ABALOS

1. VIRATA v. SANDIGANBAYAN

G.R. No. 114331

May 27, 1997

Facts:

Petitioner Cesar E. A. Virata is one of the defendants in Civil Case No. 0035, entitled
Republic of the Philippines versus Benjamin (Kokoy) Romualdez, et. al.. The case,
which was filed by the Presidential Commission on Good Government against fifty
three persons (53) including Virata, involves the recovery of ill-gotten wealth during
the reign President Marcos.

The complaint against the defendants was amended three times. The last amended
complaint filed with the Sandiganbayan, known as the expanded Second Amended
Complaint.

Asserting that the Second Amended Complaint contain allegations which are
vague and not averred with sufficient definiteness as to enable him to effectively
prepare his responsive pleading, petitioner Virata filed a motion for a bill of
particulars.

In a Resolution promulgated, the Sandiganbayan partially granted the said motion

by requiring the Republic to submit a bill of particulars concerning the charges
against petitioner Virata. However, as to the other charges, the Sandiganbayan
declared that these accusations are clear and specific enough to allow Virata to
submit an intelligent responsive pleading, hence, the motion for a bill of particulars
respecting the three charges was denied.

In view of the Sandiganbayan's order of August 4, 1992, the Republic through the
Office of the Solicitor General submitted the bill of particulars dated October 22,
1992, called as the Limited Bill of Particulars which was signed by a certain Ramon
A. Felipe IV, who was designated in the bill of particulars as "private counsel".
Virata, who was dissatisfied with the Sandiganbayan Resolution of August 4, 1992,
filed a petition for certiorari (G.R. No. 106527) with this Court questioning the
Sandiganbayan's denial of his motion for a bill of particulars. The PCGG submitted
the bill of particulars dated November 3, 1993, which was apparently signed by a
certain Reynaldo G. Ros, who was named in the bill of particulars as "deputized
prosecutor" of the PCGG.

Virata filed on November 23, 1993 his comment on the bill of particulars with motion
to dismiss the expanded Second Amended Complaint. He alleges that both the bills
of particulars are pro forma and should be stricken off the records. According to
him, the bill of particulars dated November 3, 1993 is merely a rehash of the
assertions made in the expanded Second Amended Complaint. Furthermore, a
reading of the Limited Bill of Particulars shows that it alleges new imputations
which are immaterial to the charge of being a dummy, nominee or agent, and that
Virata acted, not as a dummy, nominee or agent of his co-defendants as what is
charged in the complaint, but as a government officer of the Republic.

Dissatisfied, Virata filed this instant petition for certiorari under Rule 65 of the Rules
of Court to challenge the foregoing Resolution of the Sandiganbayan.

Issue: WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION WHEN

SANDIGANBAYAN RULED THAT THE COMPLAINT CONTAIN ULTIMATE FACTS

Ruling: YES

The complaint should contain definite statement is sought, need only inform the
defendant of the essential (or ultimate) facts to enable him to prepare an intelligent
answer.

The proper preparation of an intelligent answer requires information as to the

precise nature, character, scope and extent of the cause of action in order that the
pleader may be able to squarely meet the issues raised, thereby circumscribing
them within determined confines and, preventing surprises during the trial, and in
order that he may set forth his defenses which may not be so readily availed of if
the allegations controverted are vague, indefinite, uncertain or are mere general
conclusions. It was, therefore, grave error for the Sandiganbayan to state that"
[a]lleging the specific nature, character, time and extent of the phrase ‘active
collaboration’ would be a mere surplus age and would not serve any useful
purpose" for precisely, without any amplification or particularization thereof, the
petitioner would be hard put in meeting the charges squarely and in pleading
appropriate defenses. The complaint filed do not contain sufficient facts to lay
down the cause of action.
2. BANCO FILIPINO SAVINGS VS CA

GR NO. 129227

MAY 30, 2000

FACTS: Elsa Arcilla and her husband, Calvin Arcilla secured on three occasions,
loans from the Banco Filipino Savings and Mortgage bank in the amount of
Php.107,946.00 as evidenced by the “Promissory Note” executed by the spouses
in favor of the said bank. To secure payment of said loans, the spouses executed
“Real Estate Mortgages” in favor of the appellants (Banco Filipino) over their
parcels of land. The appellee spouses failed to pay their monthly amortization to
appellant. On September 2, 1985 the appellee’s filed a complaint for “Annulment of
the Loan Contracts, Foreclosure Sale with Prohibitory and Injunction” which was
granted by the RTC. Petitioners appealed to the Court of Appeals, but the CA
affirmed the decision of the RTC. Aggrieved with the decision of the CA, filed the
instant petition.
ISSUE: Whether or not the CA erred when it held that the cause of action of the
private respondents accrued on October 30, 1978 and the filing of their complaint
for annulment of their contracts in 1085 was not yet barred by the prescription

RULING: The court held that the petition is unmeritorious. Petitioner’s claim that
the action of the private respondents have prescribed is bereft of merit. Under
Article 1150 of the Civil Code, the time for prescription of all kinds of action where
there is no special provision which ordains otherwise shall be counted from the
day they may be brought. Thus the period of prescription of any cause of action is
reckoned only from the date of the cause of action accrued. The period should not
be made to retroact to the date of the execution of the contract, but from the date
they received the statement of account showing the increased rate of interest, for
it was only from the moment that they discovered the petitioner’s unilateral
increase thereof.
3. VITANGCOL VS NEW VISTA

GR. NO. 176014

SEPT 17, 2009

FACTS : Subject of the instant controversy is Lot No. 1702 covered by Transfer
Certificate of Title (TCT) No. (25311) 2528 of the Calamba, Laguna Registry in the
name of Maria A. Alipit and Clemente A. Alipit, married to Milagros

On June 18, 1989, Maria and Clemente A. Alipit, with the marital consent of the
latters wife, executed a Special Power of Attorney[4] (SPA) constituting Milagros
A. De Guzman as their attorney-in-fact to sell their property described in the SPA
as located at Bo. Latian, Calamba, Laguna covered by TCT No. (25311) 2538 with
Lot No. 1735 consisting of 242,540 square meters more or less. Pursuant to her
authority under the SPA, De Guzman executed on August 9, 1989 a Deed of
Absolute Sale[5] conveying to New Vista Properties, Inc. (New Vista) a parcel of
land with an area of 242,540 square meters situated in Calamba, Laguna.

Following the sale, New Vista immediately entered the subject lot, fenced it with
cement posts and barbed wires, and posted a security guard to deter trespassers.
he controversy arose more than a decade later when respondent New Vista learned
that the parcel of land it paid for and occupied, i.e., Lot No. 1702, was being claimed
by petitioners Vitangcol on the strength of a Deed of Absolute Sale for Lot No. 1702
under TCT No. (25311) 2528 entered into on August 14, 2001 by and between
Vitangcol and Maria Alipit. Consequent to the Vitangcol-Maria Alipit sale, TCT No.
(25311) 2528 was canceled and TCT No. T-482731 issued in its stead in favor of
Vitangcol on August 15, 2001.

Alarmed by the foregoing turn of events, New Vista lost no time in protecting its
rights by, first, filing a notice of adverse claim over TCT No. T-482731, followed by
commencing a suit for quieting of title before the RTC. By Order of November 25,
2003, the trial court denied Vitangcols and Maria Alipits separate motions to
dismiss the amended complaint. As there held by the RTC, the amended
complaint[10] sufficiently stated a cause of action as shown therein that after the
purchase and compliance with its legal obligations relative thereto, New Vista was
immediately placed in possession of the subject lot, but which Maria Alipit, by
herself, later sold to Vitangcol to New Vistas prejudice

On August 14, 2006, the appellate court rendered the assailed Decision reversing
the December 21, 2004 RTC Order

ISSUE : WON THE DECISION AND THE RESOLUTION OF THE TWELFTH DIVISION
OF THE COURT OF APPEALS UNDER CHALLENGE ARE CONTRARY TO LAW

HELD : The Rules of Court defines cause of action as the act or omission by which
a party violates a right of another. It contains three elements: (1) a right existing in
favor of the plaintiff; (2) a correlative duty on the part of the defendant to respect
that right; and (3) a breach of the defendants duty. It is, thus, only upon the
occurrence of the last element that a cause of action arises, giving the plaintiff a
right to file an action in court for recovery of damages or other relief.

Lack of cause of action is, however, not a ground for a dismissal of the complaint
through a motion to dismiss under Rule 16 of the Rules of Court, for the
determination of a lack of cause of action can only be made during and/or after
trial. What is dismissible via that mode is failure of the complaint to state a cause
of action. Sec. 1(g) of Rule 16 of the Rules of Court provides that a motion may be
made on the ground that the pleading asserting the claim states no cause of action.
The rule is that in a motion to dismiss, a defendant hypothetically admits the truth
of the material allegations of the ultimate facts contained in the plaintiffs
complaint.[21] When a motion to dismiss is grounded on the failure to state a cause
of action, a ruling thereon should, as rule, be based only on the facts alleged in the
complaint. However, this principle of hypothetical admission admits of exceptions.
Among others, there is no hypothetical admission of conclusions or interpretations
of law which are false; legally impossible facts; facts inadmissible in evidence;
facts which appear by record or document included in the pleadings to be
unfounded; allegations which the court will take judicial notice are not true; and
where the motion to dismiss was heard with submission of evidence which
discloses facts sufficient to defeat the claim.
4. DABUCO VS CA

G.R. No. 133775

January 20, 2000

FACTS: The Lazarrabal family were the registered owners of the properties, subject
matter of this case. In 1991, on different occasions, the subject properties were
sold to the Ruben Baculi, Editha Belocura, Lira Puno, Rafael Lapuz, Ladrioro
Montealto, Joel Masecampo, Delsa N. Manay, Ilderim Castañares, Maria Theresa
Puno, [and] Jill Mendoza. On June 27, 1994, GABI Multi-Purpose Cooperative, a
registered non-stock, non-profit cooperative filed a civil complaint against
DABUCO, et al. who were found residing and/or tilling the subject properties. The
trial court issued a TRO enjoining Dabuco, et al. to desist from further development
of GABI’s properties. The trial court then lifted the TRO upon failure of GABI to
prove its title over the properties. Dabuco et al. filed their answer alleging that GABI
had no personality to sue since they do not appear to be buyer of the properties
neither were the properties titled in its name. Dabuco filed a Motion to Dismiss on
the ground of lack of cause of action, GABI has no personality to sue and lack of
jurisdiction. The trial court dismissed the case. GABI appealed to the CA and the
decision was reversed.

ISSUE: Whether or not the dismissal of the trial court on the ground of lack of cause
of action was proper.

RULING: The dismissal by the trial court was not proper. We note that the issue of
sufficiency of GABI's cause of action does not appear to have been passed upon
by the appellate court in its assailed decision. It appears that the trial court
dismissed the case on the ground that GABI was not the owner of the lands or one
entitled to the possession thereof, and thus had no cause of action. In dismissal
for lack of cause of action, the court in effect declared that plaintiff is not entitled
to a favorable judgment inasmuch as one or more elements of his cause of action
do not exist in fact. Because questions of fact are involved, courts hesitate to
declare a plaintiff as lacking in cause of action. Such declaration is postponed until
the insufficiency of cause is apparent from a preponderance of evidence. Usually,
this is done only after the parties have been given the opportunity to present all
relevant evidence on such questions of fact.

Moreover, GABI did not have sufficient chance to prove its allegation of ownership.
Thus, the conclusion that GABI's allegation of ownership is false and that its
complaint stated no cause of action, appears to be without basis. In sum, as
appears from the available records, the Court of Appeals was correct in ruling that
the dismissal by the trial court of GABI's complaint was incorrect. The case should,
therefore, proceed to trial where the parties may adduce evidence to support their
claims and defenses.
5. AQUINO VS. QUIAZON

GR. NO. 201248

MARCH 11, 2015

FACTS: A complaint for Annulment and Quieting of Title was filed before the RTC
by the petitioners. They alleged that they were the heirs of the late Epifanio Makam
and Severina Bautista, who acquired a house and lot consisting of 557 square
meters, by virtue of a Deed of Sale, dated April 20, 1894; that since then, they and
their predecessors-in-interest had been in open, continuous, adverse, and
notorious possession for more than a hundred years, constructing houses and
paying real estate taxes on the property; that sometime in June 2005, they received
various demand letters from the respondents.

The respondents claiming ownership over the subject property and demanding
that they vacate the same; that upon inquiry with the Register of Deeds of San
Fernando, Pampanga, they confirmed that the property had been titled in the name
of respondents under Transfer Certificate of Title (TCT) No. 213777-R; that the said
title was invalid, ineffective, voidable or unenforceable; and that they were the true
owners of the property. Respondents asserted that they were the absolute owners
of the subject land as per TCT No. 213777-R; that they had inherited the same from
their predecessor-in-interest, Fausta Baluyut, one of the registered owners under
Original Certificate of Title (OCT) No. RO-1138 (11376), as per the Project of
Partition and Deed of Agreement and those petitioners had been occupying the
property by mere tolerance. They denied the allegations in the complaint and
proffered affirmative defenses with counterclaims. RTC-Br. 56 - dismissed.
Respondents, on the other hand, echo the ruling of the CA that it was within the
discretion of the trial court to conduct a preliminary hearing on the affirmative
defense of lack of cause of action or failure to state a cause of action, where both
parties were given the chance to submit arguments and evidence for or against the
dismissal of the complaint. Furthermore, they argue that the Court has previously
upheld cases where the court took into account external factors in the dismissal of
the complaint on the ground of lack of cause of action. They assert that since
petitioners were given reasonable opportunity to present evidence to prove their
cause of action, they are now estopped from invoking the rule that only allegations
in the complaint should be considered.

Issue: Whether the CA erred in affirming the dismissal of petitioners' complaint on

the ground of lack of cause of action or failure to state a cause of action.

Held:

The Court notes that respondents raised the affirmative defense in their Answer
that petitioners "have no valid, legal and sufficient cause of action," raising factual
matters, which is effectively the ground of "lack of cause of action."

It is of note that although the trial court might not have erred in holding a
preliminary hearing on the affirmative defenses of prescription and res judicata, it
is readily apparent from the decisions of the lower courts that no disquisition
whatsoever was made on these grounds. It cannot be denied that evidence in
support of the ground of "lack of cause of action" was received and given great
weight by the trial court. In fact, all the evidence given credence by the trial court
were only in support of the ground of "lack of cause of action." This all the more
highlight that the trial court erred in receiving evidence to determine whether the
complaint failed to state a cause of action.

Although neither the RTC nor the CA ruled on the affirmative defenses of
prescription and res judicata, it appears that this case could not have been
dismissed on these grounds. First, an action to quiet title is imprescriptible if the
plaintiffs are in possession of the property, which is the situation prevailing in the
present case. Second, there appears to be no res judicata nor a violation of the
prohibition against forum shopping considering that Civil Case No. 5487 had been
dismissed, without prejudice, years before petitioners initiated their complaint for
quieting of title.
6. PILIPINAS SHELL VS JOHN

GR. NO. 159831

OCTOBER 14, 2005

FACTS: Petitioner Pilipinas Shell Petroleum Corporation ("Pilipinas Shell") is a

corporation engaged in the business of refining and processing petroleum
products. From 1955 to 1975, Respondent John Bordman Ltd. of Iloilo, Inc. ("John
Bordman") purchased bunker oil in drums from Arabay. When Arabay ceased its
operations in 1975, Pilipinas Shell took over and directly marketed its products to
John Bordman.

On August 20, 1980, John Bordman filed against Pilipinas Shell a civil case for
specific performance. The former demanded the latter's short deliveries of fuel oil
since 1955; as well as the payment of exemplary damages, attorney's fees and
costs of suit. John Bordman alleged that Pilipinas Shell and Arabay had billed it at
210 liters per drum, while other oil companies operating in Bacolod had billed their
customers at 200 liters per drum.

On August 30, 1991, the RTC issued a Decision in favor of respondent. Pilipinas
Shell appealed to the CA, alleging that John Bordman had failed to prove the short
deliveries; and that the suit had been barred by estoppel, laches, and prescription.
Upholding the trial court, the CA overruled petitioner's objections to the evidence
of respondent in relation to the testimonies of the latter's witnesses and the results
of the volumetric tests. The appellate court also debunked petitioner's claims of
estoppel and laches. It held that the stipulation in the product invoices stating that
respondent had received the products in good order was not controlling.On the
issue of prescription, the CA ruled that the action had been filed within the period
required by law. Hence, this Petition.

Issue: WON THE COMPLAINT FILED HAS SUFFICIENT CAUSE OF ACTION

RULING: Actions based upon a written contract should be brought within ten years
from the time the right of action accrues.This accrual refers to the cause of action,
which is defined as the act or the omission by which a party violates the right of
another.

Jurisprudence is replete with the elements of a cause of action: (1) a right in favor
of the plaintiff by whatever means and under whatever law it arises or is created;
(2) an obligation on the part of the named defendant to respect or not to violate the
right; and (3) an act or omission on the part of the defendant violative of the right
of the plaintiff or constituting a breach of an obligation to the latter. It is only when
the last element occurs that a cause of action arises.

Applying the foregoing elements, it can readily be determined that a cause of action
in a contract arises upon its breach or violation. Therefore, the period of
prescription commences, not from the date of the execution of the contract, but
from the occurrence of the breach.

To the mind of this Court, the cause of action in the present case arose on July 24,
1974, when respondent discovered the short deliveries with certainty. Prior to the
discovery, the latter had no indication that it was not getting what it was paying for.
There was yet no issue to speak of; thus, it could not have brought an action
against petitioner. It was only after the discovery of the short deliveries that
respondent got into a position to bring an action for specific performance.
Evidently then, that action was brought within the prescriptive period when it was
filed on August 20, 1980.
7. NAGA TELEPHONE VS CA

GR. NO. 107112

FEB 24, 1994

FACTS: NATELCO entered into contract with CASURECO II for the use in operation
of its telephone service, electric light posts of CASURECO II and in return, there
will be free use of 10 telephone connections as long as NATELCO needs electric
light posts. The period would last for as long as NATELCO needs electric light
posts. In other words, the contract will terminate when they are forced to stop,
abandon operation and remove light posts. After 10 years, CASURECO filed for
reformation of contract with damages, for petitioner’s failure to conform to the
guidelines of National Electrification Administration of reasonable compensation
for use of posts. Compensation is worth P10, but the consumption of telephone
cables costs P2,630. NATELCO, who used 319, without the contract of P10 each,
refused to pay. Moreover, respondent alleged poor servicing. All in all, an amount
of not less than P100,000 is claimed as damages.

ISSUE:

WON THE COMPLAINT HAS CAUSE OF ACTION

RULING:

The case at bar involves the reformation of a Contract. Among others, the grounds
for the action filed by the plaintiff included allegations that the contract was too
one-sided in favor of the defendant, and that certain events had made the
arrangement inequitable. The Court ruled that the cause of action for a reformation
would arise only when the contract appeared disadvantageous

However, the allegations in private respondent’s complaint and the evidence it has
presented sufficiently made out a cause of action under Article 1267. The Court,
therefore, released the parties from their correlative obligations under the contract.
However, the Court has to take into account the possible consequences of such
condition—disruption of electric services to the public and prejudice to business
of petitoners.

8. NABUS VS CA

G.R. No. 91670

February 7, 1991

FACTS: Albert Nabus instituted two Civil cases:

1) June 22, 1970, herein petitioner Albert Nabus brought an action for
reconveyance of a parcel of land against herein private respondent Mariano Lim
in the then Court of First Instance of Baguio and Benguet, La Trinidad, Benguet.
Respondent Lim moved to dismiss this complaint on the grounds of lack of
cause of action, there being no tender of the repurchase price of the parcel of
land in question, and of prescription which was denied by the trial court. The
motion for reconsideration on the order of denial was also seek which the trial
court ordered Nabus to deposit the repurchase pace of the said lot in the
amount of P183,000.00. On November 13,1980, Lim filed a motion to dismiss
Civil Case No. 2159(24) for failure of Nabus to deposit in court the required
amount. On December 1, 1980, Nabus, by counsel, filed a motion for extension
of time within which to file an opposition to Lim's motion to dismiss. On March
13, 1981, no opposition having been filed to the motion to dismiss because of
the death of Nabus' counsel, the trial court dismissed with prejudice Civil Case
No. 2159(24) for his failure to deposit the required amount, evincing lack of
interest to repurchase the parcel of land in question. Nabus’ motion for
 recondsideration was denied and did not appeal on such order of dismissal was
taken.

2) On March 15, 1982, Nabus filed Civil Case No. 4293 in the same Court of First
Instance of Baguio and Benguet for the annulment of the order of dismissal in
Civil Case No. 2159(24), claiming that the failure of Atty. Florendo, his former
counsel, to file an opposition to Lim's motion to dismiss was due to his serious
illness; that the dismissal of his complaint therein, without Nabus being able to
file an opposition to Lim's motion to dismiss, deprived him of the opportunity
to be heard amounting to denial of due process; and that the denial of his
motion for reconsideration constituted grave abuse of discretion tantamount to
lack of jurisdiction on the part of the trial court.

Civil Case No. 4293 was subsequently amended to allege grounds for rescission
and damages as additional causes of action. On August 8, 1986, Lim filed a motion
to dismiss the complaint in Civil Case No. 4293 on the ground that it was barred by
prior judgment or res judicata and that the action had already prescribed. On
October 7, 1986, Nabus filed an opposition to the motion to dismiss. A reply to the
opposition and a supplement to his motion to dismiss was filed by Lim, to which
Nabus filed a rejoinder. On July 22, 1987, the trial court dismissed the complaint in
Civil Case No. 4293 on both grounds invoked in the motion to dismiss.

On appeal to respondent court, Nabus claimed that the trial court erred in holding
that all the causes of action in the case are barred by res judicata and that the
action for rescission and damages has prescribed.

Issue:

Whether or not the action for rescission and damages impleaded in the rejoinder
of the plaintiff is barred for failure to implead in the action for reconveyance which
was dismissed by the trial court for failure of the plaintiff to deposit the amount to
repurchased the subject land.

Court’s Ruling:
Sec. 5. Joinder of causes of action. –– Subject to rules regarding jurisdiction,
venue and joinder of parties, a party may in one pleading state, in the alternative
or otherwise, as many causes of action as he may have against an opposing party
(a) if the said causes of action arise out of the same contract, transaction or relation
between the parties, or (b) if the causes of action are for demands for money, or
are of the same nature and character.

The rule is clearly permissive. It does not constitute an obligatory rule, as there is
no positive provision of law or any rule of jurisprudence which compels a party to
join all his causes of action and bring them at one and the same time.

Under the present rules, the provision is still that the plaintiff may, and not that he
must, unite several causes of action although they may be included in one of the
classes specified. This, therefore, leaves it to the plaintiffs option whether the
causes of action shall be joined in the same action, and no unfavorable inference
may be drawn from his failure or refusal to do so. He may always file another action
based on the remaining cause or causes of action within the prescriptive period
therefor.

The holds that action for rescission has prescribed and should consequently be
dismissed on said ground. There can be no dispute that actions based on written
contracts prescribe after ten years from the time the right of the action accrues.

In the present case, petitioner's position is that the last three installments which
he claims were not paid by private respondent, allegedly fell due on July 1, 1968,
July 1, 1969, and July 1,1970, respectively.

The ten-year period had started to run on July 2, 1970, petitioner should have filed
the action before July 2, 1980 when the prescriptive period expired. Considering
that the amended complaint in Civil Case No. 4293, invoking petitioner's right to
rescind the contract, was filed only on May 3, 1985, the action therefor has
obviously and ineluctably prescribed.
9. SERRANO VS CA

GR. NO. 139420

AUGUST 15, 2001

FACTS: From 1974 to 1991, A Company, the local agent of foreign corporation B
Company, deployed petitioner Serrano as a seaman to Liberian, British and Danish
ships. As petitioners was on board a ship most of the time, respondent Maersk
offered to send portions of petitioners salary to his family in the Philippines by
money order. Petitioner agreed and from 1977 to 1978, he instructed respondent
Maersk to send money orders to his family. Respondent Maersk also deducted
various amounts from his salary for Danish Social Security System (SSS), welfare
contributions, ship clubs, and SSS medicate. Petitioner’s family failed to received
the money orders petitioners sent through respondent Maersk. Upon learning this
in 1978, petitioners demanded that respondent Maersk pay him the amounts the
latter deducted from his salary, which request were ignored. Whenever he returned
to the Philippines, petitioners follow up his money claims but he would be told to
return after several weeks while respondent Maersk would hire him again to board
another one of their vessels for about a year.

Finally, in October 1993, petitioner wrote to respondent Maersk demanding

immediate payment to him of the total amount of the money orders deducted from
his salary from 1977 to 1978. On November 11, 1993, B company replied to
petitioner that they keep accounting documents only for a certain number of years,
thus data on his money claims from 1977 to 1978 were no longer declined
petitioners demand for payment. In April 1994, petitioners filed a complaint for
collection of the total amount of the unsent money orders and illegal salary
deductions against the respondents Maersk in the Philippine Overseas
Employment Agency (POEA). The NLRC dismissed within three years from the time
the cause of action accrued, otherwise they shall be forever berried.

ISSUE: Did the money claim of petitioner prescribe?

