filed its Comment[11] dated March 14, 2012 alleging that petitioners have not shown
"good cause" for the production of the LSPA and that the same is allegedly irrelevant to the case a quo.
Petitioners explained that the production of the LSPA was for "good cause". They pointed out that the
claim of Cameron is based on an obligation purchased after litigation had already been... instituted in
relation to it.
hat pursuant to Article 1634 of the New Civil Code[13] on assignment of credit, the obligation subject of
the case a quo is a credit in litigation, which may be extinguished by reimbursing the assignee of... the price
paid therefor, the judicial costs incurred and the interest of the price from the day on which the same was
paid.
As petitioners' alleged loan obligations may be reimbursed up to the extent of the amount paid by Cameron
in the acquisition thereof, it becomes necessary to verify the amount of the consideration from the LSPA,
considering that the Deed of Assignment was silent on... this matter.
the trial court denied petitioners' motion for production for being utterly devoid of merit. It ruled that there
was failure to show "good cause" for the production of the LSPA and failure to show that the LSPA is...
material or contains evidence relevant to an issue involved in the action.
Aggrieved, petitioners filed on April 25, 2012, their Motion for Reconsideration.
The trial court denied petitioners' motion for reconsideration... petitioners filed their Petition for Certiorari
with the Court of Appeals (CA), to nullify and/or set aside the RTC's Resolutions
Resolution dated August 29, 2012, the CA (Third Division) dismissed the petition... subsequent motion for
reconsideration... was likewise denied in the CA's
Issues:
whether the RTC gravely abused its discretion in denying the production and/or inspection of the LSPA.
Ruling:
Section 1, Rule 27 of the 1997 Rules of Court, states:
Section 1. Motion for production or inspection; order. Upon motion of any party showing good cause
therefor, the court in which an action is pending may a) order any party to produce and permit the
inspection and copying or photographing, by or on behalf of the... moving party, of any designated
documents, papers, books, accounts, letters, photographs, objects or tangible things, not privileged, which
constitute or contain evidence material to any matter involved in the action and which are in his possession,
custody or control;... xxx... he provision on production and inspection of documents is one of the modes of
discovery sanctioned by the Rules of Court in order to enable not only the parties, but also the court to
discover all the relevant and material facts in connection with the case pending before... it.
Generally, the scope of discovery is to be liberally construed so as to provide the litigants with information
essential to the fair and amicable settlement or expeditious trial of the case.[23] All the parties are required
to lay their cards on the table... so that justice can be rendered on the merits of the case.[24]
Although the grant of a motion for production of document is admittedly discretionary on the part of the
trial court judge, nevertheless, it cannot be arbitrarily or unreasonably denied because to do so would bar
access to relevant evidence that may be used by a party-litigant... and hence, impair his fundamental right
to due process.[25]
Th... he test to be applied by the trial judge in determining the relevancy of documents and the sufficiency
of their description is one of reasonableness and practicability.[26]
As respondent Cameron's claim against the petitioners relies entirely on the validity of the Deed of
Assignment, it is incumbent upon respondent Cameron to allow petitioners to inspect all documents
relevant to the Deed, especially those documents which, by express terms,... were referred to and identified
in the Deed itself. The LSPA, which pertains to the same subject matter the transfer of the credit to
respondent is manifestly useful to petitioners' defense.
he relevance of the LSPA sought by petitioners is readily apparent. Fair play demands that petitioners must
be given the chance to examine the LSPA. Besides, we find no great practical difficulty, and respondent did
not allege any, in presenting the... document for inspection and copying of the petitioners.
Principles:
All documents mentioned in a Deed of Assignment transferring the credit of the plaintiff in a pending
litigation should be accessible to the defendant through a Motion for Production or Inspection of
Documents under Rule 27 of the Rules of Court. Litigation... is not a game of skills and stratagems. It is a
social process that should allow both parties to fully and fairly access the truth of the matters in litigation.