X.
Rule 4 Venue
IRENE MARCOS-ARANETA, DANIEL RUBIO, ORLANDO G.
RESLIN, and JOSE G. RESLIN,
Petitioners,
- versus -
COURT OF APPEALS, JULITA C. BENEDICTO, and FRANCISCA
BENEDICTO-PAULINO,
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari under Rule 45 assails and seeks to nullify
the Decision dated October 17, 2001 of the Court of Appeals (CA) in CA-G.R.
SP No. 64246 and its Resolution of June 20, 2002 denying petitioners motion
for reconsideration. The assailed CA decision annulled and set aside the
Orders dated October 9, 2000, December 18, 2000, and March 15, 2001 of
the Regional Trial Court (RTC), Branch 17 in Batac, Ilocos Norte which
admitted petitioners amended complaint in Civil Case Nos. 3341-17 and
3342-17.
The Facts
Sometime in 1968 and 1972, Ambassador Roberto S. Benedicto, now
deceased, and his business associates (Benedicto Group) organized Far East
Managers and Investors, Inc. (FEMII) and Universal Equity Corporation (UEC),
respectively. As petitioner Irene Marcos-Araneta would later allege, both
corporations were organized pursuant to a contract or arrangement whereby
Benedicto, as trustor, placed in his name and in the name of his associates,
as trustees, the shares of stocks of FEMII and UEC with the obligation to hold
G.R. No. 154096
those shares and their fruits in trust and for the benefit of Irene to the extent
of 65% of such shares. Several years after, Irene, through her trustee-
Present: husband, Gregorio Ma. Araneta III, demanded the reconveyance of said 65%
stockholdings, but the Benedicto Group refused to oblige.
QUISUMBING, J., Chairperson,
CARPIO MORALES,
In March 2000, Irene thereupon instituted before the RTC two similar
TINGA, complaints for conveyance of shares of stock, accounting and receivership
VELASCO,against
JR., andthe Benedicto Group with prayer for the issuance of a temporary
BRION, JJ.restraining order (TRO). The first, docketed as Civil Case No. 3341-17, covered
the UEC shares and named Benedicto, his daughter, and at least 20 other
Promulgated:
individuals as defendants. The second, docketed as Civil Case No. 3342-17,
sought the recovery to the extent of 65% of FEMII shares held by Benedicto
August 22,and
2008the other defendants named therein.
Respondent Francisca Benedicto-Paulino, Benedictos daughter, filed a
Motion to Dismiss Civil Case No. 3341-17, followed later by an Amended
Motion to Dismiss. Benedicto, on the other hand, moved to dismiss Civil Case
No. 3342-17, adopting in toto the five (5) grounds raised by Francisca in her
amended motion to dismiss. Among these were: (1) the cases involved an
intra-corporate dispute over which the Securities and Exchange Commission,
not the RTC, has jurisdiction; (2) venue was improperly laid; and (3) the
complaint failed to state a cause of action, as there was no allegation therein
that plaintiff, as beneficiary of the purported trust, has accepted the trust
created in her favor.
To the motions to dismiss, Irene filed a Consolidated Opposition, which
Benedicto and Francisca countered with a Joint Reply to Opposition.
Upon Benedictos motion, both cases were consolidated.
During the preliminary proceedings on their motions to dismiss, Benedicto
and Francisca, by way of bolstering their contentions on improper venue,
presented the Joint Affidavit of Gilmia B. Valdez, Catalino A. Bactat, and
Conchita R. Rasco who all attested being employed as household staff at the
Marcos Mansion in Brgy. Lacub, Batac, Ilocos Norte and that Irene did not
maintain residence in said place as she in fact only visited the mansion twice
1
in 1999; that she did not vote in Batac in the 1998 national elections; and that
she was staying at her husbands house in Makati City.
Against the aforesaid unrebutted joint affidavit, Irene presented her PhP 5
community tax certificate (CTC) issued on 11/07/99 in Curimao, Ilocos Norte
to support her claimed residency in Batac, Ilocos Norte.
In the meantime, on May 15, 2000, Benedicto died and was substituted by
his wife, Julita C. Benedicto, and Francisca.
On June 29, 2000, the RTC dismissed both complaints, stating that these
partly constituted real action, and that Irene did not actually reside in Ilocos
Norte, and, therefore, venue was improperly laid. In its dismissal order, the
court also declared all the other issues raised in the different Motions to
Dismiss x x x moot and academic.
From the above order, Irene interposed a Motion for Reconsideration which
Julita and Francisca duly opposed.
Pending resolution of her motion for reconsideration, Irene filed on July 17,
2000 a Motion (to Admit Amended Complaint attaching therewith a copy of
the Amended Complaint dated July 14, 2000 in which the names of Daniel
Rubio, Orlando G. Reslin, and Jose G. Reslin appeared as additional plaintiffs.
As stated in the amended complaint, the added plaintiffs, all from Ilocos
Norte, were Irenes new trustees. Parenthetically, the amended complaint
stated practically the same cause of action but, as couched, sought the
reconveyance of the FEMII shares only.
During the August 25, 2000 hearing, the RTC dictated in open court an order
denying Irenes motion for reconsideration aforementioned, but deferred
action on her motion to admit amended complaint and the opposition
thereto.
On October 9, 2000, the RTC issued an Order entertaining the amended
complaint, dispositively stating:
WHEREFORE, the admission of the Amended Complaint being tenable and
legal, the same is GRANTED.
2
Let copies of the Amended Complaint be served to the defendants who are
ordered to answer within the reglementary period provided by the rules.
The RTC predicated its order on the following premises:
(1) Pursuant to Section 2, Rule 10 of the Rules of Court, Irene may opt to file,
as a matter of right, an amended complaint.
(2) The inclusion of additional plaintiffs, one of whom was a Batac, an Ilocos
Norte resident, in the amended complaint setting out the same cause of
action cured the defect of improper venue.
(3) Secs. 2 and 3 of Rule 3 in relation to Sec. 2 of Rule 4 allow the filing of the
amended complaint in question in the place of residence of any of Irenes co-
plaintiffs.
In time, Julita and Francisca moved to dismiss the amended complaint, but
the RTC, by Order dated December 18, 2000, denied the motion and
reiterated its directive for the two to answer the amended complaint.
In said order, the RTC stood pat on its holding on the rule on amendments of
pleadings. And scoffing at the argument about there being no complaint to
amend in the first place as of October 9, 2000 (when the RTC granted the
motion to amend) as the original complaints were dismissed with finality
earlier, i.e., on August 25, 2000 when the court denied Irenes motion for
reconsideration of the June 29, 2000 order dismissing the original complaints,
the court stated thusly: there was actually no need to act on Irenes motion to
admit, it being her right as plaintiff to amend her complaints absent any
responsive pleading thereto. Pushing its point, the RTC added the observation
that the filing of the amended complaint on July 17, 2000 ipso facto
superseded the original complaints, the dismissal of which, per the June 29,
2000 Order, had not yet become final at the time of the filing of the amended
complaint.
Following the denial on March 15, 2001 of their motion for the RTC to
reconsider its December 18, 2000 order aforestated, Julita and Francisca, in a
bid to evade being declared in default, filed on April 10, 2001 their Answer to
the amended complaint. But on the same day, they went to the CA via a
petition for certiorari, docketed as CA-G.R. SP No. 64246, seeking to nullify
the following RTC orders: the first, admitting the amended complaint; the
second, denying their motion to dismiss the amended complaint; and the
third, denying their motion for reconsideration of the second issuance.
Inasmuch as the verification portion of the joint petition and the certification
on non-forum shopping bore only Franciscas signature, the CA required the
joint petitioners to submit x x x either the written authority of Julita C.
Benedicto to Francisca B. Paulino authorizing the latter to represent her in
these proceedings, or a supplemental verification and certification duly
signed by x x x Julita C. Benedicto. Records show the submission of the
corresponding authorizing Affidavit executed by Julita in favor of Francisca.
Later developments saw the CA issuing a TRO and then a writ of preliminary
injunction enjoining the RTC from conducting further proceedings on the
subject civil cases.
On October 17, 2001, the CA rendered a Decision, setting aside the assailed
RTC orders and dismissing the amended complaints in Civil Case Nos. 3341-
17 and 3342-17. The fallo of the CA decision reads:
WHEREFORE, based on the foregoing premises, the petition is hereby
GRANTED. The assailed Orders admitting the amended complaints are SET
ASIDE for being null and void, and the amended complaints a quo are,
accordingly, DISMISSED.[if !supportFootnotes][20][endif]
Irene and her new trustees motion for reconsideration of the assailed
decision was denied through the equally assailed June 20, 2002 CA
Resolution. Hence, this petition for review is before us.
The Issues
Petitioners urge the setting aside and annulment of the assailed CA decision
and resolution on the following submissions that the appellate court erred in:
(1) allowing the submission of an affidavit by Julita as sufficient compliance
with the requirement on verification and certification of non-forum shopping;
(2) ruling on the merits of the trust issue which involves factual and
evidentiary determination, processes not proper in a petition for certiorari
under Rule 65 of the Rules of Court; (3) ruling that the amended complaints
in the lower court should be dismissed because, at the time it was filed, there
3
was no more original complaint to amend; (4) ruling that the respondents did
not waive improper venue; and (5) ruling that petitioner Irene was not a
resident of Batac, Ilocos Norte and that none of the principal parties are
residents of Ilocos Norte.
The Courts Ruling
We affirm, but not for all the reasons set out in, the CAs decision.
First Issue: Substantial Compliance with the Rule
on Verification and Certification of Non-Forum Shopping
Petitioners tag private respondents petition in CA-G.R. SP No. 64246 as
defective for non-compliance with the requirements of Secs. 4 and 5 of Rule
7 of the Rules of Court at least with regard to Julita, who failed to sign the
verification and certification of non-forum shopping. Petitioners thus fault
the appellate court for directing Julitas counsel to submit a written authority
for Francisca to represent Julita in the certiorari proceedings.
We are not persuaded.
Verification not Jurisdictional; May be Corrected
Verification is, under the Rules, not a jurisdictional but merely a formal
requirement which the court may motu proprio direct a party to comply with
or correct, as the case may be. As the Court articulated in Kimberly
Independent Labor Union for Solidarity, Activism and Nationalism (KILUSAN)-
Organized Labor Associations in Line Industries and Agriculture (OLALIA) v.
Court of Appeals:
[V]erification is a formal, not a jurisdictional requisite, as it is mainly intended
to secure an assurance that the allegations therein made are done in good
faith or are true and correct and not mere speculation. The Court may order
the correction of the pleading, if not verified, or act on the unverified pleading
if the attending circumstances are such that a strict compliance with the rule
may be dispensed with in order that the ends of justice may be served.
Given this consideration, the CA acted within its sound discretion in ordering
the submission of proof of Franciscas authority to sign on Julitas behalf and
represent her in the proceedings before the appellate court.
Signature by Any of the Principal Petitioners is Substantial Compliance
Regarding the certificate of non-forum shopping, the general rule is that all
the petitioners or plaintiffs in a case should sign it. However, the Court has
time and again stressed that the rules on forum shopping, which were
designed to promote the orderly administration of justice, do not interdict
substantial compliance with its provisions under justifiable circumstances As
has been ruled by the Court, the signature of any of the principal petitioners]
or principal parties, as Francisca is in this case, would constitute a substantial
compliance with the rule on verification and certification of non-forum
shopping. It cannot be overemphasized that Francisca herself was a principal
party in Civil Case No. 3341-17 before the RTC and in the certiorari
proceedings before the CA. Besides being an heir of Benedicto, Francisca,
with her mother, Julita, was substituted for Benedicto in the instant case after
his demise.
And should there exist a commonality of interest among the parties, or where
the parties filed the case as a collective, raising only one common cause of
action or presenting a common defense, then the signature of one of the
petitioners or complainants, acting as representative, is sufficient
compliance. We said so in Cavile v. Heirs of Clarita Cavile. Like Thomas Cavile,
Sr. and the other petitioners in Cavile, Francisca and Julita, as petitioners
before the CA, had filed their petition as a collective, sharing a common
interest and having a common single defense to protect their rights over the
shares of stocks in question.
Second Issue: Merits of the Case cannot be Resolved
on Certiorari under Rule 65
Petitioners posture on the second issue is correct. As they aptly pointed out,
the CA, in the exercise of its certiorari jurisdiction under Rule 65, is limited to
reviewing and correcting errors of jurisdiction only. It cannot validly delve into
the issue of trust which, under the premises, cannot be judiciously resolved
without first establishing certain facts based on evidence.
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Whether a determinative question is one of law or of fact depends on the
nature of the dispute. A question of law exists when the doubt or controversy
concerns the correct application of law or jurisprudence to a certain given set
of facts; or when the issue does not call for an examination of the probative
value of the evidence presented, the truth or falsehood of facts being
admitted. A question of fact obtains when the doubt or difference arises as
to the truth or falsehood of facts or when the query invites the calibration of
the whole evidence considering mainly the credibility of the witnesses, the
existence and relevancy of specific surrounding circumstances, as well as
their relation to each other and to the whole, and the probability of the
situation.
Clearly then, the CA overstepped its boundaries when, in disposing of private
respondents petition for certiorari, it did not confine itself to determining
whether or not lack of jurisdiction or grave abuse of discretion tainted the
issuance of the assailed RTC orders, but proceeded to pass on the factual
issue of the existence and enforceability of the asserted trust. In the process,
the CA virtually resolved petitioner Irenes case for reconveyance on its
substantive merits even before evidence on the matter could be adduced.
Civil Case Nos. 3341-17 and 3342-17 in fact have not even reached the pre-
trial stage. To stress, the nature of the trust allegedly constituted in Irenes
favor and its enforceability, being evidentiary in nature, are best determined
by the trial court. The original complaints and the amended complaint
certainly do not even clearly indicate whether the asserted trust is implied or
express. To be sure, an express trust differs from the implied variety in terms
of the manner of proving its existence. Surely, the onus of factually
determining whether the trust allegedly established in favor of Irene, if one
was indeed established, was implied or express properly pertains, at the first
instance, to the trial court and not to the appellate court in a special civil
action for certiorari, as here. In the absence of evidence to prove or disprove
the constitution and necessarily the existence of the trust agreement
between Irene, on one hand, and the Benedicto Group, on the other, the
appellate court cannot intelligently pass upon the issue of trust. A
pronouncement on said issue of trust rooted on speculation and conjecture,
if properly challenged, must be struck down. So it must be here.
Third Issue: Admission of Amended Complaint Proper

As may be recalled, the CA veritably declared as reversibly erroneous the
admission of the amended complaint. The flaw in the RTCs act of admitting
the amended complaint lies, so the CA held, in the fact that the filing of the
amended complaint on July 17, 2000 came after the RTC had ordered with
finality the dismissal of the original complaints. According to petitioners,
scoring the CA for its declaration adverted to and debunking its posture on
the finality of the said RTC order, the CA failed to take stock of their motion
for reconsideration of the said dismissal order.
We agree with petitioners and turn to the governing Sec. 2 of Rule 10 of the
Rules of Court which provides:
SEC. 2. Amendments as a matter of right. A party may amend his pleading
once as a matter of right at any time before a responsive pleading is served
or in the case of a reply, at any time within ten (10) days after it is served.
As the aforequoted provision makes it abundantly clear that the plaintiff may
amend his complaint once as a matter of right, i.e., without leave of court,
before any responsive pleading is filed or served. Responsive pleadings are
those which seek affirmative relief and/or set up defenses like an answer. A
motion to dismiss is not a responsive pleading for purposes of Sec. 2 of Rule
10. Assayed against the foregoing perspective, the RTC did not err in
admitting petitioners amended complaint, Julita and Francisca not having yet
answered the original complaints when the amended complaint was filed. At
that precise moment, Irene, by force of said Sec. 2 of Rule 10, had, as a matter
of right, the option of amending her underlying reconveyance complaints. As
aptly observed by the RTC, Irenes motion to admit amended complaint was
not even necessary. The Court notes though that the RTC has not offered an
explanation why it saw fit to grant the motion to admit in the first place.
In Alpine Lending Investors v. Corpuz, the Court, expounding on the propriety
of admitting an amended complaint before a responsive pleading is filed,
wrote:
[W]hat petitioner Alpine filed in Civil Case No. C-20124 was a motion to
dismiss, not an answer. Settled is the rule that a motion to dismiss is not a
responsive pleading for purposes of Section 2, Rule 10. As no responsive
5
pleading had been filed, respondent could amend her complaint in Civil Case
No. C-20124 as a matter of right. Following this Courts ruling in Breslin v.
Luzon Stevedoring Co. considering that respondent has the right to amend
her complaint, it is the correlative duty of the trial court to accept the
amended complaint; otherwise, mandamus would lie against it. In other
words, the trial courts duty to admit the amended complaint was purely
ministerial. In fact, respondent should not have filed a motion to admit her
amended complaint.
It may be argued that the original complaints had been dismissed through the
June 29, 2000 RTC order. It should be pointed out, however, that the finality
of such dismissal order had not set in when Irene filed the amended
complaint on July 17, 2000, she having meanwhile seasonably sought
reconsideration thereof. Irenes motion for reconsideration was only resolved
on August 25, 2000. Thus, when Irene filed the amended complaint on July
17, 2000, the order of dismissal was not yet final, implying that there was
strictly no legal impediment to her amending her original complaints.
Fourth Issue: Private Respondents did not Waive Improper Venue
Petitioners maintain that Julita and Francisca were effectively precluded from
raising the matter of improper venue by their subsequent acts of filing
numerous pleadings. To petitioners, these pleadings, taken together, signify
a waiver of private respondents initial objection to improper venue.
This contention is without basis and, at best, tenuous. Venue essentially
concerns a rule of procedure which, in personal actions, is fixed for the
greatest convenience possible of the plaintiff and his witnesses. The ground
of improperly laid venue must be raised seasonably, else it is deemed waived.
Where the defendant failed to either file a motion to dismiss on the ground
of improper venue or include the same as an affirmative defense, he is
deemed to have waived his right to object to improper venue. In the case at
bench, Benedicto and Francisca raised at the earliest time possible, meaning
within the time for but before filing the answer to the complaint, the matter
of improper venue. They would thereafter reiterate and pursue their
objection on venue, first, in their answer to the amended complaints and then
in their petition for certiorari before the CA. Any suggestion, therefore, that
Francisca and Benedicto or his substitutes abandoned along the way
improper venue as ground to defeat Irenes claim before the RTC has to be
rejected.
Fifth Issue: The RTC Has No Jurisdiction
on the Ground of Improper Venue
Subject Civil Cases are Personal Actions
It is the posture of Julita and Francisca that the venue was in this case
improperly laid since the suit in question partakes of a real action involving
real properties located outside the territorial jurisdiction of the RTC in Batac.
This contention is not well-taken. In a personal action, the plaintiff seeks the
recovery of personal property, the enforcement of a contract, or the recovery
of damages. Real actions, on the other hand, are those affecting title to or
possession of real property, or interest therein. In accordance with the
wordings of Sec. 1 of Rule 4, the venue of real actions shall be the proper
court which has territorial jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated. The venue of personal actions is
the court 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.
In the instant case, petitioners are basically asking Benedicto and his Group,
as defendants a quo, to acknowledge holding in trust Irenes purported 65%
stockownership of UEC and FEMII, inclusive of the fruits of the trust, and to
execute in Irenes favor the necessary conveying deed over the said 65%
shareholdings. In other words, Irene seeks to compel recognition of the trust
arrangement she has with the Benedicto Group. The fact that FEMIIs assets
include real properties does not materially change the nature of the action,
for the ownership interest of a stockholder over corporate assets is only
inchoate as the corporation, as a juridical person, solely owns such assets. It
is only upon the liquidation of the corporation that the stockholders,
depending on the type and nature of their stockownership, may have a real
inchoate right over the corporate assets, but then only to the extent of their
stockownership.
6
The amended complaint is an action in personam, it being a suit against
Francisca and the late Benedicto (now represented by Julita and Francisca),
on the basis of their alleged personal liability to Irene upon an alleged trust
constituted in 1968 and/or 1972. They are not actions in rem where the
actions are against the real properties instead of against persons. We
particularly note that possession or title to the real properties of FEMII and
UEC is not being disputed, albeit part of the assets of the corporation happens
to be real properties.
Given the foregoing perspective, we now tackle the determinative question
of venue in the light of the inclusion of additional plaintiffs in the amended
complaint.
Interpretation of Secs. 2 and 3 of Rule 3; and Sec. 2 of Rule 4
We point out at the outset that Irene, as categorically and peremptorily found
by the RTC after a hearing, is not a resident of Batac, Ilocos Norte, as she
claimed. The Court perceives no compelling reason to disturb, in the confines
of this case, the factual determination of the trial court and the premises
holding it together. Accordingly, Irene cannot, in a personal action,
contextually opt for Batac as venue of her reconveyance complaint. As to her,
Batac, Ilocos Norte is not what Sec. 2, Rule 4 of the Rules of Court adverts to
as the place where the plaintiff or any of the principal plaintiffs resides at the
time she filed her amended complaint. That Irene holds CTC No. 17019451
issued sometime in June 2000 in Batac, Ilocos Norte and in which she
indicated her address as Brgy. Lacub, Batac, Ilocos is really of no moment. Let
alone the fact that one can easily secure a basic residence certificate
practically anytime in any Bureau of Internal Revenue or treasurers office and
dictate whatever relevant data one desires entered, Irene procured CTC No.
17019451 and appended the same to her motion for reconsideration
following the RTCs pronouncement against her being a resident of Batac.
Petitioners, in an attempt to establish that the RTC in Batac, Ilocos Norte is
the proper court venue, asseverate that Batac, Ilocos Norte is where the
principal parties reside.
Pivotal to the resolution of the venue issue is a determination of the status of
Irenes co-plaintiffs in the context of Secs. 2 and 3 of Rule 3 in relation to Sec.
2 of Rule 4, which pertinently provide as follows:
Rule 3
PARTIES TO CIVIL ACTIONS
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.
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.
Rule 4
VENUE OF ACTIONS
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.
Venue is Improperly Laid
There can be no serious dispute that the real party-in-interest plaintiff is
Irene. As self-styled beneficiary of the disputed trust, she stands to be
benefited or entitled to the avails of the present suit. It is undisputed too that
petitioners Daniel Rubio, Orlando G. Reslin, and Jose G. Reslin, all from Ilocos
Norte, were included as co-plaintiffs in the amended complaint as Irenes new
7
designated trustees. As trustees, they can only serve as mere representatives
of Irene.
Upon the foregoing consideration, the resolution of the crucial issue of
whether or not venue had properly been laid should not be difficult.
Sec. 2 of Rule 4 indicates quite clearly that when there is more than one
plaintiff in a personal action case, the residences of the principal parties
should be the basis for determining proper venue. According to the late
Justice Jose Y. Feria, the word principal has been added [in the uniform
procedure rule] in order to prevent the plaintiff from choosing the residence
of a minor plaintiff or defendant as the venue. Eliminate the qualifying term
principal and the purpose of the Rule would, to borrow from Justice Regalado,
be defeated where a nominal or formal party is impleaded in the action since
the latter would not have the degree of interest in the subject of the action
which would warrant and entail the desirably active participation expected of
litigants in a case.
Before the RTC in Batac, in Civil Case Nos. 3341-17 and 3342-17, Irene stands
undisputedly as the principal plaintiff, the real party-in-interest. Following
Sec. 2 of Rule 4, the subject civil cases ought to be commenced and
prosecuted at the place where Irene resides.
Principal Plaintiff not a Resident in Venue of Action
As earlier stated, no less than the RTC in Batac declared Irene as not a resident
of Batac, Ilocos Norte. Withal, that court was an improper venue for her
conveyance action.
The Court can concede that Irenes three co-plaintiffs are all residents of
Batac, Ilocos Norte. But it ought to be stressed in this regard that not one of
the three can be considered as principal party-plaintiffs in Civil Case Nos.
3341-17 and 3342-17, included as they were in the amended complaint as
trustees of the principal plaintiff. As trustees, they may be accorded, by virtue
of Sec. 3 of Rule 3, the right to prosecute a suit, but only on behalf of the
beneficiary who must be included in the title of the case and shall be deemed
to be the real party-in-interest. In the final analysis, the residences of Irenes
co-plaintiffs cannot be made the basis in determining the venue of the subject
suit. This conclusion becomes all the more forceful considering that Irene
herself initiated and was actively prosecuting her claim against Benedicto, his
heirs, assigns, or associates, virtually rendering the impleading of the trustees
unnecessary.
And this brings us to the final point. Irene was a resident during the period
material of Forbes Park, Makati City. She was not a resident of Brgy. Lacub,
Batac, Ilocos Norte, although jurisprudence[has it that one can have several
residences, if such were the established fact. The Court will not speculate on
the reason why petitioner Irene, for all the inconvenience and expenses she
and her adversaries would have to endure by a Batac trial, preferred that her
case be heard and decided by the RTC in Batac. On the heels of the dismissal
of the original complaints on the ground of improper venue, three new
personalities were added to the complaint doubtless to insure, but in vain as
it turned out, that the case stays with the RTC in Batac.
Litigants ought to bank on the righteousness of their causes, the superiority
of their cases, and the persuasiveness of arguments to secure a favorable
verdict. It is high time that courts, judges, and those who come to court for
redress keep this ideal in mind.
WHEREFORE, the instant petition is hereby DISMISSED. The Decision and
Resolution dated October 17, 2001 and June 20, 2002, respectively, of the CA
in CA-G.R. SP No. 64246, insofar as they nullified the assailed orders of the
RTC, Branch 17 in Batac, Ilocos Norte in Civil Case Nos. 3341-17 and 3342-17
on the ground of lack of jurisdiction due to improper venue, are hereby
AFFIRMED. The Orders dated October 9, 2000, December 18, 2000, and
March 15, 2001 of the RTC in Civil Case Nos. 3341-17 and 3342-17 are
accordingly ANNULLED and SET ASIDE and said civil cases are DISMISSED.
Costs against petitioners.
SO ORDERED.
8
G.R. No. 186993 August 22, 2012
THEODORE and NANCY ANG, represented by ELDRIGE MARVIN B. ACERON,
Petitioners,
vs.
SPOUSES ALAN and EM ANG, Respondents.
VELASCO, JR.,*
LEONARDO-DE CASTRO, **
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision1 dated August 28,
2008 and the Resolution2 dated February 20, 2009 rendered by the Court of
Appeals (CA) in CA-G.R. SP No. 101159. The assailed decision annulled and set
aside the Orders dated April 12, 20073 and August 27, 20074 issued by the
Regional Trial Court (RTC) of Quezon City, Branch 81 in Civil Case No. Q-06-
58834.
The Antecedent Facts
On September 2, 1992, 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). On even date, the respondents
executed a promissory note5 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.
Notwithstanding the receipt of the said demand letter, the respondents still
failed to settle their loan obligation.
On August 6, 2006, the petitioners, who were then residing in Los Angeles,
California, United States of America (USA), 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.
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.
On November 21, 2006, the respondents moved for the dismissal of the
complaint 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.
The RTC Orders
On April 12, 2007, the RTC of Quezon City issued an Order9 which, inter alia,
denied the respondents’ motion to dismiss. In ruling against the respondents’
claim of improper venue, the court explained that:
Attached to the complaint is the Special Power of Attorney x x x which clearly
states that plaintiff Nancy Ang constituted Atty. Eldrige Marvin Aceron as her
duly appointed attorney-in-fact to prosecute her claim against herein
defendants. Considering that the address given by Atty. Aceron is in Quezon
City, hence, being the plaintiff, venue of the action may lie where he resides
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.
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. Considering that the petitioners reside in Los
Angeles, California, USA, the respondents assert that the complaint below
may only be filed in the RTC of Bacolod City, the court of the place where they
reside in the Philippines.
The respondents further claimed that, the petitioners’ grant of Special Power
of Attorney in favor of Atty. Aceron notwithstanding, the said complaint may
not be filed in the court of the place where Atty. Aceron resides, i.e., RTC of
Quezon City. They explained that Atty. Aceron, being merely a representative
of the petitioners, is not the real party in interest in the case below;
accordingly, his residence should not be considered in determining the
proper venue of the said complaint.
9
The CA Decision
On August 28, 2008, the CA rendered the herein Decision,14 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. Thus:
As maybe clearly gleaned from the foregoing, the place of residence of the
plaintiff’s attorney-in-fact is of no moment when it comes to ascertaining the
venue of cases filed in behalf of the principal since what should be considered
is the residence of the real parties in interest, i.e., the plaintiff or the
defendant, as the case may be. Residence is the permanent home – the place
to which, whenever absent for business or pleasure, one intends to return.
Residence is vital when dealing with venue. Plaintiffs, herein private
respondents, being residents of Los Angeles, California, U.S.A., which is
beyond the territorial jurisdiction of Philippine courts, the case should have
been filed in Bacolod City where the defendants, herein petitioners, reside.
Since the case was filed in Quezon City, where the representative of the
plaintiffs resides, contrary to Sec. 2 of Rule 4 of the 1997 Rules of Court, the
trial court should have dismissed the case for improper venue.15
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
Hence, the instant petition.
Issue
In the instant petition, the petitioners submit this lone issue for this Court’s
resolution:
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
The Court’s Ruling
The petition is denied.
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
10
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, his

residence 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 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. (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 proceeding. Obviously, this objective will not be attained if the plaintiff is
case below belongs to the petitioners and not to Atty. Aceron. Clearly, an given unrestricted freedom to choose the court where he may file his
attorney-in-fact is not a real party in interest.27 complaint or petition. The choice of venue should not be left to the plaintiff's
The petitioner’s reliance on Section 3, Rule 3 of the Rules of Court to support whim or caprice. He may be impelled by some ulterior motivation in choosing
their conclusion that Atty. Aceron is likewise a party in interest in the case to file a case in a particular court even if not allowed by the rules on venue.30
below is misplaced. Section 3, Rule 3 of the Rules of Court provides that: WHEREFORE, in consideration of the foregoing disquisitions, the petition is
Sec. 3. Representatives as parties. – Where the action is allowed to be DENIED. The Decision dated August 28, 2008 and Resolution dated February
prosecuted and defended by a representative or someone acting in a 20, 2009 rendered by the Court of Appeals in CA-G.R. SP No. 101159 are
fiduciary capacity, the beneficiary shall be included in the title of the case and AFFIRMED.
shall be deemed to be the real property in interest. A representative may be SO ORDERED.
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 UNIVERSAL ROBINA CORPORATION, G.R. No. 154338
for the benefit of an undisclosed principal may sue or be sued without joining Petitioner,
the principal except when the contract involves things belonging to the Present:
principal. (Emphasis ours)
Nowhere in the rule cited above is it stated or, at the very least implied, that PUNO, C.J., Chairp
the representative is likewise deemed as the real party in interest. The said -versus- SANDOVAL-GUTIE
rule simply states that, in actions which are allowed to be prosecuted or CORONA,
defended by a representative, the beneficiary shall be deemed the real party AZCUNA, and
in interest and, hence, should be included in the title of the case. GARCIA, JJ.
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 ALBERT LIM, doing business under the name and style New H-
meaning of a "real party in interest", as defined in Section 2 of Rule 3 of the R Grocery,
1997 Rules of Court vis-à-vis Section 3 of the same Rule.28 Respondent.
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 Promulgated:
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 October 5, 2007
in the title of the case and such person or persons shall be considered the real x-----------------------------------------------------------------------------------------x
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, DECISION
if a statute is clear, plain and free from ambiguity, it must be given its literal SANDOVAL-GUTIERREZ, J.:
meaning and applied without interpretation. xxx29 (Citation omitted) Before us is a Petition for Review on Certiorari under Rule 45 of the 1997
At this juncture, it bears stressing that the rules on venue, like the other Rules of Civil Procedure, as amended, assailing the Resolutions dated January
procedural rules, are designed to insure a just and orderly administration of 16, 2002 and July 1, 2002 of the Court of Appeals in CA-G.R. SP No. 67368.
justice or the impartial and even-handed determination of every action and
11
The present controversy stemmed from a contract of sale between Universal
Robina Corporation, petitioner, and Albert Lim, respondent. Pursuant to the
contract, petitioner sold to respondent grocery products in 
the total amount
of P808,059.88. After tendering partial payments, respondent refused to
settle his obligation despite petitioners repeated demands.
Thus, on May 31, 1999, petitioner filed with the Regional Trial Court, Branch
227, Quezon City, a complaint against respondent for a sum of money,
docketed as Civil Case No. Q-99-37791
On June 22, 1999, the trial court issued an Order dismissing the complaint
motu proprio on grounds of lack of jurisdiction and improper venue, thus:
The case is misplaced with respect to jurisdiction and venue. There is not even
a remote connection by the parties to Quezon City, where this Regional Trial
Court sits, the plaintiff corporation has principal office at Pasig City and the
defendant is, as provided in the complaint, from Laoag City.
Wherefore, premises considered, this case is hereby DISMISSED without
prejudice for improper venue and for lack of jurisdiction.
Accordingly, petitioner filed a motion for reconsideration together with an
amended complaint alleging that the parties agreed that the proper venue
for any dispute relative to the transaction is Quezon City.
In an Order dated October 11, 1999, the trial court granted the motion and
admitted petitioners amended complaint.
On December 6, 1999, summons was served upon respondent. For his failure
to file an answer seasonably and upon motion of petitioner, the trial court
issued an Order dated September 12, 2000 declaring him in default and
allowing petitioner to present its evidence ex parte.
However, on April 17, 2001, the trial court, still unsure whether venue was
properly laid, issued an Order directing petitioner to file a memorandum of
authorities on whether it can file a complaint in Quezon City.[] Subsequently,
on May 11, 2001, the trial court again issued an Order dismissing the
complaint on the ground of improper venue, thus:
12
It appears that there is no connection whatsoever between Quezon City and
the parties. Plaintiffs official place of business is in Pasig whereas the
defendants residence is stated to be in Laoag City both stipulated in the
Complaint. The filing is based on the stipulation at the back of the delivery
receipt that venue shall be in Quezon City --- which is not even stated in the
Complaint nor admitted to have been signed by the defendant.
WHEREFORE, premises considered, venue is hereby declared to have been
improperly laid. This case is hereby dismissed without prejudice to filing in
the proper venue.
Petitioner filed a motion for reconsideration but it was denied by the trial
court in its Resolution dated August 15, 2001.
Petitioner then filed with the Court of Appeals a petition for review. But it
was dismissed due to petitioners failure to attach thereto an explanation why
copies of the petition were not served by personal service but by registered
mail, in violation of Section 11, Rule 14 of the 1997 Rules of Civil Procedure,
as amended. Petitioner filed a motion for reconsideration but it was likewise
denied by the appellate court in a Resolution dated July 1, 2002, thus:
After a careful assessment of the petitioners motion for reconsideration of
the Resolution dated March 21, 2002 dismissing the instant case for failure to
comply with Section 11, Rule 14, this Court finds the reasons therein alleged
to be not well-taken.
Moreover, Supreme Court Circular No. 1-88 and Administrative Circular No.
3-96, provide that subsequent compliance with the requirements of a
petition for review/certiorari shall not warrant reconsideration of the order
of dismissal unless the court is fully satisfied that the non-compliance with
the said requirements was not in any way attributable to the party, despite
due negligence on his part, and that there are highly justifiable and
compelling reasons for the court to make such other disposition as it may
deem just and equitable.
We find such reasons wanting in the present case.
Besides, after a restudy of the facts, law and jurisprudence, as well as the
dispositions already contained in the assailed Resolutions of public
respondent, we find the present petition for certiorari to be patently without
merit, and the questions raised therein are too unsubstantial to require
consideration.
WHEREFORE, the motion for reconsideration is hereby DENIED for utter lack
of merit.
Hence, this petition.
The fundamental issue being raised is whether the trial court may dismiss
motu proprio petitioners complaint on the ground of improper venue.
Sections 2 and 4, Rule 4 of the same Rules provide:
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.
Sec. 4. When Rule not applicable. This Rule shall not apply
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the
action on the exclusive venue thereof.
Clearly, in personal actions, the plaintiff may commence an action either in
the place of his or her residence or the place where the defendant resides.
However, the parties may agree to a specific venue which could be in a place
where neither of them resides.
Corollarily, Section 1, Rule 9 of the same Rules provides for the instances
when the trial court may motu proprio dismiss a claim, thus:
Section 1. Defenses and objections not pleaded. 
Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived.
However, when it appears from the pleadings or the evidence on record that
the court has no jurisdiction over the subject matter, that there is another
action pending between the same parties for the same cause, or that the
13
action is barred by a prior judgment or by statute of limitations, the court
shall dismiss the claim.
Implicit from the above provision is that improper venue not impleaded in
the motion to dismiss or in the answer is deemed waived. Thus, a court may
not dismiss an action motu proprio on the ground of improper venue as it is
not one of the grounds wherein the court may dismiss an action motu proprio
on the basis of the pleadings.
In Dacoycoy v. Intermediate Appellate Court, this Court held that a trial court
may not motu proprio dismiss a complaint on the ground of improper venue,
thus:
Dismissing the complaint on the ground of improper venue is certainly not
the appropriate course of action at this stage of the proceedings, particularly
as venue, in inferior courts as well as in the courts of first instance (now RTC),
may be waived expressly or impliedly. Where the defendant fails to challenge
timely the venue in a motion to dismiss as provided by Section 4 of Rule 4 of
the Rules of Court, and allows the trial to be held and a decision to be
rendered, he cannot on appeal or in a special action be permitted to belatedly
challenge the wrong venue, which is deemed waived.
Indeed, it was grossly erroneous for the trial court to have taken a procedural
short-cut by dismissing motu proprio the complaint on the ground of
improper venue without first allowing the procedure outlined in the rules of
court to take its proper course. Although we are for the speedy and
expeditious resolution of cases, justice and fairness take primary importance.
The ends of justice require that respondent trial court faithfully adhere to the
rules of procedure to afford not only the defendant, but the plaintiff as well,
the right to be heard on his cause.
In Rudolf Lietz Holdings Inc. v. Registry of Deeds of Paraaque, the Court
likewise held that a trial court may not motu proprio dismiss a complaint on
the ground of improper venue, thus:
Rule 9, Section 1 of the 1997 Rules of Civil Procedure states that defenses and
objections not pleaded either in a motion to dismiss or in the answer are
deemed waived. The court may only dismiss an action motu proprio in case
of lack of jurisdiction over the subject matter, litis pendentia, res judicata and
prescription. Therefore, the trial court in this case erred when it dismissed
the petition motu proprio. It should have waited for a motion to dismiss or a
responsive pleading from respondent, raising the objection or affirmative
defense of improper venue, before dismissing the petition.
In the instant case, respondent, despite proper service of summons, failed to
file an answer and was thus declared in default by the trial court. Verily,
having been declared in default, he lost his standing in court and his right to
adduce evidence and present his defense, including his right to question the
propriety of the venue of the action.
WHEREFORE, the Petition for Review is GRANTED. The assailed Resolutions
of the Court of Appeals in CA-G.R. SP No. 67368 are REVERSED. The Regional
Trial Court, Branch 227, Quezon City is ordered to REINSTATE Civil Case No.
Q-99-37791 and conduct an ex parte hearing for the reception of petitioners
evidence and dispose of the case with dispatch.
SO ORDERED.
[G.R. No. 156187. November 11, 2004]
JIMMY T. GO, petitioner, vs. UNITED COCONUT PLANTERS BANK, ANGELO
V. MANAHAN, FRANCISCO C. ZARATE, PERLITA A. URBANO and ATTY.
EDWARD MARTIN, respondents.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari[1] assailing the Decision[2] dated
31 July 2002 of the Court of Appeals in CA-G.R. SP No. 62625, the decretal
portion of which reads:
WHEREFORE, the petition is GRANTED and the assailed orders dated June 7,
2000, August 9, 2000 and November 8, 2000 are SET ASIDE.
Respondent judge is directed to DISMISS Civil Case No. 67878 on the ground
of improper venue.[3]
Petitioner Jimmy T. Go and Alberto T. Looyuko are co-owners of Noahs Ark
International, Noahs Ark Sugar Carriers, Noahs Ark Sugar Truckers, Noahs Ark
Sugar Repacker, Noahs Ark Sugar Insurers, Noahs Ark Sugar Terminal, Noahs
Ark Sugar Building, and Noahs Ark Sugar Refinery.
Sometime in August 1996, petitioner Jimmy T. Go and Alberto T. Looyuko
applied for an Omnibus Line accommodation with respondent United
14
Coconut Planters Bank (UCPB) in the amount of Nine Hundred Million
(P900,000,000) Pesos,[5] and was favorably acted upon by the latter.
The transaction was secured by Real Estate Mortgages over parcels of land,
covered by Transfer Certificate of Title (TCT) No. 64070, located at
Mandaluyong City with an area of 24,837 square meters, and registered in
the name of Mr. Looyuko; and TCT No. 3325, also located at Mandaluyong
City with an area of 14,271 square meters, registered in the name of Noahs
Ark Sugar Refinery.
On 21 July 1997, the approved Omnibus Line accommodation granted to
petitioner was subsequently cancelled[6] by respondent UCPB. As a
consequence, petitioner Jimmy T. Go demanded from UCPB the return of the
two (2) TCTs (No. 64070 and No. 3325) covered by Real Estate Mortgages
earlier executed. UCPB refused to return the same and proceeded to have
the two (2) pre-signed Real Estate Mortgages notarized on 22 July 1997 and
caused the registration thereof before the Registry of Deeds of Mandaluyong
City on 02 September 1997.
On 15 June 1999, respondent UCPB filed with the Office of the Clerk of Court
and Ex-Officio Sheriff of Mandaluyong City an extrajudicial foreclosure of real
estate mortgage[7] covered by TCT No. 64070, for nonpayment of the
obligation secured by said mortgage. As a result, the public auction sale of
the mortgaged property was set on 11 April 2000 and 03 May 2000.
To protect his interest, petitioner Jimmy T. Go filed a complaint for
Cancellation of Real Estate Mortgage and damages, with prayer for
temporary restraining order and/or writ of preliminary injunction, against
respondent bank and its officers, namely, Angelo V. Manahan, Francisco C.
Zarate, Perlita A. Urbano and Atty. Edward E. Martin, together with Ex-Officio
Sheriff Lydia G. San Juan and Sheriff IV Helder A. Dyangco, with the Regional
Trial Court of Pasig City, Branch 266, docketed as Civil Case No. 67878. The
complaint was subsequently amended[8] on 22 May 2000. The amended
complaint alleged, among other things, the following: that petitioner Jimmy
T. Go is a co-owner of the property covered by TCT No. 64070, although the
title is registered only in the name of Looyuko; that respondent bank was
aware that he is a co-owner as he was asked to sign two deeds of real estate
mortgage covering the subject property; that the approved omnibus credit
line applied for by him and Looyuko did not materialize and was cancelled by
respondent bank on 21 July 1997, so that the pre-signed real estate
mortgages were likewise cancelled; that he demanded from respondent bank
that TCTs No. 64070 and No. 3325 be returned to him, but respondent bank
refused to do so; that despite the cancellation of the omnibus credit line on
21 July 1997, respondent bank had the two deeds of real estate mortgage
dated and notarized on 22 July 1997 and caused the extrajudicial foreclosure
of mortgage constituted on TCT No. 64070; that the auction sale scheduled
on 11 April 2000 and 03 May 2000 be enjoined; that the two real estate
mortgages be cancelled and TCTs No. 64070 and No. 3325 be returned to him;
and that respondent bank and its officers be ordered to pay him moral and
exemplary damages and attorneys fees.
On 07 June 2000, respondent bank, instead of filing an answer, filed a motion
to dismiss[9] based on the following grounds: 1) that the court has no
jurisdiction over the case due to nonpayment of the proper filing and docket
fees; 2) that the complaint was filed in the wrong venue; 3) an indispensable
party/real party in interest was not impleaded and, therefore, the complaint
states no cause of action; 4) that the complaint was improperly verified; and
5) that petitioner is guilty of forum shopping and submitted an insufficient
and false certification of non-forum shopping.
On 07 June 2000, the trial court issued an order[10] granting petitioners
application for a writ of preliminary injunction. Correspondingly, the auction
sale, scheduled on 11 April 2000 and 03 May 2000, was enjoined.
On 09 August 2000, the trial court denied[11] respondent banks motion to
dismiss Civil Case No. 67878. A motion for reconsideration[12] was filed, but
the same was likewise denied in an Order[13] dated 08 November 2000.
Respondent bank questioned said orders before the Court of Appeals via a
petition for certiorari[14] dated 03 January 2001, alleging that the trial court
acted without or in excess of jurisdiction or with grave abuse of discretion in
issuing an order denying the motion to dismiss and the motion for
reconsideration thereof.
On 31 July 2002, the Court of Appeals[15] set aside the Orders dated 07 June
2000, 09 August 2000 and 08 November 2000 issued by the trial court and
directed the trial court to dismiss Civil Case No. 67878 on the ground of
improper venue.
A motion for reconsideration was filed by petitioner,[16] which was denied in
an order dated 14 November 2002.[17]
Hence, this petition for review on certiorari.[18]
On 16 June 2003, the Court gave due course to the petition, and required[19]
the parties to file their respective memoranda. Respondents filed their Joint
Memorandum on 27 August 2003, while petitioner filed his on 25 September
15
2003 upon prior leave of court for extension. With leave of this Court, private
respondents filed their reply to petitioners memorandum.
In his memorandum, petitioner raised a lone issue:
WHETHER OR NOT THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR
WHEN IT FAILED TO APPLY THE LAW AND ESTABLISHED JURISPRUDENCE ON
THE MATTER BY ISSUING THE QUESTIONED RESOLUTIONS FINDING THAT THE
CASE A QUO IS A REAL ACTION.
Simply put, the issue to be resolved in this case is whether petitioners
complaint for cancellation of real estate mortgage is a personal or real action
for the purpose of determining venue.
In a real action, the plaintiff seeks the recovery of real property, or as
provided for in Section 1, Rule 4,[20] a real action is an action affecting title to
or possession of real property, or interest therein. These include partition or
condemnation of, or foreclosure of mortgage on, real property. The venue for
real actions is the same for regional trial courts and municipal trial courts --
the court which has territorial jurisdiction over the area where the real
property or any part thereof lies.[21]
Personal action is one brought for the recovery of personal property, for the
enforcement of some contract or recovery of damages for its breach, or for
the recovery of damages for the commission of an injury to the person or
property.[22] The venue for personal actions is likewise the same for the
regional and municipal trial courts -- the court of the place where the plaintiff
or any of the principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, at the election of the plaintiff, as indicated in
Section 2 of Rule 4.[23]
It is quite clear then that the controlling factor in determining venue for cases
of the above nature is the primary objective for which said cases are filed.