HELD: No. Petitioner’s cause of action accrued only in 1993 when respondent A.P
Moller wrote to him that its accounting records showed it had no outstanding
money orders and that his case was considered outdated. Thus the three (3) years
prescriptive period should be counted from 1993 and not 1978 and since his
complaint was filed in 1994, he claims that it has not prescribed. It is settled
jurisprudence that a cause of action has three elements, to wit (1) a right in favor
of the plaintiff by whatever means and under whatever law it arises or is created;
2) an obligation on the part of the named defendant to respect or not to violate such
right, and 3) an act or omission on the part of such defendant volatile of the right
of the plaintiff or constituting a branch of the obligation of the defendant to the
plaintiff. In October 1993, Serrano finally demanded in writing payment of the
unsent money orders. Then and only then was the claim categorically denied by
respondent. AP. Moller in its letter dated November 22, 1993. Following the Baliwag
Transit ruling (1989), petitioner’s cause of action accrued only upon respondent.
AP. Mollers definite denial of his claim in November 1993. Having filed his action
five (5) months thereafter or in April 1994, we holds that it was filed within the three
– year (3) prescriptive period provided in Article 291 of the Labor Code.

10. ELIDO VS CA

G.R. No. 95441

December 16, 1992

FACTS: From 15 October 1964 to 25 February 1965, Allied Credit Integrated

Services, Inc. obtained credit accommodations from private respondent, The
Overseas Bank of Manila, later known as the Commercial Bank of Manila, and still
later, the Boston Bank
of the Philippines. On 11 January 1965, to embody the terms of their undertaking
in writing, ALLIED and private respondent entered into an Overdraft Agreement
allowing ALLIED to overdraw from its account deposited with The Overseas Bank
of Manila such amounts not exceeding Ten Thousand Pesos (P10,000.00) at an
annual interest rate of twelve percent (12%) compounded monthly.

To secure ALLIED's prompt payment of any liability arising from the Overdraft
Agreement, petitioner Carlos O. Elido, Sr., and one Vicente M. Gomez executed a
Continuing Surety Agreement, solidarily binding themselves up to the principal
amount of Ten Thousand Pesos (P10,000.00), plus interest thereon at the rate
stated in the Overdraft Agreement. Like the Overdraft Agreement, the Continuing
Surety Agreement stipulates that ten percent (10%) of the amount due shall be paid
by the debtor as attorney's fees in case a judicial proceeding is instituted to enforce
the terms and conditions thereof.

By 23 March 1965, ALLIED had an existing overdraft of P9,598.72 which remained

outstanding even after the Central Bank forbade it from doing business on 13
August 1968 upon finding respondent bank's financial condition to be extremely
precarious. On 23 October 1974, the Court approved the Program of Rehabilitation
of The Overseas Bank of Manila submitted by both private respondent and the
Central Bank, Phase I of which provides, among others, for the collection of all
loans already due and demandable.

Hence, on 23 July 1976, after sending at least four (4) demand letters and still failing
to collect, private respondent filed a collection case against ALLIED and petitioner
Carlos O. Elido, Sr. Meanwhile, Vicente M. Gomez died, hence, was no longer
impleaded. ALLIED, which had ceased operations, was then dropped as co-
defendant at the instance of private respondent as it could not be properly served
with summons and was already delaying the proceedings.

After almost ten years from the time the case was instituted, the Regional Trial
Court of Manila, Br. 7, rendered its Decision ordering defendant Carlos O. Elido, Sr.
to pay plaintiff.

From the foregoing judgment, petitioner appealed to the Court of Appeals.

However, respondent appellate court, finding no reversible error, affirmed in toto
the Decision appealed from. Hence, this petition

ISSUE: WON THE CLAIM HAS ALREADY PRESCRIBE

Petitioner's defense of prescription is untenable. He seeks refuge in Art. 1144 (1)
of the Civil Code, which however provides that the cause of action must be brought
within ten (10) years from the time the cause of action accrues.

Thus, in a number of cases, We held, Since a "cause of action" requires as essential

elements, not only a legal right of the plaintiff and a correlative obligation of the
defendant but also "an act or omission of the defendant in violation of said legal
right," the cause of action does not accrue until the party obligated refuses,
expressly or impliedly, to comply with its duty.

Also, in two (2) other cases, We ruled — A cause of action has three elements,
namely: (1) a right in favor of the plaintiff by whatever means and under whatever
law it arises or is created; (2) an obligation on the part of the named defendant to
respect or not to violate such right; and (3) an act or omission on the part of such
defendant violative of the right of the plaintiff or constituting a breach of the
obligation of the defendant to the plaintiff. It is only when the last element occurs
or takes place that it can be said in law that a cause of action has arisen. Translated
in terms of hypothetical situation regarding a written contract, no cause of action
arises until there is breach or violation thereof by either party. It is not, therefore,
from the date of the instrument but from the date of the breach that the period of
prescription of the action starts.

In the case before Us, private respondent attached to its appellee's brief filed with
the court below copies of its demand letter of 7 June 1966, 1, 12 and 19 March 1976
all addressed to petitioner, apparently to show the interruption of the ten-year
prescriptive period. Petitioner however prays that We disregard the demand letters
because of their dubious authenticity as they were not allegedly presented in the
court below.

But this does not put petitioner in a better position. For, even if We disregard the
various demands (anyway, no evidence was adduced as to when they were
received), this could only mean that the prescriptive period never commenced to
run since there was no point in time when petitioner could have refused to pay, or
committed a breach, until the judicial demand on 23 July 1976 which, incidentally,
also suspended the running of the period. This must be so as the Overdraft
Agreement stipulates that the obligation shall be payable upon demand, while the
Continuing Surety Agreement, being a supplemental agreement, merely provides
that the obligation shall become due upon maturity, with or without demand.
Hence, it is only from this judicial demand that the cause of action accrued, and
not from 11 January 1966, the date the Overdraft Agreement and the Continuing
Surety Agreement were executed. Besides, even assuming that the action on the
debt is already barred by the statute of limitations, this cannot prevent the debtor
from recognizing and confessing judgment upon it, which was what petitioner did
in fact.

11. CHINA BANKING CORP VS CA

GR. NO. 153267

JUNE 23, 2005

FACTS:

China Banking Corp. (CBC) is the registered owner of Home Notes (which are debt
instruments) issued in favor of Fund Centrum Finance, Inc. (FCI) and eventually
sold, transferred and assigned to Armed Forces and Police Savings & Loan
Association, Inc. (AFPSLAI). AFPSLAI demanded payment, CBC refused to pay.
AFPSLAI filed a complaint for a sum of money against CBC in the RTC of QC. CBC
filed an MTD alleging that the real party in interest was FCFI which was not joined
in the complaint, and that AFPSLAI was a mere trustee of FCFI. RTC denied MTD
and MR. CA denied Petition for Certiorari and Prohibition. SC denied Petition for
Certiorari under R65 for being an improper remedy. CBC filed another MTD, this
time invoking prescription. Lower court denied MTD and ordered CBC to present
evidence. CBC filed MR instead, which was denied by lower court, stating that:
“This Court finds that there are conflicting claims on the issue of whether or not
the action has already prescribed. A full blown trial is in order to determine fully
the rights of the contending parties.” CBC filed a petition under RULE 65 with CA.
CA dismissed, agreeing with the TC that more evidence should be presented in
order to properly determine WON action has prescribed. CBC insists that
prescription is apparent on the complaint. The maturity date of the Home Notes
annexed to the pleading indicate the date of accrual of the cause of action. [Dec. 2,
1983]. AFSPLAI filed complaint for sum of money on Sep. 24, 1996, which is beyond
the prescriptive period of 10 years from when the creditor may file an action.
AFSPLAI argues that prescription is NOT apparent in the complaint. Maturity date
stated in the Home Notes is NOT the time of accrual of action. Action accrued on
time of demand to pay: July 20, 1995

ISSUE: Whether cause of action accrued on the maturity date of the instruments or
on the date of demand for payment? DATE of DEMAND for PAYMENT.

RULING: Cause of action accrued on the date when demand for payment of the
Home Notes was refused by CBC [July 20, 1995]. Cause of action requires: 1. Legal
right of plaintiff (with duty of defendant to respect that right) 2. Act/omission of
defendant violating that right. Cause of action does not accrue until party obligated
refuses (expressly or impliedly) to comply with its duty. The Three elements of
cause of action a. Right in favor of plaintiff b. Obligation of defendant to respect/not
violate such right c. Act/omission of defendant violating such right / constituting a
breach of obligation of defendant to plaintiff. It is only when the last element occurs
that a cause of action arises.

In a written contract, cause of action accrues only when an actual breach or

violation occurs. In this case, breach occurred when demand was made by
AFSPLAI and CBC refused to pay. Maturity date of notes [Dec. 2, 1983] NOT the
accrual of cause of action because the 3rd element (violation/breach) was not
present at this date. Date for computing when prescription begins is therefore from
the time of actual demand (and refusal to comply thereof) and not from maturity
date. Action was filed (Sep. 24, 1996) before the end of 10 yrs from cause of action
(July 20, 1995). Therefore, action is NOT barred by prescription.

12. COLE VS GREGORIO

GR. NO. L-55315

SEPTEMBER 21, 1982

FACTS: In August 1963, parents of plaintiffs (William Cole Sr. and Angelina Cole)
entered into an agreement to buy and sell a parcel of land with spouses Angel
Gregorio and Potenciana Casuga. Said lot was priced at P6,000 but P1,000 was
paid in advance by Cole and the balance of P5,000 was to be paid in full after the
preliminary survey of the land by a private surveyor for the purpose of ascertaining
the exact size of the lot.
In the same month, Salanga, a land surveyor, was hired. He conducted a survey of
the land on September 24 and October 7, 1963 and submitted his survey plans to
the Bureau of Lands on June 22, 1964. Salanga left for the US. He received the
approval only on June 29, 1965.

Cole Sr. wrote two demand letters to Salanga to speed up the process (October 20,
1964 and April 1, 1965). Plaintiffs Cole found out that their parents had an unpaid
balance on the subject property; they tried to pay off the balance but discovered
that the property was transferred to Gregorio’s daughter, Josefina Hufano. When
Cole discovered that the lot only contained an area of 23,408 square meters instead
of 32,976 as stated in the Tax Declaration, Cole rescinded the contract and Gregorio
returned the P1,000 advanced payments. Cole never took possession of the land
nor registered it under their names.

ISSUE: Whether or not the right of action has already prescribed

RULING:

NO. In the instant case, the Agreement to Buy and Sell constitutes a conditional
obligation (Art. 1181) since it clearly stipulates that the balance will be paid AFTER
a surveyor has ascertained the exact size of the subject property. The
accomplishment, then, of said survey gives rise to the acquisition of rights by the
contracting party (Cole) and the acquisition of said rights depends upon the results
of the survey. (SUSPENSIVE OBLIGATION)

If the contract was really rescinded and the P1,000 returned to Cole a few days after
the surveyor was hired, William Cole would not have written demand letters to
Salanga to finish the survey. Furthermore, no receipt was presented by Potenciana
proving their allegations.
The agreement to buy and sell was conditioned upon the conduct of a preliminary
survey of the land to verify whether it contained the area stated in the Tax
Declaration. Both the agreement and the survey were made in 1963. The Court ruled
that the right of action for specific performance arose only in 1966, when the
plaintiff discovered the completion of the survey

The prescriptive period cannot be counted from the date of execution of the deed
of promise to buy and sell where it was stipulated that the balance of the price shall
be paid after the results of the land survey. According to the deed of promise to
buy and sell, the balance of P5,000 of the purchase price of subject property was
to be “paid in full after the preliminary survey of the land by a private surveyor, for
the purpose of verifying whether or not said parcel of land contains the same area
as declared in the Tax declaration. Because of this stipulation, it cannot be said
that the prescriptive period of the petitioner’s action begins on the date of they
entered into the agreement.
13. RURAL BANK OF CALINOG VS CA

GR. NO. 146519

July 8, 2005

Ponente: Tinga

Facts: Carmen D. Cerbo executed a REM over her property in favor of the Rural
Bank of Calinog. The mortgage was foreclosed and the subject property was sold
at public auction Calinog Bank as the highest bidder. The spouses redeemed the
subject property by depositing the amount of P18,000 to Calinog Bank. To
complete payment of the total redemption price of the subject property, the
spouses obtained a loan from Rural Bank of Dingle, Iloilo, in the amount of
P109,000. To secure payment of the loan obtained from Dingle Bank, the spouses
mortgaged the subject property in favor of Dingle Bank. The spouses have paid the
loan obtained from the bank. Later, the spouses received a Notice of Sale at public
auction of the subject property allegedly for failure to pay the mortgage debt. The
spouses demanded from the bank an accounting of all payments made and the
holding in abeyance by Dingle Bank of the public sale. The public sale proceeded
as scheduled and the subject property was adjudicated in favor of Calinog Bank.
Because of the failure of the bank to account all payments made by and for the
spouses the mortgaged property was unjustly foreclosed. Hence, the complaint.
 Calinog Bank moved for the dismissal of the complaint. It said that only
Carmen Cerbo was the proper party because she was the one who executed the
mortgage. Since Carmen is dead, the case should be dismissed against Calinog
Bank. The spouses opposed claiming that they are the heirs of Carmen. The court
ordered the dismissal of the case. The CA reversed and ruled that the spouses
have both the capacity and personality to sue. Also it ruled that the spouses need
not be parties to the mortgage contract in order to have a cause of action to recover
the payments which they allege to have paid the bank in excess of the redemption
price.

ISSUE: WON THE SPOUSES HAVE A CAUSE OF ACTION

RULING: Yes, In determining whether the allegations of a complaint are

sufficient to support a cause of action, it must be borne in mind that the complaint
does not have to establish or allege the facts proving the existence of a cause of
action at the outset; this will have to be done at the trial on the merits of the case.
If the allegations in a complaint can furnish a sufficient basis by which the
complaint can be maintained, the same should not be dismissed regardless of the
defenses that may be assessed by the defendants.

To sustain a motion to dismiss for lack of cause of action, the complaint must show
that the claim for relief does not exist rather than that a claim has been defectively
stated or is ambiguous, indefinite or uncertain. Moreover, a defendant moving to
dismiss a complaint on the ground of lack of cause of action is regarded as having
hypothetically admitted all the averments thereof.

It is enough that private respondents allege that they made a deposit in the amount
of P18,000.00 after the mortgaged property was sold to petitioner at public auction;
that they subsequently applied for and obtained an agricultural loan from another
rural bank, the net proceeds of which they paid to petitioner in order to discharge
the obligation under the mortgage constituted on Carmen Cerbo’s property; that
the excess amount of P392.47 was not accounted for by petitioner; and that the
P18,000 deposit was not deducted from the repurchase price of the property. In
fine, private respondents contend that they were the ones who paid Carmen
Cerbo’s loan obligation with petitioner. Whether these allegations entitle private
respondents to the reliefs prayed for is a question which can best be resolved after
trial on the merits at which each party can present evidence to prove their
respective allegations and defenses.

It is significant to note that petitioner already filed an answer to the complaint at

which it admitted that private respondent Gregorio Cerbaña made a deposit of
P18,000 as initial payment on the redemption price, and that the latter made a total
payment of P101,000. Petitioner, therefore, had acknowledged that it was Gregorio
Cerbaña, Carmen Cerbo’s son-in-law, who was making payments on the loan
obligation. In fact, petitioner referred to Gregorio Cerbaña as the redemptioner of
the foreclosed property.This admission cannot be disavowed by petitioner’s
allegation in its motion to dismiss filed 8 months after its answer, that private
respondents do not have a cause of action against it just because Carmen Cerbo
had already passed away.

While the death of Carmen Cerbo certainly extinguished whatever cause of action
she had against petitioner, private respondents’ cause of action, based on the
allegations in the complaint, was not thereby similarly extinguished. Indeed,
assuming the allegations of the complaint to be true, private respondents, having
paid the redemption price, have the right to demand an accounting, to be refunded
for whatever excess payments they made, and even to redeem the property.
Correlatively, petitioner, having accepted payment from private respondents, has
the obligation to account for such payment, to return the excess, if any, and to
allow redemption.

As regards the ancillary procedural question concerning the propriety of certiorari

in lieu of appeal, we find that private respondents’ resort to certiorari is warranted
under the circumstances. While it is true that certiorari is not a substitute for
appeal, jurisprudence exempts from the application of this rule cases when the trial
court’s decision or resolution was issued without jurisdiction or with grave abuse
of discretion. Considering that the trial court in this case completely disregarded
the fact that private respondents also filed the complaint on their own behalf and
in so doing prevented the latter from having their day in court, it gravely abused its
discretion justifying private respondents’ petition for certiorari.
 ALAS-AS

Misamis Occidental Coop vs David

GR No. 129928
August 25 2005

Facts: Private Respondent Virgilio David, a supplier of electric hardware filed a case for
specific performance against herein petitioner. The said case which was essentially a
collection suit was predicated on a document that according to David is the contract to
which he sold to petitioner one unit of 10 MVA Transformer. Petitioner on its Answer
raised as affirmative defenses which also constitutes ground for dismissal, the grounds
are lack of cause of action, there being allegedly no enforceable contract between David
and Petitioner, and improper venue. In essence they argue that the document was only
a quotation letter and not really a contract and also dismissible for failure to state a cause
of action. David opposed the contention stating that failure to state a cause of action is
required to be based only on allegations of the complaint and the contract being merely
an attachment cannot be inquired into. Petitioners motion for preliminary hearing of
affirmative defenses were denied as well as the Morion for Reconsideration and so the
case was elevated to CA by way of special civil action for certiorari. CA dismissed the
petition holding that the allegations constitutes a cause of action. The case was then
elevated to the SC

Issue: W/N the complaint file by David has a cause of action.

Held: Affirmative. Consistent with our ruling in The Heirs of Juliana Clavano v. Genato,as
MOELCI II’s Motion is anchored on the ground that the Complaint allegedly stated no
cause of action, a preliminary hearing thereon is more than unnecessary as it constitutes
an erroneous and improvident move. No error therefore could be ascribed to the trial court
in the denial of such Motion. The Court ruled in the cited case, thus: . . . . respondent
Judge committed an error in conducting a preliminary hearing on the private respondent’s
affirmative defenses. It is a well-settled rule that in a motion to dismiss based on the
ground that the complaint fails to state a cause of action, the question submitted to the
court for determination is the sufficiency of the allegations in the complaint itself. Whether
those allegations are true or not is beside the point, for their truth is hypothetically
admitted by the motion. The issue rather is: admitting them to be true, may the court
render a valid judgment in accordance with the prayer of the complaint? Stated otherwise,
the sufficiency of the cause of action must appear on the face of the complaint in order to
sustain a dismissal on this ground. No extraneous matter may be considered nor facts
not alleged, which would require evidence and therefore must be raised as defenses and
await the trial. In other words, to determine the sufficiency of the cause of action, only the
facts alleged in the complaint, and no other should be considered. The respondent Judge
departed from this rule in conducting a hearing and in receiving evidence in support of
the private respondent’s affirmative defense, that is, lack of cause of action.

To determine the existence of a cause of action, only the statements in the

complaint may be properly considered. It is error for the court to take cognizance of
external facts or hold preliminary hearings to determine their existence. If the allegations
in a complaint furnish sufficient basis by which the complaint can be maintained, the same
should not be dismissed regardless of the defenses that may be averred by the
defendants. The test of sufficiency of facts alleged in the complaint as constituting a cause
of action is whether or not admitting the facts alleged, the court could render a valid verdict
in accordance with the prayer of said complaint.

Heirs of Concha vs Spouses Lumocso

Gr No 158121
December 12, 2007

Facts: Spouses Concha have painstakingly preserved the forest standing in the area of
their 24 hectare homestead including the 4 hectares untitled forest land located at the
eastern portion of the forest from 1931 when they were newly married, the date they
acquired this property by occupation or possession. Spouses have preserved the forest
to the exclusion of the defendant Lumocso or other person from the year 1931 when
defendants by force, intimidation and stealth forcibly entered the premises illegally cut,
collected, disposed, a total of 21 trees and 6 trees for separates cases. This claim is an
assertion that the land is private land or that even assuming that it was public domain,
plaintiff acquired imperfect title thereto under Sec 48 of CA No 141 otherwise known as
public land Act. Respondents and their predecessor in interest knew when they filed their
respective patent application and were issued their respective free patent that the subject
land belonged to the petitioners, thereby the certificates were issued in fraud.

Issue: Whether or Not there is a cause of action in this case.

Held: Affirmative .Jurisdiction over the subject matter is the power to hear and determine
cases of the general class to which the proceedings in question belong. It is conferred by
law and an objection based on this ground cannot be waived by the parties. To determine
whether a court has jurisdiction over the subject matter of a case, it is important to
determine the nature of the cause of action and of the relief sought. The trial court
correctly held that the instant cases involve actions for reconveyance. An action for
reconveyance respects the decree of registration as incontrovertible but seeks the
transfer of property, which has been wrongfully or erroneously registered in other persons’
names, to its rightful and legal owners, or to those who claim to have a better right. There
is no special ground for an action for reconveyance. It is enough that the aggrieved party
has a legal claim on the property superior to that of the registered owner and that the
property has not yet passed to the hands of an innocent purchaser for value.

PHILROCK, INC., petitioner, vs. CONSTRUCTION INDUSTRY ARBITRATION

COMMISSION and Spouses VICENTE and NELIA CID, respondents.
G.R. No. 132848-49 June 26, 2001

FACTS : Private respondents, filed a Complaint for damages against Philrock and seven
of its officers and engineers with the Regional Trial Court of Quezon City, Branch 82. The
trial court issued an Order dismissing the case and referring the same to the CIAC
because the Cid spouses and Philrock had filed an Agreement to Arbitrate with the CIAC.
Preliminary conferences were held among the parties and their appointed arbitrators. At
these conferences, disagreements arose as to:

1) whether moral and exemplary damages and tort should be included as an issue along
with breach of contract, and

2) whether the seven officers and engineers of Philrock who are not parties to the
Agreement to Arbitrate should be included in the arbitration proceedings.

No common ground could be reached by the parties, hence, on April 2, 1994, both the
Cid spouses and Philrock requested that the case be remanded to the trial court.

On June 13, 1995, The trial court declared that it no longer had jurisdiction over the case
and ordered the records of the case to be remanded anew to the CIAC for arbitral
proceedings. the CIAC resumed conducting preliminary conferences. On August 21,
1995, herein [P]etitioner Philrock requested to suspend the proceedings until the court
clarified its ruling in the Order dated June 13, 1995

Petioner : Philrock argued that said Order was based on a mistaken premise that 'the
proceedings in the CIAC fell through because of the refusal of Philrock to include the
issue of damages therein,' whereas the true reason for the withdrawal of the case from
the CIAC was due to Philrock's opposition to the inclusion of its seven officers and
engineers, who did not give their consent to arbitration, as party defendants

Respondent : manifested that she was willing to exclude the seven officers and engineers
of Philrock as parties to the case so as to facilitate or expedite the proceedings.

the Arbitral Tribunal denied Philrock's request for the suspension of the proceedings. The
parties then proceeded to finalize, approve and sign the Terms of Reference. Philrock's
counsel and representative, Atty. Pericles C. Consunji affixed his signature to said Terms
of Reference which stated that 'the parties agree that their differences be settled by an
Arbitral Tribunal

On September 12, 1995, [P]etitioner Philrock filed its Motion to Dismiss, alleging therein
that the CIAC had lost jurisdiction to hear the arbitration case due to the parties'
withdrawal of their consent to arbitrate. The motion was denied. public respondent
ordered the parties to appear before it on November 28, 1995 for the continuation of the
arbitral proceedings, and on February 7, 1996, public respondent directed [P]etitioner
Philrock to set two hearing dates in the month of February to present its evidence and to
pay all fees assessed by it, otherwise Philrock would be deemed to have waived its right
to present evidence

Judgment is rendered in favor of the Claimant, directing Respondent to pay.

Before the CA, petitioner filed a Petition for Review, docketed as CA-GR SP No. 42443,
contesting the jurisdiction of the CIAC and assailing the propriety of the monetary awards
in favor of respondent spouses. This Petition was consolidated by the CA with CA-GR SP
No. 39781, a Petition for Certiorari earlier elevated by petitioner questioning the
jurisdiction of the CIAC.

ISSUE : Whether or not the CIAC could take jurisdiction over the case of Respondent Cid
spouses against Petitioner Philrock after the case had been dismissed by both the RTC
and the CIAC.
HELD : Section 4 of Executive Order 1008 expressly vests in the CIAC original and
exclusive jurisdiction over disputes arising from or connected with construction contracts
entered into by parties that have agreed to submit their dispute to voluntary arbitration. It
is undisputed that the parties submitted themselves to the jurisdiction of the Commission
by virtue of their Agreement to Arbitrate dated November 24, 1993. Signatories to the
Agreement were Atty. Ismael J. Andres and Perry Y. Uy (president of Philippine Rock
Products, Inc.) for petitioner, and Nelia G. Cid and Atty. Esteban A. Bautista for
respondent spouses Petitioner claims, on the other hand, that this Agreement was
withdrawn by respondents on April 8, 1994, because of the exclusion of the seven
engineers of petitioners in the arbitration case. This contention is untenable. First, private
respondents removed the obstacle to the continuation of the arbitration, precisely by
withdrawing their objection to the exclusion of the seven engineers. Second, petitioner
continued participating in the arbitration even after the CIAC Order had been issued.
Finally, as pointed out by the solicitor general, petitioner maneuvered to avoid the RTC’s
final resolution of the dispute by arguing that the regular court also lost jurisdiction after
the arbitral tribunal’s April 13, 1994 Order referring the case back to the RTC. After
submitting itself to arbitration proceedings and actively participating therein, petitioner is
estopped from assailing the jurisdiction of the CIAC, merely because the latter rendered
an adverse decision.

Socorro Limos v Spouses Odones

(G.R. No. 186979)
August 11, 2010

A request for admission is not intended merely to reproduce or reiterate the allegations
levant evidentiary matters of fact described in the request.

FACTS: Spouses Odones filed a complaint for Annulment of Title against Limos before
the RTC in Camiling, Tarlac. The complaint alleged that they were owners of a parcel of
land by virtue of an extrajudicial succession. It took a while before the respondents
decided to register the conveyance and when they did, they found out that the land’s OCT
was replaced by a TCT in the name of Socorro Limos. Limos allegedly secured the TCT
by virtue of a sale executed by Donata Lardizabal and husband, Francisco Razalan.
Respondents sought the cancellation of the TCT on the grounds that the signatures of
Lardizabal and Razalan were forged. The petitioners pleaded affirmative defenses in their
Answer to which the respondents gave a Reply maintaining that the sale was valid.
Thereafter, the petitioners served upon respondents a Request for Admission of the
following matters:

1. That the husband of the deceased Donata Lardizabal is Francisco Razalan;

2. That the children of the deceased Sps. Donata Lardizabal and Francisco Razalan are
Mercedes Razalan, Tomasa Razalan and Tomas Razalan;

3. That this Tomasa Razalan died on April 27, 1997, and her heirs are (a) Melecio Partido
surviving husband, and her surviving children are (b) Eduardo Partido, (c) Enrique
Razalan Partido, (d) Eduardo Razalan Partido, (e) Sotera Razalan Partido and (f)
Raymundo Razalan Partido.

4. That Amadeo Razalan is claiming also to be a grandchild and also claiming to be sole
forced heir of Donata Lardizabal

5. That Amadeo Razalan is not among those who signed the Extrajudicial Succession of
Estate and Sale;

6. That as per Sinumpaang Salaysay of Amadeo Razalan which was submitted by the
plaintiffs, the children of Tomasa Razalan are Sotera Razalan and 2 brothers/sisters.
These children of Tomasa Razalan did not also sign the Extrajudicial Succession of
Estate and Sale;

7. That there is/are no heirs of Clemente Razalan who appeared to have executed the
Extrajudicial Succession of Estate and Sale;

Petitioners failed to respond to this Request for Admission, prompting the filing of a Motion
to Set for Preliminary Hearing and arguing that the failure of Respondents to object to the
Request for Admission amounted to an implied admission pursuant to Rule 26, Sec 2 of
the RoC. As such a hearing on the affirmative defenses had become imperative because
petitioners were no longer required to present evidence on the admitted facts.
Respondents filed a comment on the Motion, contending that the facts sought to be
admitted were not material and relevant to the case. RTC -> denied the Motion and held
that items 1-4 were already earlier pleaded as an affirmative defense, hence, it would be
redundant for Respondents to make another denial. CA -> dismissed the petition ruling
that the affirmative defenses could be best proven by a hearing. So Petitioner’s seek for
a Motion for Reconsideration of the CA’s decision.

ISSUE:

Whether or not a preliminary hearing on the affirmative defense is proper.

HELD:
NO. Under Rule 26, Sec 1 and 2: A party who fails to respond to a Request for Admission
shall be deemed to have impliedly admitted all matters contained therein. It must be
emphasized that the application of the rules on modes of discovery rests upon the
discretion of the court. A request for admission is not intended merely to reproduce or
reiterate the allegations but should set forth relevant evidentiary matters of fact described
in the request. Thus, if the trial court finds that the matters in the Request were already
admitted then the requested party cannot be compelled to admit or deny them again. In
turn the requesting party cannot reasonably expect a response to request or even
demand the application of the implied admission rule in Rule 26, Sec 2. In the case, the
redundant and unnecessary nature of the Petitioner’s Request rendered it irrelevant so
as to apply the implied admission rule. Since there is no implied admission attributable to
the Respondent’s failure to respond, then the argument that a preliminary hearing is
imperative loses its point.*As to validity of the sale, Court held that it shall be determined
in a full-blown trial. A preliminary hearing will not sufficiently address these issues.

Asia Brewery vs. Equitable PCI Bank

Gr No. 190432 April 25, 2017
Digest on Page 15 of Recitals in Civil Procedure

Butuan Development Corporation vs CA

GR No 197358, April 5 2017
Digest on Page 22, Item No 18 of Recitals in Civil Procedure

JUANA COMPLEX I vs FIL-ESTATE LAND, INC

G.R. No. 152272

FACTS: Juana Complex I Homeowners Association, Inc., together with individual

residents of Juana Complex I and other neighboring subdivisions (collectively referred as
JCHA, et. al.), instituted a complaint for damages, in its own behalf and as a class suit
representing the regular commuters and motorists of Juana Complex I and neighboring
subdivisions who were deprived of the use of La Paz Road, against Fil-Estate Land, Inc.
(Fil-Estate), Fil-estate Ecocentrum Corporation (FEEC), La Paz Housing & Development
Corporation (La Paz), and Warbird Security Agency and their respective officers
(collectively referred as Fil-Estate, et al.).The complaint alleged that JCHA, et al. were
regular commuters and motorists who constantly traveled towards the direction of Manila
and Calamba; that they used the entry and exit toll gates of South Luzon Expressway
(SLEX) by passing through right-of-way public road known as La Paz Road; that they had
been using La Paz Road for more than ten (10) years; that in August 1998, Fil-estate
excavated, broke and deliberately ruined La Paz Road that led to SLEX so JCHA, et al.
would not be able to pass through the said road; that La Paz Road was restored by the
residents to make it passable but Fil-estate excavated the road again; that JCHA reported
the matter to the Municipal Government and the Office of the Municipal Engineer but the
latter failed to repair the road to make it passable and safe to motorists and pedestrians;
that the act of Fil-estate in excavating La Paz Road caused damage, prejudice,
inconvenience, annoyance, and loss of precious hours to them, to the commuters and
motorists because traffic was re-routed to narrow streets that caused terrible traffic
congestion and hazard; and that its permanent closure would not only prejudice their right
to free and unhampered use of the property but would also cause great damage and
irreparable injury. Accordingly, JCHA, et al. also prayed for the immediate issuance of a
Temporary Restraining Order (TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-
Estate, et al. from stopping and intimidating them in their use of La Paz Road. On the
RTC a 20-day TRO was issued against Fil-Estate. Subsequently, the RTC conducted
several hearings to determine the propriety of the issuance of a WPI. Fil-Estate, et al.
filed a motion to dismiss arguing that the complaint failed to state a cause of action and
that it was improperly filed as a class suit. The RTC issued a WPI. It also dismissed the
motion to dismiss as well as the motion for reconsideration subsequently filed by Fil-
estate. Fil-estate elevated the case to CA via certiorari maintaining that JCHA, et al
complaint failed to state a cause of action and that it was improperly filed as a class suit.
As to the WPI, the defendants averred that JCHA, et al. failed to show that they had a
clear and unmistakable right to the use of La Paz Road; and further claimed that La Paz
Road was a Torrens registered private road and there was neither a voluntary nor legal
easement constituted over it. The CA partly granted the petition. It annulled the issuance
of WPI for failure of JCHA, et al. to prove their clear and present right over the La Paz
road while the order denying the motion to dismiss was upheld ruling that the complaint
sufficiently stated a cause of action.

ISSUE/S: Whether or not the complaint states a cause of action. Whether or not the
complaint has been properly filed as a class suit. Whether or not a WPI is warranted.

RULING:

The Court finds the allegations in the complaint sufficient to establish a cause of action.

First, JCHA, et al.’s averments in the complaint show a demandable right over La Paz
Road. These are: (1) their right to use the road on the basis of their allegation that they
had been using the road for more than 10 years; and (2) an easement of a right of way
has been constituted over the said roads. There is no other road as wide as La Paz Road
existing in the vicinity and it is the shortest, convenient and safe route towards SLEX
Halang that the commuters and motorists may use.

Second, there is an alleged violation of such right committed by Fil-Estate, et al. when
they excavated the road and prevented the commuters and motorists from using the
same.
Third, JCHA, et al. consequently suffered injury and that a valid judgment could have
been rendered in accordance with the relief sought therein.

The complaint has been properly filed as a class suit.

The necessary elements for the maintenance of a class suit are:

1) the subject matter of controversy is one of common or general interest to many

persons;

2) the parties affected are so numerous that it is impracticable to bring them all to court;
and

3) the parties bringing the class suit are sufficiently numerous or representative of the
class and can fully protect the interests of all concerned.

In this case, the suit is clearly one that benefits all commuters and motorists who use La
Paz Road. Also, the subject matter–the closure and excavation of the La Paz Road–is
initially shown to be of common or general interest to many persons. The records reveal
that numerous individuals have filed manifestations with the lower court, conveying their
intention to join private respondents in the suit and claiming that they are similarly situated
with private respondents for they were also prejudiced by the acts of petitioners in closing
and excavating the La Paz Road. Moreover, the individuals sought to be represented by
private respondents in the suit are so numerous that it is impracticable to join them all as
parties and be named individually as plaintiffs in the complaint.

The issuance of a WPI is unwarranted. A writ of preliminary injunction is available to

prevent a threatened or continuous irremediable injury to parties before their claims can
be thoroughly studied and adjudicated. The requisites for its issuance are: (1) the
existence of a clear and unmistakable right that must be protected; and (2) an urgent and
paramount necessity for the writ to prevent serious damage. For the writ to issue, the right
sought to be protected must be a present right, a legal right which must be shown to be
clear and positive. This means that the persons applying for the writ must show that they
have an ostensible right to the final relief prayed for in their complaint. In the case at
bench, JCHA, et al. failed to establish a prima facie proof of violation of their right to justify
the issuance of a WPI. Their right to the use of La Paz Road is disputable since they have
no clear legal right therein.

BPI FAMILY SAVINGS BANK v. VDA. DE COSCOLLUELA

G.R. No. 167724 / June 27, 2006 / Callejo, Sr., J. / Splitting / KJMSTA.ANA
FACTS.

• Respondent and her late husband Oscar obtained an agricultural sugar crop loan
from Far East Bank & Trust Co. (later merged with BPI) for crop years 1997 and 1998. In
the book of Far East, the loan account was treated as a single account, and evidenced
by 67 promissory notes.

• Sps. Coscolluela executed a real estate mortgage in favor of FEBTC over their
parcel of land as security of loans on credit accommodation obtained and those that may
be obtained.

• Under the terms and conditions of the real estate mortgage, in the event of failure
to pay the mortgage obligation or any portion thereof, the entire principal, interest,
penalties, and other charges shall be immediately due; and Far East mat foreclose the
same extra judicially.

• For failure to settle outstanding obligation on the maturity dates, Far East sent a
final demand letter to respondent demanding payment.

• Since respondent failed to settle her obligation, Far East filed a petition for the
extrajudicial foreclosure of the mortgaged property, but only only for 31 of the promissory
notes.

• During pendency of said case, Far East filed a complaint for collection of money
representing the amounts for the 36 other promissory notes.

• In respondent’s answer, she alleged that the complaint was barred by litis
pendentia for the pending petition for the extrajudicial foreclosure of the REM.

• Petitioner presented a loan officer as sole witness, who testified that respondent
were granted a loan, which was a “single loan account.”

• Respondent filed a Demurrer to Evidence contending that the loan officer’s

admission, that there is only one loan account secured by the REM thus barred the
personal action for collection. She insisted that the filing of said complaint should be
dismissed.

• Petitioner opposed the demurrer, stating that each promissory note constituted a
separate contract.

• The trial court denied the demurrer on the ground that each note covered a loan
distinct from the others.
• Respondent filed MR but denied, prompting her to file a certiorari petition under
Rule 65 with CA.

• CA granted the petitioner, stating that the remedies sought are alternative and not
cumulative. Thus, in denying the demurrer, RTC committed grave abuse of discretion.

• Petitioner filed MR but it was denied. Hence, this petition.

ISSUES & RATIO.

1. WON collection suit should be dismissed – YES

Section 3, Rule 2 of the 1997 Rules of Civil Procedure provides that a party may not
institute one suit for a single cause of action, and, if two or more suits are instituted on
the basis of the same cause of action, the filing of one on a judgment upon the merits in
any one is available as a ground for the dismissal of others. The law does not permit the
owner of a single of entire cause of action or an entire or indivisible demand to divide and
split the cause to make it the subject of several actions.

The true rule which determined whether a party has only a single and entire cause of
action is whether the entire amount arises from one and the same act or contract or the
several parts arise from distinct and different acts. As gleaned from the plain terms of the
REM, the real estate of respondent served as a continuing security liable for obligations
already obtainer and obligations obtained thereafter. In this case, the action of petitioner
is anchored on one and the same cause: the nonpayment of respondent. Though the debt
may be covered by several promissory notes and is covered by a real estate mortgage,
the latter is subsidiary to the former and both refer to one and the same obligation. A
mortgage creditor may institute two alternative remedies against the debtor, either to
collect debt or to foreclose mortgage, but not both.

DECISION.

WHEREFORE instant petition is dismissed for lack of merit.

[G.R. No. 63145. October 5, 1999]

VENTURA vs. HON. MILITANTE

FACTS: Private respondent filed a Complaint for a Sum of Money and Damages against
petitioner. During the lifetime of Carlos Ngo he was indebted with the plaintiff (herein priv.
resp.). Said obligation is already due and demandable and the defendant thru Ms.
Ventura who is ostensibly taking care of the properties/estate of deceased Carlos Ngo,
refused, failed and neglected and still continues to refuse, fail and neglect to pay despite
repeated demands. Petitioner moved to dismiss the foregoing complaint on the ground
that “the estate of Carlos Ngo has no legal personality,” the same being “neither a natural
nor legal person in contemplation of law.” In his Opposition to Motion to Dismiss, petitioner
insisted that since “the money claim subject of this case actually represents the costs of
automotive spare parts/replacements contracted by deceased Carlos Ngo during his
lifetime for the benefit/business of the family x x x the conjugal partnership x x x shall be
accountable for the payment thereof.” Subsequently, private respondent's counsel
manifested that he is poised to “amend the complaint in order to state the correct party
defendant that he intends to sue in this case”. The public respondent gave private
respondent fifteen (15) days to make the amendment. Petitioner filed a Motion for
Reconsideration of the order of public respondent permitting private respondent to amend
his complaint. Public respondent issued the herein assailed order that the indebtedness
was incurred by Carlos Ngo and defendant Sulpicia Ventura and since Carlos Ngo is now
dead that will not preclude the plaintiff from filing a case against the living defendant,
Sulpicia Ventura. Petitioner scurried to this Court praying that the foregoing order of the
public respondent be set aside and the amended complaint of private respondent.

RULING: We grant the petition. The original complaint of petitioner named the “estate of
Carlos Ngo as represented by surviving spouse Ms. Sulpicia Ventura” as the defendant.
Petitioner moved to dismiss the same on the ground that the defendant as named in the
complaint had no legal personality. We agree. Neither a dead person nor his estate may
be a party plaintiff in a court action. A deceased person does not have such legal entity
as is necessary to bring action so much so that a motion to substitute cannot lie and
should be denied by the court. An action begun by a decedent's estate cannot be said to
have been begun by a legal person, since an estate is not a legal entity; such an action
is a nullity and a motion to amend the party plaintiff will not likewise lie, there being nothing
before the court to amend. Considering that capacity to be sued is a correlative of the
capacity to sue, to the same extent, a decedent does not have the capacity to be sued
and may not be named a party defendant in a court action. It is clear that the original
complaint of private respondent against the estate of Carlos Ngo was a suit against Carlos
Ngo himself who was already dead at the time of the filing of said complaint. At that time,
and this, private respondent admitted, no special proceeding to settle his estate had been
filed in court. As such, the trial court did not acquire jurisdiction over either the deceased
Carlos Ngo or his estate. To cure this fatal defect, private respondent amended his
original complaint. In his amended complaint, private respondent deleted the estate of
Carlos Ngo and named petitioner as the defendant. When petitioner, in her comment to
the amended complaint, reasoned that the conjugal partnership of gains between her and
Carlos Ngo was terminated upon the latter's death and that the debt which he contracted,
assuming it was a charge against the conjugal property, could only be paid after an
inventory is made in the appropriate testate or intestate proceeding, private respondent
simply reiterated his demand that petitioner pay her husband's debt which, he insisted,
redounded to the benefit of everyone in her family.

It is true that amendments to pleadings are liberally allowed in furtherance of justice, in

order that every case may so far as possible be determined on its real facts, and in order
to speed the trial of causes or prevent the circuitry of action and unnecessary expense.
But amendments cannot be allowed so as to confer jurisdiction upon a court that never
acquired it in the first place. When it is evident that the court has no jurisdiction over the
person and the subject matter and that the pleading is so fatally defective as not to be
susceptible of amendment, or that to permit such amendment would radically alter the
theory and the nature of the action, then the court should refuse the amendment of the
defective pleading and order the dismissal of the case.

Moreover, as correctly argued by petitioner, the conjugal partnership terminates upon the
death of either spouse. After the death of one of the spouses, in case it is necessary to
sell any portion of the conjugal property in order to pay outstanding obligations of the
partnership, such sale must be made in the manner and with the formalities established
by the Rules of Court for the sale of the property of deceased persons. Where a complaint
is brought against the surviving spouse for the recovery of an indebtedness chargeable
against said conjugal property, any judgment obtained thereby is void. The proper action
should be in the form of a claim to be filed in the testate or intestate proceedings of the
deceased spouse.
In many cases as in the instant one, even after the death of one of the spouses, there is
no liquidation of the conjugal partnership. This does not mean, however, that the conjugal
partnership continues. And private respondent cannot be said to have no remedy. Under
Sec. 6, Rule 78 of the Revised Rules of Court, he may apply in court for letters of
administration in his capacity as a principal creditor of the deceased Carlos Ngo if after
thirty (30) days from his death, petitioner failed to apply for administration or request that
administration be granted to some other person.

Chang Kai Shek v. CA,

GR No, 58028 172 SCRA 389

April 18 1989

FACTS: Fausta F. Oh worked at the Chiang Kai Shek School since 1932 for a continuous
period of almost 33 years. And now, out of the blue, and for no apparent or given reason,
this abrupt dismissal. Oh sued. She demanded separation pay, social security benefits,
salary differentials, maternity benefits and moral and exemplary damages. 1 The original
defendant was the Chiang Kai Shek School but when it filed a motion to dismiss on the
ground that it could not be sued, the complaint was amended. 2 Certain officials of the
school were also impleaded to make them solidarily liable with the school. As a school,
the petitioner was governed by Act No. 2706 as amended by C.A. No. 180, which provided
as follows:

Unless exempted for special reasons by the Secretary of Public Instruction, any private
school or college recognized by the government shall be incorporated under the
provisions of Act No. 1459 known as the Corporation Law, within 90 days after the date
of recognition, and shall file with the Secretary of Public Instruction a copy of its
incorporation papers and by-laws.

The Court of First Instance of Sorsogon dismissed the complaint.

ISSUE: Whether or not a school that has not been incorporated may be sued by reason
alone of its long continued existence and recognition by the government,

HELD: It is true that Rule 3, Section 1, of the Rules of Court clearly provides that "only
natural or juridical persons may be parties in a civil action." It is also not denied that the
school has NOT been incorporated. However, this omission should not prejudice the
private respondent in the assertion of her claims against the school. Having been
recognized by the government, it was under obligation to incorporate under the
Corporation Law within 90 days from such recognition. It appears that it had not done so
at the time the complaint was filed notwithstanding that it had been in existence even
earlier than 1932. The petitioner cannot now invoke its own non-compliance with the law
to immunize it from the private respondent's complaint. There should also be no question
that having contracted with the private respondent every year for thirty two years and thus
represented itself as possessed of juridical personality to do so, the petitioner is now
estopped from denying such personality to defeat her claim against it. According to Article
1431 of the Civil Code, "through estoppel an admission or representation is rendered
conclusive upon the person making it and cannot be denied or disproved as against the
person relying on it." As the school itself may be sued in its own name, there is no need
to apply Rule 3, Section 15, under which the persons joined in an association without any
juridical personality may be sued with such association. Besides, it has been shown that
the individual members of the board of trustees are not liable, having been appointed only
after the private respondent's dismissal. It is easy to imagine the astonishment and hurt
she felt when she was flatly and without warning told she was dismissed. There was not
even the amenity of a formal notice of her replacement, with perhaps a graceful
expression of thanks for her past services. She was simply informed she was no longer
in the teaching staff. To put it bluntly, she was fired. For the wrongful act of the petitioner,
the private respondent is entitled to moral damages. As a proximate result of her illegal
dismissal, she suffered mental anguish, serious anxiety, wounded feelings and even
besmirched reputation as an experienced teacher for more than three decades. We also
find that the respondent court did not err in awarding her exemplary damages because
the petitioner acted in a wanton and oppressive manner when it dismissed her.
WHEREFORE, the petition is DENIED. The appealed decision is AFFIRMED except for
the award of separation pay, which is reduced to P2,880.00. All the other awards are
approved. Costs against the petitioner. This decision is immediately executory.

Bienvenido Ejercito vs M. R. Vargas

Gr No. 172595

April 10, 2008

FACTS:

• On March 5, 2004, City Government of Quezon City, represented by Mayor

Feliciano Belmonte, Jr., entered into a construction contract with M.R. Vargas
Construction, represented by Marcial R. Vargas as the general manager, for the
improvement and concreting of Panay Avenue.
o Pursuant to the contract, the Vargas Construction commenced its clearing
operations by removing structures and uprooting the trees along Panay Avenue.

o Renato Agarao, the foreman, supervised the clearing operations.

• Petitioners Bienvenido Ejercito and Jose Martines, as well as a certain Oscar

Baria, claimed that the clearing operations lacked the necessary permit and prior
consultation. They brought the matter to the attention of barangay authorities, Mayor
Belmonte, Senator Ma. Ana Consuelo A.S. Madrigal, DENR, and Philippine Coconut
Authority, but to no avail.

• On September 10, 2004, they filed a petition for injunction before Quezon City
RTC.

o The petition was accompanied with an application for TRO and a writ of preliminary
injunction

o The petition indicated that MR Vargas Construction, is an entity, with office address
at the 4th Floor, President Tower,Timog Avenue corner Scout Ybardaloza St., Quezon
City where they may be served with summons and other court processes.

o Office of the Clerk of Court then issued summons and notice of raffle on Sept 10,
2004.

o Upon service of the processes, they were returned unserved on the ground that
respondent enterprise was unknown thereat.

• Petition was subsequently raffled to the sale of Judge Jacob before which
petitioners application for TRO was heard on Sept 15, 2004.

• On the same day, when Agarao was also present in court, Judge Jacob issued a
TRO directing MR Vargas to desist from cutting, damaging or transferring the trees along
Panay Avenue.

• Mangoba Tan Agus Law Offices then filed a special appearance on behalf of MR
Vargas Construction:

o Moved for the dismissal of the petition

o Quashal of the TRO on the ground of lack of jurisdiction.

o Assailed the raffle of the case for having been conducted in violation of Sec 4, Rule
58 of RoC
o The issuance of TRO without requiring the posting of a bond

o Failure to implead the Government of QC despite its being the real party-in-interest

o Petitioners’ application for the injunctive writ was allegedly grossly defective in form
and substance.

• Before the hearing, a court interpreter showed to MR Vargas’ counsel a copy of

the summons and of the notice of the raffle in which appear a signature at the bottom of
each copy, indicating receipt.

• MR Vargas’ counsel withdrew two of the grounds stated in the motion (lack of
jurisdiction and irregularity in the raffle of the case) on the mistaken belief that the
summons was received by MR Vargas.

• RTC issued an order granting petitioners application for a writ of preliminary

injunction.

• The following day, counsel for MR Vargas filed a manifestation with urgent
omnibus motion to nullify the proceedings and to cite petitioners and the process server
in contempt of court.

o He argued that MR Vargas failed to receive summons, alleging that it was

petitioner Jose Martinez who signed as recipient of the summons and the notice of raffle.

o RTC issued the assailed order, nullifying the proceedings thus far.

o MR of petitioners denied.

CA

• Petitioners filed a petition for certiorari, assailing the RTC Order

• They argued that RTC Judge Jacob committed grave abuse of direction in
nullifying the proceeding on the ground of lack of jurisdiction in view of Aragaos presence
at the hearing on petitioners’ application for TRO, in failing to act on petitioners pending
motions and in directing instead the issuance of new summons on respondent enterprise.

• CA dismissed this petition

• MR also denied.
RULING: Petition denied.

Whether the trial court acquired jurisdiction over respondent enterprise? - NO

• Both the CA and the TC found that summons was not served on MR Vargas. This
factual finding is conclusive upon SC.

o The Officers Return stated essentially that the server failed to serve the summons
on MR Vargas because it could not be found at the address alleged in the petition.