Thus:
1. In Commodities Storage & Ice Plant Corp. v. Court of Appeals,[24] this
Court ruled that an action to redeem by the mortgage debtor affects his title
to the foreclosed property. If the action is seasonably made, it seeks to erase
from the title of the judgment or mortgage debtor the lien created by
registration of the mortgage and sale. If not made seasonably, it may seek to
recover ownership to the land since the purchasers inchoate title to the
property becomes consolidated after [the] expiration of the redemption
period. Either way, redemption involves the title to the foreclosed property.
It is a real action.
2. In Fortune Motors, (Phils.), Inc., v. Court of Appeals,[25] this Court quoting
the decision of the Court of Appeals ruled that since an extrajudicial
foreclosure of real property results in a conveyance of the title of the property
sold to the highest bidder at the sale, an action to annul the foreclosure sale
is necessarily an action affecting the title of the property sold. It is therefore
a real action which should be commenced and tried in the province where
the property or part thereof lies.
3. In Punsalan, Jr. v. Vda. de Lacsamana,[26] this court ruled that while it is
true that petitioner does not directly seek the recovery . . . 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
petitioners 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. Respondent Court, therefore, did
not err in dismissing the case on the ground of improper venue which was
timely raised.
4. In Ruiz v. J. M. Tuason Co., Inc., et al.,[27] the court ruled that although
[a] complaint is entitled to be one for specific performance, yet the fact that
[complainant] asked that a deed of sale of a parcel of land . . . be issued in his
favor and that a transfer certificate of title covering said land be issued to
him, shows that the primary objective and nature of the action is to recover
the parcel of land itself because to execute in favor of complainant the
conveyance requested there is need to make a finding that he is the owner of
the land which in the last analysis resolves itself into an issue of ownership.
Hence, the action must be commenced in the province where the property is
situated . . . ."
5. In Dr. Antonio A. Lizares, Inc. v. Hon. Hermogenes Caluag,[28] this Court
ruled that an action praying that defendant be ordered `to accept the
payment being made by plaintiff for the lot which the latter contracted to buy
on installment basis from the former, to pay plaintiff compensatory damages
and attorneys fees and to enjoin defendant and his agents from repossessing
the lot in question, is one that affects title to the land under Section 3 of Rule
5, of the Rules of Court, and shall be commenced and tried in the province
where the property or any part thereof lies, because, although the immediate
remedy is to compel the defendant to accept the tender of payment allegedly
16
made, it is obvious that this relief is merely the first step to establish plaintiffs
title to [the] real property.
6. In Land Tenure Administration, et al. v. The Honorable Higinio B.
Macadaeg and Alejandro T. Lim,[29] this Court ruled that where the lessee
seeks to establish an interest in an hacienda that runs with the land and one
that must be respected by the purchaser of the land even if the latter is not a
party to the original lease contract, the question of whether or not the
standing crop is immovable property become[s] irrelevant, for venue is
determined by the nature of the principal claim. Since the lessee is primarily
interested in establishing his right to recover possession of the land for the
purpose of enabling him to gather his share of the crops, his action is real and
must be brought in the locality where the land is situated.
7. In Espineli & Mojica v. Hon. Santiago and Vda. de Ramirez,[30] the court
ruled that although the main relief sought in the case at bar was the delivery
of the certificate of title, said relief, in turn, entirely depended upon who,
between the parties, has a better right to the lot in question. As it is not
possible for the court to decide the main relief, without passing upon the
claim of the parties with respect to the title to and possession of the lot in
question, the claim shall be determined x x x in the province where [the] said
property or any part thereof lies.
The case of Carandang v. Court of Appeals,[31] is more particularly instructive.
There, we held that an action for nullification of the mortgage documents and
foreclosure of the mortgaged property is a real action that affects the title to
the property. Thus, venue of the real action is before the court having
jurisdiction over the territory in which the property lies, which is the Court of
First Instance of Laguna.
Petitioner in this case contends that a case for cancellation of mortgage is a
personal action and since he resides at Pasig City, venue was properly laid
therein. He tries to make a point by alluding to the case of Francisco S.
Hernandez v. Rural Bank of Lucena.[32]
Petitioners reliance in the case of Francisco S. Hernandez v. Rural Bank of
Lucena[33] is misplaced. Firstly, said case was primarily an action to compel the
mortgagee bank to accept payment of the mortgage debt and to release the
mortgage. That action, which is not expressly included in the enumeration
found in Section 2(a) of Rule 4 of the Old Civil Procedure and now under
Section 1, Rule 4 of the 1997 Rules of Civil Procedure, does not involve titles
to the mortgaged lots. It is a personal action and not a real action. The
mortgagee has not foreclosed the mortgage. The plaintiffs title is not in
question. They are in possession of the mortgaged lots. Hence, the venue of
the plaintiffs personal action is the place 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 case at bar, the action
for cancellation of real estate mortgage filed by herein petitioner was
primarily an action to compel private respondent bank to return to him the
properties covered by TCTs No. 64070 and No. 3325 over which the bank had
already initiated foreclosure proceedings because of the cancellation by the
said respondent bank of the omnibus credit line on 21 July 1997. The prime
objective is to recover said real properties. Secondly, Carandang distinctly
articulated that the ruling in Hernandez does not apply where the mortgaged
property had already been foreclosed. Here, and as correctly pointed out by
the appellate court, respondent bank had already initiated extrajudicial
foreclosure proceedings, and were it not for the timely issuance of a
restraining order secured by petitioner Go in the lower court, the same would
have already been sold at a public auction.
In a relatively recent case, Asset Privatization Trust v. Court of Appeals,[34] it
was succinctly stated that the prayer for the nullification of the mortgage is a
prayer affecting real property, hence, is a real action.
In sum, the cancellation of the real estate mortgage, subject of the instant
petition, is a real action, considering that a real estate mortgage is a real right
and a real property by itself.[35] An action for cancellation of real estate
mortgage is necessarily an action affecting the title to the property. It is,
therefore, a real action which should be commenced and tried in
Mandaluyong City, the place where the subject property lies.
WHEREFORE, the instant petition is DENIED for lack of merit. The assailed
decision dated 31 July 2002 and the Order dated 14 November 2002 denying
the motion for reconsideration are hereby AFFIRMED. With costs.
SO ORDERED.
17
[G.R. No. L-44351. May 18, 1978.]
HOECHST PHILIPPINES, INC., Petitioner, v. FRANCISCO TORRES and the
Honorable PROCORO J. DONATO, Judge of the Court of First Instance of
Isabela, Respondents.
Manuel S. Fornacier, Jr. for Petitioner.
Melanio T. Singson for Private Respondent.
SYNOPSIS
The Court of First Instance of Isabela took cognizance of private respondent’s
complaint for breach of a distributorship contract on the part of the
petitioner, despite a stipulation in the said contract that venue in case of any
litigation arising out of the agreement "shall be in the competent courts of
the Province of Rizal." Petitioner questions the court’s authority to take
cognizance of the case on the ground of improper venue. Respondents argue
that the word "shall" in the stipulation in question should be construed to be
merely permissive and not mandatory inasmuch as the stipulations in the
contract are standard and pre-made giving the distributors no option except
to take it or leave it, and that to give effect to the stipulation in controversy
would be against public policy because it serves the convenience and purpose
of petitioner only to the prejudice of small-time distributors.
The Suprme Court ruled that a written agreement as to venue made before
the filing of an action is not only binding between the parties but also
enforceable by the court and may not be declared to be against public policy
where it is shown that the party concerned is in a position to carry on a
litigation in the stipulated place.
Petition granted
SYLLABUS
1. ID.; ID.; ID.; JUDGE CANNOT ORDER RETURN OF PERSONAL PROPERTY
ATTACHED. — A property levied upon pursuant to a valid order of attachment
issued by a judge of one branch is in custodia legis and cannot be ordered
delivered or returned by the judge of another branch of the same court in an
action for replevin in view of Rule 60, Section 2, par. (c) of the Rules of Court.
The words "or attachment" were added to the new provision for the purpose
of precluding the occurrence of a dismissal situation whereby a judge of one
branch can revoke the order issued by a judge of another branch of the same
court, to the great prejudice of the orderly administration of justice.
2. CONTEMPT; INDIRECT CONTEMPT; WHEN NOT PROPER. — A sheriff cannot
be held for indirect contempt by the judge of one branch for disobeying his
order to take possession of and deliver a personal property that had been
previously attached pursuant to a valid order of the judge of another branch
of the same court.
DECISION
BARREDO, J.:
Petition for certiorari and prohibition to declare respondent court without
authority to take cognizance of private respondent’s action for "Breach of
Contract with Preliminary Injunction" and to enjoin said court from further
taking any action in said case upon the ground of improper laying of the
venue.
On April 8, 1976, private respondent, Francisco Torres, filed with respondent
Court of First Instance of Isabela complaint in Civil Case No. V-296 alleging
breach of a distributorship contract on the part of petitioner, Hoechst
Philippines, Inc. On April 14, 1976, petitioner filed a motion to dismiss said
complaint based on the ground that as the contract, the very actionable
document invoked in the complaint, provides that" (I)n case of any litigation
arising out of this agreement, the venue of any action shall be in the
competent courts of the Province of Rizal", venue has been improperly laid in
respondent court, petitioner citing in his said motion principally the ruling of
this Supreme Court in Bautista v. De Borja, 18 SCRA 474. Respondent court
nevertheless denied the said motion to dismiss as well as the motion for
reconsideration of that denial, hence the present petition.
18
Respondent do not deny in their respective answers the clear tenor of the
above-quoted stipulation as to venue in the contract in dispute. It is the
position of respondent judge, however, that inasmuch as the contract was "a
prepared standard form for the defendant-company, wherein blanks were
merely filled up after the party-distributor agreed on the valuation of
products which he may order from the company for one year" and "all
stipulations were standard and pre-made by the company, prepared by, as
your Respondent can safely and rightly assume, its legal department" and "it
(only) remains upon party-distributor to stamp his approval to the whole
contract", hence "plaintiff distributor was given no option whatsoever except
`to take it or leave it’", the word "shall" in the stipulation in question should
be construed to be merely permissive and not mandatory. It is argued that
this construction serves not only the exclusive interests of petitioner but also
that of private Respondent.
It is further contended in said answer that reading the terms of the contract,
it can be gathered that most likely, it would be petitioner who would have to
sue private respondent, and, therefore, the stipulation as to venue was
meant to apply only to suits to be filed by petitioner. Finally, it is maintained
that there are no words in the contract expressly restricting the venue to the
courts of Rizal.chanrobles.com.ph : virtual law library
Upon the other hand, in the answer of private respondent, he capitalizes on
the theory that inasmuch as petitioner is a multinational company, it is
against public policy for it to stipulate in any contract that the venue of
actions thereunder should be in any particular place, much less its place of
residence, to the prejudice of small-time distributors, the private Respondent.
It is urged that to give effect to the stipulation in controversy "is to serve the
convenience and the purpose of the petitioner only; its effect is to discourage,
to deter, to render expensive and uneconomical the filing of suits by small-
time company distributors against the petitioner even for extremely
meritorious cases of latter’s breach or violation of such distribution
agreement."cralaw virtua1aw library
The pose taken by respondents does evoke sympathy, but it can hardly carry
the day for them. Change or transfer of venue from that fixed in the rules may
be effected upon written agreement of the parties not only before the actual
filing of the action but even after the same has been filed. The settled rule of
jurisprudence in this jurisdiction is that a written agreement of the parties as
to venue, as authorized by Section 3, Rule 4, is not only binding between the
parties but also enforceable by the courts. 1 It is only after the action has
been filed already that change or transfer of venue by agreement of the
parties is understandably controllable in the discretion of the court. 2
The agreement in this case was entered into long before the petitioner’s
action was filed. It is clear and unequivocal. The parties therein stipulated
that" (I)n case of any litigation arising out of this agreement, the venue of any
action shall be in the competent courts of the Province of Rizal." No further
stipulations are necessary to elicit the thought that both parties agreed that
any action by either of them would be filed only in the competent courts of
Rizal province exclusively.
Respondent judge rather vehemently argues, however, that under the
circumstances obtaining between the parties, as earlier stated in this
decision, it is permissible, notwithstanding Our ruling in Bautista, supra, that
the word" shall" in the agreement in question be construed as "may", hence
not strictly obligatory. Private respondent points out that he had no choice
but to sign the "Distributorship Agreement" in question, he being practically
at the mercy of petitioner company which is allegedly a multinational
corporation. He maintains that to enforce the agreement literally would
amount to a denial to him, and to other distributors similarly situated, of the
opportunity to file any suit against petitioner.
We have given due attention to this posture of respondents. Indeed, there
may be instances when an agreement as to venue may be so oppressive as to
effectively deny to the party concerned access to the courts by reason of
poverty. The difficulties pictured by respondents that a poor plaintiff from a
distant province may have to encounter in filing suit in a particular place can
indeed happen. In such an eventuality and depending on the peculiar
circumstances of the case, the Court may declare the agreement as to venue
to be in effect contrary to public policy, — despite that in general, changes
and transfers of venue by written agreement of the parties is allowable —
whenever it is shown that a stipulation as to venue works injustice by
practically denying to the party concerned a fair opportunity to file suit in the
place designated by the rules.chanrobles.com : virtual law library
19
But a cursory inquiry into the respective economic conditions of the parties
herein as reflected in the record before Us does not show that private
respondent Francisco Torres is really in no position to carry on a litigation in
the Province of Rizal, because of his residence or place of business being in
Isabela province. The volume of business covered by the Distributorship
Agreement in question, Annex C of the Petition, and to be handled by private
respondent Torres is P700,000. The amount sought to be recovered by said
respondent in his complaint, Annex A of the Petition, totals more than
P300,000. These circumstances preclude, in Our view, the need to apply
equitable considerations to the case of respondent Torres. It is quite obvious
that his economic condition does not warrant non-enforcement of the
stipulation as to venue that he has agreed to. We are persuaded that his
pretension that he had no alternative but to agree, even if true, does not
merit relief. Considering the nature and volume of the business he has with
petitioner, there is nothing oppressive in his being required to litigate out of
his province. After all, for practical reasons, there seems to be justification
also for petitioner to see to it that all suits against it be concentrated in the
Province of Rizal, as otherwise, considering the nationwide extent of its
business, it would be greatly inconvenienced if it has to appear in so many
provinces everytime an action is filed against it. We are convinced both
parties agreed to the venue in controversy with eyes wide open.
IN VIEW OF ALL THE FOREGOING, the petition is granted, the orders of
respondent judge of May 13, 1976 and July 12, 1976 are hereby set aside, and
petitioner’s motion to dismiss private respondent’s complaint in question is
granted. Costs against private respondent Francisco Torres.
Fernando, Antonio, Aquino, Concepcion Jr., and Santos, JJ., concur.
[G.R. No. 158138. April 12, 2005]
PHILIPPINE BANK OF, COMMUNICATIONS, petitioner, vs. ELENA LIM,
RAMON CALDERON, and TRI-ORO INTERNATIONAL TRADING &
MANUFACTURING CORPORATION, respondents.
DECISION
PANGANIBAN, J.:
A restrictive stipulation on the venue of actions contained in a promissory
note applies to the surety agreement supporting it, because the nature of the
two contracts and the factual circumstances surrounding their execution are
intertwined or interconnected. The surety agreement is merely an accessory
to the principal loan agreement embodied in the promissory note. Hence, the
enforcement of the former depends upon the latter.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court,
assailing the April 29, 2003 Decision[2] of the Court of Appeals (CA) in CA-GR
SP No. 69786. The challenged Decision disposed as follows:
WHEREFORE, based on the foregoing, the instant petition is hereby
GRANTED. The assailed Orders dated June 9, 2000 and January 9, 2002 are
hereby ANNULED and SET ASIDE. Civil Case No. 99-94976 is hereby ordered
DISMISSED without prejudice to the filing thereof in the venue exclusively
stipulated by the parties.[3]
The Facts
The facts are related by the CA as follows:
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.
[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] ha[d] separate
causes 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. [The trial
20
court] supported [its] order with cases where venue was held to be merely
permissive. A motion for reconsideration of said order was likewise denied.[4]
Ruling of the Court of Appeals
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.[5] The parties Surety Agreement, though
silent as to venue, was an accessory contract that should have been
interpreted in consonance with the Promissory Note.[6]
Hence, this Petition.[7]
The Issue
Petitioner raises the following issue for our consideration:
Whether or not the Honorable Court of Appeals had decided the issue of
venue in a way not in accord with law and applicable decisions of this
Honorable Court and had thereby departed from the accepted and usual
course of judicial proceedings, as to call for this Honorable Supreme Courts
power of supervision and appellate review.[8]
The Courts Ruling
The Petition is unmeritorious.
Sole Issue:
Venue
At the outset, this Court observes that petitioner took liberties with the
stipulated facts to suit its allegations in the present Petition. In its Complaint,
petitioner bank averred that respondents had entered into the Surety
Agreement (SA) to guarantee existing and future credit facilities, and that
they had executed the Promissory Note (PN) to document their loan.[9] Now,
the bank is claiming that Tri-Oro issued the PN on which the other
respondents should be made liable as sureties.[10]
This strategy is obviously intended to disconnect the SA from the PN and to
support the claim of petitioner that the stipulation on venue does not apply
to the SA. However, as will be discussed below, the cause of action to recover
on the basis of the SA is inseparable from that which is based on the PN.
Rule on Venue
Section 2 of Rule 4 of the Rules of Court provides that personal actions[11]
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.[12] 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.[13] Venue is not jurisdictional and may be waived by
the parties.[14]
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.[15]
In the instant case, the stipulation on the exclusivity of the venue as stated in
the PN is not at issue. What petitioner claims is that there was no restriction
on the venue, because none was stipulated in the SA on which petitioner had
allegedly based its suit.[16] Accordingly, the action on the SA may be filed in
Manila, petitioners place of residence.
Petitioner adds that its Complaint filed in the trial court had two causes of
action: the first was founded on a breach of the PN; and the second, on a
violation of the SA.[17] Consequently, it was allegedly correct to join the causes
of action and to file the case in Manila, per Section 5 of Rule 2 of the Rules of
Court, which reads:[18]
Section 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:
xxxxxxxxx
(c) Where the causes of action are between the same parties but pertain to
different venue or jurisdictions, the joinder may be allowed in the Regional
Trial Court provided one of the causes of action falls within the jurisdiction of
the said court and venue lies therein.[19]
Surety Agreement
Suretyship arises upon the solidary binding of a person -- deemed the surety
-- with the principal debtor, for the purpose of fulfilling an obligation.[20] The
prestation is not an original and direct obligation for the performance of the
suretys own act, but merely accessory or collateral to the obligation
contracted by the principal.[21] Although the surety contract is secondary to
the principal obligation, the surety assumes liability as a regular party to the
undertaking.[22]
In enforcing a surety contract, the complementary-contracts-construed-
together doctrine finds application.[23] According to this principle, an
accessory contract must be read in its entirety and together with the principal
agreement.[24] 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.[25] This no-segregation principle is
based on Article 1374 of the Civil Code, which we quote:
21
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 factual milieu of the present case shows that the SA was entered into to
facilitate existing and future loan agreements. Petitioner approved the loan
covered by the PN, partly because of the SA that assured the payment of the
principal obligation. 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.
Notably, the PN was a contract of adhesion that petitioner required the
principal debtor to execute as a condition of the approval of the loan. It was
made in the form and language prepared by the bank. By inserting the
provision that Makati City would be the venue for any legal action [that] may
arise out of [the] Promissory Note,[26] petitioner also restricted the venue of
actions against the sureties. The legal action against the sureties arose not
only from the SA, but also from the PN.
Cause of Action
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.[27] Only one suit may be commenced for a single cause of
action.[28] 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.[29]
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,[30] as full payment by any one of them would
have extinguished the obligation.[31] 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.[32] 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.
Liberal Construction
Petitioners final plea for liberality in applying the rules on venue must be
rejected. As earlier discussed, the PN was a contract of adhesion. Ambiguities
therein are to be construed against the party that prepared the contract.[33]
On the same principle, petitioner can no longer disavow the stipulation on
venue, considering that it drafted the Surety Agreement. Besides, this alleged
technicality caused no miscarriage of substantial justice, as petitioner may
refile the case.[34] The inconveniences brought about by its failure to observe
the rules on venue sprang from its own acts. Hence, it cannot blame the
courts or anyone else for the resulting delay in the adjudication of the merits
of its cause.
WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED.
Costs against petitioner.
SO ORDERED.
G.R. No. 104175 June 25, 1993
YOUNG AUTO SUPPLY CO. AND NEMESIO GARCIA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (THIRTEENTH DIVISION) AND GEORGE
CHIONG ROXAS, respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioners.
Antonio Nuyles for private respondent.
QUIASON, J.:
Petitioners seek to set aside the decision of respondent Court of Appeals in
CA-G.R. SP No. 25237, which reversed the Order dated February 8, 1991
issued by the Regional Trial Court, Branch 11, Cebu City in Civil Case No. CEB
6967. The order of the trial court denied the motion to dismiss filed by
respondent George C. Roxas of the complaint for collection filed by
petitioners.
22
It appears that sometime on October 28, 1987, Young Auto Supply Co. Inc.
(YASCO) represented by Nemesio Garcia, its president, Nelson Garcia and
Vicente Sy, sold all of their shares of stock in Consolidated Marketing &
Development Corporation (CMDC) to Roxas. The purchase price was
P8,000,000.00 payable as follows: a downpayment of P4,000,000.00 and the
balance of P4,000,000.00 in four post dated checks of P1,000,000.00 each.
Immediately after the execution of the agreement, Roxas took full control of
the four markets of CMDC. However, the vendors held on to the stock
certificates of CMDC as security pending full payment of the balance of the
purchase price.
The first check of P4,000,000.00, representing the down-payment, was
honored by the drawee bank but the four other checks representing the
balance of P4,000,000.00 were dishonored. In the meantime, Roxas sold one
of the markets to a third party. Out of the proceeds of the sale, YASCO
received P600,000.00, leaving a balance of P3,400,000.00 (Rollo, p. 176).
Subsequently, Nelson Garcia and Vicente Sy assigned all their rights and title
to the proceeds of the sale of the CMDC shares to Nemesio Garcia.
On June 10, 1988, petitioners filed a complaint against Roxas in the Regional
Trial Court, Branch 11, Cebu City, praying that Roxas be ordered to pay
petitioners the sum of P3,400,00.00 or that full control of the three markets
be turned over to YASCO and Garcia. The complaint also prayed for the
forfeiture of the partial payment of P4,600,000.00 and the payment of
attorney's fees and costs (Rollo, p. 290).
Roxas filed two motions for extension of time to submit his answer. But
despite said motion, he failed to do so causing petitioners to file a motion to
have him declared in default. Roxas then filed, through a new counsel, a third
motion for extension of time to submit a responsive pleading.
On August 19, 1988, the trial court declared Roxas in default. The order of
default was, however, lifted upon motion of Roxas.
On August 22, 1988, Roxas filed a motion to dismiss on the grounds that:
1. The complaint did not state a cause of action due to non-joinder of
indispensable parties;
2. The claim or demand set forth in the complaint had been waived,
abandoned or otherwise extinguished; and
3. The venue was improperly laid (Rollo, p. 299).
After a hearing, wherein testimonial and documentary evidence were
presented by both parties, the trial court in an Order dated February 8, 1991
denied Roxas' motion to dismiss. After receiving said order, Roxas filed
another motion for extension of time to submit his answer. He also filed a
motion for reconsideration, which the trial court denied in its Order dated
April 10, 1991 for being pro-forma (Rollo, p. 17). Roxas was again declared in
default, on the ground that his motion for reconsideration did not toll the
running of the period to file his answer.
On May 3, 1991, Roxas filed an unverified Motion to Lift the Order of Default
which was not accompanied with the required affidavit or merit. But without
waiting for the resolution of the motion, he filed a petition for certiorari with
the Court of Appeals.
The Court of Appeals sustained the findings of the trial court with regard to
the first two grounds raised in the motion to dismiss but ordered the dismissal
of the complaint on the ground of improper venue (Rollo, p. 49).
A subsequent motion for reconsideration by petitioner was to no avail.
Petitioners now come before us, alleging that the Court of Appeals
erred in:
1. holding the venue should be in Pasay City, and not in Cebu City (where both
petitioners/plaintiffs are residents;
2. not finding that Roxas is estopped from questioning the choice of venue
(Rollo, p. 19).
The petition is meritorious.
In holding that the venue was improperly laid in Cebu City, the Court of
Appeals relied on the address of YASCO, as appearing in the Deed of Sale
dated October 28, 1987, which is "No. 1708 Dominga Street, Pasay City." This
was the same address written in YASCO's letters and several commercial
documents in the possession of Roxas (Decision, p. 12; Rollo, p. 48).
In the case of Garcia, the Court of Appeals said that he gave Pasay City as his
address in three letters which he sent to Roxas' brothers and sisters (Decision,
p. 12; Rollo, p. 47). The appellate court held that Roxas was led by petitioners
to believe that their residence is in Pasay City and that he had relied upon
those representations (Decision, p. 12, Rollo, p. 47).
The Court of Appeals erred in holding that the venue was improperly laid in
Cebu City.
In the Regional Trial Courts, all personal actions are commenced and tried in
the province or city 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 [Sec. 2(b) Rule 4, Revised Rules of Court].
23
There are two plaintiffs in the case at bench: a natural person and a domestic
corporation. Both plaintiffs aver in their complaint that they are residents of
Cebu City, thus:
1.1. Plaintiff Young Auto Supply Co., Inc., ("YASCO") is a domestic corporation
duly organized and existing under Philippine laws with principal place of
business at M. J. Cuenco Avenue, Cebu City. It also has a branch office at 1708
Dominga Street, Pasay City, Metro Manila.
Plaintiff Nemesio Garcia is of legal age, married, Filipino citizen and with
business address at Young Auto Supply Co., Inc., M. J. Cuenco Avenue, Cebu
City. . . . (Complaint, p. 1; Rollo, p. 81).
The Article of Incorporation of YASCO (SEC Reg. No. 22083) states:
THIRD That the place where the principal office of the corporation is to be
established or located is at Cebu City, Philippines (as amended on December
20, 1980 and further amended on December 20, 1984) (Rollo, p. 273).
A corporation has no residence in the same sense in which this term is applied
to a natural person. But 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 (Cohen v. Benguet Commercial Co.,
Ltd., 34 Phil. 256 [1916] Clavecilla Radio System v. Antillon, 19 SCRA 379
[1967]). The Corporation Code precisely requires each corporation to specify
in its articles of incorporation the "place where the principal office of the
corporation is to be located which must be within the Philippines" (Sec. 14
[3]). The purpose of this requirement is to fix the residence of a corporation
in a definite place, instead of allowing it to be ambulatory.
In Clavencilla Radio System v. Antillon, 19 SCRA 379 ([1967]), this Court
explained why actions cannot be filed against a corporation in any place
where the corporation maintains its branch offices. The Court ruled that to
allow an action to be instituted in any place where the corporation has branch
offices, would create confusion and work untold inconvenience to said entity.
By the same token, a corporation cannot be allowed to file personal actions
in a place other than its principal place of business unless such a place is also
the residence of a co-plaintiff or a defendant.
If it was Roxas who sued YASCO in Pasay City and the latter questioned the
venue on the ground that its principal place of business was in Cebu City,
Roxas could argue that YASCO was in estoppel because it misled Roxas to
believe that Pasay City was its principal place of business. But this is not the
case before us.
With the finding that the residence of YASCO for purposes of venue is in Cebu
City, where its principal place of business is located, it becomes unnecessary
to decide whether Garcia is also a resident of Cebu City and whether Roxas
was in estoppel from questioning the choice of Cebu City as the venue.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals
appealed from is SET ASIDE and the Order dated February 8, 1991 of the
Regional Trial Court is REINSTATED.
SO ORDERED.
G.R. No. 159507 April 19, 2006
ANICETO G. SALUDO, JR., Petitioner,
vs.
AMERICAN EXPRESS INTERNATIONAL, INC., and/or IAN T. FISH and
DOMINIC MASCRINAS, Respondents.
DECISION
CALLEJO, SR., J.:
Before the Court is the Petition for Review on Certiorari filed by Aniceto G.
Saludo, Jr. seeking to reverse and set aside the Decision1 dated May 22, 2003
of the Court of Appeals in CA-G.R. SP No. 69553. The assailed decision
directed the Regional Trial Court (RTC) of Maasin City, Southern Leyte, Branch
25 thereof, to vacate and set aside its Orders dated September 10, 2001 and
January 2, 2002 in Civil Case No. R-3172, and enjoined the presiding judge2
thereof from conducting further proceedings in said case, except to dismiss
the complaint filed therewith on ground of improper venue. The petition also
seeks to reverse and set aside the appellate court's Resolution dated August
14, 2003 denying the motion for reconsideration of the assailed decision.
The factual and procedural antecedents are as follows:
Aniceto G. Saludo, Jr. filed a complaint for damages against the American
Express International, Inc. (AMEX) and/or its officers Ian T. Fish, Vice-
President and Country Manager, and Dominic Mascrinas, Head of Operations,
with the RTC of Maasin City, Southern Leyte. The case was raffled to Branch
25 of the said court.
The complaint alleged, inter alia, that plaintiff (herein petitioner Saludo) "is a
Filipino citizen, of legal age, and a member of the House of Representatives
and a resident of Ichon, Macrohon, Southern Leyte, Philippines." On the other
hand, defendant (herein respondent AMEX, Inc.) "is a corporation doing
business in the Philippines and engaged in providing credit and other credit
facilities and allied services with office address at 4th floor, ACE Building, Rada
24
Street, Legaspi Village, Makati City." The other defendants (herein
respondents Fish and Mascrinas) are officers of respondent AMEX, and may
be served with summons and other court processes at their office address.
The complaint's cause of action stemmed from the alleged wrongful dishonor
of petitioner Saludo's AMEX credit card and the supplementary card issued
to his daughter. The first dishonor happened when petitioner Saludo's
daughter used her supplementary credit card to pay her purchases in the
United States some time in April 2000. The second dishonor occurred when
petitioner Saludo used his principal credit card to pay his account at the Hotel
Okawa in Tokyo, Japan while he was there with other delegates from the
Philippines to attend the Congressional Recognition in honor of Mr. Hiroshi
Tanaka.
The dishonor of these AMEX credit cards were allegedly unjustified as they
resulted from respondents' unilateral act of suspending petitioner Saludo's
account for his failure to pay its balance covering the period of March 2000.
Petitioner Saludo denied having received the corresponding statement of
account. Further, he was allegedly wrongfully charged for late payment in
June 2000. Subsequently, his credit card and its supplementary cards were
canceled by respondents on July 20, 2000.
Petitioner Saludo claimed that he suffered great inconvenience, wounded
feelings, mental anguish, embarrassment, humiliation and besmirched
political and professional standing as a result of respondents' acts which were
committed in gross and evident bad faith, and in wanton, reckless and
oppressive manner. He thus prayed that respondents be adjudged to pay him,
jointly and severally, actual, moral and exemplary damages, and attorney's
fees.
In their answer, respondents specifically denied the allegations in the
complaint. Further, they raised the affirmative defenses of lack of cause of
action and improper venue. On the latter, respondents averred that the
complaint should be dismissed on the ground that venue was improperly laid
because none of the parties was a resident of Leyte. They alleged that
respondents were not residents of Southern Leyte. Moreover,
notwithstanding the claim in his complaint, petitioner Saludo was not
allegedly a resident thereof as evidenced by the fact that his community tax
certificate, which was presented when he executed the complaint's
verification and certification of non-forum shopping, was issued at Pasay City.
To buttress their contention, respondents pointed out that petitioner
Saludo's complaint was prepared in Pasay City and signed by a lawyer of the
said city. Respondents prayed for the dismissal of the complaint a quo.
Thereafter, respondents filed an Opposition to Ex-Parte Motion (to Set Case
for Pre-Trial) and Motion for Preliminary Hearing (on Affirmative Defense of
Improper Venue) to which petitioner Saludo filed his Comments and/or
Objections to the Affirmative Defense of Improper Venue. He asserted that
any allegation refuting his residency in Southern Leyte was baseless and
unfounded considering that he was the congressman of the lone district
thereof at the time of the filing of his complaint. He urged the court a quo to
take judicial notice of this particular fact. As a member of Congress, he
possessed all the qualifications prescribed by the Constitution including that
of being a resident of his district. He was also a member of the Integrated Bar
of the Philippines-Southern Leyte Chapter, and has been such ever since his
admission to the Bar. His community tax certificate was issued at Pasay City
only because he has an office thereat and the office messenger obtained the
same in the said city. In any event, the community tax certificate is not
determinative of one's residence.
In the Order dated September 10, 2001, the court a quo denied the
affirmative defenses interposed by respondents. It found the allegations of
the complaint sufficient to constitute a cause of action against respondents.
The court a quo likewise denied respondents' affirmative defense that venue
was improperly laid. It reasoned, thus:
x x x [T]he fact alone that the plaintiff at the time he filed the complaint was
and still is, the incumbent Congressman of the Lone District of Southern Leyte
with residence at Ichon, Macrohon, Southern Leyte, is enough to dispell any
and all doubts about his actual residence. As a high-ranking government
official of the province, his residence there can be taken judicial notice of. As
such his personal, actual and physical habitation or his actual residence or
place of abode can never be in some other place but in Ichon, Macrohon,
Southern Leyte. It is correctly stated by the plaintiff, citing the case of Core v.
Core, 100 Phil. 321 that, "residence, for purposes of fixing venue of an action,
is synonymous with domicile. This is defined as the permanent home, the
place to which, whenever absent for business or pleasure, one intends to
return, and depends on the facts and circumstances, in the sense that they
disclose intent. A person can have but one domicile at a time. A man can have
but one domicile for one and the same purpose at any time, but he may have
numerous places of residence. Venue could be at place of his residence.
(Masa v. Mison, 200 SCRA 715 [1991])3
25
Respondents sought the reconsideration thereof but the court a quo denied
the same in the Order dated January 2, 2002. They then filed with the
appellate court a petition for certiorari and prohibition alleging grave abuse
of discretion on the part of the presiding judge of the court a quo in issuing
the September 10, 2001 and January 2, 2002 Orders. Upon respondents'
posting of a bond, the appellate court issued on March 14, 2002 a temporary
restraining order which enjoined the presiding judge of the court a quo from
conducting further proceedings in Civil Case No. R-3172.
On May 22, 2003, the appellate court rendered the assailed decision granting
respondents' petition for certiorari as it found that venue was improperly
laid. It directed the court a quo to vacate and set aside its Orders dated
September 10, 2001 and January 2, 2002, and enjoined the presiding judge
thereof from further proceeding in the case, except to dismiss the complaint.
The appellate court explained that the action filed by petitioner Saludo
against respondents is governed by Section 2, Rule 4 of the Rules of Court.
The said rule on venue of personal actions basically provides that personal
actions may be commenced and tried where plaintiff or any of the principal
plaintiffs resides, or where defendant or any of the principal defendants
resides, at the election of plaintiff.
Venue was improperly laid in the court a quo, according to the appellate
court, because not one of the parties was a resident of Southern Leyte.
Specifically, it declared that petitioner Saludo was not a resident thereof. The
appellate court pronounced that, for purposes of venue, the residence of a
person is his personal, actual or physical habitation, or his actual residence or
place of abode, which may not necessarily be his legal residence or domicile
provided he resides therein with continuity and consistency.4
The appellate court quoted the following discussion in Koh v. Court of
Appeals5 where the Court distinguished the terms "residence" and "domicile"
in this wise:
x x x [T]he term domicile is not exactly synonymous in legal contemplation
with the term residence, for it is [an] established principle in Conflict of Laws
that domicile refers to the relatively more permanent abode of a person while
residence applies to a temporary stay of a person in a given place. In fact, this
distinction is very well emphasized in those cases where the Domiciliary
Theory must necessarily supplant the Nationality Theory in cases involving
stateless persons.
xxxx
"There is a difference between domicile and residence. Residence is used to
indicate a place of abode, whether permanent or temporary; domicile
denotes a fixed permanent residence to which when absent, one has the
intention of returning. A man may have a residence in one place and a
domicile in another. Residence is not domicile, but domicile is residence
coupled with intention to remain for an unlimited time. A man can have but
one domicile for one and the same purpose at any time, but he may have
numerous places of residence. His place of residence generally is his place of
domicile, but is not by any means, necessarily so since no length of residence
without intention of remaining will constitute domicile."6 (Italicized for
emphasis)
In holding that petitioner Saludo is not a resident of Maasin City, Southern
Leyte, the appellate court referred to his community tax certificate, as
indicated in his complaint's verification and certification of non-forum
shopping, which was issued at Pasay City. Similarly, it referred to the same
community tax certificate, as indicated in his complaint for deportation filed
against respondents Fish and Mascrinas. Under Republic Act No. 7160,7 the
community tax certificate shall be paid in the place of residence of the
individual, or in the place where the principal office of the juridical entity is
located.8 It also pointed out that petitioner Saludo's law office, which was also
representing him in the present case, is in Pasay City. The foregoing
circumstances were considered by the appellate court as judicial admissions
of petitioner Saludo which are conclusive upon him and no longer required
proof.
The appellate court chided the court a quo for stating that as incumbent
congressman of the lone district of Southern Leyte, judicial notice could be
taken of the fact of petitioner Saludo's residence thereat. No evidence had
yet been adduced that petitioner Saludo was then the congressman of
Southern Leyte and actual resident of Ichon, Macrohon of the said province.
The appellate court held that, based on his complaint, petitioner Saludo was
actually residing in Pasay City. It faulted him for filing his complaint with the
court a quo when the said venue is inconvenient to the parties to the case. It
opined that under the rules, the possible choices of venue are Pasay City or
Makati City, or any place in the National Capital Judicial Region, at the option
of petitioner Saludo.
It stressed that while the choice of venue is given to plaintiff, said choice is
not left to his caprice and cannot deprive a defendant of the rights conferred
upon him by the Rules of Court.9 Further, fundamental in the law governing
26
venue of actions that the situs for bringing real and personal civil actions is
fixed by the rules to attain the greatest possible convenience to the party
litigants by taking into consideration the maximum accessibility to them - i.e.,
to both plaintiff and defendant, not only to one or the other - of the courts of
justice.10
The appellate court concluded that the court a quo should have given due
course to respondents' affirmative defense of improper venue in order to
avoid any suspicion that petitioner Saludo's motive in filing his complaint with
the court a quo was only to vex and unduly inconvenience respondents or
even to wield influence in the outcome of the case, petitioner Saludo being a
powerful and influential figure in the said province. The latter circumstance
could be regarded as a "specie of forum shopping" akin to that in Investors
Finance Corp. v. Ebarle11 where the Court mentioned that the filing of the civil
action before the court in Pagadian City "was a specie of forum shopping"
considering that plaintiff therein was an influential person in the locality.
The decretal portion of the assailed Decision dated May 22, 2003 of the
appellate court reads:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the challenged orders must
be, as they hereby are, VACATED and SET ASIDE and the respondent judge, or
any one acting in his place or stead, is instructed and enjoined to desist from
further proceeding in the case, except to dismiss it. The temporary restraining
order earlier issued is hereby converted into a writ of preliminary injunction,
upon the posting this time by petitioners [herein respondents], within five (5)
days from receipt of this decision, of a bond in the amount of Five Million
Pesos (P5,000,000.00), to answer for all damages that private respondent
[herein petitioner] may sustain by reason of the issuance of such injunction
should the Court finally decide that petitioners are not entitled thereto.
Private respondent, if he so minded, may refile his case for damages before
the Regional Trial Court of Makati City or Pasay City, or any of the Regional
Trial Courts of the National Capital Judicial Region. Without costs.
SO ORDERED.12
Petitioner Saludo sought the reconsideration of the said decision but the
appellate court, in the Resolution dated August 14, 2003, denied his motion
for reconsideration. Hence, he filed the instant petition for review with the
Court alleging that:
The Court of Appeals, (Special Fourth Division), in promulgating the afore-
mentioned Decision and Resolution, has decided a question of substance in a
way probably not in accord with law or with applicable decisions of this
Honorable Court.
(a) the Court of Appeals erred in not taking judicial notice of the undisputed
fact that herein petitioner is the incumbent congressman of the lone district
of Southern Leyte and as such, he is a residence (sic) of said district;
(b) the Court of Appeals erred in dismissing the complaint on the basis of
improper venue due to the alleged judicial admission of herein petitioner;
(c) the Court of Appeals in dismissing the complaint ignored applicable
decisions of this Honorable Court; and1avvphil.net
(d) the Court of Appeals erred in deciding that herein petitioner violated the
rules on venue, and even speculated that herein petitioner's motive in filing
the complaint in Maasin City was only to vex the respondents.13
In gist, the sole substantive issue for the Court's resolution is whether the
appellate court committed reversible error in holding that venue was
improperly laid in the court a quo in Civil Case No. R-3172 because not one of
the parties, including petitioner Saludo, as plaintiff therein, was a resident of
Southern Leyte at the time of filing of the complaint.
The petition is meritorious.
Petitioner Saludo's complaint for damages against respondents before the
court a quo is a personal action. As such, it is governed by Section 2, Rule 4 of
the Rules of Courts which reads:
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.
The choice of venue for personal actions cognizable by the RTC is given to
plaintiff but not to plaintiff's caprice because the matter is regulated by the
Rules of Court.14 The rule on venue, like other procedural rules, is designed to
insure a just and orderly administration of justice, or the impartial and
evenhanded determination of every action and proceeding.15 The option of
plaintiff in personal actions cognizable by the RTC is either the place where
defendant resides or may be found, or the place where plaintiff resides. If
plaintiff opts for the latter, he is limited to that place.16
Following this rule, petitioner Saludo, as plaintiff, had opted to file his
complaint with the court a quo which is in Maasin City, Southern Leyte. He
alleged in his complaint that he was a member of the House of
Representatives and a resident of Ichon, Macrohon, Southern Leyte to
comply with the residency requirement of the rule.
27
However, the appellate court, adopting respondents' theory, made the
finding that petitioner Saludo was not a resident of Southern Leyte at the time
of the filing of his complaint. It hinged the said finding mainly on the fact that
petitioner Saludo's community tax certificate, indicated in his complaint's
verification and certification of non-forum shopping, was issued at Pasay City.
That his law office is in Pasay City was also taken by the appellate court as
negating petitioner Saludo's claim of residence in Southern Leyte.
The appellate court committed reversible error in finding that petitioner
Saludo was not a resident of Southern Leyte at the time of the filing of his
complaint, and consequently holding that venue was improperly laid in the
court a quo. In Dangwa Transportation Co., Inc. v. Sarmiento,17 the Court had
the occasion to explain at length the meaning of the term "resides" for
purposes of venue, thus:
In Koh v. Court of Appeals, we explained that the term "resides" as employed
in the rule on venue on personal actions filed with the courts of first instance
means the place of abode, whether permanent or temporary, of the plaintiff
or the defendant, as distinguished from "domicile" which denotes a fixed
permanent residence to which, when absent, one has the intention of
returning.
"It is fundamental in the law governing venue of actions (Rule 4 of the Rules
of Court) that the situs for bringing real and personal civil actions are fixed by
the rules to attain the greatest convenience possible to the parties-litigants
by taking into consideration the maximum accessibility to them of the courts
of justice. It is, likewise, undeniable that the term domicile is not exactly
synonymous in legal contemplation with the term residence, for it is an
established principle in Conflict of Laws that domicile refers to the relatively
more permanent abode of a person while residence applies to a temporary
stay of a person in a given place. In fact, this distinction is very well
emphasized in those cases where the Domiciliary Theory must necessarily
supplant the Nationality Theory in cases involving stateless persons.
"This Court held in the case of Uytengsu v. Republic, 50 O.G. 4781, October,
1954, reversing its previous stand in Larena v. Ferrer, 61 Phil. 36, and Nuval
v. Guray, 52 Phil. 645, that -
'There is a difference between domicile and residence. Residence is used to
indicate a place of abode, whether permanent or temporary; domicile
denotes a fixed permanent residence to which when absent, one has the
intention of returning. A man may have a residence in one place and a
domicile in another. Residence is not domicile, but domicile is residence
coupled with the intention to remain for an unlimited time. A man can have
but one domicile for one and the same purpose at any time, but he may have
numerous places of residence. His place of residence generally is his place of
domicile, but is not by any means, necessarily so since no length of residence
without intention of remaining will constitute domicile.' (Italicized for
emphasis)
"We note that the law on venue in Courts of First Instance (Section 2, of Rule
4, Rules of Court) in referring to the parties utilizes the words 'resides or may
be found,' and not 'is domiciled,' thus:
'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.' (Italicized for emphasis)
"Applying the foregoing observation to the present case, We are fully
convinced that private respondent Coloma's protestations of domicile in San
Nicolas, Ilocos Norte, based on his manifested intention to return there after
the retirement of his wife from government service to justify his bringing of
an action for damages against petitioner in the C.F.I. of Ilocos Norte, is
entirely of no moment since what is of paramount importance is where he
actually resided or where he may be found at the time he brought the action,
to comply substantially with the requirements of Sec. 2(b) of Rule 4, Rules of
Court, on venue of personal actions." (Koh v. Court of Appeals, supra, pp. 304-
305.)
The same construction of the word "resides" as used in Section 1, Rule 73, of
the Revised Rules of Court, was enunciated in Fule v. Court of Appeals, et al.
(G.R. No. L-40502) and Fule v. Hon. Ernani C. Paño, et al. (G.R. No. L-42670),
decided on November 29, 1976. Thus, this Court, in the aforecited cases,
stated:
"2. But, the far-ranging question is this: What does the term 'resides' mean?