• Jurisdiction over the defendant is acquired either upon a valid service of summons
or the defendants voluntary appearance in court. When the defendant does not voluntarily
submit to the courts jurisdiction or when there is no valid service of summons, any
judgment of the court, which has no jurisdiction over the person of the defendant is null
and void.

• In an action strictly in personam, personal service on the defendant is the preferred

mode of service, that is, by handing a copy of the summons to the defendant in person.

• A sole proprietorship does not possess a juridical personality separate and distinct
from the personality of the owner of the enterprise. The law does not vest a separate legal
personality on the sole proprietorship or empower it to file or defend an action in court.
Only natural or juridical persons or entities authorized by law may be parties to a civil
action and every action must be prosecuted and defended in the name of the real parties-
in-interest.

• As applied in this case:

o MR Vargas Construction Co is a sole proprietorship and, therefore, an entity

without juridical personality.

o Since respondent enterprise is only a sole proprietorship, an entity without juridical

personality, the suit for injunction may be instituted only against its owner, Marcial Vargas,
the real party-in-interest.

o The petition for injunction should have impleaded him as the party respondent
either simply by mention of his name or by denominating him as doing business under
the name and style of M.R. Vargas Construction Co. It was erroneous to refer to him, as
the petition did in both its caption and body, as representing the enterprise.
o Summons should have been served on Vargas himself, following Rule 14,
Sections 6 and 7 of the Rules of Court on personal service and substituted service.

o In this case, no service of summons, whether personal or substituted, was effected

on Vargas.

o Personal service of summons most effectively ensures that the notice desired
under the constitutional requirement of due process is accomplished. If however efforts
to find him personally would make prompt service impossible, service may be completed
by substituted service, i.e., by leaving copies of the summons at his dwelling house or
residence with some person of suitable age and discretion then residing therein or by
leaving the copies at his office or regular place of business with some competent person
in charge thereof.

• Aragao’s appearance in the hearing does not vest the court jurisdiction over the
respondent

o Agarao was not a party respondent in the injunction case before the trial court.
Certainly, he is not a real party-in-interest against whom the injunction suit may be
brought, absent any showing that he is also an owner or he acts as an agent of
respondent enterprise. Agarao is only a foreman, bereft of any authority to defend the suit
on behalf of respondent enterprise.

o Reiterating, only Vargas, as the sole owner, is authorized by the Rules of Court to
defend the suit on behalf of the enterprise.

o While it is true that an appearance in whatever form, without explicitly objecting to

the jurisdiction of the court over the person, is a submission to the jurisdiction of the court
over the person, the appearance must constitute a positive act on the part of the litigant
manifesting an intention to submit to the courts jurisdiction.

o In the instances where the Court upheld the jurisdiction of the trial court over the
person of the defendant, the parties showed the intention to participate or be bound by
the proceedings through the filing of a motion, a plea or an answer.

• The service on a certain Rona Adol is not binding on MR Vargas.

o Records show that Rona Adol received the notice of hearing on behalf of an entity
named JCB.

o For purposes of acquiring jurisdiction over the person of the defendant, the Rules
require the service of summons and not of any other court processes.
LITONJUA GROUP OF COMPANIES, EDDIE LITONJUA and DANILO LITONJUA,
petitioners,

vs.

TERESITA VIGAN, respondent.

Facts:

TERESITA VIGAN’s version: She was hired by the Litonjua Group of Companies on
February 2, 1979 as telex operator. Later, she was assigned as accounting and payroll
clerk under the supervision of DaniloLitonjua. She had been performing well until 1995,
when DaniloLitonjua who was already naturally a (sic) very ill-tempered, ill-mouthed and
violent employer, became more so due to business problems. The incidents prompted
Vigan to write DaniloLitonjua letters asking why she was treated so and what was her
fault. DaniloLitonjua charged that Vigan had been hysterical, emotional and created
scenes at the office. He even required her to secure psychiatric assistance. But despite
proof that she was not suffering from psychosis or organic brain syndrome as certified to
by a Psychiatrist of DaniloLitonjua’s choice still she was denied by the guards entry to her
work upon instructions again of DaniloLitonjua. Left with no alternative, Vigan filed this
case for illegal dismissal, alleging she was receiving a monthly salary of P8,000.00 at the
time she was unlawfully terminated.

Litonjuas version: They negate the existence of the Litonjua Group of Companies and the
connection of Eduardo Litonjua thereto. They contended that Vigan was employed by
ACT Theater, Inc., where DaniloLitonjua is a Director. They dispute the charge of illegal
dismissal for it was Vigan who ceased to report for work despite notices and likewise
contest the P8,000.00 monthly salary alleged by Vigan, claiming it was merely P6,850.00.

They claim that Vigan was a habitual absentee. Her performance had been satisfactory,
but then starting March 15, 1996 she had become emotional, hysterical, uncontrollable
and created disturbances at the office with her crying and shouting for no reason at all.
The incident was repeated on April 3, 1996, May 24, 1996 and on June 4, 1996. Thus
alarmed, on July 24, 1996 Vigan was required by management to undergo medical and
psychological examination at the company’s expense and naming three doctors to attend
to her. Dr.Baltazar Reyes and Dr. Tony Perlas of the Philippine General Hospital and Dr.
Lourdes Ignacio of the Medical Center Manila. But they claim that Vigan refused to
comply.
On August 2, 1996, Vigan again had another breakdown, hysterical, shouting and crying
as usual for about an hour, and then she just left the premises without a word. The next
day, August 3, 1996, Saturday, she came to the office and explained she was not feeling
well the day before. After that Vigan went AWOL and did not heed telegram notices from
her employer made on August 26, 1996 and on September 9, 1996. She instead filed the
instant suit for illegal dismissal."

On June 10, 1997, Labor Arbiter Ernesto S. Dinopol rendered his decision4 finding Vigan
diseased and unfit for work under Article 284 of the Labor Code5 and awarded
corresponding separation pay.

Vigan appealed the decision to the National Labor Relations Commission which
modified7 the arbiter’s decision by ruling that Art. 284 of the Labor Code is inapplicable
in the instant case but affirmed the legality of the termination of the complainant based
on her having effectively abandoned her job; the rest of the decision was affirmed. Vigan
moved for a partial reconsideration which was denied in a resolution dated August 7,
1998.

Vigan filed a petition for certiorari with the Court of Appeals which reversed the NLRC
Resolution. It ordered the respondents jointly and severally to: (a) Reinstate VIGAN if she
so desires; or (b) pay her separation compensation in the sum of P8,000.00 multiplied by
her years of service counted from February 2, 1979 up to the time this Decision becomes
final; and in either case to pay Vigan; (c) full back wages from the time she was illegally
dismissed up to the date of the finality of this Decision; (d) moral damages in the amount
of P40,000.00; (e) exemplary damages in the amount of P15,000.00; and (f) attorney’s
fees of P10,000.00.

Litonjuas filed their motion for reconsideration which was denied. Hence, the filing of the
instant petition for review on certiorari. alleging the following grounds:

ISSUE: WHETHER OR NOT “LITONJUA GROUP OF COMPANIES", WHICH HAS NO

JURIDICAL PERSONALITY, BUT ONLY A GENERIC NAME TO DESCRIBE THE
VARIOUS COMPANIES WHICH THE LITONJUA FAMILY HAS INTERESTS, CAN BE
LEGALLY CONSTRUED AS RESPONDENT’S EMPLOYER.

HELD: NO . Only natural or juridical persons or entities authorized by law may be parties
to a civil action and every action must be prosecuted and defended in the name of the
real parties in interest.Petitioners’ claim that Litonjua Group of Companies is not a legal
entity with juridical personality hence cannot be a party to this suit deserves consideration
since respondent failed to prove otherwise. In fact, respondent Vigan’s own allegation in
her Memorandum supported petitioners’ claim that Litonjua group of companies does not
exist when she stated therein that instead of naming each and every corporation of the
Litonjua family where she had rendered accounting and payroll works, she simply referred
to these corporations as the Litonjua group of companies, thus, respondent merely used
such generic name to describe collectively the various corporations in which the Litonjua
family has business interest. Considering the non-existence of the Litonjua group of
companies as a juridical entity and petitioner Eddie Litonjua’s denial of his connection in
any capacity with the ACT Theater, the supposed company where Vigan was employed,
petitioner Eddie Litonjuas should also be excluded as a party in this case since
respondent Vigan failed to prove Eddie Litonjua’s participation in the instant case. It is
respondent Vigan, being the party asserting a fact, who has the burden of proof as to
such fact10 which however, she failed to discharge.

PELAEZ VS AUDITOR GENERAL

G.R. No. L-23825 15 SCRA 569 December 24, 1965

EMMANUEL PELAEZ, petitioner,

vs.

THE AUDITOR GENERAL, respondent.

Facts:

The President of the Philippines, purporting to act pursuant to Section 68 of the Revised
Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129;
creating thirty-three (33) municipalities enumerated in the margin. Petitioner Emmanuel
Pelaez, as Vice President of the Philippines and as taxpayer, instituted the present
special civil action, for a writ of prohibition with preliminary injunction, against the Auditor
General, to restrain him, as well as his representatives and agents, from passing in audit
any expenditure of public funds in implementation of said executive orders and/or any
disbursement by said municipalities.

Petitioner alleges that said executive orders are null and void, upon the ground that said
Section 68 has been impliedly repealed by Republic Act No. 2370 effective January 1,
1960 and constitutes an undue delegation of legislative power. The third paragraph of
Section 3 of Republic Act No. 2370, reads: “Barrios shall not be created or their
boundaries altered nor their names changed except under the provisions of this Act or by
Act of Congress.”

Issues: Whether or not Section 68 of Revised Administrative Code constitutes an undue

delegation of legislative power.

Discussions: Section 10 (1) of Article VII of our fundamental law ordains:

The President shall have control of all the executive departments, bureaus, or offices,
exercise general supervision over all local governments as may be provided by law, and
take care that the laws be faithfully executed.

The power of control under this provision implies the right of the President to interfere in
the exercise of such discretion as may be vested by law in the officers of the executive
departments, bureaus, or offices of the national government, as well as to act in lieu of
such officers. This power is denied by the Constitution to the Executive, insofar as local
governments are concerned. With respect to the latter, the fundamental law permits him
to wield no more authority than that of checking whether said local governments or the
officers thereof perform their duties as provided by statutory enactments. Hence, the
President cannot interfere with local governments, so long as the same or its officers act
within the scope of their authority.

Rulings:

Yes. It did entail an undue delegation of legislative powers. The alleged power of the
President to create municipal corporations would necessarily connote the exercise by him
of an authority even greater than that of control which he has over the executive
departments, bureaus or offices. In other words, Section 68 of the Revised Administrative
Code does not merely fail to comply with the constitutional mandate. Instead of giving the
President less power over local governments than that vested in him over the executive
departments, bureaus or offices, it reverses the process and does the exact opposite, by
conferring upon him more power over municipal corporations than that which he has over
said executive departments, bureaus or offices. Whether the settlement disputes is
administrative in nature, the municipality of Santo Tomas still remain to be part of
Municipality of Kapalong because the President has no power to create municipalities.
 BOOL (PUNIO)

Parties to an Action

1.CARANDANG, Petitioners, vs. HEIRS OF QUIRINO A. DE GUZMAN, namely:

CYNTHIA G. RAGASA and QUIRINO DE GUZMAN, JR., Respondents. G.R.
No. 160347; November 29, 2006

FACTS: Spouses Carandang and the decedent Quirino de Guzman were stockholders
and corporate officers of Mabuhay Broadcasting System (MBS).
 When the capital stock of MBS was increased on November 26, 1983, the
Carandangs subscribed P345,000 from it, P293,250 from the said amount was loaned by
Quirino to the Carandangs. In the subsequent increase in MBS’ capital stock on March 3,
1989, the Carandangs subscribed again to the increase in the amount of P93,750. But,
P43,125 out of the mentioned amount was again loaned by Quirino.

When Quirino sent a demand letter to the Carandangs for the payment of the loan,
the Carandangs refused to pay. They contend that a pre-incorporation agreement was
executed between Arcadio Carandang and Quirino, whereby Quirino promised to pay for
the stock subscriptions of the Arcadio without cost, in consideration for Arcadio’s technical
expertise, his newly purchased equipment, and his skill in repairing and upgrading
radio/communication equipment therefore, there is no indebtedness on the part of the
Carandangs.

Thereafter, Quirino filed a complaint seeking to recover the P336,375 total amount of the
loan together with damages. The RTC ruled in favor of Quirino and ordered the
Carandangs to pay the loan plus interest, attorney’s fees, and costs of suit. The
Carandangs appealed the trial court’s decision to the CA, but the CA affirmed the same.
The subsequent Motion for Reconsideration filed by the Carandangs were also denied.
Hence, this appeal to the SC.

SPOUSES CARANDANG: Three of the four checks used to pay their stock subscriptions
were issued in the name of Milagros de Guzman, the decedent’s wife. Thus, Milagros
should be considered as an indispensable party in the complaint. Being such, the failure
to join Milagros as a party in the case should cause the dismissal of the action by reason
of a jurisprudence stating that: “(i)f a suit is not brought in the name of or against the real
party in interest, a motion to dismiss may be filed on the ground that the complaint states
no cause of action."

ISSUE: Whether or not the RTC should have dismissed the case for failure to state a
cause of action, considering that Milagros de Guzman, allegedly an indispensable party,
was not included as a party-plaintiff.

HELD: No. Assuming that the four checks are credits, they are assumed to be conjugal
properties of Quirino and Milagros. There being no evidence to the contrary, such
presumption subsists. As such, Quirino de Guzman, being a co-owner of specific
partnership property, is certainly a real party in interest.

Now, with regard to the discussion on the effect of non-inclusion of parties in the complaint
filed: in indispensable parties, when an indispensable party is not before the court, the
action should be dismissed. The absence of an indispensable party renders all
subsequent actuations of the court void, for want of authority to act, not only as to the
absent parties but even as to those present. For necessary parties, the non-inclusion of
a necessary party does not prevent the court from proceeding in the action, and the
judgment rendered therein shall be without prejudice to the rights of such necessary party.
Non-compliance with the order for the inclusion of a necessary party would not warrant
the dismissal of the complaint. Lastly, for pro-forma parties, the general rule under Section
11, Rule 3 must be followed: such non-joinder is not a ground for dismissal. Hence, in a
case concerning an action to recover a sum of money, we held that the failure to join the
spouse in that case was not a jurisdictional defect. The non-joinder of a spouse does not
warrant dismissal as it is merely a formal requirement which may be cured by amendment.

Conversely, in the instances that the pro-forma parties are also indispensable or
necessary parties, the rules concerning indispensable or necessary parties, as the case
may be, should be applied. Thus, dismissal is warranted only if the pro-forma party not
joined in the complaint is an indispensable party.

Under Art. 147 of the Civil Code which was superceded by Art. 108 of the Family Code,
the conjugal partnership shall be governed by the rules on the contract of partnership.
Thus, Milagros is a co-owner of the subject personal property in this case – the credit
incurred by spouses Carandang. Being co-owners of the alleged credit, Quirino and
Milagros de Guzman may separately bring an action for the recovery thereof.

“In sum, in suits to recover properties, all co-owners are real parties in interest. However,
pursuant to Article 487 of the Civil Code and relevant jurisprudence, any one of them may
bring an action, any kind of action, for the recovery of co-owned properties. Therefore,
only one of the co-owners, namely the co-owner who filed the suit for the recovery of the
co-owned property, is an indispensable party thereto. The other co-owners are not
indispensable parties. They are not even necessary parties, for a complete relief can be
accorded in the suit even without their participation, since the suit is presumed to have
been filed for the benefit of all co-owners.”

Thus, Milagros de Guzman is not an indispensable party in the action for the recovery of
the allegedly loaned money to the spouses Carandang. As such, she need not have been
impleaded in said suit, and dismissal of the suit is not warranted by her not being a party
thereto. (The Civ Pro issue was not the main issue in the case.)

2. G.R. No. 161916 January 20, 2006

ARNELITO ADLAWAN, Petitioner,

vs.

EMETERIO M. ADLAWAN and NARCISA M. ADLAWAN, Respondents

FACTS:

A house and lot (lot 7226) was registered in the name of Dominador Adlawan, the father
of (petitioner) Arnelito Adlawan. He is the acknowledged illegitimate child of Dominador
who is claiming that he is the sole heir. He then adjudicated to himself the said house and
lot to himself and out of generosity allowed the siblings of his father to occupy the property
provided that they vacate when asked. Time came when he demanded that they vacate
but respondents refused. Hence, an action for ejectment.

ISSUE:

Whether or not Arnelito can validly maintain the ejectment suit

HELD:

NO. The theory of succession invoked by Arnelito would prove that he is not the sole heir
of Dominador. Since he was survived was his wife, upon his death, Arnelito and Graciana
became co-owners of the lot. Upon her death, her share passed on to her relatives by
consanguinity thus making them co-owners as well.
Petitioner contends that Art. 487 allows him to file the instant petition. (Art. 487. Any one
of the co-owners may bring an action in ejectment.) It is true that a co-owner may bring
such an action w/o necessity of joining all the co-owners as plaintiffs because it is
presumed to be instituted for the benefit of all BUT if the action is for the benefit of the
plaintiff alone, the action should be dismissed.

Since petitioner brought the suit in his name and for his benefit alone and his repudiation
of the ownership of the other heirs, the instant petition should be dismissed.

3.Bumatay v Bumatay

GR 191320 April 25, 2017

Lolita allegedly married a certain Amado Rosete (Amado) on January 30, 1968, when she
was 16 years old.[3] The marriage was solemnized before Judge Delfin D. Rosario, in
Malasiqui, Pangasinan.[4] Prior to the declaration of nullity of her marriage with Amado
on September 20, 2005,[5] Lolita married Jona's foster father.

Jona filed a Complaint for Bigamy.RTC granted the motion to Quash. CA affirmed

Issues:

whether the CA committed any reversible error in upholding the RTC-San Carlos' Order
granting Lolita's motion to quash the Information for the crime of Bigamy.

Ruling:

The petition is denied.

Petitioner has no legal personality to assail the dismissal of the criminal case.

the People is the real party-in-interest and only the OSG can represent the People in
criminal proceedings before this Court.

Settled is the rule that "every action must be prosecuted or defended in the name of the
real party in interest[,]" who, in turn, is one "who stands to be benefited or injured by the
judgment in the suit, or by the party entitled to the avails of the suit."[56] Within this
context, "interest" means material interest or an interest in issue to be affected by the
decree or judgment of the case, as distinguished from mere interest in the question
involved.[57] To be clear, real interest refers to a present substantial interest, and not a
mere expectancy, or a future, contingent, subordinate or consequential interest.[58] Here,
the record is replete with indications[59] that Jona's natural parents are unknown and she
was merely raised as the "foster daughter" of Jose Bumatay, without having undergone
the process of legal adoption.

4.SAMANIEGO vs AGUILA

GR 125567 June 27, 2000

Facts: The Office of the President granted the exemption from the coverage of the
"Operation Land Transfer Program" the land owned by X. On appeal, the CA dismissed
the petition questioning the decision of the Office for failure to implead the Office of the
President, as they should be considered as indispensable parties.

Issue: Whether the Office of the President should be considered as an indispensable

party and must therefore be impleaded pursuant to the Rules.

Held: No. An indispensable party is a party in interest without whom no final determination
can be had of an action without that party being impleaded. Indispensable parties are
those with such an interest in the controversy that a final decree would necessarily affect
their rights, or that the court cannot proceed without their presence. "Interests" within the
meaning of this rule, should be material, directly in issue and to be v by the decree as
distinguished from a mere incidental interest in the question involved. On the other hand,
a nominal or pro forma party is one who is joined as a plaintiff or defendant, not because
such party has any real interest on the subject matter or because any relief is demanded,
but merely because the technical rules of pleadings require the presence of such party
on the record. In the case at bar, the failure to implead the Office of the President does
not warrant the dismissal of the case as such is considered as a pro forma party.

5. Go v. Distinction Properties Development and Construction, Inc.

G.R. No. 194024 April 25, 2012

FACTS

Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim (petitioners) are registered individual
owners of condominium units in Phoenix Heights Condominium developed by the
respondent.

In August 2008, petitioners, as condominium unit-owners, filed a complaint before the

HLURB against DPDCI for unsound business practices and violation of the MDDR,
alleging that DPDCI committed misrepresentation in their circulated flyers and brochures
as to the facilities or amenities that would be available in the condominium and failed to
perform its obligation to comply with the MDDR.

In defense, DPDCI alleged that the brochure attached to the complaint was “a mere
preparatory draft”. HLURB rendered its decision in favor of petitioners. DPDCI filed with
the CA its Petition for Certiorari and Prohibition on the ground that HLURB acted without
or beyond its jurisdiction.

The CA ruled that the HLURB had no jurisdiction over the complaint filed by petitioners
as the controversy did not fall within the scope of the administrative agency’s authority.

ISSUE:

Whether PHCC is an indispensable party

HELD:

. An indispensable party is defined as one who has such an interest in the controversy or
subject matter that a final adjudication cannot be made, in his absence, without injuring
or affecting that interest. It is "precisely ‘when an indispensable party is not before the
court (that) an action should be dismissed.’ The absence of an indispensable party
renders all subsequent actions of the court null and void for want of authority to act, not
only as to the absent parties but even to those present. The purpose of the rules on joinder
of indispensable parties is a complete determination of all issues not only between the
parties themselves, but also as regards other persons who may be affected by the
judgment.

PHCC is an indispensable party and should have been impleaded, as it would be directly
and adversely affected by any determination therein. Evidently, the cause of action
rightfully pertains to PHCC

6. Samahang Magsasaka ng 53Hektarya v. Mosquera

GR 152430 March 22, 2007

FACTS:

Petitioner Samahang Magsasaka ng 53 Hektarya is an association of farmer-beneficiaries

duly recognized by the DAR. Petitioner alleged that its members had been cultivating the
disputed land of the case for many years prior to the effectivity of R.A. 6657, known as
the "Comprehensive Agrarian Reform Law". Respondents are the registered owners of
three parcels of land located in Macabud, Rodriguez (formerly Montalban), Rizal,
previously owned by Philippine Suburban Development Corporation which planned to
develop it as a residential subdivision. In 1979, it was sold to Vinebel Realties, Inc.
through an extrajudicial foreclosure sale. Petitioner alleged that in 1994, the landholding
was sold to respondents without any DAR clearance, in violation of Section CARL.

On appeal, OP set aside the DAR Secretary’s Orders and exempted the property from
the CARL coverage. Petitioners filed two Motions for Reconsiderations but both were
denied by OP through its two Resolutions. Petitioner appealed the Resolutions of the OP
to the CA through Rule 43 of the 1997 Rules of Civil Procedure. The CA ruled that the
petitioner was not a real party-in-interest and not being actual grantee of the land but
mere qualified beneficiary, had no legal standing.

ISSUE

Whether or not petitioners are real parties-in-interest in this case.

HELD.

No.petitioner is not a real party-in-interest in this case. According to Sec. 2 of Rule 3 of

the Rules of Court, 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. In the case
at bar, members of petitioner Samahan are mere qualified beneficiaries of CARP. The
certification that CLOAs were already generated in their names, but were not issued
because of the present dispute, does not vest any right to the farmers since the fact
remains that they have not yet been approved as awardees, actually awarded lands, or
granted CLOAs.

COMIA

Macababbad Jr. v Masirag GR. No. 161237 Jan. 14, 2009

Facts:

Fernando Masirag (Fernando), Faustina Masirag (Faustina), Corazon Masirag (Corazon), Leonor Masirag (Leonor)
and Leoncio Masirag Goyagoy (Leoncio) (collectively called the respondents), filed with the RTC a complaint against
Macababbad, Chua and Say. They amended their complaint to allege new matters. The deceased spouses Pedro
Masirag (Pedro) and Pantaleona Tulauan (Pantaleona) were the original registered owners of Lot No. 4144 of the
Cadastral Survey of Tuguegarao (Lot No. 4144), as evidenced by Original Certificate of Title (OCT) No. 1946.
Respondents Fernando, Faustina, Corazon and Leonor Masirag are the children of Valeriano and Alfora Goyagoy,
while Leoncio is the son of Vicenta and Braulio Goyagoy. The respondents allegedly did not know of the demise of their
respective parents; they only learned of the inheritance due from their parents in the first week of March 1999 when
their relative, Pilar Quinto, informed respondent Fernando and his wife Barbara Balisi about it. The investigation
disclosed that the petitioners falsified a document entitled Extra-judicial Settlement with Simultaneous Sale of Portion
of Registered Land (Lot 4144) dated December 3, 1967[12] (hereinafter referred to as the extrajudicial settlement of
estate and sale) so that the respondents were deprived of their shares in Lot No. 4144. The document purportedly bore
the respondents signatures, making them appear to have participated in the execution of the document when they did
not; they did not even know the petitioners. The document ostensibly conveyed the subject property to Macababbad
for the sum of P1,800.00

On May 18, 1972, Chua filed a petition for the cancellation of TCT No. T-13408 and the issuance of a title evidencing
his ownership over a subdivided portion of Lot No. 4144 covering 803.50 square meters. The RTC, after initially denying
the motion to dismiss, reconsidered its ruling and dismissed the complaint in its Order dated May 29, 2000 on one of
the grounds that: there was failure to implead indispensable parties, namely, the other heirs of Pedro and Pantaleona
and the persons who have already acquired title to portions of the subject property in good faith. CA reversed and set
aside the RTCs dismissal of the complaint

ISSUE : WON RTC is correct in dismissing complaint on ground of failure to implead indispensable parties

SC: Indispensable parties are those parties who possess such an interest in the controversy that a final decree would
necessarily affect their rights so that the courts cannot proceed without their presence. A party is indispensable if his
interest in the subject matter of the suit and in the relief sought is inextricably intertwined with the other parties’ interest.
In an action for reconveyance, all the owners of the property sought to be recovered are indispensable parties. Thus,
if reconveyance were the only relief prayed for, impleading petitioners Macababbad and the spouses Chua and Say
would suffice. On the other hand, under the claim that the action is for the declaration of the nullity of extrajudicial
settlement of estate and sale, all of the parties who executed the same should be impleaded for a complete resolution
of the case. This case, however, is not without its twist on the issue of impleading indispensable parties as the RTC
never issued an order directing their inclusion. Under this legal situation, particularly in light of Rule 3, Section 11 of the
Rules of Court, there can be no basis for the immediate dismissal of the action.