Does it refer to the actual residence or domicile of the decedent at the time
of his death? We lay down the doctrinal rule that the term 'resides' connotes
ex vi termini 'actual residence' as distinguished from 'legal residence or
domicile.' This term 'resides,' like the terms 'residing' and 'residence' is elastic
and should be interpreted in the light of the object or purposes of the statute
or rule in which it is employed. In the application of venue statutes and rules
- Section 1, Rule 73 of the Revised Rules of Court is of such nature - residence
rather than domicile is the significant factor. Even where the statute uses the
word 'domicile' still it is construed as meaning residence and not domicile in
28
the technical sense. Some cases make a distinction between the terms
'residence' and 'domicile' but as generally used in statutes fixing venue, the
terms are synonymous, and convey the same meaning as the term
'inhabitant.' In other words, 'resides' should be viewed or understood in its
popular sense, meaning, the personal, actual or physical habitation of a
person, actual residence or place of abode. It signifies physical presence in a
place and actual stay thereat. In this popular sense, the term means merely
residence, that is, personal residence, not legal residence or domicile.
Residence simply requires bodily presence as an inhabitant in a given place,
while domicile requires bodily presence in that place and also an intention to
make it one's domicile. No particular length of time of residence is required
though; however, the residence must be more than temporary."18
There is no dispute that petitioner Saludo was the congressman or the
representative of the lone district of Southern Leyte at the time of filing of his
complaint with the court a quo. Even the appellate court admits this fact as it
states that "it may be conceded that private respondent ever so often travels
to Maasin City, Southern Leyte, because he is its representative in the lower
house."19
As a member of the House of Representatives, petitioner Saludo was
correctly deemed by the court a quo as possessing the requirements for the
said position,20 including that he was then a resident of the district which he
was representing, i.e., Southern Leyte. Significantly, for purposes of election
law, the term "residence" is synonymous with "domicile," thus:
x x x [T]he Court held that "domicile" and "residence" are synonymous. The
term "residence," as used in the election law, imports not only an intention
to reside in a fixed place but also personal presence in that place, coupled
with conduct indicative of such intention. "Domicile" denotes a fixed
permanent residence to which when absent for business or pleasure, or for
like reasons, one intends to return. x x x21
It can be readily gleaned that the definition of "residence" for purposes of
election law is more stringent in that it is equated with the term "domicile."
Hence, for the said purpose, the term "residence" imports "not only an
intention to reside in a fixed place but also personal presence in that place,
coupled with conduct indicative of such intention."22 When parsed, therefore,
the term "residence" requires two elements: (1) intention to reside in the
particular place; and (2) personal or physical presence in that place, coupled
with conduct indicative of such intention. As the Court elucidated, "the place
where a party actually or constructively has a permanent home, where he, no
matter where he may be found at any given time, eventually intends to return
and remain, i.e., his domicile, is that to which the Constitution refers when it
speaks of residence for the purposes of election law."23
On the other hand, for purposes of venue, the less technical definition of
"residence" is adopted. Thus, it is understood to mean as "the personal,
actual or physical habitation of a person, actual residence or place of abode.
It signifies physical presence in a place and actual stay thereat. In this popular
sense, the term means merely residence, that is, personal residence, not legal
residence or domicile. Residence simply requires bodily presence as an
inhabitant in a given place, while domicile requires bodily presence in that
place and also an intention to make it one's domicile."24
Since petitioner Saludo, as congressman or the lone representative of the
district of Southern Leyte, had his residence (or domicile) therein as the term
is construed in relation to election laws, necessarily, he is also deemed to
have had his residence therein for purposes of venue for filing personal
actions. Put in another manner, Southern Leyte, as the domicile of petitioner
Saludo, was also his residence, as the term is understood in its popular sense.
This is because "residence is not domicile, but domicile is residence coupled
with the intention to remain for an unlimited time."
Reliance by the appellate court on Koh v. Court of Appeals25 is misplaced.
Contrary to its holding,26 the facts of the present case are not similar to the
facts therein. In Koh, the complaint was filed with the Court of First Instance
in San Nicolas, Ilocos Norte by plaintiff who admitted that he was a resident
of Kamias, Quezon City. Save for the fact that he grew up in San Nicolas, Ilocos
Norte and that he manifested the intent to return there after retirement,
plaintiff therein had not established that he was actually a resident therein at
the time of the filing of his complaint. Neither did he establish that he had his
domicile therein because although he manifested the intent to go back there
after retirement, the element of personal presence in that place was lacking.
To reiterate, domicile or residence, as the terms are taken as synonyms,
imports "not only an intention to reside in a fixed place but also personal
presence in that place, coupled with conduct indicative of such intention."27
In contrast, petitioner Saludo was the congressman or representative of
Southern Leyte at the time of filing of his complaint with the court a quo.
Absent any evidence to the contrary, he is deemed to possess the
qualifications for the said position, including that he was a resident therein.
And following the definition of the term "residence" for purposes of election
law, petitioner Saludo not only had the intention to reside in Southern Leyte,
29
but he also had personal presence therein, coupled with conduct indicative
of such intention. The latter element, or his bodily presence as an inhabitant
in Southern Leyte, was sufficient for petitioner Saludo to be considered a
resident therein for purposes of venue.
The following ratiocination of the court a quo is apt:
Residence in civil law is a material fact, referring to the physical presence of
a person in a place. A person can have two or more residences, such as a
country residence and a city residence. (Quetulio v. Ruiz, S.C. Off. Gaz. 156,
Commentaries and Jurisprudence in Civil Law, Vol. 1, page 211, Tolentino).
Residence is acquired by living in a place; on the other hand, domicile can
exist without actually living in the place. The important thing for domicile is
that, once residence has been established in one place, there be an intention
to stay there permanently, even if residence is also established in some other
place.
Thus, if a person lives with his family habitually in Quezon City, he would have
his domicile in Quezon City. If he also has a house for vacation purposes in
the City of Baguio, and another house in connection with his business in the
City of Manila, he would have residence in all three places (Tolentino,
Commentaries and Jurisprudence on Civil Law, Vol. 1, Page 212, 1990 Edition)
so that one[']s legal residence or domicile can also be his actual, personal or
physical residence or habitation or place of abode if he stays there with
intention to stay there permanently.
In the instant case, since plaintiff has a house in Makati City for the purpose
of exercising his profession or doing business and also a house in Ichon,
Macrohon, Southern Leyte, for doing business and/or for election or political
purposes where he also lives or stays physically, personally and actually then
he can have residences in these two places. Because it would then be
preposterous to acknowledge and recognize plaintiff Aniceto G. Saludo, Jr. as
congressman of Southern Leyte without also recognizing him as actually,
personally and physically residing thereat, when such residence is required
by law.28
The fact then that petitioner Saludo's community tax certificate was issued at
Pasay City is of no moment because granting arguendo that he could be
considered a resident therein, the same does not preclude his having a
residence in Southern Leyte for purposes of venue. A man can have but one
domicile for one and the same purpose at any time, but he may have
numerous places of residence.29
That petitioner Saludo was the congressman or representative of the lone
district of Southern Leyte at the time of the filing of his complaint was
admitted as a fact by the court a quo. In this connection, it consequently held
that, as such, petitioner Saludo's residence in Southern Leyte, the district he
was the representing, could be taken judicial notice of. The court a quo
cannot be faulted for doing so because courts are allowed "to take judicial
notice of matters which are of public knowledge, or are capable of
unquestionable demonstration, or ought to be known to judges because of
their judicial functions." 30 Courts are likewise bound to take judicial notice,
without the introduction of evidence, of the law in force in the Philippines, 31
including its Constitution.
The concept of "facts of common knowledge" in the context of judicial notice
has been explained as those facts that are "so commonly known in the
community as to make it unprofitable to require proof, and so certainly
known to as to make it indisputable among reasonable men." 32 Moreover,
"though usually facts of 'common knowledge' will be generally known
throughout the country, it is sufficient as a basis for judicial notice that they
be known in the local community where the trial court sits." 33 Certainly, the
fact of petitioner Saludo being the duly elected representative of Southern
Leyte at the time could be properly taken judicial notice of by the court a quo,
the same being a matter of common knowledge in the community where it
sits.
Further, petitioner Saludo's residence in Southern Leyte could likewise be
properly taken judicial notice of by the court a quo. It is bound to know that,
under the Constitution, one of the qualifications of a congressman or
representative to the House of Representatives is having a residence in the
district in which he shall be elected.
In fine, petitioner Saludo's act of filing his complaint with the court a quo
cannot be characterized as a "specie of forum-shopping" or capricious on his
part because, under the rules, as plaintiff, he is precisely given this option.
Finally, respondents' claim that the instant petition for review was not
properly verified by petitioner Saludo deserves scant consideration.
Section 4, Rule 7 of the Rules of Court reads:
Sec. 4. Verification. - Except when otherwise specifically required by law or
rule, pleadings need not be under oath, verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has read the pleading and
that the allegations therein are true and correct of his personal knowledge or
based on authentic records.
30
A pleading required to be verified which contains a verification based on
"information and belief," or upon "knowledge, information and belief," or
lacks proper verification, shall be treated as an unsigned pleading.
Petitioner Saludo's verification and certification of non-forum shopping
states that he has "read the contents thereof [referring to the petition] and
the same are true and correct of my own personal knowledge and belief and
on the basis of the records at hand." The same clearly constitutes substantial
compliance with the above requirements of the Rules of Court.
WHEREFORE, premises considered, the petition is GRANTED. The Decision
dated May 22, 2003 and Resolution dated August 14, 2003 of the Court of
Appeals in CA-G.R. SP No. 69553 are REVERSED and SET ASIDE. The Orders
dated September 10, 2001 and January 2, 2002 of the Regional Trial Court of
Maasin City, Southern Leyte, Branch 25 thereof, in Civil Case No. R-3172 are
REINSTATED.
SO ORDERED.
G.R. No. 133743 February 6, 2007
EDGAR SAN LUIS, Petitioner,
vs.
FELICIDAD SAN LUIS, Respondent.
x ---------------------------------------------------- x
G.R. No. 134029 February 6, 2007
RODOLFO SAN LUIS, Petitioner,
vs.
FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent.
DECISION
YNARES-SANTIAGO, J.:
Before us are consolidated petitions for review assailing the February 4, 1998
Decision 1 of the Court of Appeals in CA-G.R. CV No. 52647, which reversed
and set aside the September 12, 1995 2 and January 31, 1996 3 Resolutions of
the Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708;
and its May 15, 1998 Resolution 4 denying petitioners’ motion for
reconsideration.
The instant case involves the settlement of the estate of Felicisimo T. San Luis
(Felicisimo), who was the former governor of the Province of Laguna. During
his lifetime, Felicisimo contracted three marriages. His first marriage was with
Virginia Sulit on March 17, 1942 out of which were born six children, namely:
Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11, 1963, Virginia
predeceased Felicisimo.
Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with
whom he had a son, Tobias. However, on October 15, 1971, Merry Lee, an
American citizen, filed a Complaint for Divorce 5 before the Family Court of
the First Circuit, State of Hawaii, United States of America (U.S.A.), which
issued a Decree Granting Absolute Divorce and Awarding Child Custody on
December 14, 1973. 6
On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then
surnamed Sagalongos, before Rev. Fr. William Meyer, Minister of the United
Presbyterian at Wilshire Boulevard, Los Angeles, California, U.S.A. 7 He had no
children with respondent but lived with her for 18 years from the time of their
marriage up to his death on December 18, 1992.
Thereafter, respondent sought the dissolution of their conjugal partnership
assets and the settlement of Felicisimo’s estate. On December 17, 1993, she
filed a petition for letters of administration 8 before the Regional Trial Court
of Makati City, docketed as SP. Proc. No. M-3708 which was raffled to Branch
146 thereof.
Respondent alleged that she is the widow of Felicisimo; that, at the time of
his death, the decedent was residing at 100 San Juanico Street, New Alabang
Village, Alabang, Metro Manila; that the decedent’s surviving heirs are
respondent as legal spouse, his six children by his first marriage, and son by
his second marriage; that the decedent left real properties, both conjugal and
exclusive, valued at ₱30,304,178.00 more or less; that the decedent does not
have any unpaid debts. Respondent prayed that the conjugal partnership
assets be liquidated and that letters of administration be issued to her.
On February 4, 1994, petitioner Rodolfo San Luis, one of the children of
Felicisimo by his first marriage, filed a motion to dismiss 9 on the grounds of
improper venue and failure to state a cause of action. Rodolfo claimed that
the petition for letters of administration should have been filed in the
Province of Laguna because this was Felicisimo’s place of residence prior to
his death. He further claimed that respondent has no legal personality to file
the petition because she was only a mistress of Felicisimo since the latter, at
the time of his death, was still legally married to Merry Lee.
On February 15, 1994, Linda invoked the same grounds and joined her
brother Rodolfo in seeking the dismissal 10 of the petition. On February 28,
1994, the trial court issued an Order 11 denying the two motions to dismiss.
31
Unaware of the denial of the motions to dismiss, respondent filed on March
5, 1994 her opposition 12 thereto. She submitted documentary evidence
showing that while Felicisimo exercised the powers of his public office in
Laguna, he regularly went home to their house in New Alabang Village,
Alabang, Metro Manila which they bought sometime in 1982. Further, she
presented the decree of absolute divorce issued by the Family Court of the
First Circuit, State of Hawaii to prove that the marriage of Felicisimo to Merry
Lee had already been dissolved. Thus, she claimed that Felicisimo had the
legal capacity to marry her by virtue of paragraph 2, 13 Article 26 of the Family
Code and the doctrine laid down in Van Dorn v. Romillo, Jr. 14
Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately
filed motions for reconsideration from the Order denying their motions to
dismiss. 15 They asserted that paragraph 2, Article 26 of the Family Code
cannot be given retroactive effect to validate respondent’s bigamous
marriage with Felicisimo because this would impair vested rights in
derogation of Article 256 16 of the Family Code.
On April 21, 1994, Mila, another daughter of Felicisimo from his first
marriage, filed a motion to disqualify Acting Presiding Judge Anthony E.
Santos from hearing the case.
On October 24, 1994, the trial court issued an Order 17 denying the motions
for reconsideration. It ruled that respondent, as widow of the decedent,
possessed the legal standing to file the petition and that venue was properly
laid. Meanwhile, the motion for disqualification was deemed moot and
academic 18 because then Acting Presiding Judge Santos was substituted by
Judge Salvador S. Tensuan pending the resolution of said motion.
Mila filed a motion for inhibition 19 against Judge Tensuan on November 16,
1994. On even date, Edgar also filed a motion for reconsideration 20 from the
Order denying their motion for reconsideration arguing that it does not state
the facts and law on which it was based.
On November 25, 1994, Judge Tensuan issued an Order 21 granting the motion
for inhibition. The case was re-raffled to Branch 134 presided by Judge Paul
T. Arcangel.
On April 24, 1995, 22 the trial court required the parties to submit their
respective position papers on the twin issues of venue and legal capacity of
respondent to file the petition. On May 5, 1995, Edgar manifested 23 that he
is adopting the arguments and evidence set forth in his previous motion for
reconsideration as his position paper. Respondent and Rodolfo filed their
position papers on June 14, 24 and June 20, 25 1995, respectively.
On September 12, 1995, the trial court dismissed the petition for letters of
administration. It held that, at the time of his death, Felicisimo was the duly
elected governor and a resident of the Province of Laguna. Hence, the
petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It
also ruled that respondent was without legal capacity to file the petition for
letters of administration because her marriage with Felicisimo was bigamous,
thus, void ab initio. It found that the decree of absolute divorce dissolving
Felicisimo’s marriage to Merry Lee was not valid in the Philippines and did not
bind Felicisimo who was a Filipino citizen. It also ruled that paragraph 2,
Article 26 of the Family Code cannot be retroactively applied because it would
impair the vested rights of Felicisimo’s legitimate children.
Respondent moved for reconsideration 26 and for the disqualification 27 of
Judge Arcangel but said motions were denied. 28
Respondent appealed to the Court of Appeals which reversed and set aside
the orders of the trial court in its assailed Decision dated February 4, 1998,
the dispositive portion of which states:
WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are
hereby REVERSED and SET ASIDE; the Orders dated February 28 and October
24, 1994 are REINSTATED; and the records of the case is REMANDED to the
trial court for further proceedings. 29
The appellante court ruled that under Section 1, Rule 73 of the Rules of Court,
the term "place of residence" of the decedent, for purposes of fixing the
venue of the settlement of his estate, refers to the personal, actual or physical
habitation, or actual residence or place of abode of a person as distinguished
from legal residence or domicile. It noted that although Felicisimo discharged
his functions as governor in Laguna, he actually resided in Alabang,
Muntinlupa. Thus, the petition for letters of administration was properly filed
in Makati City.
The Court of Appeals also held that Felicisimo had legal capacity to marry
respondent by virtue of paragraph 2, Article 26 of the Family Code and the
rulings in Van Dorn v. Romillo, Jr. 30 and Pilapil v. Ibay-Somera. 31 It found that
the marriage between Felicisimo and Merry Lee was validly dissolved by
virtue of the decree of absolute divorce issued by the Family Court of the First
Circuit, State of Hawaii. As a result, under paragraph 2, Article 26, Felicisimo
was capacitated to contract a subsequent marriage with respondent. Thus –
With the well-known rule – express mandate of paragraph 2, Article 26, of
the Family Code of the Philippines, the doctrines in Van Dorn, Pilapil, and the
reason and philosophy behind the enactment of E.O. No. 227, — there is no
32
justiciable reason to sustain the individual view — sweeping statement — of
Judge Arc[h]angel, that "Article 26, par. 2 of the Family Code, contravenes the
basic policy of our state against divorce in any form whatsoever." Indeed,
courts cannot deny what the law grants. All that the courts should do is to
give force and effect to the express mandate of the law. The foreign divorce
having been obtained by the Foreigner on December 14, 1992, 32 the Filipino
divorcee, "shall x x x have capacity to remarry under Philippine laws". For this
reason, the marriage between the deceased and petitioner should not be
denominated as "a bigamous marriage.
Therefore, under Article 130 of the Family Code, the petitioner as the
surviving spouse can institute the judicial proceeding for the settlement of
the estate of the deceased. x x x 33
Edgar, Linda, and Rodolfo filed separate motions for reconsideration 34 which
were denied by the Court of Appeals.
On July 2, 1998, Edgar appealed to this Court via the instant petition for
review on certiorari. 35 Rodolfo later filed a manifestation and motion to
adopt the said petition which was granted. 36
In the instant consolidated petitions, Edgar and Rodolfo insist that the venue
of the subject petition for letters of administration was improperly laid
because at the time of his death, Felicisimo was a resident of Sta. Cruz,
Laguna. They contend that pursuant to our rulings in Nuval v. Guray 37 and
Romualdez v. RTC, Br. 7, Tacloban City, 38 "residence" is synonymous with
"domicile" which denotes a fixed permanent residence to which when
absent, one intends to return. They claim that a person can only have one
domicile at any given time. Since Felicisimo never changed his domicile, the
petition for letters of administration should have been filed in Sta. Cruz,
Laguna.
Petitioners also contend that respondent’s marriage to Felicisimo was void
and bigamous because it was performed during the subsistence of the latter’s
marriage to Merry Lee. They argue that paragraph 2, Article 26 cannot be
retroactively applied because it would impair vested rights and ratify the void
bigamous marriage. As such, respondent cannot be considered the surviving
wife of Felicisimo; hence, she has no legal capacity to file the petition for
letters of administration.
The issues for resolution: (1) whether venue was properly laid, and (2)
whether respondent has legal capacity to file the subject petition for letters
of administration.
The petition lacks merit.
Under Section 1, 39 Rule 73 of the Rules of Court, the petition for letters of
administration of the estate of Felicisimo should be filed in the Regional Trial
Court of the province "in which he resides at the time of his death." In the
case of Garcia Fule v. Court of Appeals, 40 we laid down the doctrinal rule for
determining the residence – as contradistinguished from domicile – of the
decedent for purposes of fixing the venue of the settlement of his estate:
[T]he term "resides" connotes ex vi termini "actual residence" as
distinguished from "legal residence or domicile." This term "resides," like the
terms "residing" and "residence," is elastic and should be interpreted in the
light of the object or purpose of the statute or rule in which it is employed. In
the application of venue statutes and rules – Section 1, Rule 73 of the Revised
Rules of Court is of such nature – residence rather than domicile is the
significant factor. Even where the statute uses the word "domicile" still it is
construed as meaning residence and not domicile in the technical sense.
Some cases make a distinction between the terms "residence" and "domicile"
but as generally used in statutes fixing venue, the terms are synonymous, and
convey the same meaning as the term "inhabitant." In other words, "resides"
should be viewed or understood in its popular sense, meaning, the personal,
actual or physical habitation of a person, actual residence or place of abode.
It signifies physical presence in a place and actual stay thereat. In this popular
sense, the term means merely residence, that is, personal residence, not legal
residence or domicile. Residence simply requires bodily presence as an
inhabitant in a given place, while domicile requires bodily presence in that
place and also an intention to make it one’s domicile. No particular length of
time of residence is required though; however, the residence must be more
than temporary. 41 (Emphasis supplied)
It is incorrect for petitioners to argue that "residence," for purposes of fixing
the venue of the settlement of the estate of Felicisimo, is synonymous with
"domicile." The rulings in Nuval and Romualdez are inapplicable to the instant
case because they involve election cases. Needless to say, there is a
distinction between "residence" for purposes of election laws and
"residence" for purposes of fixing the venue of actions. In election cases,
"residence" and "domicile" are treated as synonymous terms, that is, the
fixed permanent residence to which when absent, one has the intention of
returning. 42 However, for purposes of fixing venue under the Rules of Court,
the "residence" of a person is his personal, actual or physical habitation, or
actual residence or place of abode, which may not necessarily be his legal
residence or domicile provided he resides therein with continuity and
33
consistency. 43 Hence, it is possible that a person may have his residence in
one place and domicile in another.
In the instant case, while petitioners established that Felicisimo was
domiciled in Sta. Cruz, Laguna, respondent proved that he also maintained a
residence in Alabang, Muntinlupa from 1982 up to the time of his death.
Respondent submitted in evidence the Deed of Absolute Sale 44 dated January
5, 1983 showing that the deceased purchased the aforesaid property. She
also presented billing statements 45 from the Philippine Heart Center and
Chinese General Hospital for the period August to December 1992 indicating
the address of Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa."
Respondent also presented proof of membership of the deceased in the Ayala
Alabang Village Association 46 and Ayala Country Club, Inc., 47 letter-envelopes
48
from 1988 to 1990 sent by the deceased’s children to him at his Alabang
address, and the deceased’s calling cards 49 stating that his home/city address
is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his
office/provincial address is in "Provincial Capitol, Sta. Cruz, Laguna."
From the foregoing, we find that Felicisimo was a resident of Alabang,
Muntinlupa for purposes of fixing the venue of the settlement of his estate.
Consequently, the subject petition for letters of administration was validly
filed in the Regional Trial Court 50 which has territorial jurisdiction over
Alabang, Muntinlupa. The subject petition was filed on December 17, 1993.
At that time, Muntinlupa was still a municipality and the branches of the
Regional Trial Court of the National Capital Judicial Region which had
territorial jurisdiction over Muntinlupa were then seated in Makati City as per
Supreme Court Administrative Order No. 3. 51 Thus, the subject petition was
validly filed before the Regional Trial Court of Makati City.
Anent the issue of respondent Felicidad’s legal personality to file the petition
for letters of administration, we must first resolve the issue of whether a
Filipino who is divorced by his alien spouse abroad may validly remarry under
the Civil Code, considering that Felicidad’s marriage to Felicisimo was
solemnized on June 20, 1974, or before the Family Code took effect on August
3, 1988. In resolving this issue, we need not retroactively apply the provisions
of the Family Code, particularly Art. 26, par. (2) considering that there is
sufficient jurisprudential basis allowing us to rule in the affirmative.
The case of Van Dorn v. Romillo, Jr. 52 involved a marriage between a foreigner
and his Filipino wife, which marriage was subsequently dissolved through a
divorce obtained abroad by the latter. Claiming that the divorce was not valid
under Philippine law, the alien spouse alleged that his interest in the
properties from their conjugal partnership should be protected. The Court,
however, recognized the validity of the divorce and held that the alien spouse
had no interest in the properties acquired by the Filipino wife after the
divorce. Thus:
In this case, the divorce in Nevada released private respondent from the
marriage from the standards of American law, under which divorce dissolves
the marriage. As stated by the Federal Supreme Court of the United States in
Atherton vs. Atherton, 45 L. Ed. 794, 799:
"The purpose and effect of a decree of divorce from the bond of matrimony
by a competent jurisdiction are to change the existing status or domestic
relation of husband and wife, and to free them both from the bond. The
marriage tie, when thus severed as to one party, ceases to bind either. A
husband without a wife, or a wife without a husband, is unknown to the law.
When the law provides, in the nature of a penalty, that the guilty party shall
not marry again, that party, as well as the other, is still absolutely freed from
the bond of the former marriage."
Thus, pursuant to his national law, private respondent is no longer the
husband of petitioner. He would have no standing to sue in the case below as
petitioner’s husband entitled to exercise control over conjugal assets. As he
is bound by the Decision of his own country’s Court, which validly exercised
jurisdiction over him, and whose decision he does not repudiate, he is
estopped by his own representation before said Court from asserting his right
over the alleged conjugal property. 53
As to the effect of the divorce on the Filipino wife, the Court ruled that she
should no longer be considered married to the alien spouse. Further, she
should not be required to perform her marital duties and obligations. It held:
To maintain, as private respondent does, that, under our laws, petitioner has
to be considered still married to private respondent and still subject to a
wife's obligations under Article 109, et. seq. of the Civil Code cannot be just.
Petitioner should not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter should not
continue to be one of her heirs with possible rights to conjugal property. She
should not be discriminated against in her own country if the ends of justice
are to be served. 54 (Emphasis added)
This principle was thereafter applied in Pilapil v. Ibay-Somera 55 where the
Court recognized the validity of a divorce obtained abroad. In the said case,
it was held that the alien spouse is not a proper party in filing the adultery
suit against his Filipino wife. The Court stated that "the severance of the
34
marital bond had the effect of dissociating the former spouses from each
other, hence the actuations of one would not affect or cast obloquy on the
other." 56
Likewise, in Quita v. Court of Appeals, 57 the Court stated that where a Filipino
is divorced by his naturalized foreign spouse, the ruling in Van Dorn applies.
58
Although decided on December 22, 1998, the divorce in the said case was
obtained in 1954 when the Civil Code provisions were still in effect.
The significance of the Van Dorn case to the development of limited
recognition of divorce in the Philippines cannot be denied. The ruling has long
been interpreted as severing marital ties between parties in a mixed marriage
and capacitating the Filipino spouse to remarry as a necessary consequence
of upholding the validity of a divorce obtained abroad by the alien spouse. In
his treatise, Dr. Arturo M. Tolentino cited Van Dorn stating that "if the
foreigner obtains a valid foreign divorce, the Filipino spouse shall have
capacity to remarry under Philippine law." 59 In Garcia v. Recio, 60 the Court
likewise cited the aforementioned case in relation to Article 26. 61
In the recent case of Republic v. Orbecido III, 62 the historical background and
legislative intent behind paragraph 2, Article 26 of the Family Code were
discussed, to wit:
Brief Historical Background
On July 6, 1987, then President Corazon Aquino signed into law Executive
Order No. 209, otherwise known as the "Family Code," which took effect on
August 3, 1988. Article 26 thereof states:
All marriages solemnized outside the Philippines in accordance with the laws
in force in the country where they were solemnized, and valid there as such,
shall also be valid in this country, except those prohibited under Articles 35,
37, and 38.
On July 17, 1987, shortly after the signing of the original Family Code,
Executive Order No. 227 was likewise signed into law, amending Articles 26,
36, and 39 of the Family Code. A second paragraph was added to Article 26.
As so amended, it now provides:
ART. 26. All marriages solemnized outside the Philippines in accordance with
the laws in force in the country where they were solemnized, and valid there
as such, shall also be valid in this country, except those prohibited under
Articles 35(1), (4), (5) and (6), 36, 37 and 38.
Where a marriage between a Filipino citizen and a foreigner is validly
celebrated and a divorce is thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the Filipino spouse shall have
capacity to remarry under Philippine law. (Emphasis supplied)
xxxx
Legislative Intent
Records of the proceedings of the Family Code deliberations showed that the
intent of Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a
member of the Civil Code Revision Committee, is to avoid the absurd situation
where the Filipino spouse remains married to the alien spouse who, after
obtaining a divorce, is no longer married to the Filipino spouse.
Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of
Van Dorn v. Romillo, Jr. The Van Dorn case involved a marriage between a
Filipino citizen and a foreigner. The Court held therein that a divorce decree
validly obtained by the alien spouse is valid in the Philippines, and
consequently, the Filipino spouse is capacitated to remarry under Philippine
law. 63 (Emphasis added)
As such, the Van Dorn case is sufficient basis in resolving a situation where a
divorce is validly obtained abroad by the alien spouse. With the enactment of
the Family Code and paragraph 2, Article 26 thereof, our lawmakers codified
the law already established through judicial precedent.1awphi1.net
Indeed, when the object of a marriage is defeated by rendering its
continuance intolerable to one of the parties and productive of no possible
good to the community, relief in some way should be obtainable. 64 Marriage,
being a mutual and shared commitment between two parties, cannot
possibly be productive of any good to the society where one is considered
released from the marital bond while the other remains bound to it. Such is
the state of affairs where the alien spouse obtains a valid divorce abroad
against the Filipino spouse, as in this case.
Petitioners cite Articles 15 65 and 17 66 of the Civil Code in stating that the
divorce is void under Philippine law insofar as Filipinos are concerned.
However, in light of this Court’s rulings in the cases discussed above, the
Filipino spouse should not be discriminated against in his own country if the
ends of justice are to be served. 67 In Alonzo v. Intermediate Appellate Court,
68
the Court stated:
But as has also been aptly observed, we test a law by its results; and likewise,
we may add, by its purposes. It is a cardinal rule that, in seeking the meaning
of the law, the first concern of the judge should be to discover in its provisions
the intent of the lawmaker. Unquestionably, the law should never be
interpreted in such a way as to cause injustice as this is never within the
35
legislative intent. An indispensable part of that intent, in fact, for we presume
the good motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in consonance
with justice. Law and justice are inseparable, and we must keep them so. To
be sure, there are some laws that, while generally valid, may seem arbitrary
when applied in a particular case because of its peculiar circumstances. In
such a situation, we are not bound, because only of our nature and functions,
to apply them just the same, in slavish obedience to their language. What we
do instead is find a balance between the word and the will, that justice may
be done even as the law is obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply
the law as it is worded, yielding like robots to the literal command without
regard to its cause and consequence. "Courts are apt to err by sticking too
closely to the words of a law," so we are warned, by Justice Holmes again,
"where these words import a policy that goes beyond them."
xxxx
More than twenty centuries ago, Justinian defined justice "as the constant
and perpetual wish to render every one his due." That wish continues to
motivate this Court when it assesses the facts and the law in every case
brought to it for decision. Justice is always an essential ingredient of its
decisions. Thus when the facts warrants, we interpret the law in a way that
will render justice, presuming that it was the intention of the lawmaker, to
begin with, that the law be dispensed with justice. 69
Applying the above doctrine in the instant case, the divorce decree allegedly
obtained by Merry Lee which absolutely allowed Felicisimo to remarry, would
have vested Felicidad with the legal personality to file the present petition as
Felicisimo’s surviving spouse. However, the records show that there is
insufficient evidence to prove the validity of the divorce obtained by Merry
Lee as well as the marriage of respondent and Felicisimo under the laws of
the U.S.A. In Garcia v. Recio, 70 the Court laid down the specific guidelines for
pleading and proving foreign law and divorce judgments. It held that
presentation solely of the divorce decree is insufficient and that proof of its
authenticity and due execution must be presented. Under Sections 24 and 25
of Rule 132, a writing or document may be proven as a public or official record
of a foreign country by either (1) an official publication or (2) a copy thereof
attested by the officer having legal custody of the document. If the record is
not kept in the Philippines, such copy must be (a) accompanied by a
certificate issued by the proper diplomatic or consular officer in the Philippine
foreign service stationed in the foreign country in which the record is kept
and (b) authenticated by the seal of his office. 71
With regard to respondent’s marriage to Felicisimo allegedly solemnized in
California, U.S.A., she submitted photocopies of the Marriage Certificate and
the annotated text 72 of the Family Law Act of California which purportedly
show that their marriage was done in accordance with the said law. As stated
in Garcia, however, the Court cannot take judicial notice of foreign laws as
they must be alleged and proved. 73
Therefore, this case should be remanded to the trial court for further
reception of evidence on the divorce decree obtained by Merry Lee and the
marriage of respondent and Felicisimo.
Even assuming that Felicisimo was not capacitated to marry respondent in
1974, nevertheless, we find that the latter has the legal personality to file the
subject petition for letters of administration, as she may be considered the
co-owner of Felicisimo as regards the properties that were acquired through
their joint efforts during their cohabitation.
Section 6, 74 Rule 78 of the Rules of Court states that letters of administration
may be granted to the surviving spouse of the decedent. However, Section 2,
Rule 79 thereof also provides in part:
SEC. 2. Contents of petition for letters of administration. – A petition for
letters of administration must be filed by an interested person and must
show, as far as known to the petitioner: x x x.
An "interested person" has been defined as one who would be benefited by
the estate, such as an heir, or one who has a claim against the estate, such as
a creditor. The interest must be material and direct, and not merely indirect
or contingent. 75
In the instant case, respondent would qualify as an interested person who
has a direct interest in the estate of Felicisimo by virtue of their cohabitation,
the existence of which was not denied by petitioners. If she proves the validity
of the divorce and Felicisimo’s capacity to remarry, but fails to prove that her
marriage with him was validly performed under the laws of the U.S.A., then
she may be considered as a co-owner under Article 144 76 of the Civil Code.
This provision governs the property relations between parties who live
together as husband and wife without the benefit of marriage, or their
marriage is void from the beginning. It provides that the property acquired by
either or both of them through their work or industry or their wages and
salaries shall be governed by the rules on co-ownership. In a co-ownership, it
is not necessary that the property be acquired through their joint labor,
36
efforts and industry. Any property acquired during the union is prima facie
presumed to have been obtained through their joint efforts. Hence, the
portions belonging to the co-owners shall be presumed equal, unless the
contrary is proven. 77
Meanwhile, if respondent fails to prove the validity of both the divorce and
the marriage, the applicable provision would be Article 148 of the Family
Code which has filled the hiatus in Article 144 of the Civil Code by expressly
regulating the property relations of couples living together as husband and
wife but are incapacitated to marry. 78 In Saguid v. Court of Appeals, 79 we
held that even if the cohabitation or the acquisition of property occurred
before the Family Code took effect, Article 148 governs. 80 The Court
described the property regime under this provision as follows:
The regime of limited co-ownership of property governing the union of
parties who are not legally capacitated to marry each other, but who
nonetheless live together as husband and wife, applies to properties acquired
during said cohabitation in proportion to their respective contributions. Co-
ownership will only be up to the extent of the proven actual contribution of
money, property or industry. Absent proof of the extent thereof, their
contributions and corresponding shares shall be presumed to be equal.
xxxx
In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved
the issue of co-ownership of properties acquired by the parties to a bigamous
marriage and an adulterous relationship, respectively, we ruled that proof of
actual contribution in the acquisition of the property is essential. x x x
As in other civil cases, the burden of proof rests upon the party who, as
determined by the pleadings or the nature of the case, asserts an affirmative
issue. Contentions must be proved by competent evidence and reliance must
be had on the strength of the party’s own evidence and not upon the
weakness of the opponent’s defense. x x x 81
In view of the foregoing, we find that respondent’s legal capacity to file the
subject petition for letters of administration may arise from her status as the
surviving wife of Felicisimo or as his co-owner under Article 144 of the Civil
Code or Article 148 of the Family Code.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals
reinstating and affirming the February 28, 1994 Order of the Regional Trial
Court which denied petitioners’ motion to dismiss and its October 24, 1994
Order which dismissed petitioners’ motion for reconsideration is AFFIRMED.
Let this case be REMANDED to the trial court for further proceedings.
SO ORDERED. To secure the credit facility, a lone real estate mortgage agreement was
executed by Rosemoor and Dr. Lourdes Pascual (Dr. Pascual), Rosemoors
UNITED OVERSEAS BANK G.R. Nos. 159669 & president, as mortgagors in favor of the Bank as mortgagee in the City of
PHILS. (formerly WESTMONT 163521 Manila.The agreement, however, covered six (6) parcels of land located in
BANK), San Miguel, Bulacan (Bulacan properties), all registered under the name of
Petitioner, Present: Rosemoor, and two (2) parcels of land situated in Gapan, Nueva Ecija (Nueva
Ecija properties), owned and registered under the name of Dr. Pascual.
QUISUMBING, J.,
- versus - Chairperson, Rosemoor subsequently opened with the Bank four (4) irrevocable Letters of
CARPIO, Credit (LCs) totaling US$1,943,508.11. To cover payments by the Bank under
CARPIO MORALES, the LCs, Rosemoor proceeded to draw against its credit facility and thereafter
TINGA, and executed promissory notes amounting collectively to P49,862,682.50. Two
ROSEMOORE MINING & DEVE- VELASCO, JR., JJ. (2) other promissory notes were also executed by Rosemoor in the amounts
LOPMENT CORP. and DRA. of P10,000,000.00 and P3,500,000.00, respectively, to be drawn from its
LOURDES PASCUAL, revolving credit line.]
Respondents. Promulgated:
Rosemoor defaulted in the payment of its various drawings under the LCs and
________________ promissory notes. In view of the default, the Bank caused the extra-judicial
foreclosure of the Nueva Ecija properties on 22 May 1998 and the Bulacan
x----------------------------------------------------------------------------x properties on 10 August 1998. The Bank was the highest bidder on both
occasions.

DECISION
TINGA, J.:
We resolve these two consolidated cases, which though with distinct courts
of origin, pertain to issues stemming from the same loan transaction.
The antecedent facts follow.
Respondent Rosemoor Mining and Development Corporation (Rosemoor), a
Philippine mining corporation with offices at Quezon City, applied for and was
granted by petitioner Westmont Bank (Bank) a credit facility in the total
amount of P80 million consisting of P50,000,000.00 as long term loan and
P30,000,000.00 as revolving credit line.
37
On 8 October 1999, the Bank caused the annotation of the Notarial Certificate
of Sale covering the Nueva Ecija properties on the certificates of title
concerned. Later, on 16 March 2001, the Notarial Certificate of Sale covering
the Bulacan properties was annotated on the certificates of title of said
properties.
The foregoing facts led to Rosemoors filing of separate complaints against the
Bank, one before the Regional Trial Court of Manila (Manila RTC) and the
other before the Regional Trial Court of Malolos, Bulacan (Malolos RTC).
The Manila Case (G.R. No. 163521)
On 5 August 1998, Rosemoor and Dr. Pascual filed a Complaint, originally
captioned as one for Damages, Accounting and Release of Balance of Loan
and Machinery and for Injunction before the Manila RTC. Impleaded as
defendants were the Bank and Notary Public Jose Sineneng, whose office was
used to foreclose the mortgage. The complaint was twice amended, the
caption eventually reflecting an action for Accounting, Specific Performance
and Damages. Through the amendments, Pascual was dropped as a plaintiff
while several officers of the Bank were included as defendants.
The Bank moved for the dismissal of the original and amended complaints on
the ground that the venue had been improperly laid.The motion was denied
by the trial court through an Omnibus Resolution dated 24 January 2000.[if
Rosemoors prayer in the Second Amended Complaint, which was filed in
November of 1999, reads as follows:
WHEREFORE, plaintiff Rosemoor Mining & Development Corporation
respectfully prays that, after trial of the issues, this court promulgate
judgment
1. Directing Westmont to render an accounting of the loan account of
Rosemoor under the Long Term Loan Facility and the Revolving Credit Line at
least up to the dates of foreclosure of Rosemoors mortgaged properties on
May 22, 1998 and August 18, 1998, showing among others (a) the sums of
money paid by Rosemoor or otherwise debited from its deposit account in
payment of the loans it had obtained from Westmont to cover the cost of the
machinery to be imported under the Unpaid LCs and under LC No. 97-058 for
the tiling plant, as well as for working capital, and (b) all interests, penalties
and charges imposed on the loans pertaining to the Unpaid LCs and LC No.
97-058 and for which Westmont had foreclosed Rosemoors and Dra. Pascuals
real estate mortgage; (c) the amount of import and customs duties,
demurrage, storage and other fees which Rosemoor had paid or which was
otherwise debited from Rosemoors deposit account, in connection with the
importation of the tiling plant and as a consequence of the non-release
thereof by Westmont;
2. Ordering all the defendants jointly and severally to pay to Rosemoor, by
way of actual damages, the dollar equivalent of the amounts in (1) (a), (b) and
(c) at the exchange rate prevailing at the time of the opening of the LCs;
3. Ordering defendants jointly and severally to pay to Rosemoor actual
damages for operational losses suffered by Rosemoor due to its failure to use
38
the tiling plaint which Westmont had refused to release to Rosemoor, in such
amount as may be proven at the trial;
4. Directing the defendants jointly and severally to pay, by way of correction
for the public good, exemplary damages in the amount of P 500,000.00 each;
5. Ordering defendants jointly and severally to indemnify Rosemoor in the
sum of P350,000.00, representing attorneys fees and litigation expenses
incurred by Rosemoor for the protection and enforcement of its rights and
interests.
Plaintiff prays for further and other relief as may be just and equitable under
the circumstances.
On 15 August 2002, the Bank filed another motion to dismiss the Second
Amended Complaint on the ground of forum-shopping since, according to it,
Rosemoor had filed another petition earlier on 11 March 2002 before the
Malolos RTC.The Bank contended that as between the action before the
Manila RTC and the petition before the Malolos RTC, there is identity of
parties, rights asserted, and reliefs prayed for, the relief being founded on the
same set of facts. The Bank further claimed that any judgment that may be
rendered in either case will amount to res judicata in the other case. Still, the
Manila RTC denied the motion to dismiss. It also denied the Banks motion for
reconsideration of the order of denial.
The Bank challenged the Manila RTCs denial of the Banks second motion to
dismiss before the Court of Appeals, through a petition for certiorari. The
appellate court dismissed the petition in a Decision dated 26 February 2004.]
The Bank filed a motion for reconsideration which, however, was denied
through a Resolution dated 30 April 2004.
In the Petition for Review on Certiorari in G.R. No. 163521, the Bank argues
that the Court of Appeals erred in holding that no forum-shopping attended
the actions brought by Rosemoor
The Malolos Case (G.R. No. 159669)
After the complaint with the Manila RTC had been lodged, on 11 March 2002,
Rosemoor and Dr. Pascual filed another action against the Bank, this time
before the Malolos RTC. Impleaded together with the Bank as respondent
was the Register of Deeds for the Province of Bulacan in the Petition for
Injunction with Damages, with Urgent Prayer for Temporary Restraining
Order and/or Preliminary Injunction.
In the Malolos case, Rosemoor and Dr. Pascual alleged that the redemption
period for the Bulacan properties would expire on 16 March 2002. They
claimed that the threatened consolidation of titles by the Bank is illegal,
stressing that the foreclosure of the real estate mortgage by the Bank was
fraudulent and without basis, as the Bank had made them sign two blank
forms of Real Estate Mortgage and several promissory notes also in blank
forms. It appeared later, according to Rosemoor and Dr. Pascual, that the two
Real Estate Mortgage blank forms were made as security for two loans, one
for P80 million and the other for P48 million, when the total approved loan
was only for P80 million. The Bank later released only the amount of P10
million out of the P30 million revolving credit line, to the prejudice of
Rosemoor, they added.
The Petitions prayer reads as follows:
WHEREFORE, premises considered, it is most respectfully prayed that this
Honorable Court
1. Issue ex-parte a temporary restraining order before the matter could be
heard on notice to restrain and enjoin respondent BANK from proceeding
with its threatened consolidation of its titles over the subject properties of
petitioner Rosemoor in San Miguel, Bulacan covered by TCT Nos. 42132;
42133; 42134; 42135; 42136 and RT 34569 (T-222448) on March 16, 2002 or
at any time thereafter; that the respondent Register of Deeds for the Province
of Bulacan be enjoined and restrained from registering any document(s)
submitted and/or to be submitted by respondent BANK consolidating its titles
over the above-named properties of petitioner Rosemoor in San Miguel,
Bulacan; and likewise, that the Register of Deeds for the province of Bulacan
39
be restrained and enjoined from canceling the titles of Rosemoor over its
properties, namely, TCT Nos. 42132; 42133; 42134; 42135; 42136 and RT
34569 (T-222448);
2. That after due notice, a writ of preliminary injunction be issued upon the
posting of a bond in such amount as may be fixed by this Court;
3. That after due hearing and trial, judgment be rendered in favor of
petitioners and against respondent BANK
Permanently enjoining respondent BANK from proceeding with the
consolidation of its titles to the subject properties of Rosemoor covered by
TCT Nos. 42132; 42133; 42134; 42135; 42136 and RT 34569 (T-222448); and
permanently restraining respondent Register of Deeds for the Province of
Bulacan from registering any document(s) submitted and/or to be submitted
by respondent BANK consolidating its titles over the above-named properties
of petitioner Rosemoor in San Miguel, Bulacan; and likewise, that the Register
of Deeds for the province of Bulacan be restrained and enjoined from
cancelling the titles of Rosemoor over its properties, namely, TCT Nos. 42132;
42133; 42134; 42135; 42136 and RT 34569 (T-222448);
Declaring the foreclosures of Real Estate Mortgages on the properties of
petitioners Rosemoor and Dra. Pascual to be null and void;
Recognizing the ownership in fee simple of the petitioners over their
properties above-mentioned;
Awarding to petitioners the damages prayed for, including attorneys fees and
costs and expenses of litigation.
Petitioners pray for such other reliefs and remedies as may be deemed just
and equitable in the premises.
As it did before the Manila RTC, the Bank filed a motion to dismiss on 26
March 2002 on the ground that Rosemoor had engaged in forum-shopping,
adverting to the pending Manila case.The Bank further alleged that Dr.
Pascual has no cause of action since the properties registered in her name are
located in Nueva Ecija. The Malolos RTC denied the motion to dismiss in an
Order dated 13 May 2002. In the same Order, the Malolos RTC directed the
Bank to file its answer to the petition within five (5) days from notice.