Domingo v Scheer GR. No.154745 Jan. 29, 2004

Respondent Scheer is a native of Germany, who was eventually granted a permanent resident status in the Philippines.
He eventually married here and started a family as well as a business in Palawan. Vice Consul Hippelein informed the
Philippine Ambassador to Germany that the respondent had police records and financial liabilities in Germany. The
DFA receive from the German Embassy in Manila that the respondent is wanted in Germany, and requested to turn
over his German passport to the Embassy. Thereafter BOC issued a Summary Deportation Order dated September
27, 1997. It was stated that the deportation shall be held in abeyance pending respondent’s case and he shall remain
in the custody of the bureau. In issuing this the BOC relied on the statements of the German Vice Consul on the
speculation that it is improbable that the respondent will be issued a new passport, the warrant of arrest for insurance
fraud and alleged illegal activities in Palawan. Respondent nevertheless stayed in the Philippines after airing his side
to then BID Commissioner Verceles, the latter giving him time to apply for a clearance and a new passport. Scheer
eventually filed an Urgent Motion for Reconsideration stating that his right to due process was violated, for there was
no notice or chance to be heard before the issuance of the deportation order. Eventually the criminal case for physical
injuries against the respondent was dismissed, and he was issued a passport. He informed Commissioner Verceles
about this matter and reiterated the cancellation of the order, but the Commissioner did not respond. Thereafter
Commissioner Domingo assumed office and on June 6, 2002, she ordered the apprehension of the respondent who
was held in custody awaiting deportation. Shocked, respondent sought remedy with the CA, during the hearing of which
the Solicitor General suggested that the respondent leave the country first then just re-apply. A decision was reached
in favor of Scheer, permanently enjoining Domingo from continuing the deportation, thus this petition.
ISSUE: Whether or not the BOC was an indispensable party to the case.

SC: 1. Yes – but not enough to invalidate the petition.

Petitioner argues that the respondent must have impleaded BOC as the respondent, and not Commissioner Domingo
alone. The Summary Deportation Order was issued by the BOC as a whole and Domingo is just but one Commissioner
so the petitioner argues that the action may be dismissed. The court ruled that it agrees with the petitioner that the BOC
was an indispensable party to the respondent’s petition in the CA. However, the non-joinder of indispensable parties is
not a ground for the dismissal of an action. Parties may be added as ordered by the court and if the petitioner refuses
to implead an indispensable party, then the petition may be dismissed. In the case at bar, CA did not require to implead
BOC as the respondent so it does not warrant the dismissal of respondent’s petition. The court may choose to amend
the processes and the pleadings by substituting as party-plaintiff the real party-interest, but the court also has the power
to avoid delay in the disposition of cases and it may just be unnecessary to still choose to implead BOC. The OSG has
already represented the petitioner in instant proceedings thus the BOC cannot claim that it was not afforded the
opportunity to be in court. Proceedings may be to facilitate justice but they do not constitute the thing itself and they
may be relaxed in certain cases.

Bacalso vs. Padigos Gr No. 173192 Apr 14, 2008

The case at bar involves a parcel of land located in Inayawan, Cebu, covered by Original Certificate of Title No. RO-
2649 (0-9092) in the name of 13 co-owners. Maximo Padigos (Maximo), Flaviano Mabuyo (Flaviano), Gaudencio
Padigos (Gaudencio), Domingo Padigos (Domingo), and Victoria P. Abarquez (Victoria), who are among the herein
respondents and are heirs of some of the co-owners of the property, filed before the RTC of Cebu City, a Complaint
against Rosendo Bacalso (Rosendo) and Rodrigo Bacalso (Rodrigo) who are among the herein petitioners, for quieting
of title, declaration of nullity of documents, recovery of possession, and damages.

Respondents alleged that the therein defendants-petitioners Rosendo and Rodrigo are heirs of Alipio Bacalso, Sr.
(Alipio, Sr.) who, during his lifetime, secured Tax Declarations covering the lot without any legal basis; that Rosendo
and Rodrigo have been leasing portions of the lot to persons who built houses thereon, and Rosendo has been living
in a house built on a portion of the lot; and that demands to vacate and efforts at conciliation proved futile, prompting
them to file the complaint at the RTC. On the other hand, petitioners Rosendo and Rodrigo claimed that their father
Alipio, Sr. purchased via deeds of sale the shares in the lot of Fortunata, Simplicio, Wenceslao, Geronimo, and Felix
from their respective heirs, and that Alipio, Sr. acquired the shares of the other co-owners of the lot by extraordinary
acquisitive prescription through continuous, open, peaceful, and adverse possession thereof in the concept of an owner
since 1949.

RTC decided in favor in the therein plaintiffs-herein respondents. Upon appeal, the CA also affirmed the RTC’s decision.

ISSUE: Whether or not the case should be dismissed because of the non-inclusion of some of the heirs of the co-
owners claimed to be indispensible parties in the complaint

HELD:

Respondents’ contention does not lie. The action is for quieting of title, declaration of nullity of documents, recovery of
possession and ownership, and damages. Arcelona v. Court of Appeals defines indispensable parties under Section 7
of Rule 3, Rules of Court as follows:

[P]arties-in-interest without whom there can be no final determination of an action. As such, they must be joined either
as plaintiffs or as defendants. The general rule with reference to the making of parties in a civil action requires, of
course, the joinder of all necessary parties where possible, and the joinder of all indispensable parties under any and
all conditions, their presence being a sine qua non for the exercise of judicial power. It is precisely “when an
indispensable party is not before the court (that) the action should be dismissed.” The absence of an indispensable
party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent
parties but even as to those present.

Villanueva vs. Nite Gr No. 148211 July 25, 2006

Facts:

Marilyn Nite, the respondent, obtained a loan from petitioner Villanueva and as a security
for the loan, she issued an ABC check (Asian bank Corporation) thereto. The date
however was later on change but with consent of Villanueva. Upon presentment of check
by petitioner, it was dishonored due to material alteration, so respondent Nite who already
left the country, thru her representative, then instead partially settle her loan with the
agreement that the balance would be payable on a later date.

However, only six (6) days thereafter, Villanueva instituted an action for sum of money
against ABC bank for the full amount of dishonored check where RTC ruled in his favor
and ordered the bank to pay Villanueva. Only then respondent Nite found out that her
account lacked such amount. She went to CA seeking to annul RTC order and decision,
who ruled now on her favor finding fraud and bad faith attendant on part of Villanueva.

Hence this petition.

ISSUE:

HELD: The annulment by the Court of Appeals of judgments or final orders and
resolutions in civil actions of Regional Trial Courts for which the ordinary remedies of new
trial, appeal, petition for relief or other appropriate remedies are no longer available
through no fault of the petitioner. Respondent may avail of the remedy of annulment of
judgment under Rule 47. The ordinary remedies of new trial, appeal and petition for relief
were not available to her for the simple reason that she was not made a party to the suit
against ABC. Thus, she was neither able to participate in the original proceedings nor
resort to the other remedies because the case was filed when she was abroad.
Annulment of judgment may be based only on extrinsic fraud and lack of jurisdiction.
Extrinsic or collateral fraud pertains to such fraud which prevents the aggrieved party from
having a trial or presenting his case to the court, or is used to procure the judgment
without fair submission of the controversy. This refers to acts intended to keep the
unsuccessful party away from the courts as when there is a false promise of compromise
or when one is kept in ignorance of the suit.

The contract of loan was between petitioner and respondent. No collection suit could
prosper without respondent who was an indispensable party. Rule 3, Sec. 7 of the Rules
of Court states: Sec. 7. Compulsory joinder of indispensable parties.—Parties in interest
without whom no final determination can be had of an action shall be joined either
as plaintiffs or defendants. (emphasis ours) An indispensable party is one whose interest
in the controversy is such that a final decree will necessarily affect his rights. The court
cannot proceed without his presence. If an indispensable party is not impleaded, any
judgment is ineffective.

Galang vs. Wallis July 3, 2019

Facts:

Petitioners filed a Complaint for Accion Reivindicatoria, Declaration of Nullity, Annulment

of Tax Declaration, Injunction with Prayer for Temporary Restraining Order (TRO) and
Damages, claiming to be the lawful owners of parcels of land. In said complaint, they
traced the provenance of their title to a certain Wasiwas Bermor who occupied the land
as early as 1908 and registered the same in his name in 1961By virtue of a Deed of
Absolute Sale, petitioner Fagyan acquired the land from Wasiwas and subsequently
divided and transferred portions thereof to the rest of the petitioners. According to
petitioners, despite the fact that they legally acquired the subject lands as evidenced by
the Deeds of Absolute Sale they presented, respondents have been intruding into their
land in bad faith and without any color of title. They assert that the documents being used
by respondents to justify their intrusion were fraudulently acquired and are patent nullities.
As such, petitioners prayed that the RTC: (1) declare them as the true and absolute
owners of the subject lands; (2) issue a TRO restraining respondents from pursuing any
more improvements and excavations thereon; (3) order respondents to vacate the
portions of the lands that they are unlawfully occupying; (4) restore them of their lawful
possession of the same; (5) declare as null and void the documents of ownership being
used by respondents; and (6) order respondents to pay them damages and costs of the
suit.
Respondents filed motion to dismiss alleging that the RTC had no jurisdiction over the
subject matter of the case because of the fact that the land subject of the controversy is
an ancestral land and that said controversy is among members of indigenous peoples'
groups. As such, the case falls within the exclusive jurisdiction of the Hearing Officer of
the National Commission on Indigenous Peoples (NCIP).

RTC dismissed the complaint on the finding that it is bereft of jurisdiction to hear and
decide the case. The RTC denied the Motion for Reconsideration of the petitioners and
ruled that the parties may litigate before the NCIP. Hence, this petition.

ISSUE: W/N NCIP has jurisdiction over the case filed by petitioners.

Held: Yes. In the case of Undaran, the Supreme Court ruled that NCIP shall have
jurisdiction over claims and disputes involving rights of ICCs/IPs only when they arise
between or among parties belonging to the same ICC/IP group because of the qualifying
provision under Section 66 of the IPRA that "no such dispute shall be brought to the NCIP
unless the parties have exhausted all remedies provided under their customary laws. The
Court thus noted that the two conditions cannot be complied with if the parties to a case
either (1) belong to different ICCs/IP groups which are recognized to have their own
separate and distinct customary laws, or (2) if one of such parties was a non-ICC/IP
member who is neither bound by customary laws or a Council of Elders/Leaders, for it
would be contrary to the principles of fair play and due process for parties who do not
belong to the same ICC/IP group to be subjected to its own distinct customary laws and
Council of Elders/Leaders. In which case, the Court ruled that the regular courts shall
have jurisdiction, and that the NCIP's quasi-judicial jurisdiction is, in effect, limited to
cases where the opposing parties belong to the same ICC/IP group

In the case at bar, the parties are members of indigenous groups and that the case
involves a dispute among groups of indigenous people. They do not, however, belong to
the same ICC/IP group. Thus, applying the doctrine in Unduran, it is the RTC, and not the
NCIP, which has jurisdiction over the instant case. This is so even if it was also found that
the subject land appears to be classified as ancestral land. RTC should not have
dismissed the complaint as it actually had jurisdiction over the same.
In the case of Unduran, the allegations in petitioners' complaint neither alleged that the
parties are members of ICC/IP nor that the case involves a dispute or controversy over
ancestral lands/domains of ICC/IP. Rather, the allegations in their complaint make up for
an accion reivindicatoria, a civil action involving an interest in a real property with an
assessed value of more than P20,000.00. Thus, similar to the finding of the Court in
Unduran, the complaint of petitioners herein is well within the jurisdiction of the RTC.
Indeed, jurisdiction over the subject matter is conferred by the Constitution or by law. A
court of general jurisdiction has the power or authority to hear and decide cases whose
subject matter does not fall within the exclusive original jurisdiction of any court, tribunal
or body exercising judicial or quasi-judicial function.

With respect to the finding of the RTC on primary and concurrent jurisdiction of the regular
courts and the NCIP, moreover, the Court pronounced in Unduran that there is nothing in
the provisions of the entire IPRA that expressly or impliedly confer concurrent jurisdiction
to the NCIP and the regular courts over claims and disputes involving rights of ICC/IP
between and among parties belonging to the same ICC/IP group. As such, the NCIP's
jurisdiction vested under Section 66 of the IPRA is merely limited and cannot be deemed
concurrent with the regular courts.

Carandang v Heirs of De Guzman GR. No. 160347 Nov. 29, 2006

FACTS:

The Spouses Carandang and the decedent Quirino de Guzman were stockholders and
corporate officers of Mabuhay Broadcasting System (MBS). The Carandangs have
equities at 54 % while Quirino has 46%. When the capital stock of MBS was increased,
the Carandang borrowed money from Quirino. When Quirino sent a demand letter to the
Carandangs for the payment of the loan, the Carandangs refused to pay. Thereafter,
Quirino filed a complaint seeking to recover the P336,375 total amount of the loan
together with damages. The RTC ruled in favor of Quirino and ordered the Carandangs
to pay the loan plus interest, attorney’s fees, and costs of suit. Carandangs argued that
three of the four checks used to pay their stock subscriptions were issued in the name of
Milagros de Guzman, the decedent’s wife. Thus, Milagros should be considered as an
indispensable party in the complaint. Being such, the failure to join Milagros as a party in
the case should cause the dismissal of the action.

ISSUE: W/N the RTC should have dismissed the case for failure to state a cause of action,
considering that Milagros de Guzman, allegedly an indispensable party, was not included
as a party-plaintiff .

HELD: NO. Unlike jurisdiction over the subject matter which is conferred by law and is not
subject to the discretion of the parties, jurisdiction over the person of the parties to the
case may be waived either expressly or impliedly. Implied waiver comes in the form of
either voluntary appearance or a failure to object. In the cases cited by the spouses
Carandang, we held that there had been no valid substitution by the heirs of the deceased
party, and therefore the judgment cannot be made binding upon them. In the case at bar,
not only do the heirs of de Guzman interpose no objection to the jurisdiction of the court
over their persons; they are actually claiming and embracing such jurisdiction. In doing
so, their waiver is not even merely implied (by their participation in the appeal of said
Decision), but express (by their explicit espousal of such view in both the Court of Appeals
and in this Court). The heirs of de Guzman had no objection to being bound by the
Decision of the RTC. Thus, lack of jurisdiction over the person, being subject to waiver,
is a personal defense which can only be asserted by the party who can thereby waive it
by silence.

It also pays to look into the spirit behind the general rule requiring a formal substitution of
heirs. The underlying principle therefor is not really because substitution of heirs is a
jurisdictional requirement, but because non-compliance therewith results in the
undeniable violation of the right to due process of those who, though not duly notified of
the proceedings, are substantially affected by the decision rendered therein. Such
violation of due process can only be asserted by the persons whose rights are claimed to
have been violated, namely the heirs to whom the adverse judgment is sought to be
enforced.

The Court of Appeals is correct. Petitioners erroneously interchange the terms “real party
in interest” and “indispensable party.” A real party in interest is the party who stands to be
benefited or injured by the judgment of the suit, or the party entitled to the avails of the
suit. On the other hand, an indispensable party is a party in interest without whom no final
determination can be had of an action, in contrast to a necessary party, which is one who
is not indispensable but who ought to be joined as a party if complete relief is to be
accorded as to those already parties, or for a complete determination or settlement of the
claim subject of the action.

Whenever in any pleading in which a claim is asserted a necessary party is not joined,
the pleader shall set forth his name, if known, and shall state why he is omitted. Should
the court find the reason for the omission unmeritorious, it may order the inclusion of the
omitted necessary party if jurisdiction over his person may be obtained. The failure to
comply with the order for his inclusion, without justifiable cause, shall be deemed a waiver
of the claim against such party. The noninclusion of a necessary party does not prevent
the court from proceeding in the action, and the judgment rendered therein shall be
without prejudice to the rights of such necessary party. Noncompliance with the order for
the inclusion of a necessary party would not warrant the dismissal of the complaint. This
is an exception to Section 3, Rule 17 which allows the dismissal of the complaint for failure
to comply with an order of the court, as Section 9, Rule 3 specifically provides for the
effect of such non-inclusion: it shall not prevent the court from proceeding in the action,
and the judgment rendered therein shall be without prejudice to the rights of such
necessary party. Section 11, Rule 3 likewise provides that the nonjoinder of parties is not
a ground for the dismissal of the action.

Other than the indispensable and necessary parties, there is a third set of parties:
the pro forma parties, which are those who are required to be joined as co-parties in suits
by or against another party as may be provided by the applicable substantive law or
procedural rule. An example is provided by Section 4, Rule 3 of the Rules of Court: Sec.
4. Spouses as parties.—Husband and wife shall sue or be sued jointly, except as provided
by law. Pro forma parties can either be indispensable, necessary or neither indispensable
nor necessary. The third case occurs if, for example, a husband files an action to recover
a property which he claims to be part of his exclusive property. The wife may have no
legal interest in such property, but the rules nevertheless require that she be joined as a
party. In cases of pro forma parties who are neither indispensable nor necessary, the
general rule under Section 11, Rule 3 must be followed: such non-joinder is not a ground
for dismissal. Hence, in a case concerning an action to recover a sum of money, we held
that the failure to join the spouse in that case was not a jurisdictional defect. The non-
joinder of a spouse does not warrant dismissal as it is merely a formal requirement which
may be cured by amendment. Conversely, in the instances that the pro forma parties are
also indispensable or necessary parties, the rules concerning indispensable or necessary
parties, as the case may be, should be applied. Thus, dismissal is warranted only if the
pro forma party not joined in the complaint is an indispensable party.
Article 108 of the Family Code provides: Art. 108. The conjugal partnership shall be
governed by the rules on the contract of partnership in all that is not in conflict with what
is expressly determined in this Chapter or by the spouses in their marriage settlements.
This provision is practically the same as the Civil Code provision it superseded: Art. 147.
The conjugal partnership shall be governed by the rules on the contract of partnership in
all that is not in conflict with what is expressly determined in this Chapter. In this
connection, Article 1811 of the Civil Code provides that “[a] partner is a co-owner with the
other partners of specific partnership property.” Taken with the presumption of the
conjugal nature of the funds used to finance the four checks used to pay for petitioners’
stock subscriptions, and with the presumption that the credits themselves are part of
conjugal funds, Article 1811 makes Quirino and Milagros de Guzman co-owners of the
alleged credit. Being co-owners of the alleged credit, Quirino and Milagros de Guzman
may separately bring an action for the recovery thereof. In the fairly recent cases of
Baloloy v. Hular, 438 SCRA 80 (2004), and Adlawan v. Adlawan, 479 SCRA 275 (2006),
we held that, in a co-ownership, co-owners may bring actions for the recovery of co-
owned property without the necessity of joining all the other coowners as co-plaintiffs
because the suit is presumed to have been filed for the benefit of his co-owners. In the
latter case and in that of De Guia v. Court of Appeals, 413 SCRA 114 (2003), we also
held that Article 487 of the Civil Code, which provides that any of the coowners may bring
an action for ejectment, covers all kinds of action for the recovery of possession.

Columbia Pictures, Inc v CA GR. No. 110318 Aug. 28, 1996

FACTS:

Columbia Pictures, et al. had lodged a formal complaint with the NBI, vis-à-vis their anti-
film piracy drive. Eventually, the NBI obtained a search warrant against Sunshine Video
seeking to seize pirated video tapes, among others. The NBI carried out the seizure, and
filed a return with the trial court. However, the trial court eventually granted a motion to
lift the order of search warrant – the contention was that the master tapes of the
copyrighted films from which the pirated films were allegedly copied were never presented
in the proceedings for the issuance of the search warrants. The CA dismissed the appeal
brought before it. Hence, Columbia Pictures, et al. brought the case before the
SC.Sunshine Video contended that Columbia Pictures, et al. (being foreign
corporations doing business in the Philippines) should have a license in order to
maintain an action in Philippine courts – and without such license, it had no right
to ask for the issuance of a search warrant. Sunshine video submitted that the fact
that Columbia Pictures, et al. were copyright owners or owners of exclusive rights of
distribution in the Philippines of copyrighted motion pictures, AND the fact that Att.
Domingo had been appointed as their atty.-in-fact constituted “doing business in the
Philippines”, under the Rules of the Board of Investments.

ISSUE:

Do Colombia Pictures, et al. have legal personality to sue in the Philippines?

HELD: YES. As a general rule, a foreign corporation will not be regarded as doing
business in the State simply because it enters into contracts with residents of the State,
where such contracts are consummated outside the State. In fact, a view is taken that a
foreign corporation is not doing business in the State merely because sales of its product
are made there or other business furthering its interests is transacted there by an alleged
agent, whether a corporation or a natural person where such activities are not under the
direction and control of the foreign corporation but are engaged in by the alleged agent
as an independent business.

It is generally held that sales made to customers in the State by an independent dealer
who has purchased and obtained title from the corporation to the products sold are not a
doing of business by the corporation. Likewise, a foreign corporation which sells its
products to persons styled “distributing agents” in the State, for distribution by them, is
not doing business in the State so as to render it subject to service of process therein,
where the contract with these purchasers is that they shall buy exclusively from the foreign
corporation such goods as it manufactures and shall sell them at trade prices established
by it.

It has moreover been held that the act of a foreign corporation in engaging an attorney to
represent it in a Federal court sitting in a particular State is not doing business within the
scope of the minimum contact test. With much more reason should this doctrine apply to
the mere retainer of Atty. Domingo for legal protection against contingent acts of
intellectual piracy.

In accordance with the rule that “doing business” imports only acts in furtherance of the
purposes for which a foreign corporation organized, it is held that the mere institution and
prosecution or defense of a suit, particularly if the transaction which is the basis of the
suit took place out of the State, do not amount to the doing of business in the State. The
institution of a suit or the removal thereof is neither the making of a contract nor the doing
of business within a constitutional provision placing foreign corporation’s licensed to do
business in the State under the same regulations, limitations and liabilities with respect
to such acts as domestic corporations. Merely engaging in litigation has been considered
as not a sufficient minimum contact to warrant the exercise of jurisdiction over a foreign
corporation.

Among the grounds for a motion to dismiss under the Rules of Court are lack of
legal capacity to sue and that the complaint states no cause of action. Lack of legal
capacity to sue means that the plaintiff is not in the exercise of his civil rights, or does not
have the necessary qualification to appear in the case, or does not have the character or
representation he claims. On the other hand, a case is dismissible for lack of personality
to sue upon proof that the plaintiff is not the real party in interest, hence grounded on
failure to state a cause of action.

The term “lack of capacity to sue” should not be confused with the term “lack of personality
to sue.” While the former refers to a plaintiff’s general disability to sue, such as on account
of minority, insanity, incompetence, lack of juridical personality or any other general
disqualifications of a party, the latter refers to the fact that the plaintiff is not the real party
in interest. Correspondingly, the first can be a ground for a motion to dismiss based on
the ground of lack of legal capacity to sue; whereas the second can be used as a ground
for a motion to dismiss based on the fact that the complaint, on the face thereof, evidently
states no cause of action.

Evangelista v Santiago GR. No. 157447 April 29, 2005

Facts: This case is about the complaint for the declaration of nullity of Original
Certificate of Title No. 670 and all other titles emanating therefrom. The subject property
is a vast tract of lands where the petitioners alleged that they occupied and possessed
such parcels. The whole property covered by OCT No. 670 was issued pursuant to
Decree No. 1024in favor of Isabel Manahan Santiago the mother of herein respondent.
Petitioners filed with the trial court, on 29 April 1996, an action for declaration of nullity of
respondent’s certificates of title on the basis that OCT No. 670 was fake and spurious
and also Petitioners came by information that respondent was planning to evict them from
the Subject Property. Two of the petitioners had actually received notices to vacate.
Respondent filed his Answer with Prayer for Preliminary Hearing on the Affirmative
Defenses.Respondent claimed that the petitioners had no legal capacity to file the
Complaint, and thus, the Complaint stated no cause of action. Since OCT No. 670 was
genuine and authentic on its face, then OCT No. 670 and all of respondent’s land titles
derived therefrom, are incontrovertible, indefeasible and conclusive against the
petitioners and the whole world. Furthermore, He pointed out that any action against his
certificates of title already prescribed, especially with regard to OCT No. 670, which was
issued in 1913 or more than 83 years prior to the filing of the Complaint by the petitioners.