Despite receipt of the Order on 21 May 2002, the Bank opted not to file its
answer as it filed instead a motion for reconsideration on 5 June 2002.
Meanwhile, Rosemoor and Dr. Pascual moved to declare the Bank in default
for its failure to timely file its answer. On 10 September 2002, the Malolos
RTC issued an order denying the Banks motion for reconsideration for lack of
merit and at the same time declaring the Bank in default for failure to file its
answer.
Hence, the Bank filed a second petition for certiorari before the Court of
Appeals, where it assailed the Orders dated 13 May 2002 and 10 September
2002 of the Malolos RTC. During the pendency of this petition for certiorari,
the Malolos RTC decided the Malolos case on the merits in favor of Rosemoor.
The decision in the Malolos case was also appealed to the Court of Appeals.
Based on these developments, the appellate court considered the prayer for
preliminary injunction as moot and academic and proceeded with the
resolution of the petition, by then docketed as CA-G.R. SP No.73358, on the
merits. The appellate court dismissed the petition in a Decision dated 20 June
2003. Undaunted, the Bank filed the petition in G.R. No. 159669 before this
Court.
The two petitions before this Court have been consolidated. We find one
common issue in G.R. No. 159669 and G.R. No. 163521 whether Rosemoor
committed forum-shopping in filing the two cases against the Bank. The other
issues for resolution were raised in G.R. No. 159669, pertaining as they do to
the orders issued by the Malolos RTC. These issues are whether the action to
invalidate the foreclosure sale was properly laid with the Malolos RTC even
as regards the Nueva Ecija properties; whether it was proper for the Malolos
RTC to declare the Bank in default; and whether it was proper for the Malolos
RTC to deny the Banks motion to dismiss through a minute resolution.
Forum-Shopping
The central issue in these consolidated cases is whether Rosemoor
committed forum-shopping in filing the Malolos case during the pendency of
the Manila case.
40
The essence of forum-shopping is the filing of multiple suits involving the
same parties for the same cause of action, either simultaneously or
successively, for the purpose of obtaining a favorable judgment. The
elements of forum-shopping are: (a) identity of parties, or at least such
parties as represent the same interests in both actions; (b) identity of rights
asserted and reliefs prayed for, the reliefs being founded on the same facts;
and (c) the identity with respect to the two preceding particulars in the two
cases is such that any judgment rendered in the pending cases, regardless of
which party is successful, amount to res judicata in the other case.
As to the existence of identity of parties, several bank officers and employees
impleaded in the Amended Complaint in the Manila case were not included
in the Malolos case. These bank officers and employees were sued in Manila
in their personal capacity. A finding of negligence or bad faith in their
participation in the preparation and execution of the loan agreement would
render them personally liable. Dr. Pascual, on the other hand, was included
as petitioner only in the Malolos case because it involved properties
registered in her name. As correctly pointed out by the Court of Appeals, Dr.
Pascual is a real party-in-interest in the Malolos case because she stood to
benefit or suffer from the judgment in the suit. Dr. Pascual, however, was not
included as plaintiff in the Manila case because her interest therein was not
personal but merely in her capacity as officer of Rosemoor.
As regards the identity of rights asserted and reliefs prayed for, the main
contention of Rosemoor in the Manila case is that the Bank had failed to
deliver the full amount of the loan, as a consequence of which Rosemoor
demanded the remittance of the unreleased portion of the loan and payment
of damages consequent thereto. In contrast, the Malolos case was filed for
the purpose of restraining the Bank from proceeding with the consolidation
of the titles over the foreclosed Bulacan properties because the loan secured
by the mortgage had not yet become due and demandable. While the right
asserted in the Manila case is to receive the proceeds of the loan, the right
sought in the Malolos case is to restrain the foreclosure of the properties
mortgaged to secure a loan that was not yet due.
Moreover, the Malolos case is an action to annul the foreclosure sale that is
necessarily an action affecting the title of the property sold. It is therefore a
real action which should be commenced and tried in the province where the
property or part thereof lies.The Manila case, on the other hand, is a personal
action involving as it does the enforcement of a contract between Rosemoor,
whose office is in Quezon City, and the Bank, whose principal office is in
Binondo, Manila. Personal actions may be commenced and tried where the
plaintiff or any of the principal plaintiffs resides, or where the defendants or
any of the principal defendants resides, at the election of the plaintiff.
It was subsequent to the filing of the Manila case that Rosemoor and Dr.
Pascual saw the need to secure a writ of injunction because the consolidation
of the titles to the mortgaged properties in favor of the Bank was in the offing.
But then, this action can only be commenced where the properties, or a
portion thereof, is located. Otherwise, the petition for injunction would be
dismissed for improper venue. Rosemoor, therefore, was warranted in filing
the Malolos case and cannot in turn be accused of forum-shopping.
Clearly, with the foregoing premises, it cannot be said that respondents
committed forum-shopping.
Action to nullify foreclosure sale of
mortgaged properties in Bulacan and
Nueva Ecija before the Malolos RTC
The Bank challenges the Malolos RTCs jurisdiction over the action to nullify
the foreclosure sale of the Nueva Ecija properties along with the Bulacan
properties. This question is actually a question of venue and not of
jurisdiction, which if improperly laid, could lead to the dismissal of the case.
The rule on venue of real actions is provided in Section 1, Rule 4 of the 1997
Rules of Civil Procedure, which reads in part:
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.
xxx
41
The venue of the action for the nullification of the foreclosure sale is properly
laid with the Malolos RTC although two of the properties together with the
Bulacan properties are situated in Nueva Ecija. Following the above-quoted
provision of the Rules of Court, the venue of real actions affecting properties
found in different provinces is determined by the singularity or plurality of
the transactions involving said parcels of land. Where said parcels are the
object of one and the same transaction, the venue is in the court of any of
the provinces wherein a parcel of land is situated.
Ironically, the Bank itself correctly summarized the applicable jurisprudential
rule in one of the pleadings before the Court. Yet the Bank itself has provided
the noose on which it would be hung. Resorting to deliberate
misrepresentation, the Bank stated in the same pleading that the Bulacan and
Nueva Ecija [p]roperties were not the subject of one single real estate
mortgage contract.
In the present case, there is only one proceeding sought to be nullified and
that is the extra-judicial mortgage foreclosure sale. And there is only one
initial transaction which served as the basis of the foreclosure sale and that is
the mortgage contract. Indeed, Rosemoor, through Dr. Pascual, executed a
lone mortgage contract where it undertook to mortgage the land/real
property situated in Bulacan and Nueva Ecija, with the list of mortgaged
properties annexed thereto revealing six (6) properties in Bulacan and two (2)
properties in Nueva Ecija subject of the mortgage.
This apparent deliberate misrepresentation cannot simply pass without
action. The real estate mortgage form supplied to Rosemoor is the Banks
standard pre-printed form. Yet the Bank perpetrated the misrepresentation.
Blame must be placed on its doorstep. But as the Banks pleading was
obviously prepared by its counsel, the latter should also share the blame. A
lawyer shall not do any falsehood, nor consent to the doing of any in court;
nor shall he mislead, or allow the Court to be misled by any artifice. Both the
Banks president and counsel should be made to explain why they should not
be sanctioned for contempt of court.
Propriety of Default Order
The Court of Appeals did not touch upon the soundness or unsoundness of
the order of default although it is one of the orders assailed by the Bank.
However, the silence of the appellate court on the issue does not improve the
legal situation of the Bank.
To recall, the Bank filed a motion to dismiss the Malolos case. The Malolos
RTC denied the motion in an Order dated 13 May 2002. In the same Order,
the Malolos RTC directed the Bank to file its answer to the petition within five
(5) days from the receipt of the Order.The Bank received a copy of the Order
on 21 May 2002. Instead of filing an answer, the Bank filed a motion for
reconsideration but only on 5 June 2002.
The motion for reconsideration could not have tolled the running of the
period to answer for two reasons. One, it was filed late, nine (9) days after
the due date of the answer. Two, it was a mere rehash of the motion to
dismiss; hence, pro forma in nature. Thus, the Malolos RTC did not err in
declaring the Bank in default.
Deviation from the Prescribed
Content of an Order
Denying a Motion to Dismiss
Finally, the Bank questions the Malolos RTCs Order dated 13 May 2002
denying its motion to dismiss on the ground that it is contrary to law and
jurisprudence because it had failed to apprise the Bank of the legal basis for
the denial.
The Bank adverts to the content requirement of an order denying a motion
to dismiss prescribed by Sec. 3, Rule 16 of the Rules of Court. The Court in Lu
Ym v. Nabua made a thorough discussion on the matter, to quote:
Sec. 3, Rule 16 of the Rules provides:
Sec. 3. Resolution of motion.After the hearing, the court may dismiss the
action or claim, deny the motion or order the amendment of the pleading.
The court shall not defer the resolution of the motion for the reason that the
ground relied upon is not indubitable.
42
In every case, the resolution shall state clearly and distinctly the reasons
therefor.
xxxx
Further, it is now specifically required that the resolution on the motion shall
clearly and distinctly state the reasons therefor. This proscribes the common
practice of perfunctorily dismissing the motion for lack
of merit. Such cavalier dispositions can often pose difficulty and
misunderstanding on the part of the aggrieved party in taking recourse
therefrom and likewise on the higher court called upon to resolve the same,
usually on certiorari.
The questioned order of the trial court denying the motion to dismiss with a
mere statement that there are justiciable questions which require a full
blown trial falls short of the requirement of Rule 16 set forth above. Owing
to the terseness of its expressed justification, the challenged order ironically
suffers from undefined breadth which is a hallmark of imprecision. With its
unspecific and amorphous thrust, the issuance is inappropriate to the
grounds detailed in the motion to dismiss.
While the requirement to state clearly and distinctly the reasons for the trial
courts resolutory order under Sec. 3, Rule 16 of the Rules does call for a liberal
interpretation, especially since jurisprudence dictates that it is decisions on
cases submitted for decision that are subject to the stringent requirement
of specificity of rulings under Sec. 1, Rule 36 of the Rules, the trial courts order
in this case leaves too much to the imagination. (Emphasis supplied)
The assailed order disposed of the motion to dismiss in this wise:
xxxx
After a careful scrutiny of the grounds cited in the Motion to Dismiss and the
arguments en contra contained in the Opposition thereto and finding the
Motion to Dismiss to be not well taken as grounds cited are not applicable to
the case at bar, the Court hereby DENIES the instant Motion to Dismiss.
xxxx
Clearly, the subject order falls short of the content requirement as
expounded in Lu Ym v. Nabua. Despite the aberration, however, the Bank was
not misled, though it could have encountered difficulties or inconvenience
because of it. Comprehending, as it did, that the Malolos RTC did not share
its position that Rosemoor had engaged in forum-shopping, it went to great
lengths to impress upon the Court of
Appeals that there was indeed forum-shopping on Rosemoors part. But the
appellate court did not likewise agree with the Bank as it soundly debunked
the forum-shopping charge. In fact, the same forum-shopping argument has
been fully ventilated before the Court but we are utterly unimpressed as we
made short shrift of the argument earlier on. In the ultimate analysis,
therefore, the trial courts blunder may be overlooked as it proved to be
harmless.
WHEREFORE, considering the foregoing, the Decision of the Court of Appeals
in G.R. 163521 dated 26 February 2004 and in G.R No. 159669 dated 20 June
2003 are AFFIRMED. Costs against petitioner. Petitioner, United Overseas
Bank, Phils. and its counsel, Siguion Reyna Montecillo & Ongsiako Law Offices,
are given ten (10) days from notice to EXPLAIN why they should not be held
in contempt of court for making a misrepresentation before the Court as
adverted to in this Decision.
SO ORDERED.
G.R. No. 204444 January 14, 2015
VIRGILIO C. BRIONES, Petitioner,
vs.
COURT OF APPEALS and CASH ASIA CREDIT CORPORATION, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for certiorari1 are the Decision2 dated March 5, 2012
and the Resolution3 dated October 4, 2012 of the Court of Appeals (CA) in CA-
G.R. SP No. 117474, which annulled the Orders dated September 20, 20104
and October 22, 20105 of the Regional Trial Court of Manila, Branch 173 (RTC)
43
in Civil Case No. 10-124040, denying private respondent Cash Asia Credit
Corporation's (Cash Asia) motion to dismiss on the ground of improper venue.
The Facts
The instant case arose from a Complaint6 dated August 2, 2010 filed by Virgilio
C. Briones (Briones) for Nullity of Mortgage Contract, Promissory Note, Loan
Agreement, Foreclosure of Mortgage, Cancellation of Transfer Certificate of
Title (TCT) No. 290846, and Damages against Cash Asia before the RTC.7 In his
complaint, Briones alleged that he is the owner of a property covered by TCT
No. 160689 (subject property), and that, on July 15, 2010, his sister informed
him that his property had been foreclosed and a writ of possession had
already been issued in favor of Cash Asia.8 Upon investigation, Briones
discovered that: (a) on December 6, 2007, he purportedly executed a
promissory note,9 loan agreement,10 and deed of real estate mortgage11
covering the subject property (subject contracts) in favor of Cash Asia in order
to obtain a loan in the amount of ₱3,500,000.00 from the latter;12 and (b)
since the said loan was left unpaid, Cash Asia proceeded to foreclose his
property.13 In this relation, Briones claimed that he never contracted any
loans from Cash Asia as he has been living and working in Vietnam since
October 31, 2007. He further claimed that he only went back to the
Philippines on December 28, 2007 until January 3, 2008 to spend the holidays
with his family, and that during his brief stay in the Philippines, nobody
informed him of any loan agreement entered into with Cash Asia. Essentially,
Briones assailed the validity of the foregoing contracts claiming his signature
to be forged.14
For its part, Cash Asia filed a Motion to Dismiss15 dated August 25, 2010,
praying for the outright dismissal of Briones’s complaint on the ground of
improper venue.16 In this regard, Cash Asia pointed out the venue stipulation
in the subject contracts stating that "all legal actions arising out of this notice
in connection with the Real Estate Mortgage subject hereof shall only be
brought in or submitted tothe jurisdiction of the proper court of Makati
City."17 In view thereof, it contended that all actions arising out of the subject
contracts may only be exclusively brought in the courts of Makati City, and as
such, Briones’s complaint should be dismissed for having been filed in the City
of Manila.18
In response, Briones filed an opposition,19 asserting, inter alia, that he should
not be covered by the venue stipulation in the subject contracts as he was
never a party therein. He also reiterated that his signatures on the said
contracts were forgeries.20
The RTC Ruling
In an Order21 dated September 20, 2010, the RTC denied Cash Asia’s motion
to dismiss for lack of merit. In denying the motion, the RTC opined that the
parties must be afforded the right to be heard in view of the substance of
Briones’s cause of action against Cash Asia as stated in the complaint.22
Cash Asia moved for reconsideration23 which was, however, denied in an
Order24 dated October 22, 2010. Aggrieved, it filed a petition for certiorari25
before the CA.
The CA Ruling
In a Decision26 dated March 5, 2012, the CA annulled the RTC Orders, and
accordingly, dismissed Briones’s complaint without prejudice to the filing of
the same before the proper court in Makati City.27 It held that the RTC gravely
abused its discretion in denying Cash Asia’s motion to dismiss, considering
that the subject contracts clearly provide that actions arising therefrom
should be exclusively filed before the courts of Makati City only.28 As such,
the CA concluded that Briones’s complaint should have been dismissed
outright on the ground of improper venue,29 this, notwithstanding Briones’s
claim of forgery.
Dissatisfied, Briones moved for reconsideration,30 which was, however,
denied in a Resolution31 dated October 4, 2012, hence, this petition.
The Issue Before the Court
The primordial issue for the Court’s resolution is whether or not the CA
gravely abused its discretion in ordering the outright dismissal of Briones’s
complaint on the ground of improper venue.
The Court’s Ruling
The petition is meritorious.
At the outset, the Court stresses that "[t]o justify the grant of the
extraordinary remedy of certiorari, [the petitioner] must satisfactorily show
that the court or quasi-judicial authority gravely abused the discretion
conferred upon it. Grave abuse of discretion connotes judgment exercised in
a capricious and whimsical manner that is tantamount to lack of jurisdiction.
To be considered ‘grave,’ discretion must be exercised in a despotic manner
by reason of passion or personal hostility, and must be so patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to perform the
duty enjoined by or to act at all in contemplation of law."32 Guided by the
foregoing considerations, the Court finds that the CA gravely abused its
discretion in ordering the outright dismissal of Briones’s complaint against
44
Cash Asia, without prejudice to its re-filing before the proper court in Makati
City.
Rule 4 of the Rules of Court governs the rules on venue of civil actions, to wit:
Rule 4
VENUE OF ACTIONS
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.
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.
SEC. 3. Venue of actions against nonresidents. — If any of the defendants
does not resideand is not found in the Philippines, and the action affects the
personal status of the plaintiff, or any property of said defendant located in
the Philippines,the action may be commenced and tried in the court of the
place where the plaintiff resides, or where the property or any portion
thereof is situated or found.
SEC. 4. When Rule not applicable. — This Rule shall not apply –
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the
action on the exclusive venue thereof.
Based therefrom, the general rule is that the venue of real actions is the court
which has jurisdiction over the area wherein the real property involved, or a
portion thereof, is situated; while the venue of personal actions is the court
which has jurisdiction where the plaintiff or the defendant resides, at the
election of the plaintiff. As an exception, jurisprudence in Legaspi v. Rep. of
the Phils.33 instructs that the parties, thru a written instrument, may either
introduce another venue where actions arising from such instrument may be
filed, or restrict the filing of said actions in a certain exclusive venue, viz.:
The parties, however, are not precluded from agreeing in writing on an
exclusive venue, as qualified by Section 4 of the same rule. Written
stipulations as to venue may be restrictive in the sense that the suit may be
filed only in the place agreed upon, or merely permissive in that the parties
may file their suit not only in the place agreed upon but also in the places
fixed by law. As in any other agreement, what is essential is the ascertainment
of the intention of the parties respecting the matter.
As regards restrictive stipulations on venue, jurisprudence instructs that it
must be shown that such stipulation is exclusive.1âwphi1 In the absence of
qualifying or restrictive words, such as "exclusively," "waiving for this purpose
any other venue," "shall only" preceding the designation of venue, "to the
exclusion of the other courts," or words of similar import, the stipulation
should be deemed as merely an agreement on an additional forum,not as
limiting venue to the specified place.34 (Emphases and underscoring supplied)
In this relation, case law likewise provides that in cases where the complaint
assails only the terms, conditions, and/or coverage of a written instrument
and not its validity, the exclusive venue stipulation contained therein shall
still be binding on the parties, and thus, the complaint may be properly
dismissed on the ground of improper venue.35 Conversely, therefore, a
complaint directly assailing the validity of the written instrument itself
should not be bound by the exclusive venue stipulation contained therein
and should be filed in accordance with the general rules on venue. To be
sure, it would be inherently consistent for a complaint of this nature to
recognize the exclusive venue stipulation when it, in fact, precisely assails
the validity of the instrument in which such stipulation is contained.
In this case, the venue stipulation found in the subject contracts is indeed
restrictive in nature, considering that it effectively limits the venue of the
actions arising therefrom to the courts of Makati City. However, it must be
emphasized that Briones' s complaint directly assails the validity of the
subject contracts, claiming forgery in their execution. Given this
circumstance, Briones cannot be expected to comply with the aforesaid
venue stipulation, as his compliance therewith would mean an implicit
recognition of their validity. Hence, pursuant to the general rules on venue,
Briones properly filed his complaint before a court in the City of Manila where
the subject property is located.
In conclusion, the CA patently erred and hence committed grave abuse of
discretion in dismissing Briones's complaint on the ground of improper
venue.
WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated
March 5, 2012 and the Resolution dated October 4, 2012 of the Court of
Appeals in CA-G.R. SP No. 117474 are hereby ANNULLED and SET ASIDE. The
45
Orders dated September 20, 2010 and October 22, 2010 of the Regional Trial
Court of Manila, Branch 173 in Civil Case No. 10-124040 are REINSTATED.
SO ORDERED.
G.R. No. 227146, November 14, 2016
RADIOWEALTH FINANCE COMPANY, INC., Petitioner, v. ROMEO T.
NOLASCO AND REYNALDO T. NOLASCO, Respondents.
RESOLUTION
REYES, J.:
This is a petition for review on certiorari1 filed under Rule 45 of the Rules of
Court assailing the Amended Order2 dated July 21, 2016 and Order3 dated
September 1, 2016 of the Regional Trial Court (RTC) of San Mateo, Rizal,
Branch 75, in Civil Case No. 2806-15 SM, on pure questions of
law.chanroblesvirtuallawlibrary
Factual Antecedents
Radiowealth Finance Company, Inc. (petitioner) is a domestic financing
corporation duly organized and existing under the laws of the Philippines,
with principal address at 7th Floor, DMG Center, Domingo M. Guevara Street,
Mandaluyong City. On the other hand, Romeo Nolasco and Reynaldo Nolasco
(respondents) are obligors of the petitioner who both maintain residence in
Mandaluyong City.4
On March 31, 2014, the respondents secured a loan from the petitioner in
the amount of P1,908,360.00, payable in installments within a period of 36
months, as evidenced by a Promissory Note5 executed on the same day. To
secure the payment of the loan, the respondents constituted a Chattel
Mortgage6 over a Fuso Super Great Dropside Truck, 2001 Model.7
Unfortunately, the respondents defaulted in the payment of the installments
which caused the entire amount to become due and demandable. The
petitioner repeatedly demanded from the respondents the payment of the
balance of the loan, but they would not take heed and even refused to
surrender the possession of the motor vehicle which stood as security for the
loan. Thus, on September 30, 2015, the petitioner filed a complaint8 for Sum
of Money and Damages with Application for Writ of Replevin with the RTC of
San Mateo, Rizal, praying that the respondents be ordered to pay their
balance of P1,600,153.02 or, in the alternative, surrender the possession of
the motor vehicle subject of the Chattel Mortgage dated March 31, 2014 so
that the same may be put up on sale to answer for the obligation and the
deficiency, if any, may be determined.
After an ex parte hearing, the RTC issued an Order9 dated March 28, 2016,
directing the issuance of the Writ of Replevin. Subsequently, however, the
RTC of San Mateo, Rizal issued an Amended Order10 dated July 21, 2016,
dismissing motu proprio the case for lack of jurisdiction. Citing Section 2, Rule
4 of the 1997 Rules of Civil Procedure, it ruled that since neither the petitioner
nor the respondents reside within the jurisdiction of the trial court, that is,
either in San Mateo or Rodriguez, Rizal, the case must be dismissed.11
On August 16, 2016, the petitioner filed a Motion for Reconsideration12
arguing that the RTC of San Mateo, Rizal has jurisdiction over the case. It
pointed out that the sum of money involved amounting to P1,600,153.02 is
well within the jurisdiction of the RTC. Further, the venue is also proper,
considering that there is a provision in the promissory note which states that
any action to enforce payment of any sums due shall exclusively be brought
in the proper court within the National Capital Judicial Region or in any place
where the petitioner has a branch or office at its sole option.
In an Order13 dated September 1, 2016, the RTC reiterated its earlier ruling
and denied the petitioner's motion for reconsideration.
The petitioner now comes before this Court, challenging the order of the RTC
on pure questions of law. It contends that the RTC erred in concluding that it
had no jurisdiction over the case and in motu proprio dismissing the same on
the ground of improper venue.chanroblesvirtuallawlibrary
Ruling of the Court
The petition is meritorious.
46
A reading of the questioned orders shows that the RTC confused the terms
jurisdiction and venue, which are completely different concepts. There is no
question that the RTC has jurisdiction over the complaint filed by the
petitioner considering the nature of the case and the amount involved.
It bears noting that "'[j]urisdiction' is the court's authority to hear and
determine a case. The court's jurisdiction over the nature and subject matter
of an action is conferred by law."14 Section 19(8) of Batas Pambansa Bilang
129,15 as amended by Republic Act (R.A.) No. 7691, provides:
chanRoblesvirtualLawlibrary
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive
original jurisdiction:
xxxx
(8)
In all other cases in which the demand, exclusive of interest, damages of
whatever kind, attorney's fees, litigation expenses, and costs or the value of
the property in controversy exceeds One hundred thousand pesos
(P100,000.00) or, in such other cases in Metro Manila, where the demand,
exclusive of the abovementioned items, exceeds Two hundred thousand
pesos (P200,000.00).
This had been amended by Section 5 of R.A. No. 7691 which reads:
chanRoblesvirtualLawlibrary
SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional
amounts mentioned in Sec. 19(3), (4), and (8); and Sec. 33(1) of Batas
Pambansa Blg. 129 as amended by this Act, shall be adjusted to Two hundred
thousand pesos (P200,000.00). Five (5) years thereafter, such jurisdictional
amounts shall be adjusted further to Three hundred thousand pesos
(P300,000.00): Provided, however, That in the case of Metro Manila, the
abovementioned jurisdictional amounts shall be adjusted after five (5) years
from the effectivity of this Act to Four hundred thousand pesos
(P400,000.00).ChanRoblesVirtualawlibrary
The amount of P1,600,153.02 involved in the instant case is undoubtedly
within the jurisdiction of the RTC, as all money claims exceeding P400,000.00
are within its authority to hear and decide. It is an error, therefore, for the
RTC to claim lack of jurisdiction over the case.

At one point, the RTC anchored its ruling of dismissal on the fact that the
complaint should have been filed in Mandaluyong City where the petitioner
holds its main office and where the respondents both reside, and not in San
Mateo, Rizal.
Apparently, the RTC mistook jurisdiction for the more lenient concept of
venue. To clarify, jurisdiction and venue are not synonymous concepts.
Primarily, jurisdiction is conferred by law and not subject to stipulation of the
parties. It relates to the nature of the case. On the contrary, venue pertains
to the place where the case may be filed. Unlike jurisdiction, venue may be
waived and subjected to the agreement of the parties provided that it does
not cause them inconvenience.
Section 2, Rule 4 of the 1997 Rules of Civil Procedure, which was relied upon
by the RTC to support its ruling of dismissal, reads as follows:
chanRoblesvirtualLawlibrary
Section 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. (Emphasis ours)ChanRoblesVirtualawlibrary
The foregoing provision is not restrictive. A plain reading of the provision
shows that it is merely permissive as manifested by the use of the term
"may." Moreover, the clear language of the ensuing provision of Section 4
expressly allows the venue of personal actions to be subjected to the
stipulation of the parties. It reads, thus:
chanRoblesvirtualLawlibrary
Section 4. When rule not applicable. - This Rule shall not apply.
(a)
In those cases where a specific rule or law provides otherwise;
or
(b)
Where the parties have validly agreed in writing before the filing of the action
on the exclusive venue thereof. (Emphasis ours)
Clearly, stipulation on venue is permitted and must be recognized for as long
as it does not defeat the purpose of the Rules which primarily aims for the
47
convenience of the parties to the dispute. In Unimasters Conglomeration, Inc.
v. CA,16 the Court emphasized:
chanRoblesvirtualLawlibrary
Parties may by stipulation waive the legal venue and such waiver is valid and
effective being merely a personal privilege, which is not contrary to public
policy or prejudicial to third persons. It is a general principle that a person
may renounce any right which the law gives unless such renunciation would
be against public policy.
xxxx
Since convenience is the raison d'etre of the rules of venue, it is easy to accept
the proposition that normally, venue stipulations should be deemed
permissive merely, and that interpretation should be adopted which most
serves the parties' convenience. In other words, stipulations designating
venues other than those assigned by Rule 4 should be interpreted as designed
to make it more convenient for the parties to institute actions arising from or
in relation to their agreements; that is to say, as simply adding to or
expanding the venues indicated in said Rule 4.17 (Citations
omitted)ChanRoblesVirtualawlibrary
There is, therefore, nothing that prohibits the parties to decide on a different
venue for any dispute or action that may arise from their agreement. In this
case, in the promissory note executed and signed by the parties, there is a
provision which states that "[a]ny action to enforce payment of any sums due
under this Note shall exclusively be brought in the proper court within the
National Capital Judicial Region or in any place where [the petitioner] has a
branch/office, at its sole option."18 Thus, the petitioner's filing of the case in
San Mateo, Rizal, where it maintains a branch is proper and should have been
respected by the RTC especially when there appears no objection on the part
of the respondents.
Moreover, the Court has emphasized in several cases that the RTC may not
motu proprio dismiss the case on the ground of improper venue. It is a matter
personal to the parties and without their objection at the earliest
opportunity, as in a motion to dismiss or in the answer, it is deemed waived.
The discussion m Dacoycoy v. Intermediate Appellate Court19 is squarely in
point, viz.:
chanRoblesvirtualLawlibrary
Dismissing the complaint on the ground of improper venue is certainly not
the appropriate course of action at this stage of the proceeding, particularly
as venue, in inferior courts as well as in the Courts of First Instance (now RTC),
may be waived expressly or impliedly. Where defendant fails to challenge
timely the venue in a motion to dismiss as provided by Section 4 of Rule 4 of
the Rules of Court, and allows the trial to be held and a decision to be
rendered, he cannot on appeal or in a special action be permitted to challenge
belatedly the wrong venue, which is deemed waived.
Thus, unless and until the defendant objects to the venue in a motion to
dismiss, the venue cannot be truly said to have been improperly laid, as for
all practical intents and purposes, the venue, though technically wrong, may
be acceptable to the parties for whose convenience the rules on venue had
been devised. The trial court cannot pre-empt the defendant's prerogative to
object to the improper laying of the venue by motu proprio dismissing the
case.20ChanRoblesVirtualawlibrary
In the present case, the RTC carelessly interfered with the parties' agreement
on the venue of their dispute and interrupted what could have been an
expeditious flow of the proceeding. To reiterate, the choice of venue is a
matter addressed to the sound judgment of the parties based on
considerations personal to them, i.e. convenience. It is only the parties who
may raise objection on the same. Absent such protest, it is an error for the
RTC to decide that the venue was improperly laid as it is tantamount to
needlessly interfering to a mutually agreed term.
WHEREFORE, the petition is GRANTED. The Amended Order dated July 21,
2016 and Order dated September 1, 2016 of the Regional Trial Court of San
Mateo, Rizal, Branch 75, are REVERSED and SET ASIDE and Civil Case No.
2806-15 SM is hereby ordered REINSTATED. The RTC is ordered to proceed
with dispatch in the disposition of the mentioned case.
SO ORDERED.cralawlawlibrary
48
G.R. No. 222711
LEY CONSTRUCTION AND DEVELOPMENT CORPORATION, represented by its
President, JANET C. LEY, Petitioner,
vs.
MARVIN MEDEL SEDANO, doing business under the name and style "LOLA
TABA LOLO PATO PALENGKE AT PALUTO SA SEASIDE,", Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Orders dated June
15, 20152 and January 27, 20163 of the Regional Trial Court (RTC) of
Valenzuela City, Branch 75 (Valenzuela-RTC) in Civil Case No. 40-V-12, which
dismissed petitioner Ley Construction and Development Corporation's (as
represented by its President, Janet C. Ley; petitioner) complaint for collection
of sum of money and damages, without prejudice, on the ground of improper
venue.
The Facts
On March 13, 2012, petitioner filed a Complaint for Collection of Sum of
Money and Damages4 against respondent Marvin Medel Sedano
(respondent), doing business under the name and style "Lola Taha Lalo Pata
Palengke at Paluto sa Seaside," before the Valenzuela-RTC, docketed as Civil
Case No. 40-V-12. In its complaint, petitioner alleged that on January 14,
2005, it leased5 a 50,000-square meter (sq.m.) parcel of land located at
Financial Center Area, Pasay City (now, Lot 5-A Diosdado Macapagal
Boulevard, Pasay City) from respondent third-party defendant, the Philippine
National Construction Corporation (PNCC).6 On September 11, 2006,
petitioner subleased7 the 14,659.80-sq.m. portion thereof to respondent for
a term often (10) years beginning November 15, 2005, for a monthly rent of
₱1,174,780.00, subject to a ten percent (10%) increase beginning on the third
year and every year thereafter (lease contract).8 Respondent allegedly failed
to pay the rent due for the period August 2011 to December 2011, amounting
to a total of P8,828,025.46, and despite demands,9 refused to settle his
obligations;10 hence, the complaint.
In his Answer with Third-Party Complaint,11 respondent countered that he
religiously paid rent to petitioner until PNCC demanded12 that the rent be
paid directly to it, in view of the petitioner's eviction from the subject
property by virtue of a court order.13 Thus, during the period from August
2011 until December 2011, he remitted the rentals to PNCC.14 Should he be
found liable to petitioner, respondent maintained that the RTC should hold
PNCC liable to reimburse to him the amounts he paid as rentals; hence, the
third-party complaint.15
Respondent likewise pointed out that the venue was improperly laid since
Section 2116 of the lease contract provides that "[a]ll actions or case[s] filed
in connection with this case shall be filed with the Regional Trial Court of
Pasay City, exclusive of all others."17 Hence, the complaint should be
dismissed on the ground of improper venue.
Finally, respondent argued that he paid petitioner the amounts of
₱3,518,352.00 as deposit and advance rentals under the lease contract, and
that he made a ₱400,000.00 overpayment, all of which amounts were not
liquidated or credited to respondent during the subsistence of the lease
contract. Thus, respondent interposed a counterclaim, seeking petitioner to
reimburse the said amounts to him, and to pay him moral and exemplary
damages, including litigation expenses, in view of petitioner's filing of such
baseless suit.18
In its Comment/Opposition19 to respondent's affirmative defense of
improper venue, petitioner argued that Section 21 of the lease contract is not
a stipulation as to venue, but a stipulation on jurisdiction which is void.20 This
is because such stipulation deprives other courts, i.e., the Municipal Trial
Courts, of jurisdiction over cases which, under the law, are within its exclusive
original jurisdiction, such as an action for unlawful detainer.21 Petitioner
further posited that respondent had already submitted himself to the
jurisdiction of the Valenzuela-RTC and had waived any objections on venue,
since he sought affirmative reliefs from the said court when he asked several
times for additional time to file his responsive pleading, set-up counterclaims
against petitioner, and impleaded PNCC as a third-party defendant.22
Meanwhile, in its Answer to Third Party Complaint with Counterclaim,23 PNCC
contended that respondent has no cause of action against it, since he
acknowledged PNCC’s right to receive rent, as evidenced by his direct
payment thereof to PNCC.24 Respondent also entered into a contract of lease
with PNCC after learning that petitioner had been evicted from the premises
by virtue of a court ruling.25
The Valenzuela-RTC Ruling
In an Order26 dated June 15, 2015, the Valenzuela-RTC granted respondent's
motion and dismissed the complaint on the ground of improper venue. It held
that Section 21 of the lease contract between petitioner and respondent is
void insofar as it limits the filing of cases with the R TC of Pasay City, even
when the subject matter jurisdiction over the case is with the Metropolitan
49
Trial Courts.27 However, with respect to the filing of cases cognizable by the
RTCs, the stipulation validly limits the venue to the RTC of Pasay City.28 Since
petitioner's complaint is one for collection of sum of money in an amount that
is within the jurisdiction of the R TC, petitioner should have filed the case with
the RTC of Pasay City.29
The Valenzuela-RTC also found no merit in petitioner's claim that respondent
waived his right to question the venue when he filed several motions for
extension of time to file his answer. It pointed out that improper venue was
among the defenses raised in respondent's Answer. As such, it was timely
raised and, therefore, not waived.30
Aggrieved, petitioner moved for reconsideration31 which was, however,
denied by the Valenzuela-RTC in its Order32 dated January 27, 2016; hence,
the present petition.
The Issue Before the Court
The sole issue for the Court's resolution is whether or not the Valenzuela-RTC
erred in ruling that venue was improperly laid.
The Court's Ruling
The petition has no merit.
Rule 4
VENUE OF ACTIONS
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.
Section 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.
Section 3. Venue of actions against nonresidents. - If any of the defendants
does not reside and is not found in the Philippines, and the action affects the
personal status of the plaintiff, or any property of said defendant located in
the Philippines, the action may be commenced and tried in the court of the
place where the plaintiff resides, or where the property or any portion
thereof is situated or found.
Section 4. When Rule not applicable. - This Rule shall not apply -
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the
action on the exclusive venue thereof. (Emphases supplied)
Based on these provisions, the venue for personal actions shall - as a general
rule - lie with the court which has jurisdiction where the plaintiff or the
defendant resides, at the election of the plaintiff.33 As an exception, parties
may, through a written instrument, restrict the filing of said actions in a
certain exclusive venue.34 In Briones v. Court of Appeals,35 the Court
explained:
Written stipulations as to venue may be restrictive in the sense that the suit
may be filed only in the place agreed upon, or merely permissive in that the
parties may file their suit not only in the place agreed upon but also in the
places fixed by law. As in any other agreement, what is essential is the
ascertainment of the intention of the parties respecting the matter.
As regards restrictive stipulations on venue, jurisprudence instructs that it
must be shown that such stipulation is exclusive. In the absence of qualifying
or restrictive words, such as "exclusively," "waiving for this purpose any other
venue," "shall only" preceding the designation of venue, "to the exclusion of
the other courts," or words of similar import, the stipulation should be
deemed as merely an agreement on an additional forum, not as limiting
venue to the specified place.36
In Pilipino Telephone Corporation v. Tecson,37 the Court held that an exclusive
venue stipulation is valid and binding, provided that: (a) the stipulation on the
chosen venue is exclusive in nature or in intent; (b) it is expressed in writing
by the parties thereto; and (c) it is entered into before the filing of the suit.38
After a thorough study of the case, the Court is convinced that all these
elements are present and that the questioned stipulation in the lease
contract, i.e., Section 21 thereof, is a valid venue stipulation that limits the
venue of the cases to the courts of Pasay City. It states:
21. Should any of the party (sic) renege or violate any terms and conditions
of this lease contract, it shall be liable for damages.1âwphi1 All actions or
case[s] filed in connection with this lease shall be filed with the Regional Trial
Court of Pasay City, exclusive of all others.39 (Emphases and underscoring
supplied)
The above provision clearly shows the parties' intention to limit the place
where actions or cases arising from a violation of the terms and conditions of
the contract of lease may be instituted. This is evident from the use of the
50
phrase "exclusive of all others" and the specification of the locality of Pasay
City as the place where such cases may be filed.
Notably, the fact that this stipulation generalizes that all actions or cases of
the aforementioned kind shall be filed with the RTC of Pasay City, to the
exclusion of all other courts, does not mean that the same is a stipulation
which attempts to curtail the jurisdiction of all other courts. It is fundamental
that jurisdiction is conferred by law and not subject to stipulation of the
parties.40 Hence, following the rule that the law is deemed written into every
contract,41 the said stipulation should not be construed as a stipulation on
jurisdiction but rather, one which merely limits venue. Moreover, "[t]he
parties are charged with knowledge of the existing law at the time they enter
into the contract and at the time it is to become operative."42 Thus, without
any clear showing in the contract that the parties intended otherwise, the
questioned stipulation should be considered as a stipulation on venue (and
not on jurisdiction), consistent with the basic principles of procedural law.
In this case, it is undisputed that petitioner's action was one for collection of
sum of money in an amount43 that falls within the exclusive jurisdiction of the
RTC.44 Since the lease contract already provided that all actions or cases
involving the breach thereof should be filed with the RTC of Pasay City, and
that petitioner’s complaint purporting the said breach fell within the RTC's
exclusive original jurisdiction, the latter should have then followed the
contractual stipulation and filed its complaint before the RTC of Pasay City.
However, it is undeniable that petitioner filed its complaint with the
Valenzuela-RTC; hence, the same is clearly dismissible on the ground of
improper venue, without prejudice, however, to its refiling in the proper
court.
That respondent had filed several motions for extension of time to file a
responsive pleading, or that he interposed a counterclaim or third-party
complaint in his answer does not necessarily mean that he waived the
affirmative defense of improper venue. The prevailing rule on objections to
improper venue is that the same must be raised at the earliest opportunity,
as in an answer or a motion to dismiss; otherwise, it is deemed waived.45
Here, respondent timely raised the ground of improper venue since it was
one of the affirmative defenses raised in his Answer with Third-Party
Complaint.46 As such, it cannot be said that he had waived the same.
Further, it should be pointed out that the case of Pangasinan Transportation
Co., Inc. v. Yatco (Pantranco) 47 cited in the instant petition48 should not apply
to this case, considering that the invocation of the ground of improper venue
therein was not based on a contractual stipulation, but rather on respondent
Elpidio O. Dizon's alleged violation of the Rules of Court, as he filed his case
for damages before the Court of First Instance of Rizal, Branch IV (Quezon
City), despite testifying that he was actually a resident of Dagupan City. In that
case, the Court ruled that the filing of a counterclaim and third party-
complaint, and additionally, the introduction of evidence of petitioner
Pantranco (respondent in the case for damages) after the denial of its motion
to dismiss on the ground of improper venue, "necessarily implied a
submission to the jurisdiction of [the trial court therein], and, accordingly, a
waiver of such right as Pantranco may have had to object to the venue, upon
the ground that it had been improperly laid."49 The rationale for the
Pantranco ruling is that a party cannot invoke a violation of a rule on venue
against his counter-party, when he himself is bound by the same rule, but
nonetheless, seeks his own relief and in so doing, violates it.
In contrast, the counterclaim of respondent was alleged to be a compulsory
counterclaim,50 which he was prompted to file only because of petitioner's
complaint for collection of sum of money, else the same would be barred.51
In fact, his counterclaim only sought reimbursement of his overpayment to
petitioner in the amount of ₱400,000.00, as well as damages for the filing of
a purported baseless suit. Thus, his counterclaim is not covered by the venue
stipulation, since he is not asserting a violation of the terms and conditions of
the lease contract, but rather an independent right which arose only because
of the complaint. The same goes for his third-party complaint, whereby he
only pleaded that the rental payments remitted to PNCC for the period
August 2011 to December 2011 be reimbursed to him in the event that
petitioner's complaint is found to be meritorious. Since his counterclaim and
third-party complaint are not covered by the venue stipulation, respondent
had, therefore, every right to invoke the same whilst raising the ground of
improper venue against petitioner's complaint, which action was, on the
contrary, covered by the stipulation. Thus, there is no inconsistency in
respondent's posturing, which perforce precludes the application of the
Pantranco ruling, as well as negates the supposition that he had waived the
defense of improper venue.
WHEREFORE, the petition is DENIED. Accordingly, the Orders dated June 15,
2015 and January 27, 2016 of the Regional Trial Court of Valenzuela City,
Branch 75 in Civil Case No. 40-V-12 are hereby AFFIRMED.
SO ORDERED.
51
XI. RULE 5: UNIFORM PROCEDURE IN TRIAL COURTS
G.R. No. 105866 July 6, 1993
VICTORIA D. BAYUBAY, represented by her attorney-in-fact, MARIBEL
MAMARIL, petitioner,
vs.
THE COURT OF APPEALS, Former Fourth Division and BIG MAK BURGER,
INC., respondents.
Rodolfo P. Orticio for petitioner.
Robles, Ricafrente & Aguirre Law Firm for private respondent.
CRUZ, J.:
The proceeding at bar traces its origin to an action for ejectment filed by
petitioner Victoria D. Bayubay in the Municipal Trial Court of Los Baños,
Laguna, on April 11, 1990, on the ground of expiration of the contract of lease.
Private respondent Big Mak Burger argued in its answer that it had the option
to renew the term of the lease contract "under such conditions as may be
agreed upon by the parties" and set up the defense of estoppel. It also alleged
a counterclaim for damages and reimbursement of expenses allegedly
inccured by it on the leased promises.
The Municipal Trial Court issued summons with the notification that the case
would be heard under the Rule on Summary Procedure.
After three pre-trial meetings and the marking of the exhibits, which included
the lease contract and the exchange of letters between the parties, Judge
Romulo G. Carteciano rendered a decision holding that the contract of lease
had expired because no extension had been agreed upon by the parties as
required by the agreement.1
The private respondent appealed to the Regional Trial Court of Calamba,
Laguna, on the ground that "the MTC violated Secs. 6 and 7 of the Rules on
Summary Procedure by rendering judgment without ordering the parties to
submit their respective position papers and affidavits of their respective
witnesses, as a consequence of which, defendant's right to due process was
violated."2
On December 23, 1991, the Regional Trial Court affirmed the appealed
decision in toto.3 However, it was reversed by the Court of Appeals, which
ordered the remand of the case to the Municipal Trial Court for further
proceedings.4
The decision of the Court of Appeals is now before us. The petitioner
contends that the respondent court erred in ruling that: (1) the failure of the
MTC to give the private respondent the opportunity to submit its position
paper and/or affidavit of witnesses constituted a denial of due process; (2)
the questions raised were not only questions of law because the answer
contained a counterclaim for reimbursement of improvements allegedly
made by the lessee on the premises, and damages; and (3) there was still a
necessity for the MTC to issue an order following the close of the pre-trial
conference.
In its Comment, the private respondent refutes these contentions and argues
that (1) the petition raises questions of fact as well as law, such as the
expenses incurred by the lessor in the improvement of the leased premises
and the damages sustained by it as a result of the filing of the complaint; (2)
it was deprived of the opportunity to submit its position paper and/or
affidavits of witnesses and so denied due process; and (3) there was a need
to remand the case to the MTC so that evidence could be presented to prove
the factual issues through position papers and affidavits.
We see nothing wrong with the decision of the Court of Appeals remanding
the case to the Municipal Trial Court for further proceedings. The respondent
court was merely enforcing the mandatory provisions of the Rule on
Summary Procedure.
The record shows that the Municipal Trial Court failed to take into account
the following pertinent provisions of the Rule:
Sec. 6. Preliminary Conference. — Not later than thirty (30) days after the last
answer is filed, the case shall be calendared for a preliminary conference.
Among other matters, should the parties fail to arrive at an amicable
settlement, the court must clarify and define the issues of the case, which
must be clearly and distinctly set forth in the order to be issued immediately
after such preliminary conference, together with the other matters taken up
during the same.
Sec. 7. Submission of affidavits. — Within ten (10) days from receipt of the
order mentioned in the next preceding section, the parties shall submit the
affidavits of witnesses and other evidences on the factual issues defined
therein, together with a brief statement of their petitions setting forth the
law and the facts relied upon by them.
The above provisions require that immediately after the preliminary
conference, the Municipal Trial Court should issue an order clearly and
52
distinctly setting forth the issues of the case and the other matters taken up
during the preliminary conference.
The order is an important part of the summary procedure because it is its
receipt by the parties that begins the ten-day period to submit the affidavits
and other evidence mentioned in Sec. 7.
The minutes of the Municipal Trial Court dated August 22, 1989, contained a
notation that the pre-trial had been "terminated" and that the parties were
to submit position papers.5 However, there was no order to this effect nor
was there an indication of when the position papers were to be submitted for
the purpose of discussing the factual questioning raised.
As correctly observed by the Court of Appeals —
We think that the failure of the MTC to give the petitioner the opportunity to
submit its position paper and/or affidavit of witnesses constituted a denial of
due process. True, between August 22, 1989 and December 18, 1989, when
the MTC rendered its decision was a period of more than three months. But
under the Rule on Summary Procedure, the ten-day period for submitting
affidavits and position papers did not commence to run, until receipt by a
party of the order of the court embodying the results of the pre-trial
conference. Here, as already stated, the MTC never issued such an order and
so the ten day period never started to run.
It is not true, as the MTC said, that the only questions raised were questions
of law. The petitioner's answer contained a counterclaim for reimbursement
of improvements allegedly made by it on the premises, as well as claim for
damages for alleged bad faith of private respondent in bringing the case —
questions which obviously, required at least the affidavits of witnesses.
The Court of Appeals did not err therefore in calling for the remand of the
case to the Municipal Trial Court. While the municipal judge may be
commended for his zeal in speeding up the resolution of the case, he
nevertheless cannot be sustained for his non-observance of the Rule on
Summary Procedure.
We conclude with the following reminder:
Rules of procedure are intended to ensure the orderly administration of
justice and the protection of substantive rights in judicial and extra-judicial
proceedings. It is a mistake to suppose that substantive law and adjective law
are contradictory to each other or, as has been often suggested, that
enforcement of procedural rules should never be permitted if it will result in
prejudice to the substantive rights of the litigants. This is not exactly true; the
concept is much misunderstood. As a matter of fact the policy of the courts
is to give affect to both kinds of law, as complementing each other, in the just
and speedy resolution of the dispute between the parties. Observance of both
substantive and procedural rights is equally guaranteed by due process,
whatever the source of such rights, be it the Constitution itself or only a
statute or a rule of court. 6
WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so
ordered.
[A.M. No. MTJ-99-1226. January 31, 2000]
GLORIA LUCAS, complainant, vs. JUDGE AMELIA A. FABROS, MeTC, Branch
9, Manila, respondent.
RESOLUTION
QUISUMBING, J.:
In a verified complaint dated May 20, 1997, complainant Gloria Lucas charged
respondent, Judge Amelia A. Fabros of the Metropolitan Trial Court, Branch
9, Manila, with Gross Ignorance of the Law and Grave Abuse of Discretion
relative to Civil Case No. 151248 entitled "Editha F. Gacad, represented by
Elenita F. Castelo vs. Gloria Lucas, for Ejectment". Jksm
Complainant, who was the defendant in the aforecited case, alleged that
Judge Amelia A. Fabros issued an Order dated February 26, 1997 granting the
plaintiffs motion for reconsideration of the Order dated January 13, 1997,
which dismissed the case for failure of plaintiff and her counsel to appear at
the Preliminary Conference.
Complainant averred that it is elementary, under Section 19 (c) of the Rules
of Summary Procedure, that a motion for reconsideration is prohibited, but
respondent judge, in violation of the rule, granted the motion for
reconsideration. She added that, notwithstanding the fact that the
respondent herself had pointed out in open court that the case is governed
by the Rules on Summary Procedure, the judge ordered the revival of the case
out of malice, partiality and with intent to cause an injury to complainant.
Further, complainant alleged that the actuations of the respondent is in
blatant disregard of the established rules on procedure, and it is an instance
where the doctrine of IPSA LOQUITOR may once again may be applied by the
Court to discipline judges.
On June 18, 1997, respondent judge was required to comment on the
administrative complaint. In her Comment dated September 16, 1997, she
admitted that she granted the motion for reconsideration even if the same is
53
a prohibited motion in an ejectment case. She explained, however, that it was
granted in the interest of justice.
In her Comment, respondent stated:
"The Order subject of this complaint is the Order dated January 13, 1997
dismissing the complaint for ejectment for failure of the plaintiff to appear
for preliminary conference and more importantly her lawyer, Atty. Jose Suing,
who was duly empowered to appear for preliminary conference by virtue of
a Special Power of Attorney. Chief
Immediately upon learning the said order of dismissal and awarding of
attorneys fees, Atty. Suing filed a Motion for Reconsideration on January 17,
1997 (Annex "A") stating that he failed to appear due to a sudden excruciating
stomach pain. He further stated that his Secretary called the Court but to no
avail until finally the call came through and she was informed that the case
was dismissed. Over the objection of the defendant that the Motion for
Reconsideration was a prohibited pleading which this Presiding Judge is fully
aware of under the Rule on Summary Procedure, the Motion for
Reconsideration was nonetheless granted in the interest of justice. The
question is poised. Are the actuations of judges to be governed strictly by the
Rule on Summary Procedure despite their belief in good faith that in special
cases, its observance would result in a miscarriage of justice? This Presiding
Judge does not think so. Judges are supposed to responsible Public Officials
and should be able to perceive and discern circumstances which might lead
to miscarriage of justice, thus, negating the very purpose and essence of the
Rule on Summary Procedure. The Rule on Summary Procedure is not a
straight jacket and it is believed it was never meant to be that. This is the
reason why we have in the Rules of Court Section 5 (g) of Rule 135 which is
one of the inherent powers of the Court, that is, to amend and control its
process and orders so as to make them conformable to law and justice.
Ignorance of the law, to the mind of the undersigned, is the act of a judge in
taking legal steps or adopting procedure unknowingly aware that they are
contrary to established Rules which should be known to the judge. This
Presiding Judge in this particular case was fully aware of the Rule on Summary
Procedure. She fully knew that the Motion for Reconsideration was a
prohibited pleading but she still considered it because to deny it would result
in a miscarriage of justice. It was not a capricious, whimsical and despotic act
when viewed in the light of this circumstance.
With respect to the allegation that the charge of ignorance of the law was
compounded by the failure to issue a writ of execution, it bears stressing that
the Order dated January 13, 1997 never gained finality because the plaintiff
was able to file the Motion for Reconsideration within the fifteen (15) day
period, that is, on January 17, 1997. But even if it is argued validly that the
Motion for Reconsideration being a prohibited pleading did not interrupt the
running of the period of appeal, still the said Order did not gain finality as far
as defendant Gloria Lucas is concerned because as the record shows, it was
she who received the Order, not her lawyer, Atty. Sulit." Esm
The complaint and the Comment were referred to the Office of the Court
Administrator for evaluation, report and recommendation after the case was
docketed as an administrative matter. On August 25, 1997, OCA in a
Memorandum, submitted the following findings:
"After a careful perusal of the records of the case, we find that respondent
Judge Fabros abused her discretion in granting the Motion for
Reconsideration.
Respondent Judge Fabros maintained that she could not be guilty of gross
ignorance of the law as she knows that a motion for reconsideration of
judgment is a prohibited motion in an ejectment case. She explained that
although there is already a judgment dismissing the case, she granted the
plaintiffs motion for reconsideration in the interest of justice since the
reasons stated in the motion for reconsideration are meritorious.
Respondent failed to realize that the first duty of the court is to apply the law
and that when the law is clear and unambiguous, there is no room for
interpretation. Although her intention was good, this could not free her from
liability.
Respondent should have denied the motion since the plaintiff had other
judicial remedies like appeal.
The Office of the Court Administrator recommended that respondent judge
be fined in the amount of P2,000.00 for grave abuse of discretion. The Court,
however, finds this recommendation without factual and legal basis.
As a rule, a motion for reconsideration is a prohibited pleading under Section
19 of the Revised Rule on Summary Procedure. Thus,
"SEC. 19. Prohibited pleadings and motions. The following pleadings, motions,
or petitions shall not be allowed in the cases covered by this Rule.
xxx
(c) Motion for new trial, or for reconsideration of a judgment, or for
reopening of trial;
xxx"
54
This rule, however, applies only where the judgment sought to be
reconsidered is one rendered on the merits. As held by the Court in an earlier
case involving Sec. 15 (c) of the Rules on Summary Procedure, later Sec. 19
(c) of the Revised Rules on Summary Procedure effective November 15, 1991:
"The motion prohibited by this Section is that which seeks reconsideration of
the judgment rendered by the court after trial on the merits of the case."
Here, the order of dismissal issued by respondent judge due to failure of a
party to appear during the preliminary conference is obviously not a
judgment on the merits after trial of the case. Hence, a motion for the
reconsideration of such order is not the prohibited pleading contemplated
under Section 19 (c) of the present Rule on Summary Procedure. Thus,
respondent judge committed no grave abuse of discretion, nor is she guilty of
ignorance of the law, in giving due course to the motion for reconsideration
subject of the present complaint. Esmsc
ACCORDINGLY, the complaint filed against respondent Judge Amelia A.
Fabros is DISMISSED.
SO ORDERED.
[G.R. No. 141614. August 14, 2002]
TERESITA BONGATO, petitioner, vs. Spouses SEVERO A. MALVAR and
TRINIDAD MALVAR, respondents.
DECISION
PANGANIBAN, J.:
An action for forcible entry is a quieting process that is summary in nature. It
is designed to recover physical possession in speedy proceedings that are
restrictive in nature, scope and time limits. The one-year bar within which to
bring the suit is prescribed to complement its summary nature. Thus, after
the one-year period has lapsed, plaintiffs can no longer avail themselves of
the summary proceedings in the municipal trial court but must litigate, in the
normal course, in the regional trial court in an ordinary action to recover
possession, or to recover both ownership and possession.
Statement of the Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the December 16, 1998 Decision and the September 1, 1999
Resolution of the Court of Appeals (CA) in CA-GR SP No. 34204. The decretal
portion of the Decision reads:
WHEREFORE, the petition is hereby dismissed for lack of merit. Costs against
petitioner.
The assailed Resolution denied petitioners Motion for Reconsideration.
The CA sustained the Decision of the Regional Trial Court (RTC) of Butuan City
(Branch 4), which had disposed thus:
WHEREFORE, in view of all the foregoing, the Court hereby affirms the
decision of the Municipal Trial Court in Cities, Branch 2 penned by the
Honorable Santos Rod. Cedro and the Writ of Execution issued on the 24th
day of August 1993 upon order of the Honorable Rosarito F. Dabalos (Record,
p. 42, Folio II) can now be served on the defendant.
The Facts
The factual antecedents of the case are summarized by the Court of Appeals
as follows:
The spouses Severo and Trinidad Malvar filed a complaint for forcible entry
against petitioner Teresita Bongato, alleging that petitioner Bongato
unlawfully entered a parcel of land covered by TCT No. RT-16200 belonging
to the said spouses and erected thereon a house of light materials. The
petitioner filed a motion for extension of time to file an answer which the
MTCC denied; it being proscribed under the Rule on Summary Procedure, and
likewise containing no notice of hearing. With a new counsel, Atty. Viador C.
Viajar, petitioner filed an answer which the MTCC disregarded, the same
having been filed beyond the ten-day reglementary period. Later, with still
another counsel, Atty. Jesus G. Chavez of the Public Attorneys Office,
petitioner filed a motion to dismiss which the MTCC denied as being contrary
to the Rule on Summary Procedure.
Thereafter, the MTCC rendered a decision ordering petitioner to vacate the
land in question, and to pay rentals, attorneys fees, and the costs of the suit.
The decision was affirmed by respondent RTC judge. Petitioner filed a motion
for reconsideration.
On March 4, 1994, respondent Judge issued an order granting the motion for
reconsideration only insofar as to determine the location of the houses
involved in this civil case so that the Court will know whether they are located
on one and the same lot or a lot different from that involved in the criminal
case for Anti-Squatting. In the same order, respondent Judge disallowed any
extension and warned that if the survey is not made, the court might consider
the same abandoned and the writ of execution would be issued.
The criminal case for anti-squatting (Crim. Case No. 4659) was filed by private
respondents Malvar against petitioner Bongato. The case is still pending with
the Regional Trial Court, Branch I, Butuan City.
55
On March 28, 1994, petitioner filed a motion for extension of the March 29,
1994 deadline for the submission of the relocation survey and to move the
deadline to April 15, 1994, as the engineer concerned, Engr. Lumarda, could
not conduct his survey during the Holy Week, he being a lay minister and
parish council member.
On April 7, 1994, respondent Judge noted that no survey report was
submitted and ordered the record of the case returned to the court of origin
for disposal.(Citations omitted)
Ruling of the Court of Appeals
The CA held that the lot referred to in the present controversy was different
from that involved in the anti-squatting case. It further ruled that the
Municipal Trial Court in Cities (MTCC) had jurisdiction, and that it did not err
in rejecting petitioners Motion to Dismiss. The appellate court reasoned that
the MTCC had passed upon the issue of ownership of the property merely to
determine possession -- an action that did not oust the latter of its
jurisdiction.
Unsatisfied with the CA Decision, petitioner lodged this Petition.
Issues
In her Memorandum, petitioner raises the following issues for this Courts
consideration:
I
Whether or not the Court of Appeals gravely abused its discretion in not
finding that the trial court lacked jurisdiction since the Complaint was filed
beyond the one-year period from date of alleged entry;
II
Whether or not the Court of Appeals gravely abused its discretion in ruling
that the Motion to Dismiss was a prohibited pleading.
This Courts Ruling
The Petition is meritorious.
First Issue:
MTCC Jurisdiction
Petitioner claims that the MTCC had no jurisdiction, because the Complaint
for forcible entry was filed only in 1992 or beyond the one-year period
provided under the Rules of Civil Procedure. She avers that in Criminal Case
No. 4659 for anti-squatting, Respondent Severo Malvar alleged in his Sworn
Statement that petitioner had illegally entered his land sometime in the first
week of January 1987.
On the other hand, respondents contend that the subject of the anti-
squatting case is different from the parcel of land involved here.
Before tackling the issue directly, it is worthwhile to restate three basic legal
principles. First, in forcible entry, one employs force, intimidation, threat,
strategy or stealth to deprive another of physical possession of land or
building.Thus, the plaintiff must allege and prove prior physical possession of
the property in litigation until deprived thereof by the defendant. This
requirement implies that the possession of the disputed land by the latter
was unlawful from the beginning. The sole question for resolution hinges on
the physical or material possession (possession de facto) of the property.
Neither a claim of juridical possession (possession de jure) nor an averment
of ownership by the defendant can outrightly prevent the court from taking
cognizance of the case. Ejectment cases proceed independently of any claim
of ownership, and the plaintiff needs merely to prove prior possession de
facto and undue deprivation thereof.
Second, as a general rule, courts do not take judicial notice of the evidence
presented in other proceedings, even if these have been tried or are pending
in the same court or before the same judge. There are exceptions to this rule.
Ordinarily, an appellate court cannot refer to the record in another case to
ascertain a fact not shown in the record of the case before it yet, it has been
held that it may consult decisions in other proceedings, in order to look for
the law that is determinative of or applicable to the case under review. In
some instances, courts have also taken judicial notice of proceedings in other
cases that are closely connected to the matter in controversy. These cases
may be so closely interwoven, or so clearly interdependent, as to invoke a
rule of judicial notice.
Third, factual findings of trial courts, especially when affirmed by the Court of
Appeals, are binding on the Supreme Court. Indeed, the review of such
findings is not a function that this Court normally undertakes. However, this
Rule is not absolute; it admits of exceptions, such as (1) when the findings are
grounded entirely on speculation, surmises or conjectures; (2) when a lower
courts inference from its factual findings is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion in the appreciation of
facts; (4) when the findings of the appellate court go beyond the issues of the
case, run contrary to the admissions of the parties to the case, or fail to notice
certain relevant facts which -- if properly considered -- will justify a different
conclusion; (5) when there is a misappreciation of facts; (6) when the findings
of fact are conclusions without mention of the specific evidence on which
56
they are based, are premised on the absence of evidence, or are contradicted
by evidence on record.
Respondents in the present Petition filed three cases against petitioner: (1)
Criminal Case No. 4659 for violation of PD No. 772 (filed on October 2, 1991),
in which petitioner was acquitted on the ground of good faith; (2) Civil Case
No. 5681 for forcible entry (filed on July 10, 1992) which was resolved by the
MTCC on October 26, 1992. (3) Criminal Case No. 5734 for Violation of PD No.
1096 (filed on July 15, 1993), wherein petitioner was again acquitted.
We agree with respondents that Lot 10-A, covered by Transfer Certificate of
Title (TCT) No. RT-16200 and registered under the name of Severo Malvar, is
different from Lot 1 which is covered by TCT No. RT-15993] and registered
under the name of Severo Malvar also. However, we cannot ignore the
Decision dated April 30, 1996 in Criminal Case No. 4659 for violation of PD
772; or the Decision dated November 26, 1997 in Criminal Case No. 5734 for
violation of PD 1096. The property involved in these two criminal cases and
in the instant case for forcible entry is one and the same -- petitioners house.
The allegation of petitioner that there is only one house involved in these
three cases has not been controverted by respondents. Neither was there
evidence presented to prove that, indeed, she had constructed one house on
Lot 1 and another on Lot 10-A. On the contrary, she correctly points out that
the house involved in these three cases is found on one and the same
location. Verily, in his Sworn Statement submitted in Criminal Case No. 4659,
Respondent Severo Malvar stated that petitioners house was located in front
of the Museum and just behind the City Hall. On the other hand, in the
Complaint] for forcible entry, the subject property was said to be located
along Doongan Road and right in front of the Regional National Museum and
not far behind the City Hall of Butuan City. Lastly, the Decision in Criminal Case
No. 5734 stated that the building inspector, Engineer Margarita Burias, had
responded to a verbal complaint involving a structure built near the Museum
in Upper Doongan, Butuan City.
Based on these factual antecedents, there is cogent basis for petitioners
contention that the MTCC lacked jurisdiction in this case.
First, respondents allege that the subject house was built by petitioner on Lot
10-A covered by TCT No. 16200. This allegation is belied by the sketch plan
dated June 16, 1994, submitted by Engineer Regino A. Lomarda Jr. To recall,
in an Order dated March 4, 1994, the RTC had required petitioner to submit
a relocation survey of Lot 10-A to determine the location of the house and to
ascertain if it was the same house involved in Criminal Case No. 4659 for anti-
squatting. However, because of the Holy Week, petitioner failed to submit
the relocation survey within the period provided by the RTC. In the said sketch
plan that was offered in evidence as Exhibit 5 in the anti-squatting case,
Engineer Lomarda Jr. certified that the hut of Teresita Bongato is not within
Lot 10-A as shown in this plan as relocated by the undersigned based [o]n TCT
No. RT-1576 of Benjamin Eva, et al. and [o]n TCT No. RT-16200 of Lot 10-A of
Severo Malvar.
Second, according to the Decision in Criminal Case No. 4659, petitioners
house is actually located on Lot 1, the parcel of land previously covered by
TCT No. RT-15993 and subject of the anti-squatting case. The RTC Judge in
said case ruled:
The lot on which accuseds house is standing was formerly covered by Transfer
Certificate of Title No. RT-15993 dated January 24, 1983 in the name of
Severo Malvar, and superseded by Transfer Certificate of Title No. RT-24589
dated December 3, 1991 in the name of Butuan Land Developers Group, Inc.
Third, petitioners house had actually been in existence prior to February
1992, the alleged date of illegal entry. Thus, in Criminal Case No. 5734 for
violation of PD 1096, the RTC Judge opined as follows:
Firstly, the prosecution has not proven that the accused had constructed or
for that matter was constructing the questioned house in February of 1992,
since it was never stated that when the complaint was lodged with the City
Engineers Office, that the house occupied by the accused was under
construction or under renovation. The fact that Engr. Burias even admitted
that she had no knowledge of when the structure was built implicitly indicates
that the same was completely erected or constructed before Engr. Burias
visit, or even for that matter, before the complaint was filed.
That the house of petitioner had been constructed by her father and that she
had merely continued to reside therein was upheld by the Decision, which we
quote:
Suffice it to state, however, that We are convinced, given the testimonial
evidence offered that the house in question was not built by the accused, but
by her father, Jacinto Bongato sometime in 1935; that accused merely lived
in the house as a member of Jacinto Bongatos family until the death of her
parents, whereupon, she continued to reside in the said house and now
claims to be its owner.
Fourth, Respondent Severo Malvar admitted in Criminal Case No. 4659 that
he had knowledge of petitioners house since January 1987. We quote from
his testimony:
57
Q Earlier, Judge Malvar, you told this Honorable Court that you discovered
sometime in January 1987, the accused was occupying your property
consisting of 348 square meters. What did you do upon discovering that the
accused already occupied a portion of your property without your
knowledge?
A I want to demolish her house. I told her that I am the owner of the land and
she is looking for the hectare that was not sold by her father to me.
Q And upon being informed by Teresita Bongato that they were looking for
the hectare lot which was not sold to you by her father, what did you say to
her?
A I told her to remove her house. Then after that, I was so busy with the
squatters along Satorre Street of the Malvar Village that kept me so busy. It
was only last year that we were able to attend to this.
It is wise to be reminded that forcible entry is a quieting process, and that the
restrictive time bar is prescribed to complement the summary nature of such
process. Indeed, the one-year period within which to bring an action for
forcible entry is generally counted from the date of actual entry to the land.
However, when entry is made through stealth, then the one-year period is
counted from the time the plaintiff learned about it. After the lapse of the
one-year period, the party dispossessed of a parcel of land may file either an
accion publiciana, which is a plenary action to recover the right of possession;
or an accion reivindicatoria, which is an action to recover ownership as well
as possession.
On the basis of the foregoing facts, it is clear that the cause of action for
forcible entry filed by respondents had already prescribed when they filed
the Complaint for ejectment on July 10, 1992.[if !supportFootnotes][45][endif] Hence,
even if Severo Malvar may be the owner of the land, possession thereof
cannot be wrested through a summary action for ejectment of petitioner,
who had been occupying it for more than one (1) year. Respondents should
have presented their suit before the RTC in an accion publiciana or an accion
reivindicatoria, not before the MTCC in summary proceedings for forcible
entry. Their cause of action for forcible entry had prescribed already, and the
MTCC had no more jurisdiction to hear and decide it.
Second Issue:
Motion to Dismiss
Petitioner further argues that a motion to dismiss based on lack of jurisdiction
over the subject matter is not a prohibited pleading, but is allowed under Sec.
19(a) of the Revised Rule on Summary Procedure. We agree.
The Rule on Summary Procedure was promulgated specifically to achieve an
expeditious and inexpensive determination of cases. The speedy resolution
of unlawful detainer cases is a matter of public policy, and the Rule should
equally apply with full force to forcible entry cases, in which possession of the
premises is already illegal from the start. For this reason, the Rule frowns
upon delays and prohibits altogether the filing of motions for extension of
time. Consistently, Section 6 was added to give the trial court the power to
render judgment, even motu proprio, upon the failure of a defendant to file
an answer within the reglementary period. However, as forcible entry and
detainer cases are summary in nature and involve disturbances of the social
order, procedural technicalities should be carefully avoided and should not
be allowed to override substantial justice.
Pursuant to Section 36 of BP 129, the Court on June 16, 1983, promulgated
the Rule on Summary Procedure in Special Cases. Under this Rule, a motion
to dismiss or quash is a prohibited pleading. Under the 1991 Revised Rule on
Summary Procedure, however, a motion to dismiss on the ground of lack of
jurisdiction over the subject matter is an exception to the rule on prohibited
pleadings:
SEC. 19. Prohibited pleadings and motions. The following pleadings, motions,
or petitions shall not be allowed in the cases covered by this Rule:
(a) Motion to dismiss the complaint or to quash the complaint or information
except on the ground of lack of jurisdiction over the subject matter, or failure
to comply with the preceding section;
xxxxxxxxx
Further, a courts lack of jurisdiction over the subject matter cannot be waived
by the parties or cured by their silence, acquiescence or even express
consent. A party may assail the jurisdiction of the court over the action at any
stage of the proceedings and even on appeal. That the MTCC can take
cognizance of a motion to dismiss on the ground of lack of jurisdiction, even
if an answer has been belatedly filed we likewise held in Bayog v. Natino:
The Revised Rule on Summary Procedure, as well as its predecessor, do not
provide that an answer filed after the reglementary period should be
expunged from the records. As a matter of fact, there is no provision for an
entry of default if a defendant fails to answer. It must likewise be pointed out
that MAGDATOs defense of lack of jurisdiction may have even been raised in
a motion to dismiss as an exception to the rule on prohibited pleadings in the
Revised Rule on Summary Procedure. Such a motion is allowed under
paragraph (a) thereof, x x x.
58
In the case at bar, the MTCC should have squarely ruled on the issue of
jurisdiction, instead of erroneously holding that it was a prohibited pleading
under the Rule on Summary Procedure. Because the Complaint for forcible
entry was filed on July 10, 1992, the 1991 Revised Rule on Summary
Procedure was applicable.
Finally, the MTCC should have taken into account petitioners Answer, in
which she averred that she had been in constant occupation on said land in
question since birth on March 17, 1941 up to the present, being an heir of the
late Emiliana Eva-Bongato, who inherited said property from her father
Raymundo Eva with considerable improvements thereon. It should have
heard and received the evidence adduced by the parties for the precise
purpose of determining whether or not it possessed jurisdiction over the
subject matter. And after such hearing, it could have dismissed the case for
lack of jurisdiction. In this way, the long, drawn out proceedings that took
place in this case could have been avoided.
WHEREFORE, the Petition is GRANTED and the assailed Decision ANNULLED
and SET ASIDE. The Complaint for forcible entry is DISMISSED for lack of
jurisdiction. No pronouncement as to costs.
SO ORDERED.
[A.M. No. MTJ-02-1429. October 4, 2002]
FRANCISCA P. PASCUAL, complainant, vs. Judge EDUARDO U. JOVELLANOS,
Municipal Circuit Trial Court, Alcala, Pangasinan, respondent.
DECISION
PANGANIBAN, J.:
Municipal trial court judges ought to be familiar with the Rules on Summary
Procedure governing ejectment cases. Failure to observe them constitutes
gross ignorance of the law.
Statement of the Case
The sworn Administrative Complaint,1 filed by Francisca P. Pascual, charged
Judge Eduardo U. Jovellanos of the Municipal Circuit Trial Court of Alcala,
Pangasinan with gross ignorance of the law, bias and partiality, abuse of
discretion and neglect of duty.2
The Antecedents
The facts in the present case are summarized by the Office of the Court
Administrator (OCA) in its January 28, 2002 Memorandum3 addressed to this
Court as follows:
Complainant x x x alleges that she filed a complaint for forcible entry
docketed as Civil Case No. 730 against a certain Lorenzo L. Manaois. The
complaint was dismissed without prejudice for being insufficient in some
material allegations (Order dated 13 October 1999). On 15 November 1999,
she filed a corrected complaint which was docketed as Civil Case No. 740.
Instead of filing an answer, defendant filed a Motion to Strike Out arguing
that the new allegations in the complaint are false. After the period to answer
lapsed and no answer was submitted, complainant filed a Motion for
Summary Judgment dated 15 December 1999. Defendant opposed the
motion.
On 30 May 2000, defendants motion to strike out was granted by respondent
Judge. Complainant filed a motion for reconsideration of the aforesaid order.
Based on the foregoing, complainant accuse[d] respondent Judge of Neglect
of Duty anchored on the following grounds:
a. Defendant should have filed an answer instead of a Motion to Strike Out.
Inspite thereof, respondent Judge granted the motion 120 days after its filing,
thus defeating the summary nature of the case;
b. The Order granting the motion to strike out is bereft of any findings of fact
because no hearing was conducted relative thereon;
c. Respondent Judge exhibited his bias and partiality in favor of the defendant
in his Order granting the motion to strike out when he pointed out x x x that
the complaint in this case is virtually a rehash of the complaint in Civil Case
No. 730 x x x. Complainant asserts that the same is to be expected because
the defects or insufficiency in the first complaint were just being rectified in
the later one;
d. Her Motion for Summary Judgment remains, until the present, unacted
upon.
Meanwhile, defendant, taking advantage of the lull in the proceedings,
started the construction of a one-storey building on the subject land. To
protect her interest, complainant filed an Application for Preliminary
Injunction dated 8 May 2000. Acting thereon, respondent Judge issued a
Temporary Restraining Order dated 9 May 2000 and set the hearing on the
Injunction. On said date, complainant was able to present evidence in support
of her application while defendant chose not to present controverting
evidence and to just submit a memorandum.
On the last day of the effectivity of the TRO (29 May 2000), complainant filed
an Extremely Urgent Ex-Parte Motion to grant her application for injunction.
On 7 June 2000 defendant filed his memorandum. However, until the
59
present, respondent Judge has not ruled on her application on preliminary
injunction.
Instead of obeying the TRO, defendant continued with the construction of the
building and even started with a new one. Hence, a contempt charge was filed
by herein complainant on 8 May 2000. Defendant moved to dismiss the
contempt charge on the ground that it was filed in the same proceedings
([C]ivil [C]ase No. 740) and the filing fee was not paid. The court, however,
motu propio docketed the complaint for contempt as Civil Case No. 744 while
the required docket and other fees were paid by defendant on 31 May 2000.
On same date, the court issued an Order furnishing anew the
defendants/respondents with a copy of the contempt charge. These,
complainant claims, cured the defect cited by defendants/respondents in
their motion to dismiss. However, respondent Judge still has not resolved the
aforesaid motion to the prejudice of herein complainant.4
In his Comment5 dated September 30, 2000, respondent denied the
allegations in the Complaint. He accused Atty. Alejandro V. Peregrino,
complainants counsel in the forcible entry case, of having a penchant for filing
administrative cases against him instead of appealing decisions before the
proper court. Respondent added that none of the charges had any factual or
legal bases. He insisted that his Decision in Civil Case No. 730 had been
rendered with utmost good faith, honesty and sound discretion.6
The OCAs Recommendation
After investigation of this case, the OCA found that respondent failed to apply
the Rule on Summary Procedure, which he ought to have been very
conversant with, because it was a common procedure in municipal courts.
Accordingly, it recommended that respondent be FINED in the amount of
P10,000.00 and warned that the commission of a similar infraction will be
dealt with more severely.7
This Courts Ruling
We agree with the findings of the OCA, but increase the penalty, taking note
that this is respondents second infraction.
Administrative Liability
Judges are the visible representations of law and justice.8 They ought to be
embodiments of competence, integrity and independence.9 In particular,
municipal judges are frontline officers in the administration of justice.10 It is
therefore essential that they live up to the high standards demanded by the
Code of Judicial Conduct.11 To be able to render substantial justice and to
maintain public confidence in the legal system, they are expected to exhibit
more than just a cursory acquaintance with statutes and procedural rules.
They are likewise expected to keep abreast of all laws and prevailing
jurisprudence.12 Judicial competence requires no less.13
Moreover, judges are bound to dispose of the courts business promptly and
to decide cases within the required period.14 For it cannot be gainsaid that
justice delayed is justice denied. Procrastination among members of the
judiciary in rendering decisions and in acting upon cases before them not only
causes great injustice to the parties involved, but also invites suspicion of
ulterior motives on their part.15
It must be emphasized that rules of procedure have been formulated and
promulgated by this Court to ensure the speedy and efficient administration
of justice. Failure to abide by these rules undermines the wisdom behind
them and diminishes respect for the rule of law.16 The Rule on Summary
Procedure was promulgated precisely to achieve an expeditious and
inexpensive determination of cases. Failure to observe the period within
which to render a judgment subjects the defaulting judge to administrative
sanctions.17 For this reason, the Rule frowns upon delays and expressly
prohibits, altogether, the filing of motions for extension.18
In this case, it is very clear that respondent lacks awareness of the relevant
provisions on ejectment.19 He has evidently been remiss in resolving the
forcible entry case, pursuant to the Revised Rules on Summary Procedure.20
Verily, judgment should have been rendered based on the allegations of the
Complaint and the evidence presented therein, inasmuch as the defendant
failed to file his answer after the lapse of ten (10) days from the service of the
summons.21 Section 6 of the Rule allows the trial court to render judgment,
even motu proprio, upon failure of the defendant to file an answer within the
reglementary period.22 Moreover, under Section 10 of the Rule, respondent
was duty-bound to render his decision within thirty (30) days from receipt of
the last affidavits and position papers, or the expiration of the period for filing
them.23 This notwithstanding, he has not yet ruled on the Motion for
Summary Judgment24 dated December 15, 1999, filed in accordance with
Section 6 of the Rule on Summary Procedure.
Furthermore, respondent failed to apply these very basic rules when he
granted the defendants Motion to Strike Out which was in reality a motion to
dismiss, a prohibited pleading.25 In his Order26 dated May 30, 2000, he ruled
that the Complaint in Civil Case No. 740 was a mere rehash of the dismissed
Complaint in Civil Case No. 730. He cited Section 1227 of Rule 8 of the 1997
Rules on Civil Procedure as basis for this ruling. In doing so, he committed an
60
obvious mistake showing gross ignorance of the law. This is because the civil
case assigned to him is for forcible entry, which is governed by the Rule on
Summary Procedure.28 In fact, all cases of forcible entry and unlawful detainer
are governed by this Rule.29
It must likewise be underscored that respondent dismissed Civil Case No. 730
without prejudice, on the theory that the date of the dispossession had not
been initially indicated in the Complaint. Thus, it would reasonably be
expected that the allegations in that civil case would be reiterated in Civil Case
No. 740. Needless to state, what also contributed to the delay in the
resolution of the main case was the grant of the Motion to Strike Out based
on misplaced reasoning.30
Lack of knowledge of the Rules on Summary Procedure reflects a serious
degree of incompetence.31 When the law is so elementary, as in this case, not
to be aware of it constitutes gross ignorance of the law.32 A member of the
bench must be constantly abreast of legal and jurisprudential developments,
bearing in mind that this learning process never ceases. It is indispensable to
the correct dispensation of justice.33
Delay
Respondent claimed that if there was any delay on his part in resolving the
incidents, it was not intentional but merely brought about by pressure from
work.34
We are not convinced. Rule 3.05 of Canon 3 of the Canons on Judicial Ethics
mandates that a judge should dispose of the courts business promptly and
decide each case within the period prescribed therefor.35 We have held in
numerous cases that failure to decide within the reglementary period
constitutes gross inefficiency and warrants the imposition of administrative
sanctions.36
In the present case, the heavy caseload in respondents sala, though
unfortunate, cannot excuse him from due observance of the rules. We
reiterate that judges, when burdened by heavy caseloads that prevent them
from deciding cases within the reglementary period, may ask for additional
time from this Court. Indubitably, respondent has failed to do so.37 He ought
to know that the speedy resolution of forcible entry cases is a matter of public
policy. His inaction for almost three years on complainants Motion for
Summary Judgment practically rendered nugatory the whole purpose of
summary proceedings -- to promote a more expeditious and inexpensive
determination of cases.38 By tarrying too long in deciding this forcible entry
case, he failed to live up to the mandate of the Code of Judicial Conduct to
maintain professional competence.39 Judges are called upon to observe
utmost diligence and dedication in the performance of their judicial functions DECISION
and duties.40
In determining his administrative liability, we note that this is not the first
infraction of respondent.41 In Espiritu v. Jovellanos,42 he was found guilty of CARPIO MORALES, J.:
gross misconduct for his partiality to one of the parties, for which he was
fined P20,000.
Indeed, it seems that he has remained undeterred in disregarding the law and Judge Eduardo H. Mirafuente of the Municipal Trial Court of Buenavista,
the Code which he has pledged to uphold.43 He appears to be unfazed by the Marinduque, respondent, is charged with Grave Misconduct and Conduct
previous penalties and warnings meted out to him.44 Since this is his second Prejudicial to the Best Interest of the Service, Violation of the Rules on
infraction, he deserves a sanction heavier than that recommended by the Summary Procedure in Special Cases and Gross Ignorance of the Law by Dr.
OCA. Jose S. Luna (Dr. Luna) arising from respondents act of giving due course to
WHEREFORE, Judge Eduardo Jovellanos is hereby found GUILTY of gross the belatedly filed and unverified answer of the defendants in a complaint for
ignorance of the law and is FINED in the amount of fifteen thousand pesos unlawful detainer.
(P15,000). He is further warned that a repetition of this or similar offenses
will be dealt with even more severely. In May 2003, Dr. Luna filed a complaint for unlawful detainer, docketed as
SO ORDERED. Civil Case No. Y2K3-01, against Florencio Sadiwa and Alex Sadiwa (the
defendants) with the Municipal Trial Court of Buenavista, Marinduque
DR. JOSE S. LUNA, presided by respondent.
Complainant, A. M. No. MTJ-05-1610
[formerly OCA IPI No.
As adverted
04-1548-MTJ]
to above, the defendants filed an unverified answer to the
complaint, seven (7) days beyond the reglementary period of ten (10) days
Present: from the service of the summons on them.
-versus-
In mid July 2003, Dr. Lunas counsel filed a Motion for Judgment,[1] invoking
PANGANIBAN, Chairman,
SANDOVAL- GUTIERREZ,
Section 6 of the Revised Rule on Summary Procedure, to which motion the
CORONA, defendants did not file any opposition. By Order[2] of August 28, 2003
JUDGE EDUARDO H. MIRAFUENTE, Municipal Trial Court, CARPIO MORALES,respondent
and denied the motion.
Buenavista, Marinduque, GARCIA, JJ.
Respondent. Dr. Luna later filed an Urgent Manifestation[3] relative to the said order of
respondent which the latter treated as a motion for reconsideration and
Promulgated: which he denied.

Hence, arose the present administrative complaint[4] against respondent, Dr.

September 26, 2005
Luna asserting that as the defendants answer was unverified and belatedly
filed, respondent should have motu proprio or on motion of the plaintiffs
rendered judgment as warranted by the facts alleged in the complaint,
x----------------------------------------------x following Section 6 of the Revised Rule on Summary Procedure.
61
In his Comment[5] dated April 16, 2004, respondent explains that his
admission of the defendants unverified, belatedly filed answer was premised
on the spirit of justice and fair play, which underlie[s] every court litigation
and serves as the bedrock to preserve the trust and faith of parties litigants
in the judicial system; that the admission was proper because the delay was
negligible, it involving only four (4) days as June 13 to 15, 2003 were non-
working holidays (per presidential proclamation in connection with the
Independence Day celebration); that the defendants might have believed
that the period to file answer was 15 days, which is the usual or common
period to file an answer; and that the delay was also excusable as defendants
acted pro se, without the benefit of legal assistance, and not dilatory.
At any rate, respondent contends that, assuming arguendo that he erred in
denying Dr. Lunas Motion for Judgment, a judge may not be held
administratively liable for every erroneous order or decision, for to hold
otherwise would render judicial office untenable as no one called upon to try
the facts or interpret the law in the process of administering the law can be
infallible in his judgment. Besides, respondent adds, there is a judicial remedy
to correct the error.
For ignorance of the law, the Office of the Court Administrator, by Report and
Recommendation[6] dated December 21, 2004, recommends that respondent
be faulted and ordered to pay a fine in the amount of P11,000.00, with stern
warning that a repetition of the same or similar act shall be dealt with more
severely.
The office of a judge exists for one solemn end to promote the ends of justice
by administering it speedily and impartially. A judge is the visible
representation of the law and justice. These are self-evident dogmas which
do not even have to be emphasized, but to which this Court is wont to advert
when members of the judiciary commit legal faux pas, hopefully only through
unwitting error or inattention.[7]
Delay in the disposition of cases undermines the peoples faith and confidence
in the judiciary. Hence, judges are enjoined to decide cases with dispatch.[8]
Such a requirement is especially demanded in forcible entry and unlawful
detainer cases.
62
For forcible entry and unlawful detainer cases involve perturbation of social
order, which must be restored as promptly as possible, such that
technicalities or details of procedure which may cause unnecessary delays
should carefully be avoided.[9] That explains why the Revised Rule on
Summary Procedure which governs ejectment, among other cases, lays down
procedural safeguards to guarantee expediency and speedy resolution.
Sections 5 and 6 of the 1991 Revised Rule on Summary Procedure provide:
Sec. 5. Answer. Within ten (10) days from service of summons, the defendant
shall file his answer to the complaint and serve a copy thereof on the plaintiff.
xxx
Sec. 6. Effect of failure to answer. Should the defendant fail to answer the
complaint within the period above provided, the court, motu proprio, or on
motion of the plaintiff, shall render judgment as may be warranted by the
facts alleged in the complaint and limited to what is prayed for therein:
Provided, however, That the court may in its discretion reduce the amount of
damages and attorneys fees claimed for being excessive or otherwise
unconscionable. This is without prejudice to the applicability of Section 4,
Rule 18 of the Rules of Court, if there are two or more defendants. (Italics in
the original, emphasis and underscoring supplied)
The word shall in the above-quoted sections of the 1991 Revised Rule on
Summary Procedure underscores their mandatory character.[10] Giving the
provisions a directory application would subvert the nature of the Rule and
defeat its objective of expediting the adjudication of the suits covered
thereby. To admit a late answer is to put a premium on dilatory maneuvers
the very mischief that the Rule seeks to redress.
In the present case, respondent gave a liberal interpretation of the above-
said Rule. Liberal interpretation or construction of the law or rules, however,
is not a free commodity that may be availed of in all instances under the cloak
of rendering justice. Liberality in the interpretation and application of 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.[11]
Respondents act, albeit a disregard of procedural rules, does not, however,
constitute grave misconduct.
Neither does it constitute gross ignorance of the law. Gross ignorance
transcends a simple error in the application of legal provisions. In the absence
of fraud, dishonesty or corruption, the acts of a judge in his judicial capacity
are generally not subject to disciplinary action, even though such acts are
erroneous.[12]
For liability for ignorance of the law to attach, the assailed order, decision or
actuation of the judge in the performance of official duties must not only be
found to be erroneous but, most importantly, it must be established that the
issuance thereof was actuated by bad faith, dishonesty, hatred or some other
like motive.[13] Any of such circumstances does not obtain in the instant case.
That respondent granted complainants motion for inhibition[14] just to erase
any nagging doubts on his impartiality and fairness negates malice or any like
motive on his part.
Respondents act of admitting the belated answer violated Section 6 of the
above-quoted Revised Rule on Summary Procedure, however, which
violation is classified as less serious charge[15] under Section 9 of Rule 140, as
amended by A.M. No. 01-8-10-SC[16] (Violation of Supreme Court rules,
directives and circulars).
In Ruperto v. Banquerigo[17] wherein the therein respondent Judge was
charged also for violation of some provisions of the Revised Rule on Summary
Judgment, he was severely reprimanded after taking into account the fact
that he was not only detailed to the court where the cases therein involved
were pending, but also to other courts. Such multiple assignments were seen
to affect his efficient handling of cases. Additionally, lack of showing of
malice, corrupt motives or improper considerations on the part of the judge
was appreciated.
Respecting respondents admission of the unverified answer of the
defendants, while paragraph (B) of Section 3 of the Revised Rule on Summary
63
Procedure requires that all pleadings shall be verified, the requirement is
formal, not jurisdictional. The court may order the correction of the pleading
if the verification is lacking or act on the pleading although it is not verified, if
the attending circumstances are such that strict compliance with the rules
may be dispensed with in order that the end of justice may thereby be
served.[18]
After considering the appreciation by respondent of the fact that the
defendants filed a belated and unverified answer without the assistance of
counsel, and the lack of showing of malice, corrupt motives or the like on his
part, this Court finds that, as in the above-cited Ruperto case, the penalty may
be as it is hereby mitigated to severe reprimand.
WHEREFORE, for violation of Section 6 of the Revised Rule on Summary
Procedure, respondent Judge Eduardo H. Mirafuente is hereby SEVERELY
REPRIMANDED[19] with a warning that a repetition of the same or similar acts
shall be dealt with more strictly.
SO ORDERED.
[G.R. No. 128954. October 8, 1998]
AZUCENA GO and REGENA GLORIA SIONG, petitioners, vs. COURT OF
APPEALS and STAR GROUP RESOURCES AND DEVELOPMENT, INC.,
respondents.
DECISION
PANGANIBAN, J.:
Where the trial court abuses its discretion by indefinitely suspending
summary proceedings involving ejectment cases, a petition for certiorari may
be entertained by the proper court to correct the blunder. In the interest of
justice and in view of the procedural void on the subject, an appeal may be
treated as a petition for certiorari for this purpose and only in this instance,
pro hac vice.
The Case
The petition for review on certiorari before us seeks to set aside and reverse
the consolidated Decision of the Court of Appeals (CA) promulgated on March
4, 1997, in CA-GR SP No. 37306 and CA-GR SP No. 39403, which disallowed
the suspension of the ejectment proceedings, the decretal portion of which
reads:
It bears mentioning again, that due to petitioners apparent dilatory tactics
prolonging both the ejectment and specific performance proceedings, we are
convinced beyond cavil that the ejectment case should proceed
independently of the specific performance case.
WHEREFORE, the Orders dated August 30, 1995 and October 17, 1995 issued
by the respondent Regional Trial Court (Branch 34) of Iloilo City in Civil Case
No. 21713 are declared NULL and VOID on the sole ground of non-compliance
with the mandate of Section 14, Article VIII of the Constitution.
The petition for certiorari assailing the Orders dated January 27, 1995 and
March 24, 1995 issued by the same respondent Regional Trial Court (Branch
34) of Iloilo City in Civil Case No. 21713; and the supplemental petition for
certiorari assailing the Orders dated February 14, 1996 and March 1, 1996
issued by the respondent MTCC of Iloilo City (Branch 1) in Civil Case No. 332
(93) are DENIED for lack of merit.
The writ of preliminary injunction is hereby LIFTED.
The Facts
The undisputed facts as found by Respondent Court are reproduced
hereunder:
Private respondent filed with the Municipal Trial Court in Cities (MTCC) of
Iloilo City (Branch 1) an ejectment case [docketed as Civil Case No. 332(93)]
against petitioners. Upon motion of petitioners, said court issued an Order
dated November 29, 1993 holding in abeyance the preliminary conference in
said case until after the case for specific performance docketed as Civil Case
No. 21142 likewise involving the same parties shall have been finally decided
by the RTC of Iloilo City (Branch 37).