During said hearing, petitioners presented their lone witness, Engineer Placido Naval, a
supposed expert on land registration laws. In response to questions from Honorable
Judge Francisco C. Rodriguez of the trial court, Engineer Naval answered that a parcel
of land titled illegally would revert to the State if the Torrens title was cancelled, and that
it was the State, through the Office of the Solicitor General, that should file for the
annulment or cancellation of the title. Respondent, on the other hand, did not present any
evidence but relied on all the pleadings and documents he had so far submitted to the
trial court.

RTC dismissed the case ruling that plaintiffs were not the lawful owners of the land subject
of this case, for they did not comply with PD 892, the said plaintiffs do not have the legal
standing to bring before this Court the instant complaint.Defendants title especially so
with the mother title OCT 670 was entered and issued in 1913 or more than Eighty Three
(83) years ago, the same not having been questioned by any party. Only now that it is
being questioned, but sad to say, plaintiffs who are on the offensive and relying on their
lone expert witness, instead of bolstering their case, unwittingly sealed their fate.

The MR of the petitioner are likewise dismissed. The CA affirmed the decision of RTC.
Hence the reason of this petition.

Issue: Whether or not the Petitioner has the capacity to sue

Held:No. Before anything else, it should be clarified that “the plaintiff has no legal capacity
to sue” and “the pleading asserting the claim states no cause of action” are two different
grounds for a motion to dismiss or are two different affirmative defenses. Failure to
distinguish between “the lack of legal capacity to sue” from “the lack of personality to sue”
is a fairly common mistake. The difference between the two is explained by this Court in
Columbia Pictures, Inc. v. Court of Appeals: Among the grounds for a motion to dismiss
under the Rules of Court are lack of legal capacity to sue and that the complaint states
no cause of action. Lack of legal capacity to sue means that the plaintiff is not in the
exercise of his civil rights, or does not have the necessary qualification to appear in the
case, or does not have the character or representation he claims. On the other hand, a
case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real
party-in-interest, hence grounded on failure to state a cause of action. The term “lack of
capacity to sue” should not be confused with the term “lack of personality to sue.” While
the former refers to a plaintiff’s general disability to sue, such as on account of minority,
insanity, incompetence, lack of juridical personality or any other general disqualifications
of a party, the latter refers to the fact that the plaintiff is not the real party-in-interest.
Correspondingly, the first can be a ground for a motion to dismiss based on the ground
of lack of legal capacity to sue; whereas the second can be used as a ground for a motion
to dismiss based on the fact that the complaint, on the face thereof, evidently states no
cause of action.

Lorenzo Shipping Corp. v Chubb and Sons, Inc .

GR. No. 147724
June 8, 2004
Puno, J.
Facts:
Lorenzo Shipping Corporation is a corporation engaged in shipping. It was the
carrier of 581 bundles of black steel pipes from Manila to Davao City. From Davao City,
Gearbulk, Ltd. A corporation licensed as a common carrier under the laws of Norway,
through its agent, Philippine Transmarine Carriers, Inc., carried the goods on board M/V
San Mateo to the US, for the account of Sumitomo Corporation.
Sumitomo insured the shipment with Chubb and Sons, Inc., a foreign corporation
licensed to engage in insurance business under the laws of the US. M/V Lorcon received
the shipping of steel pipes in good order and condition as evidenced by the clean bill of
lading. When the cargo was unloaded from Lorenzo Shipping’s vessel at Davao City, the
steel pipes were rusted all over.
M/V San Mateo of Gearbulk Ltd which received the cargo issued bills of lading
covering the entire shipment marked “all units heavily rusted”. Surveyors found that the
cargo hold of M/V Lorcon was flooded with seawater, the tank was rusty, thinning and
perforated thereby exposing the cargo to sea water. The cargo was damaged while in the
ship. Negligence was sufficiently established. The contact with the steel pipes caused the
development of rust.
While the ship was on transit from Davao to US, the consignee sent a letter of intent
to Lorenzo shipping informing them that it would file a claim based on the damaged cargo
once the damage had been ascertained. Once Sumitomo inspected the pipes, it declared
them unfit and filed a marine insurance claim against Chubb and Sons for $104k.
 Chubb and Sons filed a complaint for collection of a sum of money against Lorenzo
Shipping, Gearbulk, and Transmarine. RTC found Chubb and Sons had the right to
institute the action and Lorenzo shipping was negligent. CA affirmed.
Lorenzo claimed the packaging was defective and that the action was prescribed
(SC ruled against both defenses. There was evidence that the shipment was packed in
superior condition.)

Issue:
1. Did Chubb and Sons have capacity to sue?
2. Had the action prescribed?

Held: 1. Yes
Re: Capacity to sue
Capacity to sue is a right personal to its holder , its is conferred by law. The foreign
corporation doing an isolated business transaction in the Philippines does not need a
license. The insurer Chubb and Sons is the real party in interest and damages. Where an
insurance company as subrogee pays the insured of the entire loss it suffered, the insurer
subrogee is the only real party in interest and must sue in its own name to enforce its right
of subrogation against a third party which caused the loss. The subrogated unsurer
becomes owner of the claims and the entire fruits of the action.

2. No Ratio:
Re: Art 366 Code of Commerce:
24 hour period that does not begin until the consignee has received possession of
the merchandise or by delivery of the cargo by the carrier to the consignee at the place of
destination. · In this case, consignee Sumitomo only took possession of the entire
shipment when it reached the US. Only then was the delivery made and completed and
only then did the 24 hour prescriptive period run.

Steelcase Inc. v Design International Selection

GR. No. 171995
April 18, 2012

FACTS
Steelcase, Inc. (Steelcase) granted Design International Selections, Inc. (DISI) the right
to market, sell, distribute, install, and service its products to end-user customers within
the Philippines.Steelcase argues that Section 3(d) of R.A. No. 7042 or the Foreign
Investments Act of 1991 (FIA) expressly states that the phrase doing business excludes
the appointment by a foreign corporation of a local distributor domiciled in the
Philippines which transacts business in its own name and for its own account. On the
other hand, DISI argues that it was appointed by Steelcase as the latter’s exclusive
distributor of Steelcase products. The dealership agreement between Steelcase and DISI
had been described by the owner himself as basically a buy and sell arrangement.

ISSUE

Whether Steelcase had been doing business in the Philippines.

RULING

NO.

[T]he appointment of a distributor in the Philippines is not sufficient to constitute doing

business unless it is under the full control of the foreign corporation. On the other hand,
if the distributor is an independent entity which buys and distributes products, other than
those of the foreign corporation, for its own name and its own account, the latter cannot
be considered to be doing business in the Philippines. Here, DISI was an independent
contractor which sold Steelcase products in its own name and for its own account. As a
result, Steelcase cannot be considered to be doing business in the Philippines by its act of
appointing a distributor as it falls under one of the exceptions under R.A. No. 7042.

La Chemise Lacoste, S.A v Fernandez

214 Phil 332
Nature: Petition for review on certiorari the decision of the Court of Appeals
Facts:
La chemise Lacoste is a French corporation and the actual owner of the trademarks
“Lacoste,”“Chemise Lacoste,” “Crocodile Device” and a composite mark consisting of the
word “Lacoste” and are presentation of a crocodile/alligator, used on clothing's and other
goods sold in many parts of the world and which has been marketed in the Philippines
(notably by Rustans) since 1964.

In 1975 and 1977, Hemandas Q. Co. was issued certificate of registration for the
trademark “Chemise Lacoste and Q Crocodile Device "both in the supplemental and
Principal Registry. In 1980, La Chemise Lacoste SA filed for the registration of the
“Crocodile device” and “Lacoste”.

Games and Garments (Gobindram Hemandas, assignee of Hemandas Q.Co.) opposed the
registration of “Lacoste.”

In 1983, La Chemise Lacoste filed with the NBI a letter-complaint alleging acts of
unfair competition committed by Hemandas and requesting the agency’s assistance for
investigation and prosection.
A search warrant was issued by the trial court. Various goods and articles were seized
upon the execution of the warrants.

Hemandas filed motion to quash the warrants, which the court granted. The search
warrants were recalled, and the goods ordered to be returned. La Chemise Lacoste filed a
petition for certiorari. The defendant argued that the petitioner has no capacity to sue
being a foreign corporation not doing business in the Philippines

Issue/s:

Whether or not La Chemise Lacoste has capacity to sue

Ruling:

-Yes.

As early as 1927, this Court was, and it still is, of the view that a foreign corporation
not doing business in the Philippines needs no license to sue before Philippine courts for
infringement of trademark and unfair competition. Thus, in Western Equipment and
Supply Co. v. Reyes(51 Phil. 115), this Court held that a foreign corporation which has
never done any business in the Philippines and which is unlicensed and unregistered to
do business here, but is widely and favorably known in the Philippines through the use
therein of its products bearing its corporate and tradename, has a legal right to maintain
an action in the Philippines to restrain the residents and inhabitants thereof from
organizing a corporation therein bearing the same name as the foreign corporation, when
it appears that they have personal knowledge of the existence of such a foreign
corporation, and it is apparent that the purpose of the proposed domestic corporation is
to deal and trade in the same goods as those of the foreign corporation.

We further held:

xxx xxx xxx

... That company is not here seeking to enforce any legal or control rights
arising from, or growing out of, any business which it has transacted in the
Philippine Islands. The sole purpose of the action:

Is to protect its reputation, its corporate name, its goodwill, whenever that
reputation, corporate name or goodwill have, through the natural
development of its trade, established themselves.' And it contends that its
rights to the use of its corporate and trade name:
 Is a property right, a right in rem, which it may assert and protect against
all the world, in any of the courts of the world-even in jurisdictions where it
does not transact business-just the same as it may protect its tangible
property, real or personal, against trespass, or conversion. …….xx

Since it is the trade and not the mark that is to be protected, a trade-mark
acknowledges no territorial boundaries of municipalities or states or
nations, but extends to every market where the trader's goods have become
known and Identified by the use of the mark.

More important is the nature of the case which led to this petition. What preceded this
petition forcertiorari was a letter complaint filed before the NBI charging Hemandas with
a criminal offense, i.e., violation of Article 189 of the Revised Penal Code. If prosecution
follows after the completion of the preliminary investigation being conducted by the
Special Prosecutor the information shall be in the name of the People of the Philippines
and no longer the petitioner which is only an aggrieved party since a criminal offense is
essentially an act against the State. It is the latter which is principally the injured party
although there is a private right violated. Petitioner's capacity to sue would become,
therefore, of not much significance in the main case

Heirs of Marciano Nagano v. Court of Appeals

G.R. No. 123231 November 17, 1997

Facts:

Plaintiffs-appellants [private respondents] filed complaint for the declaration of nullity of

Original Certificate of Title No. P-8265 issued in the name of the heirs of Marciano
Nagaño and covering Cad. Lot. No. 3275. Plaintiff-appellants alleged that the issuance of
the said title was on account of the fraud, deceit, and misrepresentation committed by
defendant Marcario Valerio. An information for perjury was even filed on November 2,
1983 against defendant Valerio, who unlawfully attested that Lot No. 3275 was not
occupied or being claimed by other persons. Plaintiff-appellants alleged that part of the
subject property was owned by their predecessors-in-interest Rufino Mallari and
Ferminal Jamlig and that they were in possession of the said land since 1920. They
recently discovered that their entire Lot No. 3275 was registered by defendant Valerio
under Free Patent No. (III-2) 001953 and OCT No. P-8265 in the name of the heirs of
Marciano Nagaño. They allegedly demanded from defendant Velerio to execute the
necessary document in order that the 2,250 square meters owned by them be segregated
from the property titled in the name of the defendants-appellee [petitioners herein].
Defendants-appellee, however, refused to accede their demands.

Issue:

Whether private respondents claim ownership to the 2,250 square meter portion of the
land.

Held:

It is clear from the allegations in the complaint that private respondents claimownership
to the 2,250 square meter portion for having possessed it in the concept of an owner,
openly, peacefully, publicly, continuously and adversely since 1920. This claim is an
assertion that the lot is private land, or that even assuming it was part of the public
domain, private respondents had already acquired imperfect title thereto. Consequently,
merely on the basis of the allegations in the complaint, the lot in question is apparently
beyond the jurisdiction of the Director of the Bureau of Lands and could not be the subject
of a Free Patent. Hence, dismissal of private respondents’ complaintwas premature and
trial on the merits should have been conducted to thresh out evidentiary matters.

In light of the above, and at this time, prescription is unavailing against private
respondent’s action. It is settled that a Free Patent issued over private land is null and
void, and produces no legal affects whatsoever. Moreover, private respondent’s claim of
open, public, peaceful, continuous and adverse possession of the 2,250 square meter
portion since 1920, and its illegal inclusion in the Free Patent of petitioners and in their
original certificateof title, gave private respondents a cause of action for quieting of title
which is imprescriptible.

DE CASTRO

Heirs of Kionisala vs Heirs of Dacut, GR No. 147379, Feb 27, 2002

Facts:
 In this case, the Kionisalas acquired a free patent over the subject properties. Thereafter an Original Certificate
of Title was issued in their names. However, the Dacuts filed a complaint for declaration of nullity of titles, reconveyance
and damages against the Kionisalas, claiming absolute ownership of the subject properties even prior to the issuance
of the corresponding free patents and certificates of title.

The trial court dismissed the complaint on the ground that the cause of action of Dacuts was truly for reversion
so that only the Director of Lands could have filed the complaint. The CA ruled that, it was reversible error for the lower
court to have dismissed the complaint because in an action for reconveyance, what is sought is the transfer of the
property which has been wrongfully or erroneously registered in another person’s name, to its rightful and legal owner
or to one with a better right. Thus, this appeal.

ISSUE:

W/N action for declaration of nullity of free patents and certificates of title the same as action for reversion

SC: NO. The real party-in-interest is not the State but the plaintiff who alleges a pre-existing right of ownership over the
parcel of land in question even before the grant of title to the defendant in case of action for declaration of nullity of free
patents and certificates of title.

In an action for reversion, the pertinent allegations in the complaint would admit State ownership of the disputed land.
Hence in Gabila v. Barriga where the plaintiff in his complaint admits that he has no right to demand the cancellation
or amendment of the defendants title because even if the title were canceled or amended the ownership of the land
embraced therein or of the portion affected by the amendment would revert to the public domain, we ruled that the
action was for reversion and that the only person or entity entitled to relief would be the Director of Lands.

Macababbad Jr. v Masirag GR. No. 161237 Jan. 14, 2009

Facts:

Fernando Masirag (Fernando), Faustina Masirag (Faustina), Corazon Masirag (Corazon), Leonor Masirag (Leonor)
and Leoncio Masirag Goyagoy (Leoncio) (collectively called the respondents), filed with the RTC a complaint against
Macababbad, Chua and Say. They amended their complaint to allege new matters. The deceased spouses Pedro
Masirag (Pedro) and Pantaleona Tulauan (Pantaleona) were the original registered owners of Lot No. 4144 of the
Cadastral Survey of Tuguegarao (Lot No. 4144), as evidenced by Original Certificate of Title (OCT) No. 1946.
Respondents Fernando, Faustina, Corazon and Leonor Masirag are the children of Valeriano and Alfora Goyagoy,
while Leoncio is the son of Vicenta and Braulio Goyagoy. The respondents allegedly did not know of the demise of their
respective parents; they only learned of the inheritance due from their parents in the first week of March 1999 when
their relative, Pilar Quinto, informed respondent Fernando and his wife Barbara Balisi about it. The investigation
disclosed that the petitioners falsified a document entitled Extra-judicial Settlement with Simultaneous Sale of Portion
of Registered Land (Lot 4144) dated December 3, 1967[12] (hereinafter referred to as the extrajudicial settlement of
estate and sale) so that the respondents were deprived of their shares in Lot No. 4144. The document purportedly bore
the respondents signatures, making them appear to have participated in the execution of the document when they did
not; they did not even know the petitioners. The document ostensibly conveyed the subject property to Macababbad
for the sum of P1,800.00

On May 18, 1972, Chua filed a petition for the cancellation of TCT No. T-13408 and the issuance of a title evidencing
his ownership over a subdivided portion of Lot No. 4144 covering 803.50 square meters. The RTC, after initially denying
the motion to dismiss, reconsidered its ruling and dismissed the complaint in its Order dated May 29, 2000 on one of
the grounds that: there was failure to implead indispensable parties, namely, the other heirs of Pedro and Pantaleona
and the persons who have already acquired title to portions of the subject property in good faith. CA reversed and set
aside the RTCs dismissal of the complaint
ISSUE : WON RTC is correct in dismissing complaint on ground of failure to implead indispensable parties

SC: Indispensable parties are those parties who possess such an interest in the controversy that a final decree would
necessarily affect their rights so that the courts cannot proceed without their presence. A party is indispensable if his
interest in the subject matter of the suit and in the relief sought is inextricably intertwined with the other parties’ interest.
In an action for reconveyance, all the owners of the property sought to be recovered are indispensable parties. Thus,
if reconveyance were the only relief prayed for, impleading petitioners Macababbad and the spouses Chua and Say
would suffice. On the other hand, under the claim that the action is for the declaration of the nullity of extrajudicial
settlement of estate and sale, all of the parties who executed the same should be impleaded for a complete resolution
of the case. This case, however, is not without its twist on the issue of impleading indispensable parties as the RTC
never issued an order directing their inclusion. Under this legal situation, particularly in light of Rule 3, Section 11 of the
Rules of Court, there can be no basis for the immediate dismissal of the action.

Uy v CA GR. No. 157065 July 11, 2006

Facts:

Heritage Memorial Park is a flagship project of the Bases Conversion Development Authority (BCDA) in Fort Bonifacio.
BCDA entered into an agreement denominated as the Pool Formation Trust Agreement 2 (PFTA) with the Philippine
National Bank (PNB) and the Public Estates Authority (PEA). The BCDA was designated as the Project Owner; PEA,
the Project Manager; and PNB as the Trustee.

As project owner, the BCDA was tasked to sell the Heritage Park Investment Certificates to the public and buyers
become certificate holders. PEA, as project manager, is tasked to implement and complete the various engineering
works and improvements of Heritage Park.Alleging delay in the construction of the projects and huge discrepancy
between the Accomplishment Report and the actual physical accomplishment of petitioner's construction firm, the
Heritage Park Executive Committee terminated the two construction contracts namely, the landscaping and nursery
works, and the construction of the terrasoleum. Petitioner filed a complaint against the PEA before the Construction
Industry Arbitration Commission (CIAC) where it sought to recover payment for its progress billings on the said projects.

On December 18, 2001, CIAC promulgated its decision in favor of the Claimant Contractor ELPIDIO S. UY. Alias Writ
of Execution was issued by CIAC and on the following day, a Notice of Garnishment was served on private respondent.
HPMC then filed a petition for Injunction/Prohibition before the CA on the ground that CIAC had no jurisdiction over the
subject matter since HPMC was not impleaded as a party thereby depriving it of its right to be heard. CA court ruled in
favor of respondent.

ISSUE: Is HPMC a real party-in-interest or an indispensable party

SC: Indispensable part is one that his legal presence as a party to the proceeding is an absolute necessity. Based on
the Construction Agreement, PEA entered into it in its capacity as Project Manager, pursuant to the PFTA. According
to the provisions of the PFTA, upon the formation of the HPMC, the PEA would turn over to the HPMC all the contracts
relating to the Heritage Park. At the time of the filing of the CIAC Case on May 31, 2001, PEA ceased to be the Project
Manager of the Heritage Park Project, pursuant to Section 11 of the PFTA. Through a Deed of Assignment, PEA
assigned its interests in all the existing contracts it entered into as the Project Manager for Heritage Park to HPMC. As
early as March 17, 2000, PEA officially turned over to HPMC all the documents and equipment in its possession related
to the Heritage Park Project. Petitioner was duly informed of these incidents through a letter dated March 13, 2000.
Apparently, as of the date of the filing of the CIAC Case, PEA is no longer a party-in-interest. Instead, it is now private
respondent HPMC, as the assignee, who stands to be benefited or injured by the judgment in the suit. In its absence,
there cannot be a resolution of the dispute of the parties before the court which is effective, complete or equitable. We
thus reiterate that HPMC is an indispensable party.
Seno v Mangubat GR. No. L-44339 Dec. 2, 1987

FACTS:

Plaintiffs filed a complaint seeking: the reformation of a Deed of Sale executed in favor of defendant Marcos Mangubat
and, the annulment of a subsequent sale to defendant spouses Francisco Luzame and Vergita Penaflor of a parcel of
land in Barrio Dongalo, Paranaque, Rizal covered by OCT No. 1197 of the Land Registry of Rizal.

Plaintiff Crisanta Seno negotiated with defendant Marcos Mangubat to enter with him a mortgage over a parcel of land
so she can pay off a previous indebtedness. Here are the conditions agreed upon:

Money borrowed: P15,000.00 (with interest of 2% a month payable every month; As long as the interest is being paid,
the mortgage over the property will not be foreclosed;Plaintiff Crisanta F. Seno (on the assurance of defendant Marcos
Mangubat, which is a practicing lawyer) agreed to the execution of a Deed of Absolute Sale over the subject property
for a consideration of P5,000.00. Later, the Deed of Absolute Sale was executed transferring the title of the subject
property to defendant Marcos Mangubat.

Spouses Luzame and Penaflor moved to include as defendants Andres Evangelista and Bienvenido Mangubat on the
ground that they are indispensable parties.

The newly impleaded defendants moved for the dismissal of the case against them on the ground of prescription.

DEFENDANTS Luzame, Penaflor and Marcos Mangubat asked the court a quo to dismiss the case against all the
defendants.

RTC: Dismissed the case against all the defendants – it is no longer in a position to grant plaintiffs' demands, principally
the reformation of subject Deed of Absolute Sale. An appeal was brought to CA. CA certified the instant case to SC
since the assignment of errors made by plaintiffs are purely legal questions.

ISSUE: W/N defendants Andres Evangelista and Bienvenido Mangubat indispensable parties in the case without whom
no action can be properly taken thereon?

SC: NO. They are not indispensable parties, just proper parties. indispensable parties must always be joined either as
plaintiffs or defendants, for the court cannot proceed without them. Necessary parties must be joined, under Section 8,
in order to adjudicate the whole controversy and avoid multiplicity of suits.

Indispensable parties are those with such an interest in the controversy that a final decree would necessarily affect
their rights, so that the courts cannot proceed without their presence. Necessary parties are those whose presence is
necessary to adjudicate the whole controversy, but whose interests are so far separable that a final decree can be
made in their absence without affecting them.

In the present case, there are no rights of defendants Andres Evangelista and Bienvenido Mangubat to be safeguarded
if the sale should be held to be in fact an absolute sale nor if the sale is held to be an equitable mortgage. Defendant
Marcos Mangubat became the absolute owner of the subject property by virtue of the sale to him of the shares of the
aforementioned defendants in the property. Said defendants no longer have any interest in the subject property.
However, being parties to the instrument sought to be reformed, their presence is necessary in order to settle all the
possible issues of tile controversy. Whether the disputed sale be declared an absolute sale or an equitable mortgage,
the rights of all the defendants will have been amply protected. Defendants-spouses Luzame in any event may enforce
their rights against defendant Marcos Mangubat.

Plaintiffs were not after defendants Andres Evangelista and Bienvenido Mangubat as shown by their non-inclusion in
the complaint and their opposition to the motion to include said defendants in the complaint as indispensable parties.
It was only because they were ordered by the court a quo that they included the said defendants in the complaint. The
lower court erroneously held that the said defendants are indispensable parties.

Notwithstanding, defendants Andres Evangelista and Bienvenido Mangubat not being indispensable parties but only
proper parties, their joinder as parties defendants was correctly ordered being in accordance with Sec. 8 of Rule 3.

Landbank v Cacayuran GR. No. 191667 April 22, 2015

FACTS: The Municipality of Agoo entered into two loans with LBP in order to finance a Redevelopment Plan of the
Agoo Public Plaza. The Sangguniang Bayan of the Municipality authorized the mayor Eufranio Eriguel to enter into a
P4M loan with LBP for the Public Plaza and again for the amount of P28M to construct a commercial center called
Agoo People’s Center within the Plaza’s premises. The Municipality used as collateral a 2,323.75 sqm lot at the south-
eastern portion of the Plaza. Cacayuran and other residents opposed the redevelopment of the Plaza as well as the
means of the funding. They claim that these are highly irregular, violative of the law, and detrimental to public interest
resulting in the desecration of the public plaza. Cacayuran’s request for the documents relating to the plaza’s
redevelopment was not granted. Cacayuran invokes his taxpayer right and files a complaint against LBP and officers
of the municipality but does not include the municipality itself as party-defendant. He questioned the validity of the loan
agreements and prays that the redevelopment is enjoined. The municipal officers moved for the dismissal but were
denied. LBP asserted that Cacayuran did not have any cause of action because he was not privy to the loan
agreements.

RTC Ruling: Subject loans are null and void. Resolutions approving the procurement were passed irregularly and are
thus ultra vires.

CA Ruling: RTC decision affirmed with modification: Vice-Mayor Antonio Eslao is free from personal liability.

ISSUE: WON the Municipality of Agoo should be deemed an indispensable party to the case and thus be ordered
impleaded herein.

SC: YES it is an indispensable party under Sec 7, Rule 3 of the Rules of Court.