An appeal was taken by private respondent from the aforesaid Order which
was assigned to herein public respondent RTC of Iloilo City (Branch 34).
Thereafter, petitioners filed with the respondent RTC a motion to dismiss the
appeal on the ground that the appealed order is interlocutory and therefore
not appealable. Said motion was denied by the respondent RTC (Branch 34)
per its Order dated January 27, 1995.
Petitioners subsequently filed a motion for reconsideration which was
likewise denied per Order dated March 24, 1995.
Hence, petitioners filed the present petition for certiorari, docketed as SP No.
37306, raising the issue of whether or not the respondent RTC (Branch 34)
acted without or in excess of jurisdiction or with grave abuse of discretion in
denying petitioners motion to dismiss appeal.
64
Private respondent then filed with respondent RTC a Motion to Resume
Proceedings. On August 30, 1995, respondent RTC issued an Order granting
said motion and directed the remand of the records of the case to the MTCC
(Branch 1) of Iloilo City for further proceedings. Petitioners filed a motion for
reconsideration and clarification but the same was denied in the Order dated
October 17, 1995.
Petitioners then filed with this Court the present petition for review,
docketed as SP No. 39403, raising the issue of whether or not the same
respondent RTC acted without or in excess of jurisdiction or with grave abuse
of discretion in ordering the resumption of the proceedings in the MTCC of
Iloilo (Branch 1).
On October 20, 1995, we issued a temporary restraining order enjoining the
respondent RTC from further proceeding with Civil Case No. 21713.
Sometime after the restraining order lapsed, respondent court remanded the
records to the MTCC.
Petitioners filed with the MTCC a motion to hold in abeyance further
proceedings. In the Order dated February 14, 1996, the MTCC denied the
motion and set the case for preliminary conference. Petitioners motion for
reconsideration was likewise denied per Order dated March 1, 1996.
Subsequently, petitioners filed their supplemental petition for review
impleading the presiding Judge of the MTCC, raising the issue of whether or
not the respondent MTCC erred in resuming the proceedings in view of the
timely filing of the petition for review, docketed as SP No. 39403.
On May 29, 1996, we granted petitioners motion for a writ of preliminary
injunction and ordered herein private and public respondents to refrain from
continuing with the proceedings in Civil Case No. 332 (93) before the MTCC
until the herein above-entitled petitions are resolved by this Court.
The issues raised by petitioners in their pleadings are the following[:]
I. Whether or not the respondent RTC (Branch 34) gravely abused its
discretion when it denied the motion to dismiss an appeal from an
interlocutory order.
II. Whether or not the respondent RTC (Branch 34) gravely abused its
discretion when it granted private respondents Motion to Resume
Proceedings and ordered the remand of the records to the MTCC (Branch 1).
III. Whether or not the respondent MTCC (Branch 1) erred when it resumed
the ejectment proceedings despite the timely filing of the petition for review.
Respondent Courts Ruling
Recognizing the existence of a procedural void in the Rules on Summary
Procedure, the Court of Appeals sustained the propriety of appeal as a
remedy to challenge the suspension of the ejectment suit by the Municipal
Trial Court in Cities (MTCC) of Iloilo City:
Verily, the respondent RTC was cognizant of the impropriety of an appeal
from an interlocutory order. However, in denying the motion to dismiss the
appeal it considered the following circumstances: 1) the procedural void
where the aggrieved party (herein private respondent) will have no remedy
for the ventilation of his rights; and 2) the fact that herein petitioners as
plaintiffs in the case for specific performance (Civil Case No. 21142) also filed
a motion to hold in abeyance the pre-trial of said case.
We find that the respondent RTC did not abuse its discretion in taking
cognizance of the appeal. Neither did it act without or in excess of its
jurisdiction.
First, it must be stated that the purpose of the Rule[s] on Summary Procedure
is to achieve an expeditious and inexpensive determination of cases without
regard to technical rules. (Section 36, Chapter III, B.P. Blg. 129).
Apparently, the prohibition against petitions for certiorari involving
interlocutory orders was included to forestall useless petitions and avoid
undue inconvenience and delays. In effect, a party is prevented from having
to assail orders on incidental matters as they are issued by the court. Instead,
a party is obliged to contest all such expeditious resolution of the case.
However, in the case at bench, what the private respondent sought to be
reviewed by way of appeal was a suspension order. An order which to all
intents and purposes runs counter to the summary nature of ejectment
proceedings. Thus, the private respondent as plaintiff in the ejectment
proceeding should be given a remedy to question said order which the
respondent court had judiciously provided for.
All told, inaction on the MTCCs order of suspension due to the procedural
void created by Section 19 of the Rule[s] on Summary Procedure and Section
2, Rule 41 of the Rules of Court will defeat rather than promote the thrust of
the summary rules which is the speedy disposition of cases.
After all, while technicalities have their uses, resort to them should not be
encouraged when they serve only to impede the speedy and just resolution
of the case, least of all an ejectment case which, under the Rules, is supposed
to be summary in nature (Top Rate International Services, Inc. vs. CA, 170
SCRA 84). Further, actions for forcible entry and unlawful detainer must be
abated as promptly as possible without any undue reliance on technical and
65
procedural rules which only cause delay because they involve a disturbance
of social order (Co Keng Kian vs. IAC, 189 SCRA 112).
The Issues
In their Memorandum, petitioners raise two issues:
1. The Honorable Court of Appeals erred in allowing the appeal of an
interlocutory order.
2. The Honorable Court of Appeals erred in not applying the exceptions
provided for in the Vda. de Legaspi and Wilmon cases allowing the suspension
of the ejectment case based on strong reasons of equity or when the right of
the private respondent to the property in question is seriously placed in issue.
In the main, the crux of this case is the propriety of an appeal as a remedy to
challenge the suspension of proceedings in an ejectment suit.
The Courts Ruling
The petition is devoid of merit.
First Issue:
Remedy to Contest Interlocutory Orders
in Summary Proceedings
In affirming the ruling of the Regional Trial Court (RTC) of Iloilo City, the Court
of Appeals noted that there was a procedural void in the summary
proceedings before the MTCC. The undisputed facts illustrate that existing
procedural rules do not provide an adequate remedy to herein private
respondent.
It may be recalled that the MTCC, acting on petitioners motion, held in
abeyance the preliminary conference in the ejectment suit, until the
termination of a pending case for specific performance involving the same
parties. In challenging the order of the MTCC, herein private respondent
appealed to the Regional Trial Court. Petitioners filed a motion to dismiss,
arguing that the assailed order was interlocutory and, therefore, not subject
to appeal.
Indisputably, the appealed order is interlocutory, for it does not dispose of
the case but leaves something else to be done by the trial court on the merits
of the case.It is axiomatic that an interlocutory order cannot be challenged by
an appeal.Thus, it has been held that the proper remedy in such cases is an
ordinary appeal from an adverse judgment on the merits, incorporating in
said appeal the grounds for assailing the interlocutory order. Allowing
appeals from interlocutory orders would result in the sorry spectacle of a case
being subject of a counterproductive ping-pong to and from the appellate
court as often as a trial court is perceived to have made an error in any of its
interlocutory rulings. However, where the assailed interlocutory order is
patently erroneous and the remedy of appeal would not afford adequate and
expeditious relief, the Court may allow certiorari as a mode of redress.
Clearly, private respondent cannot appeal the order, being interlocutory. But
neither can it file a petition for certiorari, because ejectment suits fall under
the Revised Rules on Summary Procedure, Section 19 (g) of which considers
petitions for certiorari prohibited pleadings:
SEC. 19. Prohibited pleadings and motions. -- The following pleadings,
motions, or petitions shall not be allowed in the cases covered by this Rule:
(a) Motion to dismiss the complaint or to quash the complaint or information
except on the ground of lack of jurisdiction over the subject matter, or failure
to comply with the preceding section;
(b) Motion for a bill of particulars;
(c) Motion for new trial, or for reconsideration of a judgment, or for
reopening of trial;
(d) Petition for relief from judgment;
(e) Motion for extension of time to file pleadings, affidavits or any other
paper;
(f) Memoranda;
(g) Petition for certiorari, mandamus, or prohibition against any interlocutory
order issued by the court;
(h) Motion to declare the defendant in default;
(i) Dilatory motions for postponement;
(j) Reply;
(k) Third party complaints;
(l) Interventions.
Based on the foregoing, private respondent was literally caught between
Scylla and Charybdis in the procedural void observed by the Court of Appeals
and the RTC. Under these extraordinary circumstances, the Court is
constrained to provide it with a remedy consistent with the objective of
speedy resolution of cases.
As correctly held by Respondent Court of Appeals, the purpose of the Rules
on Summary Procedure is to achieve an expeditious and inexpensive
determination of cases without regard to technical rules. (Section 36, Chapter
III, BP Blg. 129) Pursuant to this objective, the Rules prohibit petitions for
certiorari, like a number of other pleadings, in order to prevent unnecessary
delays and to expedite the disposition of cases. In this case, however, private
66
respondent challenged the MTCC order delaying the ejectment suit, precisely
to avoid the mischief envisioned by the Rules.
Thus, this Court holds that in situations wherein a summary proceeding is
suspended indefinitely, a petition for certiorari alleging grave abuse of
discretion may be allowed. Because of the extraordinary circumstances in this
case, a petition for certiorari, in fact, gives spirit and life to the Rules on
Summary Procedure. A contrary ruling would unduly delay the disposition of
the case and negate the rationale of the said Rules.
Private respondent herein filed an appeal to question the interlocutory order.
This recourse was upheld by the RTC and the CA in order to fill a procedural
void. We affirm the ruling of both the trial court and the Court of Appeals. We
hold, however, that the appeal should instead be treated as a petition for
certiorari under Rule 65. An appeal ordinarily entails a longer process which
negates an expeditious resolution.
Petitioners posit that if such procedural void exists, no remedy is sanctioned
by law, and the courts thus have no power to provide one. Petitioners aver
that the defect lies in the law and can only be remedied by the legislature.
This argument is unacceptable. First, at issue in this case is not a law passed
by the legislature, but procedural rules promulgated by the Supreme Court.
Section 5, Article VIII of the Constitution, categorically allows the Court to lay
down rules concerning, among others, procedure in all courts. Second, courts
are empowered, even obligated, to suspend the operation of the rules, when
a rule deserts its proper office as an aid to justice and becomes its great
hindrance and chief enemy such that rigid application thereof frustrates
rather than promotes substantial justice." Thus, it has been held that the
power of this Court to suspend its own rules or to except a particular case
from [their] operations whenever the purposes of justice require it, cannot
be questioned.
Second issue:
Suspension of Ejectment Cases
Petitioners likewise bewail the non-application of the doctrine enunciated by
the Court in Vda. de Legaspi v. Avendano, subsequently recognized in Wilmon
Auto Supply v. Court of Appeals, that an ejectment suit may be suspended if
there are strong reasons of equity. In Vda. de Legaspi the Court held:
Where the action, therefore, is one of illegal detainer, as distinguished from
one of forcible entry, and the right of the plaintiff to recover the premises is
seriously placed in issue in a proper judicial proceeding, it is more equitable
and just and less productive of confusion and disturbance of physical
possession, with all its concomitant inconvenience and expenses. For the
Court in which the issue of legal possession, whether involving ownership or
not, is brought to restrain, should a petition for preliminary injunction be filed
with it, the effects of any order or decision in the unlawful detainer case in
order to await the final judgment in the more substantive case involving legal
possession or ownership. It is only where there has been forcible entry that
as a matter of public policy the right to physical possession should be
immediately set at rest in favor of the prior possession regardless of the fact
that the other party might ultimately be found to have superior claim to the
premises involved, thereby to discourage any attempt to recover possession
thru force, strategy or stealth and without resorting to the courts.
Thus, petitioners contend that they are entitled to the suspension of the
ejectment case, because the right of the private respondent to the property
in question was seriously placed in issue in the specific performance case.
The argument is not persuasive. In Wilmon, the Court recognized that Vda.
De Legaspi was an exception to the general rule against suspension of an
ejectment proceeding, viz.:
xxx [A]s regards the seemingly contrary ruling in Vda. de Legaspi v. Avendano,
79 SCRA 135 (1977), this Court observed in Salinas v. Navarro, 126 SCRA 167,
172-173 (1983), that the exception to the rule in this case of Vda. de Legaspi
is based on strong reasons of equity not found in the present petition. The
right of the petitioner is not so seriously placed in issue in the annulment case
as to warrant a deviation, on equitable grounds, from the imperative nature
of the rule. In the Vda. de Legaspi case, execution of the decision in the
ejectment case would also have meant demolition of the premises, a factor
not present in this petition.[if !supportFootnotes][13][endif]
The situation in Vda. de Legaspi, however, does not obtain in the case at bar.
The resolution of the present ejectment suit will not result in the demolition
of the premises, an event which would thus entail a categorical, not merely
provisional, ruling on the question of ownership. Indeed, petitioners have not
cited strong reasons of equity to support their prayer for the application of
Vda. De Legaspi.
Accordingly, we reiterate the Wilmon ruling that as the law now stands, even
when, in forcible entry and unlawful detainer cases, the defendant raises the
question of ownership in his pleadings and the question of possession cannot
be resolved without deciding the issue of ownership, the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts nevertheless
have the undoubted competence to resolve the issue of ownership xxx only
67
to determine the issue of possession. In this case, there is no need to suspend
the ejectment suit, for the issue in litigation involves purely physical and de
facto possession, as it is well-settled that whatever pronouncement the court
in the ejectment case makes on the issue of ownership is provisional in
nature.
WHEREFORE, the petition is hereby DENIED. Costs against petitioners.
REPUBLIC OF THE PHILIPPINES and NATIONAL POWER G.R. No
CORPORATION, both represented by the PRIVATIZATION
MANAGEMENT OFFICE, Present
Petitioners,
CARPIO
BRION,
- versus - PEREZ,
SERENO
REYES, J
SUNVAR REALTY DEVELOPMENT CORPORATION, Respondent.
Promulg
June 20
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
SERENO, J.:
This is a Rule 45 Petition questioning the Decision of the Regional Trial Court
(RTC) of Makati City, which ordered the dismissal of the Complaint for
unlawful detainer filed by petitioners herein with the Metropolitan Trial
Court.
Petitioners Republic of the Philippines (Republic) and National Power
Corporation (NPC) are registered co-owners of several parcels of land located
along Pasong Tamo Extension and Vito Cruz in Makati City, and covered by
four Transfer Certificates of Title (TCTs).[if !supportFootnotes][1][endif] The main subject
matter of the instant Petition is one of these four parcels of land covered by
TCT No. 458365, with an area of approximately 22,294 square meters
(hereinafter, the subject property). Eighty percent (80%) of the subject
property is owned by petitioner Republic, while the remaining twenty percent
(20%) belongs to petitioner NPC.[if !supportFootnotes][2][endif] Petitioners are being
represented in this case by the Privatization Management Office (PMO),
which is the agency tasked with the administration and disposal of
government assets.[if !supportFootnotes][3][endif] Meanwhile, respondent Sunvar
Realty Development Corporation (Sunvar) occupied the subject property by
virtue of sublease agreements, which had in the meantime expired.
The factual antecedents of the case are straightforward. On 26 December
1977,[if !supportFootnotes][4][endif] petitioners leased the four parcels of land,
including the subject property, to the Technology Resource Center
Foundation, Inc., (TRCFI) for a period of 25 years beginning 01 January 1978
and ending on 31 December 2002.[if !supportFootnotes][5][endif] Under the Contract of
Lease (the main lease contract), petitioners granted TRCFI the right to
sublease any portion of the four parcels of land.[if !supportFootnotes][6][endif]
Exercising its right, TRCFI consequently subleased a majority of the subject
property to respondent Sunvar through several sublease agreements (the
sublease agreements).[if !supportFootnotes][7][endif] Although these agreements
commenced on different dates, all of them contained common provisions on
the terms of the sublease and were altogether set to expire on 31 December
2002, the expiration date of TRCFIs main lease contract with petitioners, but
subject to renewal at the option of respondent:[if !supportFootnotes][8][endif]
The term of the sublease shall be for an initial period of [variable] years and
[variable] months commencing on [variable], renewable for another twenty-
five (25) years at SUNVARs exclusive option.[if !supportFootnotes][9][endif]
According to petitioners, in all the sublease agreements, respondent Sunvar
agreed to return or surrender the subleased land, without any delay
whatsoever upon the termination or expiration of the sublease contract or
any renewal or extension thereof.[if !supportFootnotes][10][endif]
During the period of its sublease, respondent Sunvar introduced useful
improvements, consisting of several commercial buildings, and leased out the
spaces therein.[if !supportFootnotes][11][endif] It also profitably utilized the other open
spaces on the subject property as parking areas for customers and guests.[if
!supportFootnotes][12][endif]
In 1987, following a reorganization of the government, TRCFI was dissolved.
In its stead, the Philippine Development Alternatives Foundation (PDAF) was
created, assuming the functions previously performed by TRCFI.[if
!supportFootnotes][13][endif]
68
On 26 April 2002, less than a year before the expiration of the main lease
contract and the sublease agreements, respondent Sunvar wrote to PDAF as
successor of TRCFI. Respondent expressed its desire to exercise the option to
renew the sublease over the subject property and proposed an increased
rental rate and a renewal period of another 25 years.[if !supportFootnotes][14][endif] On
even date, it also wrote to the Office of the President, Department of
Environment and Natural Resources and petitioner NPC. The letters
expressed the same desire to renew the lease over the subject property
under the new rental rate and renewal period.[if !supportFootnotes][15][endif]
On 10 May 2002, PDAF informed respondent that the notice of renewal of
the lease had already been sent to petitioners, but that it had yet to receive
a response.[if !supportFootnotes][16][endif] It further explained that the proposal of
respondent for the renewal of the sublease could not yet be acted upon, and
neither could the proposed rental payments be accepted.[if
!supportFootnotes][17][endif]
Respondent acknowledged receipt of the letter and
requested PDAF to apprise the former of any specific actions undertaken with
respect to the said lease arrangement over the subject property.[if
!supportFootnotes][18][endif]
On 03 June 2002, six months before the main contract of lease was to expire,
petitioner NPC through Atty. Rainer B. Butalid, Vice-President and General
Counsel notified PDAF of the formers decision not to renew the contract of
lease.[if !supportFootnotes][19][endif] In turn, PDAF notified respondent of NPCs
decision.[if !supportFootnotes][20][endif]
On the other hand, petitioner Republic through then Senior Deputy Executive
Secretary Waldo Q. Flores likewise notified PDAF of the formers decision not
to renew the lease contract.[if !supportFootnotes][21][endif] The Republic reasoned that
the parties had earlier agreed to shorten the corporate life of PDAF and to
transfer the latters assets to the former for the purpose of selling them to
raise funds.[if !supportFootnotes][22][endif] On 25 June 2002, PDAF duly informed
respondent Sunvar of petitioner Republics decision not to renew the lease
and quoted the Memorandum of Senior Deputy Executive Secretary Flores.[if
!supportFootnotes][23][endif]
On 31 December 2002, the main lease contract with PDAF, as well as its
sublease agreements with respondent Sunvar, all expired. Hence, petitioners
recovered from PDAF all the rights over the subject property and the three
other parcels of land. Thereafter, petitioner Republic transferred the subject
property to the PMO for disposition. Nevertheless, respondent Sunvar
continued to occupy the property.
On 22 February 2008, or six years after the main lease contract expired,
petitioner Republic, through the Office of the Solicitor General (OSG), advised
respondent Sunvar to completely vacate the subject property within thirty
(30) days.[if !supportFootnotes][24][endif] The latter duly received the Notice from the
OSG through registered mail,[if !supportFootnotes][25][endif] but failed to vacate and
remained on the property.[if !supportFootnotes][26][endif]
On 03 February 2009, respondent Sunvar received from respondent OSG a
final notice to vacate within 15 days.[if !supportFootnotes][27][endif] When the period
lapsed, respondent Sunvar again refused to vacate the property and
continued to occupy it.
On 02 April 2009, the PMO issued an Inspection and Appraisal Report to
determine the fair rental value of the subject property and petitioners lost
income a loss arising from the refusal of respondent Sunvar to vacate the
property after the expiration of the main lease contract and sublease
agreements.[if !supportFootnotes][28][endif] Using the market comparison approach,
the PMO determined that the fair rental value of the subject property was
₱10,364,000 per month, and that respondent Sunvar owed petitioners a total
of ₱630,123,700 from 01 January 2002 to 31 March 2009.[if
!supportFootnotes][29][endif]
On 23 July 2009, petitioners filed the Complaint dated 26 May 2009 for
unlawful detainer with the Metropolitan Trial Court (MeTC) of Makati City.
Petitioners prayed that respondent Sunvar be ordered to vacate the subject
property and to pay damages for the illegal use and lost income owing to
them:
WHEREFORE, PREMISES CONSIDERED, it is most respectfully prayed that after
proper proceedings, judgment be rendered:
1. Ordering defendant SUNVAR REALTY DEVELOPMENT CORPORATION and
all persons, natural and juridical, claiming rights under it, to vacate the subject
property and peacefully surrender the same, with the useful improvements
therein, to the plaintiffs or to their authorized representative; and
2. Ordering defendant SUNVAR REALTY DEVELOPMENT CORPORATION to pay
plaintiffs damages in the amount of SIX HUNDRED THIRTY MILLION ONE
HUNDRED TWENTY THREE THOUSAND SEVEN HUNDRED PESOS
(₱630,123,700.00) for the illegal and unauthorized use and occupation of the
subject property from January 1, 2003 to March 31, 2009, and the amount of
TEN MILLION THREE HUNDRED SIXTY-FOUR THOUSAND PESOS
69
(₱10,364,000.00) per month from April 1, 2008 until the subject property,
together with its improvements, are completely vacated and peacefully
surrendered to the plaintiffs or to their authorized representative.[if
!supportFootnotes][30][endif]
Respondent Sunvar moved to dismiss the Complaint and argued that the
allegations of petitioners in the Complaint did not constitute an action for
unlawful detainer, since no privity of contract existed between them.[if
!supportFootnotes][31][endif]
In the alternative, it also argued that petitioners cause of
action was more properly an accion publiciana, which fell within the
jurisdiction of the RTC, and not the MeTC, considering that the petitioners
supposed dispossession of the subject property by respondent had already
lasted for more than one year.
In its Order dated 16 September 2009, the MeTC denied the Motion to
Dismiss and directed respondent Sunvar to file an answer to petitioners
Complaint.[if !supportFootnotes][32][endif] The lower court likewise denied the Motion
for Reconsideration[if !supportFootnotes][33][endif] filed by respondent.[if
!supportFootnotes][34][endif]
Respondent later on filed its Answer[if !supportFootnotes][35][endif]
to the Complaint.[if !supportFootnotes][36][endif]
Despite the filing of its Answer in the summary proceedings for ejectment,
respondent Sunvar filed a Rule 65 Petition for Certiorari with the RTC of
Makati City to assail the denial by the MeTC of respondents Motion to
Dismiss.[if !supportFootnotes][37][endif]
In answer to the Rule 65 Petition of respondent, petitioners placed in issue
the jurisdiction of the RTC and reasoned that the Rules on Summary
Procedure expressly prohibited the filing of a petition for certiorari against
the interlocutory orders of the MeTC.[if !supportFootnotes][38][endif] Hence, they
prayed for the outright dismissal of the certiorari Petition of respondent
Sunvar.
The RTC denied the motion for dismissal and ruled that extraordinary
circumstances called for an exception to the general rule on summary
proceedings.[if !supportFootnotes][39][endif] Petitioners filed a Motion for
Reconsideration,[if !supportFootnotes][40][endif] which was subsequently denied by the
RTC.[if !supportFootnotes][41][endif] Hence, the hearing on the certiorari Petition of
respondent proceeded, and the parties filed their respective Memoranda.[if
!supportFootnotes][42][endif]
In the assailed Order dated 01 December 2010, which discussed the merits of
the certiorari Petition, the RTC granted the Rule 65 Petition and directed the
MeTC to dismiss the Complaint for unlawful detainer for lack of jurisdiction.[if
!supportFootnotes][43][endif]
The RTC reasoned that the one-year period for the filing
of an unlawful detainer case was reckoned from the expiration of the main
lease contract and the sublease agreements on 31 December 2002.
Petitioners should have then filed an accion publiciana with the RTC in 2009,
instead of an unlawful detainer suit.
Hence, the instant Rule 45 Petition filed by petitioners.[if !supportFootnotes][44][endif]
I circumstances.[if !supportFootnotes][51][endif]
Petitioners Resort to a Rule 45 Petition
Before the Court proceeds with the legal questions in this case, there are
procedural issues that merit preliminary attention.
Respondent Sunvar argued that petitioners resort to a Rule 45 Petition for
Review on Certiorari before this Court is an improper mode of review of the
assailed RTC Decision. Allegedly, petitioners should have availed themselves
of a Rule 65 Petition instead, since the RTC Decision was an order of dismissal
of the Complaint, from which no appeal can be taken except by a certiorari
petition.
The Court is unconvinced of the arguments of respondent Sunvar and holds
that the resort by petitioners to the present Rule 45 Petition is perfectly
within the bounds of our procedural rules.
As respondent Sunvar explained, no appeal may be taken from an order of
the RTC dismissing an action without prejudice,[if !supportFootnotes][45][endif] but the
aggrieved party may file a certiorari petition under Rule 65.[if
!supportFootnotes][46][endif]
Nevertheless, the Rules do not prohibit any of the parties
from filing a Rule 45 Petition with this Court, in case only questions of law are
raised or involved.[if !supportFootnotes][47][endif] This latter situation was one that
petitioners found themselves in when they filed the instant Petition to raise
only questions of law.
In Republic v. Malabanan,[if !supportFootnotes][48][endif] the Court clarified the three
modes of appeal from decisions of the RTC, to wit: (1) by ordinary appeal or
appeal by writ of error under Rule 41, whereby judgment was rendered in a
civil or criminal action by the RTC in the exercise of its original jurisdiction; (2)
by a petition for review under Rule 42, whereby judgment was rendered by
the RTC in the exercise of its appellate jurisdiction; and (3) by a petition for
review on certiorari before the Supreme Court under Rule 45. The first mode
of appeal is taken to the [Court of Appeals] on questions of fact or mixed
questions of fact and law. The second mode of appeal is brought to the CA on
questions of fact, of law, or mixed questions of fact and law. The third mode
70
of appeal is elevated to the Supreme Court only on questions of law.[if
!supportFootnotes][49][endif]
(Emphasis supplied.)
There is a question of law when the issue does not call for an examination of
the probative value of the evidence presented or of the truth or falsehood of
the facts being admitted, and the doubt concerns the correct application of
law and jurisprudence on the matter.[if !supportFootnotes][50][endif] The resolution of
the issue must rest solely on what the law provides on the given set of
In the instant case, petitioners raise only questions of law with respect to the
jurisdiction of the RTC to entertain a certiorari petition filed against the
interlocutory order of the MeTC in an unlawful detainer suit. At issue in the
present case is the correct application of the Rules on Summary Procedure;
or, more specifically, whether the RTC violated the Rules when it took
cognizance and granted the certiorari petition against the denial by the MeTC
of the Motion to Dismiss filed by respondent Sunvar. This is clearly a question
of law that involves the proper interpretation of the Rules on Summary
Procedure. Therefore, the instant Rule 45 Petition has been properly lodged
with this Court.
II
Propriety of a Rule 65 Petition in Summary Proceedings
Proceeding now to determine that very question of law, the Court finds that
it was erroneous for the RTC to have taken cognizance of the Rule 65 Petition
of respondent Sunvar, since the Rules on Summary Procedure expressly
prohibit this relief for unfavorable interlocutory orders of the MeTC.
Consequently, the assailed RTC Decision is annulled.
Under the Rules on Summary Procedure, a certiorari petition under Rule 65
against an interlocutory order issued by the court in a summary proceeding
is a prohibited pleading.[if !supportFootnotes][52][endif] The prohibition is plain enough,
and its further exposition is unnecessary verbiage.[if !supportFootnotes][53][endif] The
RTC should have dismissed outright respondent Sunvars Rule 65 Petition,
considering that it is a prohibited pleading. Petitioners have already alerted
the RTC of this legal bar and immediately prayed for the dismissal of the
certiorari Petition.[if !supportFootnotes][54][endif] Yet, the RTC not only refused to
dismiss the certiorari Petition,[if !supportFootnotes][55][endif] but even proceeded to
hear the Rule 65 Petition on the merits.
Respondent Sunvars reliance on Bayog v. Natino[if !supportFootnotes][56][endif] and Go
v. Court of Appeals[if !supportFootnotes][57][endif] to justify a certiorari review by the
RTC owing to extraordinary circumstances is misplaced. In both cases, there
were peculiar and specific circumstances that justified the filing of the
mentioned prohibited pleadings under the Revised Rules on Summary
Procedure conditions that are not availing in the case of respondent Sunvar.
In Bayog, Alejandro Bayog filed with the Municipal Circuit Trial Court (MCTC)
of Patnongon-Bugasong-Valderama, Antique an ejectment case against
Alberto Magdato, an agricultural tenant-lessee who had built a house over
his property. When Magdato, an illiterate farmer, received the Summons
from the MCTC to file his answer within 10 days, he was stricken with
pulmonary tuberculosis and was able to consult a lawyer in San Jose, Antique
only after the reglementary period. Hence, when the Answer of Magdato was
filed three days after the lapse of the 10-day period, the MCTC ruled that it
could no longer take cognizance of his Answer and, hence, ordered his
ejectment from Bayogs land. When his house was demolished in January
1994, Magdato filed a Petition for Relief with the RTC-San Jose, Antique,
claiming that he was a duly instituted tenant in the agricultural property, and
that he was deprived of due process. Bayog, the landowner, moved to dismiss
the Petition on the ground of lack of jurisdiction on the part of the RTC, since
a petition for relief from judgment covering a summary proceeding was a
prohibited pleading. The RTC, however, denied his Motion to Dismiss and
remanded the case to the MCTC for proper disposal.
In resolving the Rule 65 Petition, we ruled that although a petition for relief
from judgment was a prohibited pleading under the Revised Rules on
Summary Procedure, the Court nevertheless allowed the filing of the Petition
pro hac vice, since Magdato would otherwise suffer grave injustice and
irreparable injury:
We disagree with the RTCs holding that a petition for relief from judgment
(Civil Case No. 2708) is not prohibited under the Revised Rule on Summary
Procedure, in light of the Jakihaca ruling. When Section 19 of the Revised Rule
on Summary Procedure bars a petition for relief from judgment, or a petition
for certiorari, mandamus, or prohibition against any interlocutory order
issued by the court, it has in mind no other than Section 1, Rule 38 regarding
petitions for relief from judgment, and Rule 65 regarding petitions for
certiorari, mandamus, or prohibition, of the Rules of Court, respectively.
These petitions are cognizable by Regional Trial Courts, and not by
Metropolitan Trial Courts, Municipal Trial Courts, or Municipal Circuit Trial
Courts. If Section 19 of the Revised Rule on Summary Procedure and Rules 38
and 65 of the Rules of Court are juxtaposed, the conclusion is inevitable that
no petition for relief from judgment nor a special civil action of certiorari,
71
prohibition, or mandamus arising from cases covered by the Revised Rule on
Summary Procedure may be filed with a superior court. This is but consistent
with the mandate of Section 36 of B.P. Blg. 129 to achieve an expeditious and
inexpensive determination of the cases subject of summary procedure.
Nevertheless, in view of the unusual and peculiar circumstances of this case,
unless some form of relief is made available to MAGDATO, the grave injustice
and irreparable injury that visited him through no fault or negligence on his
part will only be perpetuated. Thus, the petition for relief from judgment
which he filed may be allowed or treated, pro hac vice, either as an exception
to the rule, or a regular appeal to the RTC, or even an action to annul the
order (decision) of the MCTC of 20 September 1993. As an exception, the RTC
correctly held that the circumstances alleged therein and the justification
pleaded worked in favor of MAGDATO, and that the motion to dismiss Civil
Case No. 2708 was without merit. xxx [if !supportFootnotes][58][endif] (Emphasis
supplied.)
On the other hand, in Go v. Court of Appeals, the Court was confronted with
a procedural void in the Revised Rules of Summary Procedure that justified
the resort to a Rule 65 Petition in the RTC. In that case, the preliminary
conference in the subject ejectment suit was held in abeyance by the
Municipal Trial Court in Cities (MTCC) of Iloilo City until after the case for
specific performance involving the same parties shall have been finally
decided by the RTC. The affected party appealed the suspension order to the
RTC. In response, the adverse party moved to dismiss the appeal on the
ground that it concerned an interlocutory order in a summary proceeding
that was not the subject of an appeal. The RTC denied the Motion to Dismiss
and subsequently directed the MTCC to proceed with the hearing of the
ejectment suit, a ruling that was upheld by the appellate court.
In affirming the Decisions of the RTC and CA, the Supreme Court allowed the
filing of a petition for certiorari against an interlocutory order in an ejectment
suit, considering that the affected party was deprived of any recourse to the
MTCCs erroneous suspension of a summary proceeding. Retired Chief Justice
Artemio V. Panganiban eloquently explained the procedural void in this wise:
Indisputably, the appealed [suspension] order is interlocutory, for it does not
dispose of the case but leaves something else to be done by the trial court on
the merits of the case. It is axiomatic that an interlocutory order cannot be
challenged by an appeal. Thus, it has been held that the proper remedy in
such cases is an ordinary appeal from an adverse judgment on the merits
incorporating in said appeal the grounds for assailing the interlocutory order.
Allowing appeals from interlocutory orders would result in the sorry spectacle
of a case being subject of a counterproductive ping-pong to and from the
appellate court as often as a trial court is perceived to have made an error in
any of its interlocutory rulings. However, where the assailed interlocutory
order is patently erroneous and the remedy of appeal would not afford
adequate and expeditious relief, the Court may allow certiorari as a mode of
redress.
Clearly, private respondent cannot appeal the order, being interlocutory. But
neither can it file a petition for certiorari, because ejectment suits fall under
the Revised Rules on Summary Procedure, Section 19(g) of which considers
petitions for certiorari prohibited pleadings:
xxxxxxxxx
Based on the foregoing, private respondent was literally caught between
Scylla and Charybdis in the procedural void observed by the Court of Appeals
and the RTC. Under these extraordinary circumstances, the Court is
constrained to provide it with a remedy consistent with the objective of
speedy resolution of cases.
As correctly held by Respondent Court of Appeals, the purpose of the Rules
on Summary Procedure is to achieve an expeditious and inexpensive
determination of cases without regard to technical rules. (Section 36, Chapter
III, BP Blg. 129) Pursuant to this objective, the Rules prohibit petitions for
certiorari, like a number of other pleadings, in order to prevent unnecessary
delays and to expedite the disposition of cases. In this case, however, private
respondent challenged the MTCC order delaying the ejectment suit, precisely
to avoid the mischief envisioned by the Rules.
Thus, this Court holds that in situations wherein a summary proceeding is
suspended indefinitely, a petition for certiorari alleging grave abuse of
discretion may be allowed. Because of the extraordinary circumstances in this
case, a petition for certiorari, in fact, gives spirit and life to the Rules on
Summary Procedure. A contrary ruling would unduly delay the disposition of
the case and negate the rationale of the said Rules.[if !supportFootnotes][59][endif]
(Emphasis supplied.)
72
Contrary to the assertion of respondent Sunvar, the factual circumstances in
these two cases are not comparable with respondents situation, and our
rulings therein are inapplicable to its cause of action in the present suit. As
this Court explained in Bayog, the general rule is that no special civil action
for certiorari may be filed with a superior court from cases covered by the
Revised Rules on Summary Procedure. Respondent Sunvar filed a certiorari
Petition in an ejectment suit pending before the MeTC. Worse, the subject
matter of the Petition was the denial of respondents Motion to Dismiss,
which was necessarily an interlocutory order, which is generally not the
subject of an appeal. No circumstances similar to the situation of the
agricultural tenant-lessee in Bayog are present to support the relaxation of
the general rule in the instant case. Respondent cannot claim to have been
deprived of reasonable opportunities to argue its case before a summary
judicial proceeding.
Moreover, there exists no procedural void akin to that in Go v. Court of
Appeals that would justify respondents resort to a certiorari Petition before
the RTC. When confronted with the MeTCs adverse denial of its Motion to
Dismiss in the ejectment case, the expeditious and proper remedy for
respondent should have been to proceed with the summary hearings and to
file its answer. Indeed, its resort to a certiorari Petition in the RTC over an
interlocutory order in a summary ejectment proceeding was not only
prohibited. The certiorari Petition was already a superfluity on account of
respondents having already taken advantage of a speedy and available
remedy by filing an Answer with the MeTC.
Respondent Sunvar failed to substantiate its claim of extraordinary
circumstances that would constrain this Court to apply the exceptions
obtaining in Bayog and Go. The Court hesitates to liberally dispense the
benefits of these two judicial precedents to litigants in summary proceedings,
lest these exceptions be regularly abused and freely availed of to defeat the
very goal of an expeditious and inexpensive determination of an unlawful
detainer suit. If the Court were to relax the interpretation of the prohibition
against the filing of certiorari petitions under the Revised Rules on Summary
Procedure, the RTCs may be inundated with similar prayers from adversely
affected parties questioning every order of the lower court and completely
dispensing with the goal of summary proceedings in forcible entry or unlawful
detainer suits.
III
Reckoning the One-Year Period in Unlawful Detainer Cases
We now come to another legal issue underlying the present Petition whether
the Complaint filed by petitioners is properly an action for unlawful detainer
within the jurisdiction of the MeTC or an accion publiciana lodged with the
RTC. At the heart of the controversy is the reckoning period of the one-year
requirement for unlawful detainer suits.
Whether or not petitioners action for unlawful detainer was brought within
one year after the unlawful withholding of possession will determine whether
it was properly filed with the MeTC. If, as petitioners argue, the one-year
period should be counted from respondent Sunvars receipt on 03 February
2009 of the Final Notice to Vacate, then their Complaint was timely filed
within the one-year period and appropriately taken cognizance of by the
MeTC. However, if the reckoning period is pegged from the expiration of the
main lease contract and/or sublease agreement, then petitioners proper
remedy should have been an accion publiciana to be filed with the RTC.
The Court finds that petitioners correctly availed themselves of an action for
unlawful detainer and, hence, reverses the ruling of the RTC.
Under the Rules of Court, lessors against whom possession of any land is
unlawfully withheld after the expiration of the right to hold possession may
by virtue of any express or implied contract, and within one year after the
unlawful deprivation bring an action in the municipal trial court against the
person unlawfully withholding possession, for restitution of possession with
damages and costs.[if !supportFootnotes][60][endif] Unless otherwise stipulated, the
action of the lessor shall commence only after a demand to pay or to comply
with the conditions of the lease and to vacate is made upon the lessee; or
after a written notice of that demand is served upon the person found on the
premises, and the lessee fails to comply therewith within 15 days in the case
of land or 5 days in the case of buildings.[if !supportFootnotes][61][endif]
In Delos Reyes v. Spouses Odenes,[if !supportFootnotes][62][endif] the Court recently
defined the nature and scope of an unlawful detainer suit, as follows:
Unlawful detainer is an action to recover possession of real property from
one who illegally withholds possession after the expiration or termination of
his right to hold possession under any contract, express or implied. The
possession by the defendant in unlawful detainer is originally legal but
became illegal due to the expiration or termination of the right to possess.
The proceeding is summary in nature, jurisdiction over which lies with the
proper MTC or metropolitan trial court. The action must be brought up within
one year from the date of last demand, and the issue in the case must be the
right to physical possession. (Emphasis supplied.)
73
Hence, a complaint sufficiently alleges a cause of action for unlawful detainer
if it states the following elements:
1. Initially, the possession of the property by the defendant was by contract
with or by tolerance of the plaintiff.
2. Eventually, the possession became illegal upon the plaintiffs notice to the
defendant of the termination of the latters right of possession.
3. Thereafter, the defendant remained in possession of the property and
deprived the plaintiff of the latters enjoyment.
4. Within one year from the making of the last demand on the defendant to
vacate the property, the plaintiff instituted the Complaint for ejectment.[if
!supportFootnotes][63][endif]
On the other hand, accion publiciana is the plenary action to recover the right
of possession which should be brought in the proper regional trial court when
dispossession has lasted for more than one year. It is an ordinary civil
proceeding to determine the better right of possession of realty
independently of title. In other words, if at the time of the filing of the
complaint, more than one year had elapsed since defendant had turned
plaintiff out of possession or defendants possession had become illegal, the
action will be, not one of forcible entry or illegal detainer, but an accion
publiciana.[if !supportFootnotes][64][endif]
There are no substantial disagreements with respect to the first three
requisites for an action for unlawful detainer. Respondent Sunvar initially
derived its right to possess the subject property from its sublease agreements
with TRCFI and later on with PDAF. However, with the expiration of the lease
agreements on 31 December 2002, respondent lost possessory rights over
the subject property. Nevertheless, it continued occupying the property for
almost seven years thereafter. It was only on 03 February 2009 that
petitioners made a final demand upon respondent Sunvar to turn over the
property. What is disputed, however, is the fourth requisite of an unlawful
detainer suit.
The Court rules that the final requisite is likewise availing in this case, and that
the one-year period should be counted from the final demand made on 03
February 2009.
Contrary to the reasoning of the RTC,[if !supportFootnotes][65][endif] the one-year
period to file an unlawful detainer case is not counted from the expiration of
the lease contract on 31 December 2002. Indeed, the last demand for
petitioners to vacate is the reckoning period for determining the one-year
period in an action for unlawful detainer. Such one year period should be
counted from the date of plaintiffs last demand on defendant to vacate the
real property, because only upon the lapse of that period does the possession
become unlawful.[if !supportFootnotes][66][endif]
In case several demands to vacate are made, the period is reckoned from the
date of the last demand.[if !supportFootnotes][67][endif] In Leonin v. Court of Appeals,[if
!supportFootnotes][68][endif]
the Court, speaking through Justice Conchita Carpio
Morales, reckoned the one-year period to file the unlawful detainer
Complaint filed on 25 February 1997 from the latest demand letter dated 24
October 1996, and not from the earlier demand letter dated 03 July 1995:
Prospero Leonin (Prospero) and five others were co-owners of a 400-square
meter property located at K-J Street, East Kamias, Quezon City whereon was
constructed a two-storey house and a three-door apartment identified as No.
1-A, B, and C.
Prospero and his co-owners allowed his siblings, herein petitioners, to occupy
Apartment C without paying any rentals.
xxxxxxxxx
Petitioners further contend that respondents remedy is accion publiciana
because their possession is not de facto, they having been authorized by the
true and lawful owners of the property; and that one year had elapsed from
respondents demand given on July 3, 1995 when the unlawful detainer
complaint was filed.
The petition fails.
Contrary to petitioners contention, the allegations in the complaint make out
a case for unlawful detainer. Thus, respondent alleged, inter alia, that she is
the registered owner of the property and that petitioners, who are tenants
by tolerance, refused to vacate the premises despite the notice to vacate sent
to them.
Likewise, contrary to petitioners contention, the one-year period for filing a
complaint for unlawful detainer is reckoned from the date of the last demand,
74
in this case October 24, 1996, the reason being that the lessor has the right
to waive his right of action based on previous demands and let the lessee
remain meanwhile in the premises. Thus, the filing of the complaint on
February 25, 1997 was well within the one year reglementary period.[if
!supportFootnotes][69][endif]
(Emphasis supplied.)
From the time that the main lease contract and sublease agreements expired
(01 January 2003), respondent Sunvar no longer had any possessory right
over the subject property. Absent any express contractual renewal of the
sublease agreement or any separate lease contract, it illegally occupied the
land or, at best, was allowed to do so by mere tolerance of the registered
owners petitioners herein. Thus, respondent Sunvars possession became
unlawful upon service of the final notice on 03 February 2009. Hence, as an
unlawful occupant of the land of petitioners, and without any contract
between them, respondent is necessarily bound by an implied promise that
it will vacate upon demand, failing which a summary action for ejectment is
the proper remedy against them.[if !supportFootnotes][70][endif] Upon service of the
final notice of demand, respondent Sunvar should have vacated the property
and, consequently, petitioners had one year or until 02 February 2010 in
which to resort to the summary action for unlawful detainer. In the instant
case, their Complaint was filed with the MeTC on 23 July 2009, which was well
within the one-year period.
The Court is aware that petitioners had earlier served a Notice to Vacate on
22 February 2008, which could have possibly tolled the one-year period for
filing an unlawful detainer suit. Nevertheless, they can be deemed to have
waived their right of action against respondent Sunvar and continued to
tolerate its occupation of the subject property. That they sent a final Notice
to Vacate almost a year later gave respondent another opportunity to comply
with their implied promise as occupants by mere tolerance. Consequently,
the one-year period for filing a summary action for unlawful detainer with the
MeTC must be reckoned from the latest demand to vacate.
In the past, the Court ruled that subsequent demands that are merely in the
nature of reminders of the original demand do not operate to renew the one-
year period within which to commence an ejectment suit, considering that
the period will still be reckoned from the date of the original demand.[if
!supportFootnotes][71][endif]
If the subsequent demands were merely in the nature of
reminders of the original demand, the one-year period to commence an
ejectment suit would be counted from the first demand.[if !supportFootnotes][72][endif]
However, respondent failed to raise in any of the proceedings below this
question of fact as to the nature of the second demand issued by the OSG. It
is now too late in the proceedings for them to argue that the 2009 Notice to
Vacate was a mere reiteration or reminder of the 2008 Notice to Vacate. In
any event, this factual determination is beyond the scope of the present Rule
45 Petition, which is limited to resolving questions of law.
The Court notes that respondent Sunvar has continued to occupy the subject
property since the expiration of its sublease on 31 December 2002. The
factual issue of whether respondent has paid rentals to petitioners from the
expiration of the sublease to the present was never raised or sufficiently
argued before this Court. Nevertheless, it has not escaped the Courts
attention that almost a decade has passed without any resolution of this
controversy regarding respondents possession of the subject property,
contrary to the aim of expeditious proceedings under the Revised Rules on
Summary Procedure. With the grant of the instant Petition and the remand
of the case to the MeTC for continued hearing, the Court emphasizes the duty
of the lower court to speedily resolve this matter once and for all, especially
since this case involves a prime property of the government located in the
countrys business district and the various opportunities for petitioners to gain
public revenues from the property.
WHEREFORE, the Court GRANTS the Petition for Review on Certiorari dated
14 February 2011, filed by petitioners Republic and National Power
Corporation, which are represented here by the Privatization Management
Office. The assailed Decision dated 01 December 2010 of the Regional Trial
Court of Makati City, Branch 134, is hereby REVERSED and SET ASIDE. The
Metropolitan Trial Court of Makati City, Branch 63, is DIRECTED to proceed
with the summary proceedings for the unlawful detainer case in Civil Case No.
98708.
SO ORDERED.
G.R. No. 204528 February 19, 2013
SECRETARY LEILA M. DE LIMA, DIRECTOR NONNATUS R. ROJAS and DEPUTY
DIRECTOR REYNALDO 0. ESMERALDA, Petitioners,
vs.
MAGTANGGOL B. GATDULA, Respondent.
RESOLUTION
LEONEN, J.:
Submitted for our resolution is a prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction to enjoin "the Regional
75
Trial Court, Branch 26, in Manila from implementing its Decision x x x in Civil
Case No. 12-127405 granting respondent's application for the issuance of
inspection and production orders x x x."1 This is raised through a Petition for
Review on Certiorari under Rule 45 from the "Decision" rendered by the
Regional Trial Court dated 20 March 2012.
From the records, it appears that on 27 February 2012, respondent
Magtanggol B. Gatdula filed a Petition for the Issuance of a Writ of Amparo in
the Regional Trial Court of Manila.2 This case was docketed as In the Matter
of the Petition for Issuance of Writ of Amparo of Atty. Magtanggol B. Gatdula,
SP No. 12-127405. It was raffled to the sala of Judge Silvino T. Pampilo, Jr. on
the same day.
The Amparo was directed against petitioners Justice Secretary Leila M. De
Lima, Director Nonnatus R. Rojas and Deputy Director Reynaldo O. Esmeralda
of the National Bureau of Investigation (DE LIMA, ET AL. for brevity). Gatdula
wanted De Lima, et al. "to cease and desist from framing up Petitioner
[Gatdula] for the fake ambush incident by filing bogus charges of Frustrated
Murder against Petitioner [Gatdula] in relation to the alleged ambush
incident."3
Instead of deciding on whether to issue a Writ of Amparo, the judge issued
summons and ordered De Lima, et al. to file an Answer.4 He also set the case
for hearing on 1 March 2012. The hearing was held allegedly for determining
whether a temporary protection order may be issued. During that hearing,
counsel for De Lima, et al. manifested that a Return, not an Answer, is
appropriate for Amparo cases.5
In an Order dated 2 March 2012,6 Judge Pampilo insisted that "[s]ince no writ
has been issued, return is not the required pleading but answer".7 The judge
noted that the Rules of Court apply suppletorily in Amparo cases.8 He opined
that the Revised Rules of Summary Procedure applied and thus required an
Answer.9
Judge Pampilo proceeded to conduct a hearing on the main case on 7 March
2012.10 Even without a Return nor an Answer, he ordered the parties to file
their respective memoranda within five (5) working days after that hearing.
Since the period to file an Answer had not yet lapsed by then, the judge also
decided that the memorandum of De Lima, et al. would be filed in lieu of their
Answer.11
On 20 March 2012, the RTC rendered a "Decision" granting the issuance of
the Writ of Amparo. The RTC also granted the interim reliefs prayed for,
namely: temporary protection, production and inspection orders. The
production and inspection orders were in relation to the evidence and reports
involving an on-going investigation of the attempted assassination of Deputy
Director Esmeralda. It is not clear from the records how these pieces of
evidence may be related to the alleged threat to the life, liberty or security of
the respondent Gatdula.
In an Order dated 8 October 2012, the RTC denied the Motion for
Reconsideration dated 23 March 2012 filed by De Lima, et al.
Petitioners Sec. De Lima, et al. thus came to this Court assailing the RTC
"Decision" dated 20 March 2012 through a Petition for Review on Certiorari
(With Very Urgent Application for the Issuance of a Temporary Restraining
Order/Writ of Preliminary Injunction) via Rule 45, as enunciated in Section 19
of the Rule on the Writ of Amparo (A.M. No. 07-9- 12-SC, 25 September 2007),
viz:
SEC. 19. Appeal. – Any party may appeal from the final judgment or order to
the Supreme Court under Rule 45. The appeal may raise questions of fact or
law or both. x x x (Emphasis supplied).
It is the Court’s view that the "Decision" dated 20 March 2012 granting the
writ of Amparo is not the judgment or final order contemplated under this
rule. Hence, a Petition for Review under Rule 45 may not yet be the proper
remedy at this time.
The RTC and the Parties must understand the nature of the remedy of
Amparo to put its procedures in the proper context.
The remedy of the Writ of Amparo is an equitable and extraordinary remedy
to safeguard the right of the people to life, liberty12 and security13 as
enshrined in the 1987 Constitution.14 The Rule on the Writ of Amparo was
issued as an exercise of the Supreme Court's power to promulgate rules
concerning the protection and enforcement of constitutional rights.15 It aims
to address concerns such as, among others, extrajudicial killings and enforced
disappearances.16
Due to the delicate and urgent nature of these controversies, the procedure
was devised to afford swift but decisive relief.17 It is initiated through a
petition18 to be filed in a Regional Trial Court, Sandiganbayan, the Court of
Appeals, or the Supreme Court.19 The judge or justice then makes an
"immediate" evaluation20 of the facts as alleged in the petition and the
affidavits submitted "with the attendant circumstances detailed".21 After
evaluation, the judge has the option to issue the Writ of Amparo22 or
immediately dismiss the case. Dismissal is proper if the petition and the
supporting affidavits do not show that the petitioner's right to life, liberty or
76
security is under threat or the acts complained of are not unlawful. On the
other hand, the issuance of the writ itself sets in motion presumptive judicial
protection for the petitioner. The court compels the respondents to appear
before a court of law to show whether the grounds for more permanent
protection and interim reliefs are necessary.
The respondents are required to file a Return23 after the issuance of the writ
through the clerk of court. The Return serves as the responsive pleading to
the petition.24 Unlike an Answer, the Return has other purposes aside from
identifying the issues in the case. Respondents are also required to detail the
actions they had taken to determine the fate or whereabouts of the aggrieved
party.
If the respondents are public officials or employees, they are also required to
state the actions they had taken to: (i) verify the identity of the aggrieved
party; (ii) recover and preserve evidence related to the death or
disappearance of the person identified in the petition; (iii) identify witnesses
and obtain statements concerning the death or disappearance; (iv) determine
the cause, manner, location, and time of death or disappearance as well as
any pattern or practice that may have brought about the death or
disappearance; and (vi) bring the suspected offenders before a competent
court.25 Clearly these matters are important to the judge so that s/he can
calibrate the means and methods that will be required to further the
protections, if any, that will be due to the petitioner.
There will be a summary hearing26 only after the Return is filed to determine
the merits of the petition and whether interim reliefs are warranted. If the
Return is not filed, the hearing will be done ex parte.27 After the hearing, the
court will render the judgment within ten (10) days from the time the petition
is submitted for decision.28
If the allegations are proven with substantial evidence, the court shall grant
the privilege of the writ and such reliefs as may be proper and appropriate.29
The judgment should contain measures which the judge views as essential for
the continued protection of the petitioner in the Amparo case. These
measures must be detailed enough so that the judge may be able to verify
and monitor the actions taken by the respondents. It is this judgment that
could be subject to appeal to the Supreme Court via Rule 45.30 After the
measures have served their purpose, the judgment will be satisfied. In
Amparo cases, this is when the threats to the petitioner’s life, liberty and
security cease to exist as evaluated by the court that renders the judgment.
Parenthetically, the case may also be terminated through consolidation
should a subsequent case be filed – either criminal or civil.31 Until the full
satisfaction of the judgment, the extraordinary remedy of Amparo allows
vigilant judicial monitoring to ensure the protection of constitutional rights.
The "Decision" dated 20 March 2012 assailed by the petitioners could not be
the judgment or final order that is appealable under Section 19 of the Rule
on the Writ of Amparo. This is clear from the tenor of the dispositive portion
of the "Decision", to wit:
The Branch Clerk of Court of Court [sic] is hereby DIRECTED to issue the Writ
of Amparo.
Likewise, the Branch Clerk of Court is hereby DIRECTED to effect the service
of the Writ of Amparo in an expeditious manner upon all concerned, and for
this purpose may call upon the assistance of any military or civilian agency of
the government.
This "Decision" pertained to the issuance of the writ under Section 6 of the
Rule on the Writ of Amparo, not the judgment under Section 18. The
"Decision" is thus an interlocutory order, as suggested by the fact that
temporary protection, production and inspection orders were given together
with the decision. The temporary protection, production and inspection
orders are interim reliefs that may be granted by the court upon filing of the
petition but before final judgment is rendered.32
The confusion of the parties arose due to the procedural irregularities in the
RTC.
First, the insistence on filing of an Answer was inappropriate. It is the Return
that serves as the responsive pleading for petitions for the issuance of Writs
of Amparo. The requirement to file an Answer is contrary to the intention of
the Court to provide a speedy remedy to those whose right to life, liberty and
security are violated or are threatened to be violated. In utter disregard of
the Rule on the Writ of Amparo, Judge Pampilo insisted on issuing summons
and requiring an Answer.
Judge Pampilo’s basis for requiring an Answer was mentioned in his Order
dated 2 March 2012:
Under Section 25 of the same rule [on the Writ of Amparo], the Rules of Court
shall apply suppletorily insofar as it is not inconsistent with the said rule.
Considering the summary nature of the petition, Section 5 of the Revised
Rules of Summary Procedure shall apply.
Section 5. Answer – Within ten (10) days from service of summons, the
defendant shall file his Answer to the complaint and serve a copy thereof on
the plaintiff. x x x
77
WHEREFORE, based on the foregoing, the respondents are required to file
their Answer ten (days) from receipt of this Order.33
The 1991 Revised Rules of Summary Procedure is a special rule that the Court
has devised for the following circumstances:
SECTION 1. Scope. – This rule shall govern the summary procedure in the
Metropolitan Trial Courts, the Municipal Trial Courts in Cities, the Municipal
Trial Courts, and the Municipal Circuit Trial Courts in the following cases
falling within their jurisdiction:
A. Civil Cases:
(1) All cases of forcible entry and unlawful detainer, x x x.
(2) All other cases, except probate proceedings, where the total amount of
the plaintiff’s claim does not exceed x x x.
B. Criminal Cases:
(1) Violations of traffic laws, rules and regulations;
(2) Violations of the rental law;
(3) Violations of municipal or city ordinances;
(4) All other criminal cases where the penalty prescribed by law for the
offense charged is imprisonment not exceeding six months, or a fine not
exceeding one thousand pesos (P1,000.00), or both, x x x.
xxxx
It is clear from this rule that this type of summary procedure only applies to
MTC/MTCC/MCTCs. It is mind-boggling how this rule could possibly apply to
proceedings in an RTC. Aside from that, this Court limited the application of
summary procedure to certain civil and criminal cases. A writ of Amparo is a
special proceeding. It is a remedy by which a party seeks to establish a status,
a right or particular fact.34 It is not a civil nor a criminal action, hence, the
application of the Revised Rule on Summary Procedure is seriously misplaced.
The second irregularity was the holding of a hearing on the main case prior to
the issuance of the writ and the filing of a Return. Without a Return, the issues
could not have been properly joined.
Worse, is the trial court’s third irregularity: it required a memorandum in lieu
of a responsive pleading (Answer) of De Lima, et al.
The Return in Amparo cases allows the respondents to frame the issues
subject to a hearing. Hence, it should be done prior to the hearing, not after.
A memorandum, on the other hand, is a synthesis of the claims of the party
litigants and is a final pleading usually required before the case is submitted
for decision. One cannot substitute for the other since these submissions
have different functions in facilitating the suit.
More importantly, a memorandum is a prohibited pleading under the Rule on
the Writ of Amparo.35
The fourth irregularity was in the "Decision" dated 20 March 2012 itself. In
the body of its decision, the RTC stated:
"Accordingly this court GRANTS the privilege of the writ and the interim
reliefs prayed for by the petitioner." (Emphasis supplied).
This gives the impression that the decision was the judgment since the
phraseology is similar to Section 18 of the Rule on the Writ of Amparo:
"SEC. 18. Judgment. — The court shall render judgment within ten (10) days
from the time the petition is submitted for decision. If the allegations in the
petition are proven by substantial evidence, the court shall grant the privilege
of the writ and such reliefs as may be proper and appropriate; otherwise, the
privilege shall be denied." (Emphasis supplied).
The privilege of the Writ of Amparo should be distinguished from the actual
order called the Writ of Amparo. The privilege includes availment of the
entire procedure outlined in A.M. No. 07-9-12-SC, the Rule on the Writ of
Amparo. After examining the petition and its attached affidavits, the Return
and the evidence presented in the summary hearing, the judgment should
detail the required acts from the respondents that will mitigate, if not totally
eradicate, the violation of or the threat to the petitioner's life, liberty or
security.
A judgment which simply grants "the privilege of the writ" cannot be
executed.1âwphi1 It is tantamount to a failure of the judge to intervene and
grant judicial succor to the petitioner. Petitions filed to avail of the privilege
of the Writ of Amparo arise out of very real and concrete circumstances.
Judicial responses cannot be as tragically symbolic or ritualistic as "granting
the privilege of the Writ of Amparo."
The procedural irregularities in the RTC affected the mode of appeal that
petitioners used in elevating the matter to this Court.
It is the responsibility of counsels for the parties to raise issues using the
proper procedure at the right time. Procedural rules are meant to assist the
parties and courts efficiently deal with the substantive issues pertaining to a
case. When it is the judge himself who disregards the rules of procedure, delay
and confusion result.
The Petition for Review is not the proper remedy to assail the interlocutory
order denominated as "Decision" dated 20 March 2012. A Petition for
Certiorari, on the other hand, is prohibited.36 Simply dismissing the present
petition, however, will cause grave injustice to the parties involved. It
78
undermines the salutary purposes for which the Rule on the Writ of Amparo
were promulgated.
In many instances, the Court adopted a policy of liberally construing its rules
in order to promote a just, speedy and inexpensive disposition of every action
and proceeding.37 The rules can be suspended on the following grounds: (1)
matters of life, liberty, honor or property, (2) the existence of special or
compelling circumstances, (3) the merits of the case, (4) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension
of the rules, (5) a lack of any showing that the review sought is merely
frivolous and dilatory, and (6) the other party will not be unjustly prejudiced
thereby.38
WHEREFORE, in the interest of justice, as a prophylactic to the irregularities
committed by the trial court judge, and by virtue of its powers under Article
VIII, Section 5 (5) of the Constitution, the Court RESOLVES to:
(1) NULLIFY all orders that are subject of this Resolution issued by Judge
Silvino T. Pampilo, Jr. after respondent Gatdula filed the Petition for the
Issuance of a Writ of Amparo;
(2) DIRECT Judge Pampilo to determine within forty-eight (48) hours from his
receipt of this Resolution whether the issuance of the Writ of Amparo is
proper on the basis of the petition and its attached affidavits.
The Clerk of Court is DIRECTED to cause the personal service of this Resolution
on Judge Silvino T. Pampilo, Jr. of Branch 26 of the Regional Trial Court of
Manila for his proper guidance together with a WARNING that further
deviation or improvisation from the procedure set in A.M. No. 07-9-12-SC
shall be meted with severe consequences.
SO ORDERED.
G.R. No. 183795 November 12, 2014
PRUDENTIAL BANK (now Bank of the Philippine Islands) as the duly appointed
ADMINISTRATOR OF THE ESTATE OF JULIANA DIEZ VDA. DE
GABRIEL,Petitioner,
vs.
AMADOR A. MAGDAMIT, JR., on his behalf and as substituted heir (son) of
AMADOR MAGDAMIT, SR., and AMELIA F. MAGDAMIT, as substituted heir
(Widow) of AMADOR MAGDAMIT, SR., Respondents.
DECISION
PEREZ, J.:
Before us is a Petition for Review under Rule 45 of the 1997 Rules of Civil
Procedure assailing the Decision1 and Resolution2 of the Court of Appeals (CA)
dated 3 September 2007 and 18 July 2008, respectively, in CA-G.R. SP No.
93368, affirming the Decision of the Regional Trial Court (RTC),3 dated 18
January 2006, in Civil Case No. 05-112499, which reversed the ruling of the
Metropolitan Trial Court (MeTC) on the ground that the MeTC did not acquire
jurisdiction over the person of the respondents due to invalid service of
summons.
The facts as culled from the records are as follows:
This is a case of unlawful detainer filed by petitioner Prudential Bank, now
Bank of the Philippine Islands (petitioner), in its capacity as administrator of
the Estate of Juliana Diez Vda. De Gabriel (Estate). It is based on the ground
of respondents’ failure to pay rentals and refusal to vacate the subject
property, which is allegedly part of the Estate located at 1164 Interior, Julio
Nakpil St., Paco, Manila, covered by Transfer Certificate of Title No. 118317
of the Registry of Deeds of Manila.
In the Original Complaint4 filed before the MeTC, Branch 15 of Manila,
petitioner impleaded Amador A. Magdamit, Jr. (Magdamit, Jr.), as
respondent.
Instead of filing an Answer, Magdamit, Jr. filed a Notice of Special Appearance
with Motion to Dismiss. Among others, Magdamit, Jr. argued that (1)
petitioner was not duly authorized through a Board Resolution to institute
the complaint, (2) he was not the occupant of the subject property but
instead, his parents, as grantees or awardees of Juliana Diez Vda. De Gabriel,
and (3) the MeTC did not acquire jurisdiction over his person because the
summons was served at his former address at 1164 Interior Julio Nakpil St.,
Paco, Manila. On 30 April 2003, petitioner filed a Motion to Strike Out this
pleading on the ground that it is prohibited. Petitioner then filed an Amended
Complaint, this time, impleading both Magdamit, Jr. and Amador Magdamit,
Sr. (Magdamit, Sr.).
In an Order5 dated 26 June 2003, the MeTC granted petitioner’s Motion to
Strike Out Magdamit, Jr.’s Notice of Special Appearance with Motion to
Dismiss and ordered Magdamit,Jr. to file an Answer. The Order reads:
After due consideration of the matter and arguments stated therein, the
Court resolves to DENY the defendant’s Motion to dismiss, it appearing that
the summons issued in this case was served, albeit substituted nevertheless
valid. It is of no consequence that defendant is also presently residing in
Bacoor, Cavite. Suffice it to say that summons was served upon him (although
79
substituted) on the leased premises which plaintiff is justified in assuming
that he is also residing there at. Moreover, it appears that he knew the person
on whom summons was served (together with a copy of the complaint) as a
certain Dara Cabug only that he claims that the latter is not of "suitable age
and discretion" to receive the summons. Simply put, the requirement of due
process has been satisfied. Be that as it may, it would not unduly prejudice
the rights of the plaintiff if defendant is given additional period of five (5) days
from notice hereof within which to file his Answer.6
In response to the Amended Complaint, both Magdamit, Jr. and Magdamit,
Sr. filed their Answers separately. On 9 July 2003, Magdamit, Jr., filed his
Answerwith Counterclaim7 (In a Special Appearance Capacity). On the other
hand, Magdamit, Sr. filed his Answer8 on 13 November 2003. Magdamit, Sr.
argued that the MeTC did not acquire jurisdiction over his person because the
summons was not properly served as the summons was received by Madel
Magalona, who is not authorized to receive summons being a mere
housemaid of Magdamit, Sr.’s daughter, Arleen Marie Cabug. Also,
Magdamit, Sr. argued that in the 1960s, the Spouses Francisco and Juliana
Gabriel assigned the subject property to him free of charge as a reward and
in recompense for the long, faithful, and devoted services he rendered to
them. Since then, he had been continuously exercising acts of ownership over
the subject property, including payment of real estate taxes. Magdamit, Sr.
further argued that amendment of the Complaint in order to implead him is
improper. According to Magdamit, Sr., amendment cannot be allowed so as
to confer jurisdiction upon a court that never acquired it in the first place, and
the ejectment case cannot be instituted against Magdamit, Jr. because an
action to recover possession cannot be maintained against one who is not in
actual or legal possession thereof.9
Pending litigation of the case, Magdamit, Jr., who was made an original
defendant in the MeTC, substituted his deceased father, Magdamit, Sr.
Ruling of the MeTC
After trial, the MeTC ruled in favor of petitioner. According to the MeTC,
"[t]he fact that the person who received the summons was a 13-year old girl
does not make the service of summons invalid. That she was of sufficient age
and discretion is shown by the fact that she was intelligent enough to
immediately bring to the attention of defendant Atty. Amador Magdamit, Jr.
the summons and copy of the complaint she received."10 The MeTC went on
further, stating that Magdamit Sr.’s claim of ownership is beyond its
jurisdiction because the onlyissue in an ejectment case is "possession de
facto". The dispositive portion of the MeTC Decision dated 21 March 2005
reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against
defendants Amador Magdamit, Sr.:
1. ordering said defendant and all persons claiming right under him to vacate
the subject three (3) lots covered by TCT No. 118317 of the Registry of Deeds
of Manila, located at and also known as 1164 Interior J. Nakpil St., Paco,
Manila and to peacefully surrender possession thereof to plaintiff;
2. ordering said defendant to pay plaintiff the sum of ₱180,000.00
representing rentals or reasonable compensation for the use of the property
due from August 2003 up to February 2005 and ₱10,000.00 per month
thereafter until defendants fully vacate the subject property;
3. ordering said defendant to pay plaintiff the sum of ₱20,000.00 as
attorney’s fees; and
4. to pay the costs. The complaint is dismissed as against defendant Amador
Magdamit, Jr. and the latter’s counterclaim is likewise dismissed.
SO ORDERED.11
Ruling of the RTC
On appeal, the RTC set aside the decision of the MeTC and dismissed the case
for lack of jurisdiction over the person of the respondents.12 According to the
RTC, amending the original complaint to implead Magdamit, Sr. to cure a
defect in the complaint and introduce a non-existing cause of action, which
petitioner did not possess at the outset, and to confer
jurisdiction upon the court that never acquired jurisdiction in the first place
renders the complaint dismissible. The RTC further stated that because the
Return did not clearly indicate the impossibility of service of summons within
a reasonable time upon the respondents, the process server’s resort to
substituted service of summons was unjustified. The decision of the RTC
reads:
WHEREFORE, this Court finds merit on the appeal and consequently, the
decision on appeal is hereby set aside, and this case is accordingly dismissed
for lack of jurisdiction over the persons of the defendants.13
Ruling of the CA
Aggrieved, petitioner filed an appeal via a petition for review under Rule 42
of the Rules of Court beforethe CA. The petitioner argued that the RTC erred
in ruling thatthe MeTC did not acquire jurisdiction over the person of the
respondents due to improper service of summons considering that the
respondents participated in the proceedings in the MeTC by filing a Notice of
80
Appearance with Motion to Dismiss, Answer with Counterclaim, entering into
pre-trial, submitting position papers, and presenting evidence, which militate
against the alleged improper service of summons. On 3 September 2007, the
CA denied the petition and affirmed the decision of the RTC.
According to the CA, the Return, with only a general statement and without
specifying the details of the attendant circumstances or of the efforts exerted
to serve the summons, will notsuffice for purposes of complying with the
rules of substituted service of summons. The CA also rejected petitioner’s
contention that respondents’ voluntary submission to the jurisdiction of the
court cured any defect in the substituted service of summons when as early
as during the infancy of the proceedings in the MeTC, Magdamit, Jr.
seasonably raised the ground of lack of jurisdiction over his person by filing a
Notice of Appearance with Motion to Dismiss, which the respondents
incessantly reiterated in their pleadings even when the case was elevated to
the RTC, then to the CA. The dispositive portion of the decision of the CA
reads:
Having found that the MeTC did notacquire jurisdiction over the persons (sic)
of respondents, it would be futile on Our part to still pass upon the other
errors assigned by petitioner. WHEREFORE, premises considered, the petition
is DENIED. Costs against petitioner.
SO ORDERED.14
The motion for reconsideration was likewise denied for lack of merit.
Hence, this Petition, raising the following assignment of errors:
"I. Whether or not the Court of Appeals erred in dismissing the Petition for
Review of the Decision of the Regional Trial Court of Manila dated January
18,2006; and disposing of only the issue of lack of jurisdiction over the person
of respondents for alleged improper service of summons;
II. Whether or not the Court of Appeals erred in not ruling on the material
and substantial issues in the case; and
III. Whether or not the Court of Appeals erred in affirming the decision of the
Metropolitan Trial Court of Manila dismissing of the Complaint against
Magdamit, Jr., based on the ground that he was no longer residing at the
subject property prior to, and at the time of the filing of the ejectment
complaint."15
The pivotal issue is whether or not the MeTC acquired jurisdiction over the
person of the respondents.
The petition is bereft of merit.
Both respondents, Magdamit, Jr. and Magdamit, Sr. argued that the MeTC did
not acquire jurisdiction overtheir persons due to defective or improper
service of summons. Magdamit,Sr. argued that the MeTC could not have
acquired jurisdiction over his person due to improper/defective service of
summons because it was served upon an incompetent person, the housemaid
of his daughter. Magdamit Sr. also argued that the MeTC did not acquire
jurisdiction over him because he was impleaded asa respondent only after
the inherently invalid original complaint was amended. According to
Magdamit, Sr., the original complaint was inherently invalid because it was
instituted against Magdamit, Jr., against whom an action to recover
possession cannot be maintained, because he is not in actual or legal
possession thereof. Thus, the amendment of the inherently invalid original
complaint for the purpose of curing a defect to confer jurisdiction was invalid
as the MeTC never acquired jurisdiction in the first place.16 Pertinent to the
position of Magdamit, Sr. is the Sheriff’s Return dated 24 October 2003 on
the service of summons on Magdamit, Jr. which reads:
1. That, on October 22, 2003, he proceeded to the place of defendant Amador
Magdamit, Sr. at No. 1164 Int. Julio Nakpil St., Paco, Manila, for the purpose
of serving the Summons issued in the above-entitled case, but no service was
effected because he was not around;
2. That, on October 23, 2003, undersigned repaired (sic) anew to the said
place but for the second time, he failed to reached (sic) said defendant. Thus,
he elected (sic) substituted service by serving the said summons together
with the copy of the complaint and annexes attached thereat (sic) to Ms.
Madel Magalona, a person of sufficient age and living thereat who however
refused to acknowledge(d) receipt thereof;
3. That, undersigned explained to (this)Ms. Magalona the contents of the said
process in a language she fully understood and adviced (sic) her to gave (sic)
the same to her employer as soon as he arrives.17
On the other hand, Magdamit, Jr. argued that the MeTC did not acquire
jurisdiction over his person because the summons was not served at his
residence but at the house of Magdamit, Sr., and on a person not authorized
to receive summons. The Sheriff’s Return dated 25 March 2003 reads:
This is to certify, that on the 24th day of March, 2003, xxx served copy of the
Summons together with the copy of the Complaint and its attachment, upon
defendant/s Amador A. Magdamit, Jr. at 1164 Int., J. Nakpil St., Paco, Manila,
by tendering the copy to Dara Cabug (grand daughter), a person of sufficient
81
age, discretion and residing therein who however refused to acknowledged
(sic) receipt thereof.
That on several occasions despite deligent (sic) efforts exerted to serve the
said processes personally to defendant/s herein the same proved futile. Thus,
substituted service was effected in accordance with the provision of Sec. 8,
Rule 14, Rules of Court.
In view of the foregoing, the original summons is now respectfully returned
to the Honorable Court, DULY SERVED.18
Fundamental is the rule that jurisdiction over a defendant in a civil case is
acquired either through service of summons or through voluntary
appearance in court and submission to its authority. In the absence or when
the service of summons upon the person of the defendant isdefective, the
court acquires no jurisdiction over his person, and a judgment rendered
against him is null and void.19
In actionsin personamsuch as ejectment, the court acquires jurisdiction over
the person of the defendant through personal or substituted service of
summons. However, because substituted service is in derogation of the usual
method of service and personal service of summons is preferred over
substituted service, parties do not have unbridled right to resort to
substituted service of summons.20 Before substituted service of summons is
resorted to, the parties must: (a) indicate the impossibility of personal service
of summons within a reasonable time; (b) specify the efforts exerted to locate
the defendant; and (c) state that the summons was served upon a person of
sufficient age and discretion who is residing in the address, or who is in charge
of the office or regular place of business of the defendant.21
In Manotoc v. Court of Appeals,22 we have succinctly discussed a valid resort
to substituted service of summons:
We can break down this section into the following requirements to effect a
valid substituted service:
(1) Impossibility of Prompt Personal Service
The party relying on substituted service or the sheriff must show that
defendant cannot be served promptly or there is impossibility of prompt
service. Section 8, Rule 14 provides that the plaintiff or the sheriff is given a
"reasonable time" to serve the summons to the defendant in person, but no
specific time frame is mentioned. "Reasonable time" is defined as "so much
time as is necessary under the circumstances for a reasonably prudent and
diligent man to do, conveniently, what the contract or duty requires that
should be done, having a regard for the rights and possibility of loss, if any, to
the other party." Under the Rules, the service of summons has no set period.
However, when the court, clerk of court,or the plaintiff asks the sheriff to
make the return of the summons and the latter submits the return of
summons, then the validity of the summons lapses. The plaintiff may then ask
for an alias summons if the service of summons has failed. What then is a
reasonable time for the sheriff to effect a personal service in order to
demonstrate impossibility of prompt service? To the plaintiff, "reasonable
time" means no more than seven (7) days since an expeditious processing of
a complaint is what a plaintiff wants. To the sheriff, "reasonable time" means
15 to 30 days because at the end of the month, it is a practice for the branch
clerk of court to require the sheriff to submit a return of the summons
assigned to the sheriff for service. The Sheriff’s Return provides data to the
Clerk of Court, which the clerk uses in the Monthly Report of Cases to be
submitted to the Office of the Court Administrator within the first ten (10)
days of the succeeding month. Thus, one month from the issuance of
summons can be considered "reasonable time" with regard to personal
service on the defendant.
Sheriffs are asked to discharge their duties on the service of summons with
due care, utmost diligence, and reasonable promptness and speed so as not
to prejudice the expeditious dispensation of justice. Thus, they are enjoined
to try their best efforts to accomplish personal service on defendant. On the
other hand, since the defendant is expected to try to avoid and evade service
of summons, the sheriff must be resourceful, persevering, canny, and diligent
in serving the process on the defendant. For substituted service of summons
to be available, there must be several attempts by the sheriff to personally
serve the summons within a reasonable period [of one month] which
eventually resulted in failure to prove impossibility of prompt service.
"Several attempts" means at least three (3) tries, preferably on at least two
different dates. In addition, the sheriff must cite why such efforts were
unsuccessful. It is only then that impossibility of service can be confirmed or
accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of Summons the facts and
circumstances surrounding the attempted personal service. The efforts made
to find the defendant and the reasons behind the failure must be clearly
narrated in detail in the Return.The date and time of the attempts on
personal service, the inquiries made to locate the defendant, the name/s of
82
the occupants of the alleged residence or house of defendant and all other
acts done, though futile, to serve the summons on defendant must be
specified in the Return to justify substituted service. The form on Sheriff’s
Return of Summons on Substituted Service prescribed in the Handbook for
Sheriffs published by the Philippine Judicial Academy requires a narration of
the efforts made to find the defendant personally and the fact of failure.
Supreme Court Administrative Circular No. 5 dated November 9, 1989
requires that "impossibility of prompt service should be shown by stating the
efforts made to find the defendant personallyand the failure of such efforts,"
which should be made in the proof of service.
(3) A Person of Suitable Age and Discretion
If the substituted service will be effected at defendant’s house or residence,
it should be left with a person of "suitable age and discretion then residing
therein." A person of suitable age and discretion is one who has attained the
age of full legal capacity (18 years old) and is considered to have enough
discernment to understand the importance of a summons. "Discretion"
isdefined as "the ability to make decisions which represent a responsible
choice and for which an understanding of what is lawful, right or wise may be
presupposed". Thus, to be of sufficient discretion, suchperson must know
how to read and understand English to comprehend the import of the
summons, and fully realize the need to deliver the summonsand complaint to
the defendant at the earliest possible time for the person to take appropriate
action. Thus, the person must have the "relation of confidence" to the
defendant, ensuring that the latter would receive orat least be notified of the
receipt of the summons. The sheriff must therefore determine if the person
found in the alleged dwelling or residence of defendant is of legal age, what
the recipient’s relationship with the defendant is, and whether said person
comprehends the significance of the receipt of the summons and his duty to
immediately deliver it to the defendant or at least notify the defendant of
said receipt of summons. These matters must be clearly and specifically
described in the Return of Summons.
(4) A Competent Person in Charge
If the substituted service will be done at defendant’s office or regular place
of business, then it should be served on a competent person in charge of the
place. Thus, the person on whom the substituted service will be made must
be the one managing the office or business of defendant, such as the
president or manager; and such individual must have sufficient knowledge
tounderstand the obligation of the defendant in the summons, its
importance, and the prejudicial effects arising from inaction on the summons.
Again, these details must be contained in the Return.23 (Emphasis and
underscoring supplied; citations omitted)
The service of summons on Magdamit, Sr. failed to comply with the rule laid
down in Manotoc. The resort to substituted service after just two (2)
attempts to personally serve the summons on Magdamit, Sr., is premature
under our pronouncement that:
What then is a reasonable time for the sheriff to effect a personal service in
order to demonstrate impossibility of prompt service? To the plaintiff,
"reasonable time"means no more than seven (7) days since an expeditious
processing of a complaint is what a plaintiff wants. To the sheriff, "reasonable
time" means 15 to 30 days because at the end of the month, it is a practice
for the branch clerk of court to require the sheriff to submit a return of the
summons assigned to the sheriff for service. The Sheriff’s Return provides
data to the Clerk of Court, which the clerk uses in the Monthly Report of Cases
to be submitted to the Office of the Court Administrator within the first ten
(10) days of the succeeding month. Thus, one month from the issuance of
summons can be considered "reasonable time" with regard to personal
service on the defendant.24
Then too, the proof of service failed to specify the details of the attendant
circumstances. The Return merely expressed a general statement that
because the Sheriff failed to reachMagdamit, Sr., he elected substituted
service of summons. The Return failed to state the impossibility to serve
summons within a reasonable time. And the further defect in the service was
that the summons was served on a person not of sufficient discretion, an
incompetent person, Madel Magalona, a housemaid of Magdamit Sr.’s
daughter, Arleen Marie Cabug.
Similar to the case of Magdamit, Sr., the service of summons on Magdamit,
Jr. also failed to complywith the rules laid down in Manotoc. The summons
was served at 1163 Int., J. Nakpil St., Paco, Manila, Magdamit, Jr.’s former
residence when at the time, Magdamit, Jr. was residing at 0369 Jupiter St.,
Progressive Village 20 and 21, Molino I, Bacoor, Cavite. In Keister v. Navarro,25
we have defined "dwelling house" or "residence" to refer to a place where
the person named in the summons is living at the time when the service is
made, even though he may be temporarily out of the country at the time to
the time of service. Therefore, it is not sufficient for the Sheriff "to leave the
copy at defendant's former dwelling house, residence, or place ofabode, as
the case may be, after his removal therefrom".26
83
Worse, the Return did not make mention of any attempt to serve the
summons at the actual residence of Magdamit, Jr. The Return merely
expressed a general statement that the sheriff exerted efforts to serve the
summons and that the same was futile, "[t]hat on several occasions despite
deligent (sic) efforts exerted to serve the said processes personally to
defendant/s herein the same proved futile," without any statement on the
impossibility of service of summons within a reasonable time. Further, the
summons was served on a certain DaraCabug, a person not of suitable age
and discretion, who is unauthorized to receive the same.
Notably, the requirement additionally is that
Thus, to be of sufficient discretion, such person must know how to read and
understand English to comprehend the import of the summons, and fully
realize the need to deliver the summons and complaint to the defendant at
the earliest possible timefor the person to take appropriate action. Thus, the
person must have the "relation of confidence" to the defendant, ensuring
that the latter would receive or at least be notified of the receipt of the
summons. The sheriff must therefore determine if the person found in the
alleged dwelling or residence of defendant is of legal age, what the recipient’s
relationship with the defendant is, and whether said person comprehends
the significance of the receipt of the summons and his duty to immediately
deliver it tothe defendant or at least notify the defendant of said receipt of
summons. These matters must be clearly and specifically described in the
Return of Summons.27
The readily acceptable conclusion inthis case is that the process server at
once resorted to substituted service of summons without exerting enough
effort to personally serve summons on respondents. In Sps. Jose v. Sps.
Boyon,28 we discussed the effect of failure to specify the details of the effort
exerted by the process serverto personally serve summons upon the
defendants:
The Return of Summons shows no effort was actually exerted and no positive
step taken by either the process server or petitioners to locate and serve the
summons personally on respondents. At best, the Return merely states the
alleged whereabouts of respondents without indicating that such information
was verified from a person who had knowledge thereof. Certainly, without
specifying the details of the attendant circumstances or of the efforts exerted
to serve the summons, a general statement that such efforts were made will
not suffice for purposes of complying withthe rules of substituted service of
summons.29 (Emphasis and underscoring supplied)
In the case at bar, the Returns contained mere general statements that
efforts at personal service were made. Not having specified the details of the
attendant circumstances or of the efforts exerted to serve the summons,30
there was a failure to comply strictly with all the requirements of substituted
service, and as a result the service of summons is rendered ineffective.31
Filing an Answer does not amount to voluntary appearance
The petitioner asserted that assuming arguendo that the service of summons
was defective, respondents’ filing of their respective Answers and
participation in the proceedings in the MeTC, such as attending the pre-trial
and presenting evidence, amount to voluntary appearance which vested the
MeTC jurisdiction over their persons.
Indeed, despite lack of valid service of summons, the court can still acquire
jurisdiction over the person of the defendant by virtue of the latter’s
voluntary appearance. Section 20, Rule14 of the Rules of Court clearly states:
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 shall not be deemed a voluntary appearance.
However, such is not the case atbar. Contrary to petitioner’s contention,
respondents are not deemed to have voluntarily submitted to the court’s
jurisdiction by virtue of filing an Answer or other appropriate responsive
pleadings and by participating in the case.
The mandate under the Rules on Summary Proceedings that govern
ejectment cases, is expeditious administration of justice such that the filing
of an Answer is mandatory. To give effect to the mandatory character and
speedy disposition of cases, the defendant is required to file an answer within
ten (10) days from service of summons, otherwise, the court, motu proprio,
or upon motion of the plaintiff, shall render judgment as may be warranted
by the facts alleged in the complaint, limited to the relief prayed for by the
petitioner.32 Through this rule, the parties are precluded from resorting to
dilatory maneuvers.
Compliantly, respondents filed their respective Answers. In the MeTC, at first,
Magdamit, Jr. filed a Notice of Special Appearance with Motion to Dismiss,
where he seasonably raised the issue of lack of jurisdiction, which the MeTC
later ordered to be stricken out. In lieu thereof, Magdamit, Jr. filed an Answer
with Counterclaim (In a Special Appearance Capacity). Again, Magdamit, Jr.
reiterated the lack of jurisdiction over his person and the subject matter. On
84
the other hand, Magdamit, Sr. filed an Answer with an allegation by special
defense that the original complaint
should be dismissed outright because the MeTC did not acquire jurisdiction
over his person and the subject matter.1âwphi1 In sum, both respondents
filed their Answers via special appearance.
In Philippine Commercial International Bank v. Spouses Wilson Dy Hong Pi
and Lolita Dy,33 we held that filing of an answer in a special appearance
cannot be construed as voluntary appearance or submission to the court’s
jurisdiction:
Preliminarily, jurisdiction over the defendant in a civil case is acquired either
by the coercive power of legal processes exerted over his person, or his
voluntary appearance in court. As a general proposition, one who seeks an
affirmative relief is deemed to have submitted to the jurisdiction of the court.
It is by reason of this rule that we have had occasion to declare that the filing
of motions to admit answer, for additional time to file answer, for
reconsideration of a default judgment, and to lift order of default with motion
for reconsideration, is considered voluntary submission to the court’s
jurisdiction. This, however, is tempered by the concept of conditional
appearance, such that a party who makes a special appearance to challenge,
among others, the court’s jurisdiction over his person cannot be considered
to have submitted to its authority.
Prescinding from the foregoing, it is thus clear that:
(1) Special appearance operates as an exception to the general rule on
voluntary appearance;
(2) Accordingly, objections to the jurisdiction of the court over the person of
the defendantmust be explicitly made, i.e., set forth in an unequivocal
manner; and
(3) Failure to do so constitutes voluntary submission to the jurisdiction of the
court, especially in instanceswhere a pleading or motion seeking affirmative
relief is filed and submitted to the court for resolution.34 (Emphasis supplied
and underscoring supplied)
Parallel to our ruling in Philippine Commercial International Bank, the
respondents’ act of filing their respective Answers with express reservation
should not be construed as a waiver of the lack of jurisdiction of the MeTC
over their person because of non-service/defective/improper service of
summons and for lack of jurisdiction over the subject matter. Hence, sans
voluntary submission to the court’s jurisdiction, filing an answer in
compliance with the rules on summary procedure in lieu of obtaining an
adverse summary judgment does not amount to voluntary submission. As we
already held, a party who makes a special appearance in court, challenging
the jurisdiction of said court, is not deemed to have submitted himself to the
jurisdiction of the court.35 It should not be construed as voluntary submission
to the jurisdiction of the court.
In view of the foregoing, the petition is DENIED. The Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 93368, which upheld the
ruling of the Regional Trial Court that the Metropolitan Trial Court in Civil Case
No. 174798 did not acquire jurisdiction over the person of the respondents
due to invalid service of summons, are AFFIRMED.
SO ORDERED.
G.R. No. 217694
FAIRLAND KNITCRAFT CORPORATION, Petitioner,
vs.
ARTURO LOO PO, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari1 seeking to reverse and set aside the
October 31, 2014 Decision2 and the March 6, 2015 Resolution3 of the Court
of Appeals (CA), in CA-G.R. SP No. 134701 which affirmed the September 16,
2013 Decision4 of the Regional Trial Court of Pasig City, Branch 67 (RTC) in
SCA Case No. 3831. The RTC decision, in turn, sustained the March 21, 2013
Decision5 of the Metropolitan Trial Court, Branch 72, Pasig City (MeTC), which
dismissed the unlawful detainer case filed by petitioner Fairland Knitcraft
Corporation (Fairland) against respondent Arturo Loo Po (Po) for failure to
prove its case by preponderance of evidence.
The Antecedents
In a complaint6 for unlawful detainer, docketed as Civil Case No. 19429, filed
before the MeTC, Fairland alleged that it was the owner of Condominium Unit
No. 205 in Cedar Mansion II on Ma. Escriba Street, Pasig City. The said unit
was leased by Fairland to Po by verbal agreement, with a rental fee of
P20,000.00 a month, to be paid by Po at the beginning of each month. From
March 2011, Po had continuously failed to pay rent. For said reason, Fairland
opted not to renew the lease agreement anymore.
On January 30, 2012, Fairland sent a formal letter7 to Po demanding that he
pay the amount of P220,000.00, representing the rental arrears, and that he
vacate the leased premises within fifteen (15) days from the receipt of the
85
letter. Despite receipt of the demand letter and the lapse of the said 15-day
period to comply, Po neither tendered payment for the unpaid rent nor
vacated the premises. Thus, on December 12, 2012, Fairland was constrained
to file the complaint for unlawful detainer before the MeTC. Po had until
January 7, 2013 to file his answer but he failed to do so. Hence, on February
6, 2013, Fairland filed a motion to render judgment.8
In its February 21, 2013 Order,9 the MeTC considered the case submitted for
decision.
On March 1, 2013, Po’s counsel filed his Entry of Appearance with Motion for
Leave of Court to file Comment/Opposition to Motion to Render Judgment.10
In the attached Comment/Opposition, Po denied the allegations against him
and commented that there was no supporting document that would show
that Fairland owned the property; that there was no lease contract between
them; that there were no documents attached to the complaint which would
show that previous demands had been made and received by him; that the
alleged unpaid rental was P220,000.00, but the amount of damages being
prayed for was P440,000.00; that the issue in the case was one of ownership;
and that it was the RTC which had jurisdiction over the case.
The MeTC treated the comment/opposition as Po’s answer to the complaint.
Considering, however, that the case fell under the Rules of Summary
Procedure, the same was deemed filed out of time. Hence, the motion was
denied.11
The Ruling of the Metropolitan Trial Court
In its March 21, 2013 Decision, the MeTC dismissed the complaint for lack of
merit due to Fairland’s failure to prove its claim by preponderance of
evidence. The MeTC explained that although the complaint sufficiently
alleged a cause of action, Fairland failed to prove that it was entitled to the
possession of the subject property. There was no evidence presented to
support its claim against Po either.
Aggrieved, Fairland seasonably filed its appeal before the RTC under Rule 40
of the Rules of Court. Being an appealed case, the RTC required the parties to
submit their respective memoranda.
In its memorandum,12 Fairland argued that an unlawful detainer case was a
special civil action governed by summary procedure. In cases where a
defendant failed to file his answer, there was no need for a declaration of
default. Fairland claimed that the Rules stated that in such cases, judgment
should be based on the “facts alleged in the complaint,”13 and that there was
no requirement that judgment must be based on facts proved by
preponderance of evidence. Considering that the presentation of evidence
was not required when a defendant in an ejectment case failed to appear in
a preliminary conference, the same should be applied when no answer had
been filed.
Fairland continued that the failure to file an answer in an ejectment case was
tantamount to an admission by the defendant of all the ultimate facts alleged
in the complaint. There was no more need for evidence in such a situation as
every allegation of ultimate facts in the complaint was deemed established
by the defendant’s acquiescence.
On July 18, 2013, Po filed his memorandum14 and countered that there was
no merit in Fairland’s insistence that evidence was unnecessary when no
answer had been filed. The facts stated in the complaint did not warrant a
rendition of judgment in the plaintiff’s favor. The court had the discretion to
rule on the pleadings based on its evaluation of the allegation of facts.