Sec 7, Rule 3 mandates that all indispensable parties are to be joined in a suit as it is the party whose interest will be
affected by the court’s action and without whom no final determination of the case can be had. His legal presence is an
absolute necessity. Absence of the indispensable party renders all subsequent actions of the court null and void for
want of authority to act. Failure to implead any indispensable party is not a ground for the dismissal of the complaint.
The proper remedy is to implead them. In this case, Cacayuran failed to implead the Municipality, a real party in interest
and an indispensable party that stands to be directly affected by any judicial resolution. It is the contracting party and
the owner of the public plaza. It stands to be benefited or injured by the judgment of the case. The decision of the RTC,
affirmed with modification by the CA, and finally affirmed by the SC is not binding upon the Municipality as it was not
impleaded as defendant in the case

Subject motions are PARTLY GRANTED. Previous decisions are SET ASIDE. Instant case is REMANDED to the RTC
and Cacayuran is DIRECTED to implead all indispensable parties.

Domingo v Scheer GR. No.154745 Jan. 29, 2004

Respondent Scheer is a native of Germany, who was eventually granted a permanent resident status in the Philippines.
He eventually married here and started a family as well as a business in Palawan. Vice Consul Hippelein informed the
Philippine Ambassador to Germany that the respondent had police records and financial liabilities in Germany. The
DFA receive from the German Embassy in Manila that the respondent is wanted in Germany, and requested to turn
over his German passport to the Embassy. Thereafter BOC issued a Summary Deportation Order dated September
27, 1997. It was stated that the deportation shall be held in abeyance pending respondent’s case and he shall remain
in the custody of the bureau. In issuing this the BOC relied on the statements of the German Vice Consul on the
speculation that it is improbable that the respondent will be issued a new passport, the warrant of arrest for insurance
fraud and alleged illegal activities in Palawan. Respondent nevertheless stayed in the Philippines after airing his side
to then BID Commissioner Verceles, the latter giving him time to apply for a clearance and a new passport. Scheer
eventually filed an Urgent Motion for Reconsideration stating that his right to due process was violated, for there was
no notice or chance to be heard before the issuance of the deportation order. Eventually the criminal case for physical
injuries against the respondent was dismissed, and he was issued a passport. He informed Commissioner Verceles
about this matter and reiterated the cancellation of the order, but the Commissioner did not respond. Thereafter
Commissioner Domingo assumed office and on June 6, 2002, she ordered the apprehension of the respondent who
was held in custody awaiting deportation. Shocked, respondent sought remedy with the CA, during the hearing of which
the Solicitor General suggested that the respondent leave the country first then just re-apply. A decision was reached
in favor of Scheer, permanently enjoining Domingo from continuing the deportation, thus this petition

ISSUE: Whether or not the BOC was an indispensable party to the case.

SC: 1. Yes – but not enough to invalidate the petition.

Petitioner argues that the respondent must have impleaded BOC as the respondent, and not Commissioner Domingo
alone. The Summary Deportation Order was issued by the BOC as a whole and Domingo is just but one Commissioner
so the petitioner argues that the action may be dismissed. The court ruled that it agrees with the petitioner that the BOC
was an indispensable party to the respondent’s petition in the CA. However, the non-joinder of indispensable parties is
not a ground for the dismissal of an action. Parties may be added as ordered by the court and if the petitioner refuses
to implead an indispensable party, then the petition may be dismissed. In the case at bar, CA did not require to implead
BOC as the respondent so it does not warrant the dismissal of respondent’s petition. The court may choose to amend
the processes and the pleadings by substituting as party-plaintiff the real party-interest, but the court also has the power
to avoid delay in the disposition of cases and it may just be unnecessary to still choose to implead BOC. The OSG has
already represented the petitioner in instant proceedings thus the BOC cannot claim that it was not afforded the
opportunity to be in court. Proceedings may be to facilitate justice but they do not constitute the thing itself and they
may be relaxed in certain cases.

Cortez v Avila 101 Phil 205

Cortez, alleges in complaint that since 1935, he has continuously, publicly and adversely occupied a parcel of land, of
about sixteen (16) hectares, situated in the Barrio of Conversion, Municipality of Pantabangan, Province of Nueva Ecija.
Cortez applied for a homestead patent on said 16-hectare lot, the same being a public land; For reasons unknown to
plaintiff, said homestead patent has not been issued to him, although he has already become the "equitable owner" of
the lot aforementioned; that defendant Avila had filed a free patent application for the same lot, knowing that it had
been in continuous and actual possession of the plaintiff since 1935, and despite his (Avila’s) knowledge, actual or
presumed, of the submission of plaintiff’s aforementioned final proof; that through threat, intimidation and force, Avila
succeeded in occupying said lot, in or about June, 1953, to the exclusion of the plaintiff;

Avila filed a motion to dismiss alleging that plaintiff has no legal capacity to sue, because the land in dispute is part of
the public domain, and, hence, an action to recover the same may be instituted exclusively by the Government, through
the Solicitor-General. Appellant now maintains that the lower court erred in granting said motion, upon the ground that,
having complied with the conditions essential to be entitled to a patent, he is the equitable owner of the lot in question,
and that the Government could not have maintained the present action, the same being for the benefit of the plaintiff,
in his private capacity.

ISSUE: W/N Cortez has legal capacity to sue

SC: Obviously, plaintiff herein has "legal capacity" to sue, which is independent of the public or private character of the
lot in controversy. This does not mean, however, that he has a cause of action, or that his appeal should prosper.

An indispensable party is lacking. The complaint is predicated upon the major premise that plaintiff is the equitable
owner of said lot, for he has fully satisfied the prerequisites to the issuance of a homestead patent in his favor. This
pretense implies that said lot was a public land; that the legal, as well as the equitable, title thereto used to be in the
State; and that, although still its legal owner, the State has already been divested of its equitable title, and plaintiff has
acquired it, he having fulfilled all the conditions essential for the issuance of a patent in his name. Thus, the issue raised
cannot be determined without affecting the interest of the State, which is not a party in this proceeding, and, hence,
cannot protect and defend therein such interest.

Ordinarily, when a complaint is defective by reason of failure to include an indispensable party, reasonable opportunity
to amend said pleading must be given, and the action should not be dismissed, except when plaintiff fails or refuses to
include said party, or the latter cannot be sued. In the case at bar, such policy need not be followed, for plaintiff has not
exhausted the administrative remedies available to him. Indeed, he seeks, in effect, a review of the decision of the
Director of Lands in causing a patent to be issued to defendant Avila. Yet, plaintiff does not appear to have asked the
Director of Lands to reconsider said decision, or to have appealed therefrom to the Secretary of Agriculture and Natural
Resources.

Pimentel v Senate Committee of the Whole GR. No. 187714 Mar. 8, 2011

FACTS:

Sen Lacson delivered a privilege speech entitled "Kaban ng Bayan, Bantayan!" wherein he called attention to the
congressional insertion in the 2008 GAA of the P200M appropriated for the construction of the President Carlos P.
Garcia Avenue Extension from Sucat Luzon Expressway to Sucat Road in Parañaque City including Right-of-Way
(ROW), and another P200M appropriated for the extension of C-5 road including ROW. Senate Committee of the
Whole conducted its hearings on 4 May 2009, with eleven Sens present, and on 7 May 2009, with eight Sens present.
On both, petitioners objected to the application of the Rules of the Ethics Committee to the Senate Committee of the
Whole. On 11 May 2009, petitioners proposed 11 amendments to the Rules of the Ethics Committee that would
constitute the Rules of the Senate Committee of the Whole, out of which three amendments were adopted.

Contentions Petitioners: The transfer of the complaint against Sen Villar from the Ethics Committee to the Senate
Committee of the Whole is violative of Sen Villar’s constitutional right to equal protection;

Contentions Respondents: The instant petition should be dismissed for failure to join or implead an indispensable party;

ISSUE:

Whether Sen Madrigal, who filed the complaint against Sen Villar, is an indispensable party in this petition- NO

An indispensable party is a party who has an interest in the controversy or subject matter that a final adjudication cannot
be made, in his absence, without injuring or affecting that interest. A person who is not an indispensable party if his
interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not
necessarily be directly or injuriously affected by a decree which does complete justice between them. In this case, Sen
Madrigal is not an indispensable party to the petition before the Court. The issues in this case are matters of jurisdiction
and procedure on the part of the Senate Committee of the Whole which can be resolved without affecting Sen Madrigal’s
interest.

Lagunilla v Velasco GR. No. 169278 June 16, 2009

FACTS:

Fr. Patricio, Magdalena, Venancio, Macaria ( all surnamed Monis) and Andrea Monis Velasco are siblings. Venancio
had two children (herein petitioners) : Dionisia Monis Lagunilla and Rafael Monis. Fr. Patricio and Magdalena acquired
several properties in La Union and one in Quezon City.The Q.C. property was co-owned by Patricio and Magdalena
with Spouses Andrea Monis-Velasco and Pedro Velasco. After death of Patricio and Magdalena, Andrea and Macaria
executed a deed of extrajudicial settlement with Donation and donated it to Andrea’s Son : Pedro Monis Velasco Jr.
Petitioners, Dionisia and Rafael instituted an action for Annulment of Documents and Damages before RTC on the
ground of the alleged fraudulent act committed by Andrea and Macaria that they misrepresented themselves as the
only surviving heirs of Patricio and Magdalena. Respondents countered that nowhere in the deed did they assert to be
the only surviving heirs, they also added that the petitioners already received advances of their share of the properties
and that there still other properties not yet partitioned from which the petitioners could obtain reparation. Petitioners
moved for the amendment of the complaint to implead Pedro (donee) raising that he is an indispensable party. RTC
denied the motion. RTC decided in favor of respondents: Art 887 NCC Petitioners are not compulsory heirs. Declaration
of respondents that they were the only heirs is a valid way of non recognition of petitioners’ claim. CA affirmed RTC:
ruled that the petitioners are heirs but they are not compulsory heirs and that they cannot invoke bad faith.

ISSUE: WoN Pedro (donee) is an indispensable party.

RULING: The general rule with reference to parties to a civil action pursuant to Section 7 Rule 3 of Rules of Court
requires the joinder of all necessary parties and the joinder of all indispensable partiesunder any and all conditions.
Jurispridence holds that an indispensable party is a party who has interest in the controversy or subject matter that a
final adjudication cannot be made in his absence without injuring or affecting that interest. An indispensable party is
one who must be included in an action before it may properly go forward. A person is not indispensable if his interest
in controversy or subject matter is seperable. Pedro is an indispensable party. At the time of filing of the complaint the
title of the Quezon City property was already transferred to Pedro. Even if the court will only resolve the validity of the
extrajudicial settlement, there would be no final adjudication of the case without involving Pedro’s interest. His interest
in the controversy and the subject matter is not separable from the interests of the other parties. Well settled is the rule
that joinder of indispensable parties is mandatory. It is a condition sine qua non to the exercise of judicial power. Without
the presence of indispensable parties, the judgment of the court cannot attain finality. Nevertheless the non joinder of
indispensable parties is not a ground for dismissal of an action. The remedy is to implead the non party claimed to be
indispensable. Parties may be added by order of the court on motion of the party or on its own initiative at any stage. If
the plaintiff refuses to implead an indispensable party then the court may dismiss the complaint.

Plasabas v CA GR. No. 166519 Mar. 31, 2009

In 1074, Plasabas and Malazarte filed a complaint for recovery of title to property with damages before CFI Maasin,
Leyte. The subject property was a parcel of coconut land declared in the name of Plasabas. They pray for their rights
over the land be confirmed and for Lumen and Aunzo to vacate the land. Aunzo and Lumen interposed that they
inherited the land from their common ancestor, Francisco Plasabas. In the course of trial, it was found out that Nieves
was not the absolute owner of the land. Aunzo and Lumen then raised the argument that the case should have been
terminated at inception for petitioner's failure to implead indispensable parties (Jose, Victor and Victoria).

CFI dismissed the case. The instant case should have been dismissed without prejudice a long time ago for lack of
cause of action as the plaintiffs spouses Marcos Malazarte and Nieves Plasabas Malazarte have no complete legal
personality to sue by themselves alone without joining the brothers and sisters of Nieves who are as INDISPENSABLE
as the latter in the final determination of the case. Not impleading them, any judgment would have no effectiveness.

Petitioners then elevated the case to the CA. CA affirmed the ruling of the CFI. CA declared that the non-joinder of the
indispensable parties would violate the principle of due process, and that Article 487 of the Civil Code could not be
applied considering that the complaint was not for ejectment, but for recovery of title or a reivindicatory action.

ISSUE: W/N CA is correct

Held:

With a motion to reconsider, SC grants the petition and remands the case to the CFI for disposition on the merits, citing
Article 487 that provides any one of the co-owners may bring an action for ejectment.

In any event, the trial and appellate courts committed reversible error when they summarily dismissed the case, after
both parties had rested their cases following a protracted trial commencing in 1974, on the sole ground of failure to
implead indispensable parties. The rule is settled that the non-joinder of indispensable parties is not a ground for the
dismissal of an action. The remedy is to implead the non-party claimed to be indispensable.

In re: Query of Mr. Roger C. Prioreschi Re Exemption from Legal and Filing Fees of the Good Shepherd Foundation
AM No. 09-6-9-SC Aug. 19, 2009

FACTS:

In his letter dated May 22, 2009 addressed to the Chief Justice, Mr. Roger C. Prioreschi, administrator of the Good
Shepherd Foundation, Inc., wrote that it be granted the same exemption from paying docket fees as that of poor
litigants.

ISSUE:

Should an incorporated foundation (serving indigent litigants) be exempted from paying docket fees?

RULING:

NO. The Good Shepherd Foundation, Inc., being a corporation invested by the State with a juridical personality separate
and distinct from that of its members, is a juridical person. Among others, it has the power to acquire and possess
property of all kinds as well as incur obligations and bring civil or criminal actions, in conformity with the laws and
regulations of their organization. As a juridical person, therefore, it cannot be accorded the exemption from legal and
filing fees granted to indigent litigants.

There are other reasons that warrant the rejection of the request for exemption in favor of a juridical person. For one,
extending the exemption to a juridical person on the ground that it works for indigent and underprivileged people may
be prone to abuse (even with the imposition of rigid documentation requirements), particularly by corporations and
entities bent on circumventing the rule on payment of the fees. Also, the scrutiny of compliance with the documentation
requirements may prove too time-consuming and wasteful for the courts.

Pangcatan v Maghuyop and Bangkiao GR. No. 194412

FACTS:
Pangcatan commenced Civil Case No. 1888-02 in the RTC to recover various damages he had suffered in April 2002
from the vehicular accident caused by the negligence of the defendants. Defendants Alexandro "Dodong" Maghuyop
and Belindo Bankiao, the petitioners in G.R. No. 194568, were respectively the owner and driver of the passenger van
that Pangcatan had hired to transport him and the goods he had purchased in Pagadian City to his store in
Margosatubig, Zamboanga del Sur. Pangcatan's complaint alleged that his estimated daily income before the accident
was P400.00/day; When he filed his complaint in September 2002, Pangcatan also filed his Ex Parte Motion for Leave
to File Case as Pauper Litigant, which the RTC granted through its order of September 4, 2002 under the condition that
the filing fees would constitute a first lien on any favorable monetary judgment that he would recover from the suit.
Maghuyop and Bakiao did not file their answer subsequently, and were declared in default as a consequence.

ISSUE:

Whether or not Pangcatan was exempt from the payment of filing and docket fees as an indigent litigant?

RULING: Pangcatan was represented from the start by the Public Attorney's Office (PAO). The exemption of the clients
of the PAO like him from the payment of the legal fees was expressly declared by law for the first time in Republic Act
No. 9406,27 particularly its amendment of Section 16-D of the Administrative Code of 1987, as follows: Section 16-D.
Exemption from Fees and Costs of the Suit. – The clients of the PAO shall be exempt from payment of docket and
other fees incidental to instituting an action in court and other quasi-judicial bodies, as an original proceeding or on
appeal. The costs of the suit, attorney's fees and contingent fees imposed upon the adversary of the PAO clients after
a successful litigation shall be deposited in the National Treasury as trust fund and shall be disbursed for special
allowances of authorized officials and lawyers of the PAO. The exemption of clients of the PAO from the payment of
the legal fees under Republic Act No. 9406 and OCA Circular No. 121-2007 was not yet a matter of law at the time
Pangcatan initiated Civil Case No. 1888-02 on September 4, 2002. Yet, we cannot avoid applying the exemption in his
favor for purposes of this case. The remand to the RTC for the purpose of determining the factual basis for the
exemption would be superfluous. To start with, the exemption, being a matter of procedure, can be retrospectively
applied to his case. It is fundamental wisdom, indeed, that procedural laws do not come within the legal conception of
a retroactive law, or the general rule against the retroactive operation of statutes, and, as such, they may be given
retroactive effect on actions pending and undetermined at the time of their passage. Doing so will not violate any right
of a person who may feel that he is adversely affected, inasmuch as there are no vested rights in rules of procedure.31
And, secondly, if the ultimate objective to be served by all courts is the administration of justice, the remand of the case
after the trial by the RTC would be unreasonable and burdensome on all the parties as well as on the trial court.

DELOS SANTOS

SPOUSES ANTONIO F. ALGURA and LORENCITA S.J.ALGURA vs. THE LOCAL

GOVERNMENT UNIT OF THECITY OF NAGA, ATTY. MANUEL TEOXON, ENGR.
LEONPALMIANO, NATHAN SERGIO and BENJAMIN NAVARRO,SR.

G.R. No. 150135 October 30, 2006

FACTS:

Souses Antonio F. Algura and Lorencita S.J. Algura filed a Verified Complaint for
damages against the Naga City Government and its officers, arising from the alleged
illegal demolition of their residence and boarding house and for payment of lost income
derived from fees paid by their boarders amounting to PhP 7,000.00 monthly.

Finding that petitioners' motion to litigate as indigent litigants was meritorious, Executive
Judge Jose T. Atienza of the Naga City RTC granted petitioners' plea for exemption from
filing fees.

Respondents filed an Answer with Counterclaim, arguing that the defenses of the
petitioners in the complaint had no cause of action, the spouses' boarding house blocked
the road right of way, and said structure was a nuisance per se.

Respondents filed a Motion to Disqualify the Plaintiffs for Non-Payment of Filing Fees
dated March 10, 2000. They asserted that in addition to the more than PhP 3,000.00 net
income of petitioner Antonio Algura, who is a member of the Philippine National Police,
spouse Lorencita Algura also had a mini-store and a computer shop on the ground floor
of their residence along Bayawas St., Sta. Cruz, Naga City. On March 2000, petitioners
subsequently interposed their Opposition to the Motion to respondents' motion to
disqualify them for non-payment of filing fees.

RTC issued an Order disqualifying petitioners as indigent litigants on the ground that they
failed to substantiate their claim for exemption from payment of legal fees and to comply
with the third paragraph of Rule 141, Section 18 of the Revised Rules of Court—directing
them to pay the requisite filing fees.

Petitioners filed a Motion for Reconsideration but was denied.

ISSUE:

Whether or Not petitioners Algura should be considered as indigent litigants who qualify
for exemption from paying filing fees.

RULING:

Yes. Applying Rule 3, Section 21 of the 1997 Rules of Civil Procedure, The petitioner
Algura should be declared and considered as indigent litigants who qualify for exemption
from paying filing fees. The court rule that if the applicant for exemption meets the salary
and property requirements under Section 19 of Rule 141, then the grant of the application
is mandatory. On the other hand, when the application does not satisfy one or both
requirements, then the application should not be denied outright; instead, the court should
apply the "indigency test" under Section 21 of Rule 3 and use its sound discretion in
determining the merits of the prayer for exemption.

In the Case at bar, the trial court should have applied Rule 3, Section 21 to the application
of the Alguras after their affidavits and supporting documents showed that petitioners did
not satisfy the twin requirements on gross monthly income and ownership of real property
under Rule 141. Instead of disqualifying the Alguras as indigent litigants, the trial court
should have called a hearing as required by Rule 3, Section 21 to enable the petitioners
to adduce evidence to show that they didn't have property and money sufficient and
available for food, shelter, and basic necessities for them and their family. In that hearing,
the respondents would have had the right to also present evidence to refute the
allegations and evidence in support of the application of the petitioners to litigate as
indigent litigants. Since this Court is not a trier of facts, it will have to remand the case to
the trial court to determine whether petitioners can be considered as indigent litigants
using the standards set in Rule 3, Section 21.

GLYNNA FORONDA-CRYSTAL v. ANIANA LAWAS SON.

G.R. No. 221815 November 29, 2017

FACTS:

Petitioner is the daughter of Eddie Foronda, the registered owner of a parcel of land
located in Barrio Magay, Municipality of Compostela, Province of Cebu. The latter derived
his title over the property from a successful grant of a Free Patent.

On March 15, 1999, Aniana Lawas Son (respondent) instituted an action for
reconveyance and damages against Glynna Foronda-Crystal (petitioner) alleging that, for
twelve and a half years, she has been the lawful owner and possessor of the subject lot.
She alleged that she purchased the same from a certain Eleno T. Arias (Arias) on August
4, 1986 for a sum of P200,000.00. According to her, since her acquisition, she has been
religiously paying real property taxes thereon as evidenced by Tax Declaration No.
16408A, which was issued under her name.
On April 13, 1999, herein petitioner filed a motion to dismiss on the grounds of (1) lack of
jurisdiction, (2) venue is improperly laid, (3) action has prescribed, and, (4) lack of cause
of action. A week thereafter, the RTC issued an Order dated April 20, 1999,8 which
dismissed the case for lack of jurisdiction. The RTC asserted that the "market value of
the subject property per Tax Declaration No. 16408 (Annex B, Complaint) is P2,830.00"
and thus, jurisdiction over the case lies with the Municipal Circuit Trial Court of Liloan-
Compostela, Cebu.

However, in yet another Order9 dated July 23, 1999, issued by the RTC following herein
respondent's motion for reconsideration, the RTC reconsidered and set aside its earlier
ruling. On November 24, 2006, the RTC rendered its Decision in favor of the respondent.
The Register of Deeds of Cebu was ordered to cancel OCT No. OP-37324.

CA rendered the assailed Decision, which affirmed the RTC decision.

ISSUE:

WON the RTC of Mandaue City has jurisdiction over the case.

RULING:

NEGATIVE.

Settled is the requirement that the Judiciary Reorganization Act of 1980, as amended,
required the allegation of the real property's assessed value in the complaint. That the
complaint in the present case did not aver the assessed value of the property is a
violation of the law, and generally would be dismissed because the court which would
exercise jurisdiction over the case could not be identified.

In here, the respondent failed to allege in her complaint the assessed value of the subject
property. Rather, what she included therein was an allegation of its market value
amounting to P200,000.00.47 In the course of the trial, the petitioner asserted that the
assessed value of the property as stated in the tax declaration was merely P1,030.00,
and therefore the RTC lacked jurisdiction.

However, a liberal interpretation of this law, as opined by the Court in Tumpag, would
necessitate an examination of the documents annexed to the complaint. In this instance,
the complaint referred to Tax Declaration No. 16408A, attached therein as Annex "B,"
which naturally would contain the assessed value of the property. A perusal thereof would
reveal that the property was valued at P2,826.00.

On this basis, it is clear that it is the MTC, and not the RTC, that has jurisdiction over the
case. The RTC should have upheld its Order dated November 8, 2006 which dismissed
the same. Consequently, the decision that it rendered is null and void.

Barangay Piapi vs Talip

G.R. NO. 138248 SEPTEMBER 7, 2005

FACTS:

On August 28, 1998, Barangay Piapi, herein petitioners, filed with the Regional Trial Court
(RTC) Branch 18, Digos, Davao del Sur, a complaint for Reconveyance and Damages
for a parcel of land consisting of 3.2 hectares situated in Piapi, Davaol del Sur, and
covered by Original Certificate of Title (OCT) No. P-(3331)-4244 of the Registry of Deeds
issued in the name of Juan Jayag and has a market value of P15,000. They alleged that
they have openly possessed such land for thirty (30) years in the concept of owner, and
that respondent, Talip, fraudulently obtained from the said Registry of Deeds a Transfer
Certificate of Title (TCT) under his name.

Instead of filing an answer, respondent filed a motion to dismiss on the ground that the
RTC has no jurisdiction over the case as considering that the assessed value of the land
is P6,030. Under Section 33 (3) of Batas Pambansa (BP) Bilang 129, as amended by
Republic Act (R.A.) No. 7691, Municipal Circuit Trial Court has exclusive jurisdiction.
Petitioners alleged that jurisdiction is vested in the RTC as the total assessed value of the
property is P41,890, as shown by Real Property Field Appraisal and Assessment Sheet
dated August 20, 1996 issued by the Provincial Assessor of Davao del Sur, Atty. Marcos
D. Risonar, Jr.

On January 12, 1999, RTC Davao dismissed the complaint for lack of jurisdiction hence
this certiorari petition alleging that Section 19 (1) of BP Bilang 129, as amended, gives
the RTC jurisdiction over the complaint for reconveyance since it is incapable of pecuniary
estimation.

ISSUE:

Whether the RTC has jurisdiction over the complaint for reconveyance

RULING:

NO, the Municipal Circuit Trial Court of Davao del Sur has jurisdiction over the case for
failure to allege the property’s assessed value.