Further, all the statements in the complaint were mere allegations which
were not substantiated by any competent evidence. Po asserted that there
was no proof presented to show that the subject property was indeed owned
by Fairland; that there was no lease contract between the parties; that he
never received the demand letter, dated January 30, 2012; and that the
amount stated in the prayer of the complaint did not coincide with the
amount of unpaid rent. Po also reiterated that the case involved an issue of
ownership over the condominium unit he was occupying.
The Ruling of the Regional Trial Court
On September 16, 2013, the RTC affirmed the MeTC ruling and agreed that
Fairland failed to establish its case by preponderance of evidence. There was
nothing on record that would establish Fairland’s right over the property
subject of the complaint. Though it had been consistently ruled that the only
issue for resolution in an ejectment case was the physical or material
possession of the property involved, independent of any claim of ownership
by any of the party-litigants, the court may go beyond the question of physical
possession provisionally. The RTC concluded that even assuming that Po was
not the lawful owner, his actual physical possession of the subject property
created the presumption that he was entitled to its possession thereof.
Fairland filed a motion for reconsideration15 attaching its condominium
certificate of title16 over the subject property, but it was denied by the RTC in
its Order,17 dated February 24, 2014.
Undaunted, Fairland filed a petition for review18 under Rule 42 of the Rules
of Court before the CA.
86
The Ruling of the Court of Appeals
In the assailed Decision, dated October 31, 2014, the CA dismissed the
petition and ruled that an action for unlawful detainer would not lie against
Po. Notwithstanding the abbreviated proceeding it ordained and the limited
pleadings it allowed, the Rules on Summary Procedure did not relax the rules
on evidence. In order for an action for recovery of possession to prosper, it
was indispensable that he who brought the action should prove not only his
ownership but also the identity of the property claimed. The CA concluded,
however, that Fairland failed to discharge such bounden duty.
Fairland filed its motion for reconsideration, but it was denied by the CA in its
assailed Resolution, dated March 6, 2015.
Hence, this petition.
ARGUMENTS/DISCUSSIONS
I
IN AN EJECTMENT CASE WHEREIN NO ANSWER WAS SEASONABLY FILED, IT
IS AN ERROR OF LAW TO BASE JUDGMENT ON PREPONDERANCE OF
EVIDENCE
II
HOLDING THAT EVIDENCE IN AN EJECTMENT CASE SHOULD HAVE BEEN
ATTACHED TO THE COMPLAINT IS AN ERROR OF LAW.19
Fairland argues that in ejectment cases, presentation of evidence was
undertaken through the submission of position papers but the same was
dispensed with when the defendant failed to file an answer or when either
party failed to appear during the preliminary conference. In an ejectment
case, the scope of inquiry should be limited to the sufficiency of the cause of
action stated in the complaint when no seasonable answer was filed. The
attachment of documentary evidence to the Complaint was not a
requirement and was even proscribed by law.
In his Comment,20 Po countered that the present petition raised a question
of fact. Although couched in different words, the issues raised here were
substantially the same as the issues raised before the CA. There was no legal
basis in Fairland’s assertion that evidence was dispensed with when no
answer to the complaint had been filed. Such argument would undermine the
inherent authority of the courts to resolve legal issues based on the facts of
the case and on the rules on evidence. Contrary to Fairland’s position, the
court decided the case on the basis of the complaint which was found wanting
in preponderance of evidence.
In its Reply,21 Fairland posited that the petition did not raise mere questions
of fact but one of law as what was being sought for review was the erroneous
dismissal of the ejectment case for lack of preponderance of evidence. Since
no answer was filed and the complaint sufficiently alleged a cause of action
for unlawful detainer, it became the duty of the MeTC to decide the case in
its favor.
The Court’s Ruling
The petition is meritorious.
Complaint has a valid cause of action for Unlawful Detainer
Section 1 of Rule 70 of the Rules of Court lays down the requirements for
filing a complaint for unlawful detainer, to wit:
Section 1. – Who may institute proceedings, and when. – Subject to the
provision of the next succeeding section, a person deprived of the possession
of any land or building by force, intimidation, threat, strategy, or stealth, or a
lessor, vendor, vendee, or other person against whom the possession of any
land or building is unlawfully withheld after the expiration or termination of
the right to hold possession, by virtue of any contract, express or implied, or
the legal representatives or assigns of any such lessor, vendor, vendee, or
other person, may, at any time within one (1) year after such unlawful
deprivation or withholding of possession, bring an action in the proper
Municipal Trial Court against the person or persons unlawfully withholding or
depriving of possession, or any person or persons claiming under them, for
the restitution of such possession, together with damages and costs.1âwphi1
Stated differently, unlawful detainer is a summary action for the recovery of
possession of real property. This action may be filed by a lessor, vendor,
vendee, or other person from whom the possession of any land or building is
unlawfully withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied. The possession of
the defendant was originally legal, as his possession was permitted by the
plaintiff on account of an express or implied contract between them. The
defendant’s possession, however, became illegal when the plaintiff
demanded that the defendant vacate the subject property due to the
expiration or termination of the right to possess under the contract, and the
defendant refused to heed such demand. A case for unlawful detainer must
be instituted one year from the unlawful withholding of possession.22
A complaint sufficiently alleges a cause of action for unlawful detainer if it
recites the following: (1) initially, possession of the property by the defendant
was by contract with or by tolerance of the plaintiff; (2) eventually, such
87
possession became illegal upon notice by the plaintiff to the defendant of the
termination of the latter’s right of possession; (3) thereafter, the defendant
remained in possession of the property, and deprived the plaintiff of the
enjoyment thereof; and (4) within one (1) year from the last demand on
defendant to vacate the property, the plaintiff instituted the complaint for
ejectment.23
There is no question that the complaint filed by Fairland adequately alleged
a cause of action for unlawful detainer. The pertinent portion of the said
complaint reads:
xxx
3. Plaintiff is the owner of, and had been leasing to the defendant, the
premises mentioned above as the residence of the latter;
4. There is no current written lease contract between plaintiff and the
defendant, but the latter agreed to pay the former the amount of
Php20,000.00 as rent at the beginning of each month. Thus, the term of the
lease agreement is renewable on a month-to-month basis;
5. Since March 2011, defendant has not been paying the aforesaid rent
despite plaintiff’s repeated demands;
6. Due to defendant’s continuous failure to pay rent, plaintiff reached a
decision not to renew the lease agreement. It sent a formal letter, x x x
demanding defendant to pay the amount of Php220,000.00, representing
defendant’s twelve month rental arrears beginning January 2011, and to
vacate the leased premises, both within fifteen (15) days from receipt of said
letter;
7. Despite receipt of the aforesaid demand letter and lapse of the fifteen day
period given to comply with plaintiff’s demand, defendant neither tendered
payment for the unpaid rent nor vacated the leased premises. Worse,
defendant has not been paying rent up to now;
x x x24
The above-cited portions of the complaint sufficiently alleged that Fairland
was the owner of the subject property being leased to Po by virtue of an oral
agreement. There was a demand by Fairland for Po to pay rent and vacate
before the complaint for unlawful detainer was instituted. The complaint was
seasonably filed within the one-year period prescribed by law. With all the
elements present, there was clearly a cause of action in the complaint for
unlawful detainer.
Under the Rules of Summary Procedure, the weight of evidence is not
considered when a judgment is rendered based on the complaint
The question now is whether the MeTC correctly dismissed the case for lack
of preponderance of evidence. Fairland posits that judgment should have
been rendered in its favor on the basis of the complaint itself and not on its
failure to adduce proof of ownership over the subject property.
The Court agrees with Fairland’s position.
The summons, together with the complaint and its annexes, was served upon
Po on December 28, 2012. This presupposes that the MeTC found no ground
to dismiss the action for unlawful detainer.25 Nevertheless, Po failed to file his
answer on time and the MeTC had the option to render judgment motu
proprio or on motion of the plaintiff. In relation thereto, Sections 5 and 6 of
the Rules on Summary Procedure provide:
Sec. 5. Answer. – Within ten (10) days from service of summons, the
defendant shall file his answer to the complaint and serve a copy thereof on
the plaintiff. Affirmative and negative defenses not pleaded therein shall be
deemed waived, except for lack of jurisdiction over the subject matter. Cross-
claims and compulsory counterclaims not asserted in the answer shall be
considered barred. The answer to counterclaims or cross-claims shall be filed
and served within ten (10) days from service of the answer in which they are
pleaded.
Sec. 6. Effect of failure to answer. – Should the defendant fail to answer the
complaint within the period above provided, the court, motu proprio or on
motion of the plaintiff, shall render judgment as may be warranted by the
facts alleged in the complaint and limited to what is prayed for therein. The
court may in its discretion reduce the amount of damages and attorney’s fees
claimed for being excessive or otherwise unconscionable, without prejudice
to the applicability of Section 4, Rule 18 of the Rules of Court, if there are two
or more defendants.
[Emphasis Supplied]
Section 6 is clear that in case the defendant failed to file his answer, the court
shall render judgment, either motu proprio or upon plaintiff’s motion, based
solely on the facts alleged in the complaint and limited to what is prayed for.
The failure of the defendant to timely file his answer and to controvert the
claim against him constitutes his acquiescence to every allegation stated in
the complaint. Logically, there is nothing to be done in this situation26 except
to render judgment as may be warranted by the facts alleged in the
complaint.27
Similarly, under Section 7, Rule 70 of the Rules of Court, which governs the
rules for forcible entry and unlawful detainer, if the defendant fails to answer
88
the complaint within the period provided, the court has no authority to
declare the defendant in default. Instead, the court, motu proprio or on
motion of the plaintiff, shall render judgment as may be warranted by the
facts alleged in the complaint and limited to what is prayed for.28
This has been enunciated in the case of Don Tino Realty and Development
Corporation v. Florentino,29 citing Bayog v. Natino,30 where the Court held
that there was no provision for an entry of default under the Rules of
Summary Procedure if the defendant failed to file his answer.
In this case, Po failed to file his answer to the complaint despite proper service
of summons. He also failed to provide a sufficient justification to excuse his
lapses.1âwphi1 Thus, as no answer was filed, judgment must be rendered by
the court as may be warranted by the facts alleged in the complaint.
Failure to attach annexes is not fatal if the complaint alleges a sufficient cause
of action; evidence need not be attached to the complaint
The lower courts erroneously dismissed the complaint of Fairland simply on
the ground that it failed to establish by preponderance of evidence its
ownership over the subject property. As can be gleaned above, the rules do
not compel the plaintiff to attach his evidence to the complaint because, at
this inception stage, he only has to file his complaint to establish his cause of
action. Here, the court was only tasked to determine whether the complaint
of Fairland alleged a sufficient cause of action and to render judgment
thereon.
Also, there was no need to attach proof of ownership in the complaint
because the allegations therein constituted a sufficient cause of action for
unlawful detainer. Only when the allegations in the complaint are insufficient
to form a cause of action shall the attachment become material in the
determination thereof. Even under Section 4 of the Rules of Summary
Procedure,31 it is not mandatory to attach annexes to the complaint.
In the case of Lazaro v. Brewmaster32 (Lazaro), where judgment was rendered
based on the complaint due to the failure of the defendant to file an answer
under the Rules of Summary Procedure, it was written that:
xxx To determine whether the complaint states a cause of action, all
documents attached thereto may, in fact, be considered, particularly when
referred to in the complaint. We emphasize, however, that the inquiry is into
the sufficiency, not the veracity of the material allegations in the complaint.
Thus, consideration of the annexed documents should only be taken in the
context of ascertaining the sufficiency of the allegations in the complaint.
[Emphasis Supplied]
In Lazaro, the assailed invalid invoices attached to the complaint were not
considered because the complaint already alleged a sufficient cause of action
for collection of sum of money. Those assailed documents were not the bases
of the plaintiff’s action for sum of money, but were only attached to the
complaint to provide evidentiary details on the alleged transactions.
Similarly, in the case at bench, there was no need for documentary
attachments to prove Fairland’s ownership over the subject property. First,
the present action is an action for unlawful detainer wherein only de facto or
material possession is required to be alleged. Evidently, the attachment of
any deed of ownership to the complaint is not indispensable because an
action for unlawful detainer does not entirely depend on ownership.
Second, Fairland sufficiently alleged ownership and superior right of
possession over the subject property. These allegations were evidently
manifest in the complaint as Fairland claimed to have orally agreed to lease
the property to Po. The Court is of the view that these allegations were clear
and unequivocal and did not need supporting attachments to be considered
as having sufficiently established its cause of action. Even the MeTC conceded
that the complaint of Fairland stated a valid cause of action for unlawful
detainer.33 It must be stressed that inquiry into the attached documents in
the complaint is for the sufficiency, not the veracity, of the material
allegations in the complaint.
Third, considering that Po failed to file an answer within the prescribed
period, he was deemed to have admitted all the allegations in the complaint
including Fairland’s claim of ownership. To reiterate, the failure of the
defendant to timely file his answer and controvert the claim against him
constituted his acquiescence to every allegation stated in the complaint.
In the Entry of Appearance with Motion for Leave of Court to file
Comment/Opposition to Motion to Render Judgment, which was belatedly
filed and so was denied by the MeTC, Po merely denied the allegations against
him without even bothering to aver why he claimed to have a superior right
of possession of the subject property.34
Fourth, it is only at the later stage of the summary procedure when the
affidavits of witnesses and other evidence on factual issues shall be presented
before the court. Sections 8 and 9 of the Rules on Summary Procedure state:
Sec. 8. Record of preliminary conference. – Within five (5) days after the
termination of the preliminary conference, the court shall issue an order
stating the matters taken up therein, x x x
89
Sec. 9. Submission of affidavits and position papers. – Within ten (10) days
from receipt of the order mentioned in the next preceding section, the parties
shall submit the affidavits of their witnesses and other evidence on the
factual issues defined in the order, together with their position papers setting
forth the law and the facts relied upon by them.
[Emphasis Supplied]
Again, it is worth stressing that these provisions are exactly Sections 9 and 10
under Rule 70 of the Rules of Court.
Accordingly, it is only at this part of the proceedings that the parties will be
required to present and offer their evidence before the court to establish
their causes and defenses. Before the issuance of the record of preliminary
conference, the parties are not yet required to present their respective
evidence.
These specific provisions under the Rules of Summary Procedure which are
also reflected in Rule 70 of the Rules of Court, serve their purpose to
immediately settle ejectment proceedings. “Forcible entry and unlawful
detainer cases are summary proceedings designed to provide for an
expeditious means of protecting actual possession or the right to possession
of the property involved. It does not admit of a delay in the determination
thereof. It is a ‘time procedure’ designed to remedy the situation.35 Thus, as
a consequence of the defendant’s failure to file an answer, the court is simply
tasked to render judgment as may be warranted by the facts alleged in the
complaint and limited to what is prayed for therein.
As the complaint contains a valid cause of action, a judgment can already be
rendered
In order to achieve an expeditious and inexpensive determination of unlawful
detainer cases, a remand of this case to the lower courts is no longer
necessary and the case can be determined on its merits by the Court.
To recapitulate, as Po failed to file his answer on time, judgment shall be
rendered based only on the complaint of Fairland without the need to
consider the weight of evidence. As discussed above, the complaint of
Fairland had a valid cause of action for unlawful detainer.
Consequently, there is no more need to present evidence to establish the
allegation of Fairland of its ownership and superior right of possession over
the subject property. Po’s failure to file an answer constitutes an admission
of his illegal occupation due to his non-payment of rentals, and of Fairland’s
rightful claim of material possession. Thus, judgment must be rendered
finding that Fairland has the right to eject Po from the subject property.
The Judicial Affidavit Rule
On a final note, the Court deems it proper to discuss the relevance of the
Judicial Affidavit Rule or A.M. No. 12-8-8-SC, where documentary or object
evidence are required to be attached. To begin with, the rule is not applicable
because such evidence are required to be attached to a judicial affidavit, not
to a complaint. Moreover, as the rule took effect only on January 1, 2013, it
cannot be required in this case because this was earlier filed on December
12, 2012.
Granting that it can be applied retroactively, the rule being essentially
remedial, still it has no bearing on the ruling of this Court.
In the Judicial Affidavit Rule, the attachments of documentary or object
evidence to the affidavits is required when there would be a pre-trial or
preliminary conference or the scheduled hearing. As stated earlier, where a
defendant fails to file an answer, the court shall render judgment, either
motu proprio or upon plaintiff’s motion, based solely on the facts alleged in
the complaint and limited to what is prayed for. Thus, where there is no
answer, there is no need for a pre-trial, preliminary conference or hearing.
Section 2 of the Judicial Affidavit Rule reads:
Section 2. Submission of Judicial Affidavits and Exhibits in lieu of direct
testimonies. - (a) The parties shall file with the court and serve on the adverse
party, personally or by licensed courier service, not later than five days before
pre-trial or preliminary conference or the scheduled hearing with respect to
motions and incidents, the following:
(1) The judicial affidavits of their witnesses, which shall take the place of such
witnesses' direct testimonies; and
(2) The parties' docun1entary or object evidence, if any, which shall be
attached to the judicial affidavits and marked as Exhibits A, B, C, and so on in
the case of the complainant or the plaintiff, and as Exhibits 1, 2, 3, and so on
in the case of the respondent or the defendant.
(b) Should a party or a witness desire to keep the original document or object
evidence in his possession, he may, after the same has been identified,
marked as exhibit, and authenticated, warrant in his judicial affidavit that the
copy or reproduction attached to such affidavit is a faithful copy or
reproduction of that original. In addition, the party or witness shall bring the
original document or object evidence for comparison during the preliminary
conference with the attached copy, reproduction, or pictures, failing which
the latter shall not be admitted.
90
This is without prejudice to the introduction of secondary evidence in place
of the original when allowed by existing rules.
WHEREFORE, the petition is GRANTED. The October 31, 2014 Decision and
the March 6, 2015 Resolution of the Court of Appeals in CAG. R. SP No.
134701 are hereby REVERSED and SET ASIDE. Respondent Arturo Loo Po is
ORDERED TO VACATE Condominium Unit No. 205 located in Cedar Mansion
II on Ma. Escriba Street, Pasig City.
Respondent Po is further ORDERED TO PAY the rentals-in-arrears, as well as
the rentals accruing in the interim until he vacates the property. The unpaid
rentals shall incur a legal interest of six percent (6%) per annum from January
30, 2012, when the demand to pay and to vacate was made, up to the finality
of this decision. Thereafter, an interest of six percent (6%) per annum shall
be imposed on the total amount due until full payment is made.
SO ORDERED.
G.R. No. 191458
CHINATRUST (PHILS.) COMMERCIAL BANK, Petitioner
vs.
PHILIP TURNER, Respondent
DECISION
LEONEN, J.:
Issues that were not alleged or proved before the lower court cannot be
decided for the first time on appeal. This rule ensures fairness in proceedings.
This Petition for Review assails the Court of Appeals' (a) December 14, 2009
Decision1 affirming the Regional Trial Court's Decision dated January 29, 2007
and (b) its March 2, 2010 Resolution2 denying petitioner Chinatrust
(Philippines) Commercial Bank's (Chinatrust) Motion for Reconsideration.3
The Regional Trial Court set aside the Metropolitan Trial Court's dismissal4 of
the complaint. It ordered Chinatrust to restore to the account of respondent
Philip Turner (Turner) the following amounts: 1) US$430 or ₱24,129.88, its
peso equivalent as of September 13, 2004; and 2) US$30 or ₱l,683.48, its peso
equivalent as of September 13, 2004. It also ordered Chinatrust to pay
₱20,000.00 as moral damages, ₱l0,000.00 as exemplary damages, and
₱5,000.00 as attorney's fees.
On September 13, 2004, British national Turner initiated via Chinatrust-Ayala
Branch the telegraphic transfer of US$430.00 to the account of "MIN
TRAVEL/ESMAT AZMY, Account No. 70946017, Citibank, Heliopolis Branch" in
Cairo, Egypt.5 The amount was partial payment to Turner's travel agent for
his and his wife's 11-day tour in Egypt.6 Turner paid a service fee of US$30.00.
Both amounts were debited from his dollar savings account with Chinatrust.7
On the same day, Chinatrust remitted the funds through the Union Bank of
California, its paying bank, to Citibank-New York, to credit them to the bank
account of Min Travel/EsmatAzmy in Citibank-Cairo, Egypt.8
On September 17, 2004, Chinatrust received Citibank-Cairo's telexnotice
about the latter's inability to credit the funds it received because the
"beneficiary name d[id] not match their books (referred to as the 'discrepancy
notice')."9 In other words, the beneficiary's name "Min Travel/Esmat Azmy"
given by Turner did not match the account name on file of Citibank-Cairo.10
Chinatrust relayed this information to Turner on September 20, 2004, "the
next succeeding business day."11
Chinatrust claimed that it relayed the discrepancy to Turner and requested
him to verify from his beneficiary the correct bank account name.12 On
September 22, 2004, Turner allegedly informed Chinatrust that he was able
to contact Esmat Azmy, who acknowledged receipt of the transferred funds.
Turner, however, had to cancel his travel-tour because his wife got ill and
requested from Chinatrust the refund of his money.13
According to Chinatrust, it explained to Turner that since the funds were
already remitted to his beneficiary's account, they could no longer be
withdrawn or retrieved without Citibank-Cairo's consent. Turner was, thus,
advised to seek the refund of his payment directly from his travel agency.14
Turner allegedly insisted on withdrawing the funds from Chinatrust
explaining that the travel agency would forfeit fifty percent (50%) as penalty
for the cancellation of the booking, as opposed to the minimal bank fees he
would shoulder if he withdrew the money through Chinatrust.15 Hence,
Chinatrust required Turner to secure, at least, his travel agency's written
certification denying receipt of the funds so that it could act on his request.
However, Turner purportedly failed to submit the required certification
despite repeated reminders.16
On October 28, 2004, Chinatrust received Citibank-Cairo's Swift telex reply,
which confirmed receipt of Chinatrust's telegraphic funds transfer and its
credit to the bank account of Min Travel, not "Min Travel/Esmat Azmy" as
indicated by the respondent, as early as September 15, 2004.17 This
information was relayed to Turner on October 29, 2004.18
Despite this official confirmation, Turner allegedly continued to insist on his
demand for a refund.19
91
On March 7, 2005, Turner filed a Complaint20 against Chinatrust before the
Metropolitan Trial Court of Makati City, demanding the refund of his
telegraphic transfer of ₱24,129.88 plus damages.21
Upon further queries, Chinatrust received another telex on September 28,
2005 from Citibank-Cairo confirming again and acknowledging receipt of
Turner's remittance and its credit to the account of Min Travel on September
15, 2004.22
After the parties had submitted their respective position papers in
accordance with the Rules on Summary Procedure, the Metropolitan Trial
Court of Makati City, Branch 61 rendered a Decision23 on January 15, 2006,
dismissing Turner's complaint for lack of merit as well as Chinatrust's
counterclaim. The Metropolitan Trial Court found sufficient evidence to
prove that Chinatrust complied with its contractual obligation to transmit the
funds to Citibank-Cairo and that these funds were actually credited to the
intended beneficiary's account.24
Turner filed an appeal. On the substantive matters, Turner argued that the
Metropolitan Trial Court erred in ruling that he had no basis in claiming a
refund from Chinatrust and in not awarding him damages and attorney's
fees.25
Branch 137, Regional Trial Court of Makati City rendered a Decision26 on
January 29, 2007, reversing and setting aside the decision of the Metropolitan
Trial Court. While it agreed with the Metropolitan Trial Court's findings that
the funds had been deposited to the account of the beneficiary as early as
September 15, 2004, the Regional Trial Court ruled that this was not sufficient
basis to absolve Chinatrust of any responsibility.27 The trial court found
insufficient evidence to show that Chinatrust was not negligent in the
performance of its obligation under the telegraphic transfer agreement. It
held that no "discrepancy notice" from Citibank-Cairo was even presented in
evidence.28
The Regional Trial Court further held that Chinatrust failed to render its
services in a manner that could have mitigated, if not prevented, the
monetary loss, emotional stress, and mental anguish that Turner suffered for
six (6) weeks while waiting for his intended beneficiary's confirmation of
receipt of his money.29 Hence, Chinatrust was found liable for the monetary
loss suffered by Turner and for damages. The Decision disposed as follows:
WHEREFORE, in view of all the foregoing, the Decision of the Metropolitan
Trial Court of Makati City, Branch 61, in Civil Case No. 87471, is hereby
REVERSED and SET ASIDE, and a new one entered finding for plaintiff-
appellant PHILIP TURNER, and against defendant-appellee CHINA TRUST
(PHILS.) COMMERCIAL BANK CORPORATION by ordering the latter to pay, or
restore to PHILIP TURNER's account with said Bank, the following amounts:
(1) US $ 430.00 or ₱24,129.88, the Peso equivalent at the rate of ₱56.l160/US
$1.00, as of 13 September 2004; and
(2) US $ 30.00 or ₱l,683.48, the Peso equivalent at the rate of ₱56.1160/US
$1.00, as of 13 September 2004.
The defendant-appellee bank is further ordered to pay plaintiff-appellant
Philip Turner ₱20,000.00 as and for moral damages; ₱10,000.00 as and for
exemplary damages; and ₱5,000.00 as and for reasonable attorney's fees.
SO ORDERED.30
Chinatrust filed a motion for reconsideration, but it was denied by the
Regional Trial Court in a Resolution31 dated June 4, 2007.
On July 4, 2007, Chinatrust filed a Petition for Review32 under Rule 42 of the
1997 Rules of Civil Procedure before the Court of Appeals.
In its Decision33 dated December 14, 2009, the Court of Appeals dismissed the
petition and upheld the decision of the Regional Trial Court. Chinatrust's
subsequent Motion for Reconsideration34 was likewise denied in the Court of
Appeals' Resolution35 dated March 2, 2010.
Hence, this Petition36 was filed. In compliance with this Court's directive,
respondent filed his Comment,37 to which petitioner filed its Reply.38
Petitioner stresses that based on the allegations in the Complaint, the real
issue is "whether or not the petitioner-bank has legally complied with its
contractual obligation with respondent in remitting his telegraphic fund to
the latter's beneficiary account with Citibank-Cairo."39 It reasons that as
respondent has failed to prove his allegation that his telegraphic transfer
funds were not received or credited to his intended beneficiary's Citibank-
Cairo account, the Court of Appeals should have dismissed respondent's
complaint.40
Instead, the Court of Appeals adjudged petitioner liable for negligence: (1)
when it did not immediately refund the telexed funds to respondent upon
receipt of the discrepancy notice from Citibank-Cairo; and (2) when it did not
immediately relay to Citibank-Cairo respondent's demand for the
cancellation of the transaction.41 According to petitioner, this was erroneous
because the Court of Appeals ruled upon matters not alleged in the complaint
or raised as an issue42 and awarded damages not prayed for in the
complaint.43
92
Petitioner further argues that respondent demanded for the return of his
money long after-and not immediately after-he was informed of the
discrepancy in the beneficiary's name. Moreover, respondent made the
demand (1) only because he had changed his mind about the tour because
his wife was ill, (2) after he had personally known that his beneficiary had
received the transferred funds, and (3) to avoid the 50% forfeiture penalty.44
Petitioner adds that Article 1172 of the Civil Code was erroneously applied by
the Court of Appeals because this provision refers to an obligor's negligence
in performing the obligation. Here, the "acts of negligence" attributed to
petitioner were those that transpired after it had fully performed its
obligation to transfer the funds.45
Finally, petitioner contends that the Court of Appeals erred "when it unjustly
enriched the respondent by making the petitioner liable to refund the
amount already legally transferred to, and received by respondent's
beneficiary, for his benefit."46
Respondent counters that the issues raised by petitioner are factual, which
are not reviewable by this Court.47 He further denies that he disclosed to the
petitioner that he was able to contact his travel agency, which admitted that
it had received the funds. On the contrary, respondent avers that he
"demanded for the return of his money when the petitioner informed him
that the funds could not be deposited to the beneficiary account."48
The issues for resolution are:
First, whether the Court of Appeals erred in affirming the Regional Trial
Court's Decision, granting the refund of respondent's US$430.00 telegraphic
funds transfer despite its successful remittance and credit to respondent's
beneficiary Min Travel's account with Citibank-Cairo;
Second, whether petitioner Chinatrust (Philippines) Commercial Bank was
negligent in the performance of its obligation under the telegraphic transfer
agreement; and
Finally, whether the subsequent acts of petitioner after compliancewith its
obligation can be considered "negligent" to justify the award of damages by
the Regional Trial Court, as affirmed by the Court of Appeals.
I
The Regional Trial Court and the Court of Appeals erred in holding that
petitioner was negligent in failing to immediately address respondent's
queries and return his money and was consequently liable for the anguish
suffered by respondent. They ruled on an issue that was not raised by
respondent in the lower court, thereby violating petitioner's right to due
process.
It is an established principle that "courts cannot grant a relief not prayed for
in the pleadings or in excess of what is being sought by the party."49 The
rationale for the rule was explained in Development Bank of the Philippines v.
Teston,50 where this Court held that it is improper to enter an order which
exceeds the scope of the relief sought by the pleadings:
The Court of Appeals erred in ordering [Development Bank of the Philippines]
to return to respondent "the ₱l,000,000.00" alleged down payment, a matter
not raised in respondent's Petition for Review before it. In Jose Clavano, Inc.
v. Housing and Land Use Regulatory Board, this Court held:
It is elementary that a judgment must conform to, and be supported by, both
the pleadings and the evidence, and must be in accordance with the theory
of the action on which the pleadings are framed and the case was tried. The
judgment must be secudum allegata et probata.
Due process considerations justify this requirement. It is improper to enter
an order which exceeds the scope of relief sought by the pleadings, absent
notice which affords the opposing party an opportunity to be heard with
respect to the proposed relief. The fundamental purpose of the requirement
that allegations of a complaint must provide the measure of recovery is to
prevent surprise to the defendant.51 (Emphasis supplied, citations omitted)
The bank's supposed negligence in the handling of respondent's concerns was
not among respondent's causes of action and was never raised in the
Metropolitan Trial Court. Respondent's cause of action was based on the
theory that the telexed funds transfer did not materialize, and the relief
sought was limited to the refund of his money and damages as a result of the
purported non-remittance of the funds to the correct beneficiary account.52
"[T]he purpose of an action ... and the law to govern it ... is to be determined
. . . by the complaint itself, its allegations and the prayer for relief."53 The
complaint states "the theory of a cause of action which forms the bases of
the plaintiff's claim of liability."54
A review of the Complaint filed before the Metropolitan Trial Court reveals
that respondent originally sued upon a breach of contract consisting in the
alleged failure of petitioner to remit the funds to his travel agency's account
in Cairo-Egypt.
Respondent's cause of action was based on paragraphs 5 and 6 of his
Complaint:
93
5. That after a few days, the plaintiff verified from the defendant whether the
telegraphic transfer was sent but the plaintiff was told that the fund was not
applied to the intended account number and name as "THE BENE TITLE DOES
NOT MATCH WITH THEIR BOOKS";
6. That the plaintiff talked with the President of the defendant and asked
what was meant by that and was told that they did not succeed in sending
the telegraphic transfer to the beneficiary account[.]55
Respondent further alleged:
10. That because of the refusal of the defendant to return the amounts given
by the plaintiff, the latter suffered sleepless nights, worry and anxiety because
of his fear that he lost the money that he entrusted to the defendant for
transfer to the beneficiary account for which the plaintiff should be awarded
moral damages on the amount of ₱20,000.00;
11. That the defendant was guilty of gross negligence in failing to comply with
its obligation to send the telegraphic transfer to the intended beneficiary
account;
12. That by way of example, the defendant should be ordered to pay
exemplary damages in the amount of ₱20,000.00.56 (Emphasis supplied)
In both his Complaint and Position Paper,57 respondent anchored his claim for
refund and damages on the "discrepancy notice" and the manager's
explanation that the funds were not successfully credited to the beneficiary's
account. Respondent demanded for the return of his money having the
impression that the bank was not successful in remitting it.
The parties' pleadings and position papers submitted before the
Metropolitan Trial Court raised the factual issue of whether petitioner had
complied with its obligation to remit the funds of the respondent to his
intended beneficiary's account with Citibank-Cairo. They likewise raised the
legal issue of whether respondent was entitled to rescind the contract.
Furthermore, during the preliminary conference, the following issues were
defined: (a) "whether or not the amount was remitted to the correct
beneficiary's account," and (b) "whether or not the parties are entitled to
their respective claims."58 This does not include the issue of negligence on the
part of petitioner in attending to respondent's queries or the purported one
(1)-month delay in the confirmation of the remittance.
The case was decided by the Metropolitan Trial Court pursuant to the Revised
Rules on Summary Procedure.59 Accordingly, no trial was conducted as, after
the conduct of a preliminary conference, the parties were made to submit
their position papers.60 There was, thus, no opportunity to present witnesses
during an actual trial. However, Section 9 of the Revised Rules on Summary
Procedure calls for the submission of witnesses' affidavits together with a
party's position paper after the conduct of a preliminary conference:
Section 9. Submission of Affidavits and Position Papers. - Within ten (10) days
from receipt of the order mentioned in the next preceding section, the parties
shall submit the affidavits of their witnesses and other evidence on the
factual issues defined in the order, together with their position papers setting
forth the law and the facts relied upon by them.
The determination of issues at the preliminary conference bars the
consideration of other questions on appeal.61 This is because under Section 9
above, the parties were required to submit their affidavits and other evidence
on the factual issues as defined in the preliminary conference order. Thus,
either of the parties cannot raise a new factual issue on appeal, otherwise it
would be unfair to the adverse party, who had no opportunity to present
evidence against it.
II
The Metropolitan Trial Court correctly absolved petitioner from liability and
dismissed the complaint upon its finding that the bank had duly proven that
it had complied with its obligation under the telegraphic transfer. It found
that despite the earlier advice of Citibank-Cairo that the beneficiary name did
not match their files, Chinatrust and respondent Turner were subsequently
informed that the amount sent had been credited to the account of the
beneficiary as early as September 15, 2004.62
However, on appeal, the Regional Trial Court reversed the dismissal of the
complaint. While the Regional Trial Court affirmed the court a quo's ruling
that indeed the funds were credited to the intended beneficiary's account, it
went further and touched upon an issue that was beyond the cause of action
framed by the respondent. It adjudged petitioner liable not because it failed
to perform its obligation to remit the funds but because it purportedly did
not exercise due diligence in attending to respondent's queries and demands
with regard to the telegraphic funds transfer. Specifically, it found petitioner
negligent in its failure to promptly inform respondent that the money was, in
fact, credited to the account of the beneficiary.63 According to the Regional
Trial Court, "it is but right that the [petitioner] bank be held liable for the
monetary loss, as well as the emotional stresses and mental anguish that
[respondent] Turner had to go through as a result thereof."64 Hence, the
Regional Trial Court awarded respondent's claims for refund and damages.
94
The Regional Trial Court also faulted the petitioner for not submitting in
evidence the "discrepancy notice," which according to the trial court "puts
the ... bank's position in a cloud of doubt."65
Contrary to the observation of the Regional Trial Court, however, the
discrepancy notice's existence and content were not the core of the
controversy. In fact, they were never put in issue. The discrepancy notice only
came up because it was the basis for Turner's claim for refund insisting that
the funds were not credited to his travel agency's account. Hence, it is
understandable that both parties did not present it in evidence.
Similarly, the purported negligence of the bank personnel in attending to his
concerns was neither raised by respondent in any of his pleadings nor
asserted as an issue in the preliminary conference. Hence, it was improper
for the Regional Trial Court to consider this issue on negligence in
determining the respective claims of the parties.
Basic rules of fair play, justice, and due process require that arguments or
issues not raised in the trial court may not be raised for the first time on
appeal.66
In Philippine Ports Authority v. City of Iloilo:67
As a rule, a party who deliberately adopts a certain theory upon which the
case is tried and decided by the lower court will not be permitted to change
theory on appeal. Points of law, theories, issues and arguments not brought
to the attention of the lower court need not be, and ordinarily will not be,
considered by a reviewing court, as these cannot be raised for the first time
at such late stage. Basic considerations of due process underlie this rule. It
would be unfair to the adverse party who would have no opportunity to
present further evidence material to the new theory, which it could have
done had it been aware of it at the time of the hearing before the trial court.
To permit petitioner in this case to change its theory on appeal would thus be
unfair to respondent, and offend the basic rules of fair play, justice and due
process.68 (Citations omitted)
There is more reason for a reviewing court to refrain from resolving motu
proprio an issue that was not even raised by a party. This Court has previously
declared that:
"[C]ourts of justice have no jurisdiction or power to decide a question not in
issue" and that a judgment going outside the issues and purporting to
adjudicate something upon which the parties were not heard is not merely
irregular, but extrajudicial and invalid.69 (Citations omitted)
As pointed out earlier, respondent's cause of action was anchored on the
alleged non-remittance of the funds to his travel agency's account or based
on a breach of contract.
On appeal, however, the Regional Trial Court motu proprio found that
petitioner was negligent in addressing respondent's concerns, which justified
the award of damages against it. This was unfair to petitioner who had no
opportunity to introduce evidence to counteract this new issue. The factual
bases of this change of theory would certainly require presentation of further
evidence by the bank in order to enable it to properly meet the issue raised.
III
The Regional Trial Court and the Court of Appeals erred in awarding damages
to respondent.
Petitioner was not remiss in the performance of its contractual obligation to
remit the funds. It was established that the funds were credited to the
account of Min Travel on September 15, 2004, or two (2) days from
respondent's application.70
Petitioner cannot likewise be faulted for the discrepancy notice sent by
Citibank-Cairo, assuming there was a mistake in its sending. It merely relayed
its contents to respondent. Citibank-Cairo is not an agent of petitioner but a
beneficiary bank designated by respondent, upon the instruction of the
beneficiary, Min Travel.
The Regional Trial Court, as affirmed by the Court of Appeals, found petitioner
negligent in addressing the concerns and queries of respondent. It specifically
faulted petitioner for failure to submit any letters, tracers, cables, or other
evidence of communication sent to Citibank-Cairo to inquire about the status
of the remittance and adjudged petitioner liable for the anxieties suffered by
respondent.71
The rule that factual findings of the Court of Appeals are not reviewable by
this Court is subject to certain exceptions such as when there is a
misapprehension of facts and when the conclusions are contradicted by the
evidence on record.72 Here, there is insufficient evidence to show negligence
on the part of petitioner.
The one (1 )-month delay in receiving the telex reply from Citibank-Cairo does
not sufficiently prove petitioner's fault or negligence, especially since
"[p]etitioner's communications were coursed thru a third-party-
correspondent bank, Union Bank of Califomia."73
Furthermore, the lower courts overlooked the fact that respondent knew all
along, or as early as September 22, 2004, that his funds were already received
95
by his beneficiary. Despite this, he insisted on demanding the retrieval of the
funds after he opted not to pursue with his travel abroad.
Respondent did not specifically deny paragraphs 8 and 9 of petitioner's
Answer with Counterclaims, which alleged the following:
8. However, on September 22, 2004, the Plaintiff, despite being aware that
his foregoing remittance was already received by the beneficiary MIN
TRAVEL, changed his mind, and stated that he will no longer push though with
his tour travel, and thus, requested for the retrieval of said funds. Defendant
relayed said request through the foregoing channel to Citibank-Cairo.
Considering that said fund was already transferred, Citibank-Cairo refused to
honor said request, and consider the transmittal closed and accomplished;
9. Plaintiff, however, insisted on demanding refund of said amount from the
Defendant, who politely denied such demand, and repeatedly explained to
the Plaintiff that Citibank-Cairo will not honor such request, and that there is
nothing that the Defendant can do under the circumstances[.]74
The Affidavit of Rosario C. Astrologo (Astrologo), Branch Service Head,
Chinatrust-Ayala Branch, was never rebutted by respondent by submitting his
counter evidence. Portions of it stated:
7. On September 22, 2004, when he visited our branch office, which he has
been doing almost everyday, he mentioned to our Ms. Rina Chua, the bank's
Senior Service Assistant, Ayala Branch, that he [was] able to contact Mr.
Esmat Azmy who already confirmed having received the said remittance;
8. When I also talked to him, also on the same date, he, stated that he
changed his mind and will no longer push through with his said travel because
his wife, who is supposed to accompany him, became sick, injured, or
something to such effect. He also mentioned that if he will cancel his travel
agreement, the travel agency will only return to him fifty [percent] (50%) of
his foregoing down-payment, but if he will be able to retrieve and withdraw
such remittance from the bank, he will only pay the bank charges, which is
minimal. He, therefore, insisted, that said fund be withdrawn and returned to
him by the bank;
9. He was also told that if such fund was already received by the travel agency
and credited to its bank account of said travel agency at Citibank, it cannot be
returned anymore, and I advised him to contact his travel agency and
negotiate for the refund of his entire proceeds. I do not know if he later made
such plea to his travel agency for we were not told what happened later. I
promised, however, that we will relay his request for its retrieval of such fund
to Citibank, which we did thru various telexes[.]75
The successful remittance was later confirmed by the telex-reply from
Citibank-Cairo on October 28, 2004, stating that the funds were credited to
the account of Min Travel on September 15, 2004.76 This telex-reply confirms
that petitioner indeed made a follow up with Citibank-Cairo regarding the
status of respondent's funds.
Moreover, the refusal of petitioner's personnel to accede to respondent's
demand for a refund cannot be considered an actionable wrong. Their refusal
was due primarily to lack of information or knowledge of the effective
cancellation of the remittance and not from a deliberate intent to ignore or
disregard respondent's rights. When respondent insisted on asking for the
refund, he was repeatedly requested to submit a certification or, at least, a
written denial from his beneficiary that the funds were not in fact received.
They cannot be faulted for wanting to verify with Citibank-Cairo the status of
the remittance before acting upon his request, especially since the funds have
actually been received by Citibank-Cairo. The written denial would also be the
basis for petitioner's demand upon Citibank-Cairo.
The Court of Appeals erred in ruling that petitioner had the duty to
immediately return the money to Turner together with the service fee upon
the first instance that it relayed the discrepancy notice to him. Turner could
no longer rescind the telegraphic transfer agreement.
In Republic of the Philippines v. Philippine National Bank,77 thisCourt
described the nature of a telegraphic transfer agreement:
"[C]redit" in its usual meaning is a sum credited on the books of a company
to a person who appears to be entitled to it. It presupposes a creditor-debtor
relationship, and may be said to imply ability, by reason of property or
estates, to make a promised payment.
....
[A]s the transaction is for the establishment of a telegraphic or cable transfer,
the agreement to remit creates a contractual obligation and has been termed
a purchase and sale transaction (9 C.J.S. 368). The purchaser of a telegraphic
transfer upon making payment completes the transaction insofar as he is
concerned, though insofar as the remitting bank is concerned the contract is
executory until the credit is established.78
Thus, once the amount represented by the telegraphic transfer order is
credited to the account of the payee or appears in the name of the payee in
the books of the receiving bank, the ownership of the telegraphic transfer
order is deemed to have been transmitted to the receiving bank. The local
96
bank is deemed to have fully executed the telegraphic transfer and is no
longer the owner of this telegraphic transfer order.
It is undisputed that on September 13, 2004, the funds were remitted to
Citibank-New York through petitioner's paying bank, Union Bank of California.
Citibank-New York, in turn, credited Citibank-Cairo, Egypt, Heliopolis Branch.
Moreover, it was established that the amount of US$430.00 was actually
credited to the account of Min Travel on September 15, 2004,79 or merely two
(2) days after respondent applied for the telegraphic transfer and even before
petitioner received its "discrepancy notice" on September 17, 2004.
Chinatrust is, thus, deemed to have fully executed the telegraphic transfer
agreement and its obligation to respondent was extinguished.80 Hence,
respondent could no longer ask for rescission of the agreement' on
September 22, 2004.
When the funds were credited to the account of Min Travel at Citibank-Cairo,
ownership and control of these funds were transferred to Min
Travel.1âwphi1 Thus, the funds could not be withdrawn without its consent.
The Court of Appeals, in affirming the decision of the Regional Trial Court,
held that petitioner was obliged to immediately return the money to
respondent as early as September 17, 2004 when it received the "discrepancy
notice" from Citibank-Cairo.81 It held that petitioner's failure to do so even
upon respondent's demand constituted an actionable negligence under
Article 1172.82
The Court of Appeals misappreciated the true import of the discrepancy
notice when it held that the notice was an "effective cancellation of the
remittance by the Citibank-Cairo"83 that gave rise to the legal obligation of
petitioner to return the funds to respondent.
The discrepancy notice does not mean that the funds were not received by
the beneficiary bank. On the contrary, what it implies is that these funds were
actually received by Citibank-Cairo but it could not apply it because the
account name of the beneficiary indicated in the telex instruction does not
match the account name in its books. In short, it cannot find in its file the
beneficiary account name "Min Travel/Esmat Azmy" pursuant to the telex
instruction, for which reason, Citibank-Cairo asked for clarifications.
Petitioner, in turn, had to clarify from respondent, because it was respondent
himself, upon instruction of his travel agency, who indicated such
beneficiary's name in his telegraphic transfer form. True enough, as later
shown, the beneficiary account name was not '"Min Travel/Esmat Azmy" but
only "Min Travel." Petitioner, therefore, had nothing to do with the mismatch
of the beneficiary name and could not be made liable for it.
The information initially relayed by Citibank-Cairo and received by petitioner
on September 17, 2004-that the funds were not applied to the intended
account because the beneficiary name did not match its books-proved to be
no longer true. This is because Citibank-Cairo later confirmed that
respondent's remittance was duly credited to the account of Min Travel on
September 15, 2004.
As stated earlier, respondent's request for retrieval of the funds was because
he changed his mind about the travel rather than the discrepancy notice sent
by Citibank-Cairo. The Affidavit of Astrologo was never refuted.
The tour travel arrangement, which brought about the remittance of the
funds, is a separate and private arrangement between respondent and Min
Travel. Respondent's change of mind and claim for refund, therefore, should
have been properly addressed to Min Travel: which already had possession
of the funds and not to petitioner, who was not privy to the arrangement.
WHEREFORE, the Petition is GRANTED. The Court of Appeals' Decision dated
December 14, 2009 and Resolution dated March 2, 2010 are set aside and the
Decision dated January 15, 2006 of the Metropolitan Trial Court, Branch 61,
Makati City is reinstated.
SO ORDERED.

97