The contention is bereft of merit. This case is analogous to Huguete vs Embudo; where
petitioners argued that a complaint for annulment of a deed of sale and partition is
incapable of pecuniary estimation, and thus falls within the exclusive jurisdiction of the
RTC. Supreme Court ruled that the nature of an action is not determined by the caption
of the complaint but by the allegations of the complaint and the reliefs prayed for.

When the ultimate objective of the petitioners, is to obtain title to real property, it should
be filed in the proper court having jurisdiction over the assessed value of the property
subject thereof. However, they failed to alleged therein the assessed value of the subject
property. Instead, what they stated was the market value of the land which was at
P15,000.00.

The Rule requires that the assessed value of the property, or if there is none, the
estimated value thereof, shall be alleged by the claimant. It bears reiterating that what
determines

jurisdiction is the allegations in the complaint and the reliefs prayed for. Petitioners'
complaint is for reconveyance of a parcel of land. Considering that their action involves
the title to or interest in real property, they should have alleged therein its assessed value.
However, they only specified the market value or estimated value, which is P15,000.00.
Pursuant to the provisions of Section 33 (3), it is the Municipal Circuit Trial Court and not
the RTC, which has jurisdiction over the case.

A.L. ANG NETWORK, INC., Petitioner, vs. EMMA MONDEJAR, accompanied by

her husband, EFREN MONDEJAR, Respondent.

G.R. No. 200804 January 22, 2014

FACTS:

On 23 March 2011, petitioner filed a complaint for collection of sum of money under Rule
of Procedure for Small Claims Cases before the MTCC, seeking to collect from
respondent the amount of P23, 111.71 which represented her unpaid water bills for the
period of 1 June 2002 to 30 September 2005.

Petitioner claimed that it was duly authorized to supply water to and collect payment
therefor from the homeowners of Regent Pearl Subdivision, one of whom is the
respondent.

Respondent assailed that she religiously paid the monthly charges of P75.00. She
claimed that the increased rate of P113.00 for every 10 cubic meter of water plus an
additional P11.60 for every cubic meter thereafter was not valid because the petitioner
unilaterally made the increase without informing the residents therein which was
stipulated in their agreement.

MTCC
The MTCC ruled in favour of the respondent. The petitioner can only charge the
respondent the agreed flat rate for the period 1 June 2002 to 7 August 2003 since the
Certificate of Public Convenience was only issued on the latter date. Respondent should
be considered to have fully paid.

The MTCC disregarded the petitioner’s reliance on HLURB’s decision because it failed to
prove that it complied with the directive to inform the HLURB of the result of its
consultation with the concerned homeowners as regards the rates to be charged and the
HLURB’s approval to such charges.

Petitioner also failed to submit evidence showing the exact date when it actually began
imposing the NWRB approved rates and the formal agreement of the parties containing
the terms and conditions thereof, without which it cannot establish with certainty
respondent’s obligation.

RTC

On a petition for certiorari under Rule 65 of the Rules of Court for grave abuse of
discretion filed with the RTC, the petitioner assailed that the MTCC disregarded
petitioner’s reliance on the source of its authority to impose new water consumption rates.

The RTC issued a decision dismissing the petition, finding that the petition was only filed
to circumvent the non-appealable nature of small claims cases as provided in Section23
of the Rules of Procedure on Small Claims Cases. To this end, the RTC ruled that it
cannot supplant the decision of the MTCC with another decision directing respondent to
pay petitioners a bigger sum than that which has been awarded.

Petitioner moved for reconsideration but was denied.

Hence, this instant petition.

ISSUE:

Whether or not the RTC erred in dismissing petitioner’s recourse under Rule 65 of
the RRC assailing the propriety of the MTCC’s decision in the subject small claims case.

RULING:

Yes. The RTC erred in its decision.

The petition for certiorari under Rule 65 of the RRC before the RTC was proper.

It is an essential requisite for the availability of the extraordinary remedies under the Rules
in the absence of an appeal or any “plain, speedy and adequate remedy” in the ordinary
course of law.

In the case at bar, the first level courts are vested exclusive jurisdiction over small claims
cases, certiorari petitions assailing its dispositions should be filed to their corresponding
RTCs.

The SC held that the RTC was wrong in dismissing the said petition on the ground that it
was an improper remedy and, as such, the RTC case must be reinstated and remanded
thereto for its proper disposition.

Petition is granted. The RTC’s decision and resolution are reversed and set aside. RTC
case is reinstated and the court a quo is ordered to resolve the same with dispatch.
 LOURDES SUITES (CROWN HOTEL MANAGEMENT CORPORATION), Petitioner,
v. NOEMI BINARAO, Respondent.

G.R. No. 204729 August 06, 2014

FACTS:

Lourdes Suites (petitioner) is the owner and operator of a hotel located along Kalayaan
Avenue, Makati City. It executed two (2) contracts with Noemi Binarao (respondent) for
room accommodations for two groups of students.

According to petitioner’s records, respondent was able to pay the total contract price
above. However, petitioner claimed that there was an unpaid balance of P47,810.00
representing the charges for damages to the furniture, a lost key and excess guests.3
Thus, on 25 July 2011, petitioner sent a demand letter to respondent for the unsettled
amount.4 Respondent failed to pay the amount, prompting petitioner to file a Statement
of Claim5 for collection of sum of money plus damages before the MeTC.

In her Response, respondent alleged that she is not obliged to pay the claimed amount
because petitioner billed the charges twice.

The MeTC dismissed the complaint with prejudice for lack of cause of action in its
Decision dated 15 March 2012.

Aggrieved, petitioner then filed a petition for certiorari before the RTC. Petitioner argued
that “a dismissal based on the ground that the complaint states no cause of action cannot
be deemed a dismissal with prejudice under the Rules.” Petitioner further argued that lack
of cause of action is not a valid ground for dismissal of case, much more a dismissal with
prejudice.
RTC ruled against petitioner, and found that there was no grave abuse of discretion on
the part of the MeTC. Petitioner filed a motion for reconsideration which was denied by
the RTC in its Order dated 16 November 2012.

Hence, this petition.

ISSUE:

WON the courts are not precluded from dismissing a case for lack of cause of action.

RULING:

NEGATIVE. The RTC correctly upheld the MTC Decision.

The basis of the public respondent in dismissing the complaint for lack of cause of action
is the failure of petitioner to preponderantly establish its claim against the private
respondent by clear and convincing evidence. Hence, public respondent did not commit
grave abuse of discretion when it dismissed the Complaint for lack of cause of action, as
he referred to the evidence presented and not to the allegations in the Complaint.

The dismissal of the complaint with prejudice is likewise not an exercise of wanton or
palpable discretion. It must be noted that this case is an action for small claims where
decisions are rendered final and unappealable, hence, a decision dismissing the same is
necessarily with prejudice.
 ESPERANZA SUPAPO et al vs. SPOUSES ROBERTO AND SUSAN DE JESUS et
al.

G.R. No. 198356 April 20,2015

FACTS:

The Spouses Supapo filed a complaint for accion publiciana against Roberto and Susan
de Jesus with the MeTC of Caloocan City. The complaint sought to compel the
respondents to vacate a piece of land located in Novaliches, Quezon City, and registered
under petitioners’ name. The land has an assessed value of Php39,980.00. Petitioners
did not reside on the lot but made sure to visit at least twice a year.

During one of their visits, they saw two houses built on the lot without their knowledge
and permission. They learned that respondents occupied both houses. They demanded
the surrender of the lot by bringing the dispute before the appropriate Lupong
Tagapamayapa. The Lupon issued a certificate to file action for failure of the parties to
settle amicably.

The Spouses Supapo filed a criminal case against the respondents for violating PD No.
772 (Anti-Squatting Law). The trial court convicted the respondents. On appeal, the CA
dismissed the case because Congress enacted R.A. No. 8368 repealing the Anti-
Squatting Law. Notwithstanding the dismissal, the Spouses Supapo moved for the
execution of the respondents’ civil liability, praying that the latter vacate the subject lot.
The RTC granted the motion and issued the writ of execution. Respondents moved to
quash it but the RTC denied their motion. They filed with the CA a petition for certiorari.
The CA granted it and ruled that with the repeal of the Anti-Squatting Law, the criminal
and civil liabilities of respondents were extinguished, but it also said that recourse may
be had in court by filing the proper action for recovery of possession. Thus, the Spouses
Supapo filed the complaint for accion publiciana.

After filing their Answer, the respondents moved to set their affirmative defenses for
preliminary hearing and argued that there is another action pending between the same
parties, the complaint is barred by statute of limitations, and the petitioners’ cause of
action is barred by prior judgment.
The MeTC denied the motion to set the affirmative defenses for preliminary hearing. The
RTC granted the petition for certiorari of respondents because the action has prescribed
and accion publiciana falls within the exclusive jurisdiction of the RTC. It likewise denied
the motion for reconsideration of petitioners. On appeal, the CA affirmed the RTC
decision; hence, this petition.

ISSUES:

1. Whether or not the MeTC properly acquired jurisdiction.

2. Whether or not the cause of action has prescribed.

3. Whether or not the complaint for accion publiciana is barred by res judicata.

RULING:

1. YES. Under BP 129, the jurisdiction of the RTC over actions involving title to or
possession of real property is plenary. However, R.A. No. 7691 granted the MeTC, MTC,
and MCTC the exclusive original jurisdiction to hear actions where the assessed value of
the property does not exceed Php20,000 ot Php50,000 if the property is located in Metro
Manila. Jurisdiction over actions involving title to or possession of real property is now
determined by its assessed value. It is its fair market value multiplied by the assessment
level.

In the present case, the Spouses Supapo alleged that the assessed value of the subject
lot located in Metro Manila is Php39,980. Thus, the MeTC properly acquired jurisdiction
over the complaint for accion publiciana.

2. NO. Lands covered by a title cannot be acquired by prescription or adverse possession.

Even if it be supposed that the holders of the Torrens Title were aware of the other
persons’ occupation of the property, regardless of the length of that possession, the lawful
owners have a right to demand the return of their property at any time as long as the
possession was unauthorized or merely tolerated.

3. NO. Res judicata is not present in the case because:

a. First, there is no identity of parties. The criminal complaint was prosecuted in the name
of the People of the Philippines. The accion publiciana was filed in the name of the
Spouses Supapo.
b. There is no identity of subject matter. The criminal case involves the prosecution of a
crime under the Anti-Squatting Law while the accion publiciana is an action to recover
possession of the subject property.

c. There is no identity of causes of action. The People of the Philippines filed the case to
protect governmental interests, while the spouses filed the accion publiciana to protect
their proprietary interests.

PETITION GRANTED.
 EULALIA RUSSELL, RUPERTO TAUTHO, FRANCISCO TAUTHO, SUSANA T.
REALES, APITACIO TAUTHO, DANILO TAUTHO, JUDITHA PROS, GREGORIO
TAUTHO, DEODITA T. JUDILLA, AGRIPINO TAUTHO, FELIX TAUTHO, WILLIAM
TAUTHO, AND MARILYN PERALES, Petitioner, v. HONORABLE AUGUSTINE A.
VESTIL, ADRIANO TAGALOG, MARCELO TAUTHO, JUANITA MENDOZA,
DOMINGO BANTILAN, RAUL BATALUNA AND ARTEMIO CABATINGAN,
Respondents.

G.R. No. 119347 March 17, 1999

FACTS:

The complaint alleged that petitioners are co-owners of a parcel of land situated in
Liloan, Cebu. The land was previously owned by the spouses Tautho. Upon the death of
the spouses, the property was inherited by their legal heirs, petitioner and private
respondents. Since then the lot had remained undivided until petitioners discovered a
public document denominated “DECLARATION OF HEIRS AND DEED OF
CONFIRMATION OF A PREVIOUS ORAL AGREEMENT OF PARTITION." Private
respondents divided the property with the exclusion of the petitioners

Petitioners filed a complaint against private respondents, denominated “

Declaration of nullity and partition ,” with the RTC claiming that the document was false
and perjurious as the private respondents were not the only heirs and that no oral partition
of the property whatsoever had been made between the heirs. The complaint prayed that
the document be declared null and void and an order be issued to partition the land among
all the heirs.

Private respondents filed a Motion to Dismiss the complaint on the ground of lack
of jurisdiction over the nature of the case as the total assessed value of the subject land
is P5,000.00 which under section 33 (3) of Batas Pambansa Blg. 129, as amended by
R.A. No. 7691, falls within the exclusive jurisdiction of the MCTC.

Petitioners filed an Opposition to the Motion to Dismiss saying that the RTC has
jurisdiction over the case since the action is one which is incapable of pecuniary
estimation within the contemplation of Section 19(l) of B.P. 129, as amended.

ISSUES:

1. WON the action of the Petitioners is one incapable of pecuniary estimation.

2. WON the RTC have jurisdiction over the complaint filed by the Petitioners
RULING:

1. The action of the Petitioners to annul a document or to declare a document null and
void is one incapable of pecuniary estimation.

In determining whether an action is one subject matter of which is not capable of

pecuniary estimation the Court laid down the following criterion:

Ascertaining the nature of the principal action or remedy sought

-If it is primarily for the recovery if sum of money= the claim is considered
capable of pecuniary estimation

- If the basic issue is something other than the right to recover a sum of
money, where the money claim is purely incidental to, or a consequences
of the principal sought= considered incapable of pecuniary estimation

In this case, The main purpose of petitioners in filing the complaint is to declare null and
void the document in which private respondents declared themselves as the only heirs of
the late spouses CasimeroTautho and CesariaTautho and divided his property among
themselves to the exclusion of petitioners who also claim to be legal heirs and entitled to
the property. While the complaint also prays for the partition of the property, this is just
incidental to the main action, which is the declaration of nullity of the document above-
described.

Hence the action of Petitioners are considered one that is incapable of pecuniary
investigation

2. The court held that, where the basic issue is something other than the right to recover
a sum of money, where the money claim is purely incidental to, or a consequence of, the
principal relief sought, this Court has considered such actions as cases where the subject
of the litigation may not be estimated in terms of money, and are cognizable exclusively
by Regional Trial Court

BP 129

While actions under Sec 33(3) of B.P 129, are also incapable of pecuniary estimation, the
law specifically mandates that they are cognizable by the MTC, METC or MCTC, where
the assessed value of the real property involved does not exceed P20,000 in Metro
Manila, or P50,000.000 if located elsewhere. If the value exceeds P20,000.00 or
P50,000.00 as the case may be, it is the RTC which have jurisdiction
However, in this case, the subject matter of the complaint is ANNULMENT OF A
DOCUMENT.

SPOUSES JORGE J. HUGUETE and YOLANDA B. HUGUETE, petitioners, vs.

SPOUSES TEOFEDO AMARILLO EMBUDO and MARITES HUGUETE-EMBUDO,

respondents
G.R. No. 149554 July 1, 2003

FACTS:

Petitioner spouses filed a complaint for the annulment of deed of sale and partition of the
50-square meter portion of land against respondent spouses in the RTC.

Respondent spouses filed a Motion to Dismiss the complaint on the ground of lack of
jurisdiction over the subject matter of the case, arguing that the action is one for
annulment of title and the total assessed value of the subject land was only P15,000.00
which falls within the exclusive jurisdiction of the MTC, pursuant to Sec 33(3) of BP Blg
129, as amended by RA 7691.

Petitioner spouses filed an Opposition to the Motion to Dismiss alleging that the subject
matter of the action is incapable of pecuniary estimation and, therefore, is cognizable by
the RTC, as provided by Sec 19(1) of BP 129, as amended.

ISSUE:

WON the civil action is one in which the subject matter is incapable of pecuniary
estimation.

RULING:

No. The argument that the present action is one incapable of pecuniary estimation
considering that it is for annulment of deed of sale and partition is not well-taken.

What determines the nature of an action as well as which court has jurisdiction over it are
the allegations of the complaint and the character of the relief sought (Cañiza vs CA).

The principal purpose of the petitioners in filing the complaint was to secure title to the
50-square meter portion of the property which they purchased from the respondents.
Their cause of action is based on their right as purchaser of the subject land from
respondents. They pray that they be declared owners of the property sold. Thus, their
complaint involved title to real property or any interest therein. The alleged value of the
land which they purchased was P15,000.00, which was within the jurisdiction of MTC.
The annulment of the deed of sale, were prayed for in the complaint because they were
necessary before the lot may be partitioned and the 50-square meter portion subject
thereof may be conveyed to petitioners.

De Ungria et al. vs. Court of Appeals

G.R. No. 165777 July 25, 2011

FACTS:

This is a petition for review on certiorari for ownership, possession and damages, and
alternativecauses of action either to declare two documents as patent nullities, and/or for
recovery of Rosario'sconjugal share with damages or redemption of the subject land
against petitioner Ceferina de Ungria et al.Respondent Rosario is the surviving wife of the
late Fernando Castor, while the rest of the respondentsare their legitimate children. The
documents they (respondents) sought to annul are (1) the Deed of
Transfer of Rights and Interest including Improvements thereon allegedly executed by
Fernando in favorof Eugenio de Ungria, petitioner's father; and (2) the Affidavit of
Relinquishment executed by Eugenio infavor of petitioner.Petitioner also filed an
Addendum to the Motion to Dismiss raising, among others that the court has no
jurisdiction over the case for failure of plaintiffs to pay the filing fee in full.

Pending resolution of the motion, respondents filed a Motion to Allow them to continue
prosecuting this case as indigent litigants. Petitioner filed a motion for reconsideration
and clarification on whether plaintiffs should beallowed to continue prosecuting the case
as indigent litigants. Said motion was denied.

The same wasfiled to the RTC and to the CA; both were denied. Hence, this petition for
review on certiorari wherepetitioner raises the following assignment of error: that the
Court of Appeals erred in not finding that respondent RTC committed grave abuse of
discretion in denying petitioners Motion to Dismiss despiterespondents non-payment of
the correct docket fees.

ISSUE:

Was jurisdiction vested to the RTC in this civil case despite the failure of the plaintiff to
file thenecessary docket fees?

RULING:

YES. It is a settled rule in this jurisdiction that when an action is filed in court, the complaint
must be accompanied by the payment of the requisite docket and filing fees. It is not
simply the filing of thecomplaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests atrial court with jurisdiction over the subject matter or
nature of the action.Section 7(b)(1) of Rule 141 of the Rules of Court provides:SEC. 7.
Clerks of Regional Trial Courts. - (a) For filing an action or a permissive counter-claim or
moneyclaim against an estate not based on judgment, or for filing with leave of court a
third-party, fourth-party,etc. complaint, or a complaint-in-intervention, and for all clerical
services in the same, if the total-sumclaimed, exclusive of interest, or the stated value of
the property in litigation, is:x x x x(b) For filing:1. Actions where the value of the subject
matter cannot be estimated

2. x x xIn a real action, the assessed value of the property, or if there is none, the
estimated value thereof shall be alleged by the claimant and shall be the basis in
computing the fees.
Since we find that the case involved the annulment of contract which is not susceptible of
pecuniaryestimation, thus, falling within the jurisdiction of the RTC, the docket fees should
not be based on theassessed value of the subject land as claimed by petitioner in their
memorandum, but should be based onSection 7(b)(1) of Rule 141. A perusal of the entries
in the Legal Fees Form attached to the records wouldreflect that the amount of P400.00
was paid to the Clerk of Court, together with the other fees, as assessedby the Clerk of
Court.

Thus, upon respondents' proof of payment of the assessed fees, the RTC hasproperly
acquired jurisdiction over the complaint. Jurisdiction once acquired is never lost, it
continuesuntil the case is terminated.

SAN PEDRO v. ASDALA

GR. NO. 164560 JULY 22, 2009

FACTS:

Sometime in July 2001, private respondents Allan and Eleonor Dionisio (heirs of spouses
Apolonio and Valeriana Dionisio) filed with the MeTC of Quezon City a Complaint against
herein petitioners (Ana de guia San Pedro and Alejo Dopeo) and Wood Crest Residents
Association, Inc., for Accion Reivindicatoria, Quieting of Title and Damages, with Prayer
for Preliminary Mandatory Injunction.

PRs alleged that subject property located in Batasan Hills, Quezon City, with an assessed
value of P32,100.00, was titled in the name of SPS Dionisio but petitioners, with malice
and evident bad faith, claimed that they were the owners of a parcel of land that
encompasses and covers subject property but it was alleged in the complaint that
petitioners' TCT over the property was spurious. Since PRS had allegedly been prevented
from entering, possessing and using subject property they prayed that they be declared
the sole and absolute owners of the subject property. to recover possession of the same
and for payment of actual and moral damages, and attorney's fees.

Petitioners filed a Motion to Dismiss on the ground that the MeTC had no jurisdiction over
the subject matter of the action, as the subject of litigation was incapable of pecuniary
estimation.

MeTC: denied the motion to dismiss under B.P129, as amended, the MeTC had exclusive
original jurisdiction over actions involving title to or possession of real property of small
value. Petitioners' Motion for Reconsideration was denied.

RTC (petition for certiorari): dismissed the petition and sustained the MeTC ruling
pursuant Section 33(3) of R.A. No. 7691, amending B.P. Blg. 129, the MeTC had
jurisdiction over the complaint as it involves recovery of ownership and possession of real
property located in QC, with an assessed value not exceeding P50,000.00.

MR was denied.

CA (petition for certiorari): dismissed the petition outright, holding that petitioners' should
have availed themselves of the remedy of appeal. Petitioners' MR was denied. Hence,
the petition for certiorari under rule 65.

ISSUES:

WON the MeTC has jurisdiction over the case?

RULING:

YES. The Court reiterates the ruling in Heirs of Valeriano S. Concha, Sr. v. Spouses
Lumocso,to wit: In a number of cases, we have held that actions for reconveyance of or
for cancellation of title to or to quiet title over real property are actions that fall under the
classification of cases that involve title to, or possession of, real property, or any interest
therein.
 x x x x Thus, under the old law, there was no substantial effect on jurisdiction
whether a case is one, the subject matter of which was incapable of pecuniary
estimation, under Section 19(1) of B.P. 129, or one involving title to propertyunder Section
19(2). The distinction between the two classes became crucial with the amendment
introduced by R.A. No. 7691 in 1994, which expanded the exclusive original jurisdiction
of the first level courts to include "all civil actions which involve title to, or possession of,
real property, or any interest therein where the assessed value of the property or interest
therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and
costs."

Thus, under the present law, original jurisdiction over cases the subject matter of which
involves "title to, possession of, real property or any interest therein" under Section 19(2)
of B.P. 129 is divided between the first and second level courts, with the assessed value
of the real property involved as the benchmark. This amendment was introduced to
"unclog the overloaded dockets of the RTCs which would result in the speedier
administration of justice."

Clearly, the RTC and the CA ruled correctly that the MeTC had jurisdiction over private
respondents' complaint for Accion Reivindicatoria involving a lot in QC with an assessed
value not exceeding P50,000.
 MALANA VS. TAPPA

GR NO. 181303 SEPTEMBER 17, 2009

FACTS:

Petitioners in this case filed before the RTC of Tuguegarao an action for reivindicatoria
and quieting of title against the respondents. The petitioners alleged that they are the
owners of the land because they acquire it by inheritance from their father. And that the
respondents were only allowed by their father before the latter died, to occupy the land
on the condition that they will vacate it anytime they need the subject property. However
when their father died, the respondents continued to occupy the property and had already
built their residences using permanent materials and claimed ownership over the
property.

Petitioners referred their land dispute with the respondents to the lupong tagapamayapa
for conciliation. During the conciliation proceeding, respondents asserts their ownership
over the land

Petitioners were compelled to file before the RTC an action to remove the cloud from their
title alleging that the documents of the respondents were highly Dubious, falsified and
incapable of proving their ownership.
RTC issued an order dismissing the complaint for lack of jurisdiction. According to BP
129, RTC has jurisdiction over real actions where the assessed value of the property
which involved exceeds 20,000 outside MM or 50,000 within MM. it found out that the
value of the property is only 410 pesos thus outside of its jurisdiction.

Petitioner filed a motion for reconsideration. They argued that the principal action is
quieting of title; reivindicacion was included merely to seek complete relief from
respondents.

RTC denied the MR it reasoned out that quieting of title is a real action. Pursuant RA
7691 amending BP 129, it is the MTC that exercises jurisdiction over real action where
the assessed value does not exceed 20,000.

Hence this petition

ISSUE:

Whether the RTC committed grave abuse of discretion in dismissing petitioner’s

complaint for lack of jurisdiction

RULING:

The court ruled in the NEGATIVE

An action for declaratory relief should be filed by a person interested under a deed, will,
contract or other written instrument, and whise rights are affected by a statute, EO or
regulation or an ordinance. The relief sought under this includes the interpretation and
determination of the validity of the written instrument and judicial declaration of the parties’
rights and duties

RTc correctly made a distinction between the 1st and the 2nd paragraph of section 1 rule
63. Specifically in second paragraph, in order to determine which court has jurisdiction,
it must be read together with the Judicial reorganization act of 1980 as amended.

It is important to note that section 1 does not categorically require an action to quiet the
tile to be filed before the RTC. It repeatedly used the word “May”. It denotes that the
provision is merely permissive and indicates a mere possibility, an opportunity or an
option. In contrast judicial reorganization act uses the word “shall” and explicitly requires
the MTC to exercise exclusive jurisdiction over all civil actions which involves title to or
possession of real property where the assessed value does not exceed 20,000. Thus, the
complaint involving title to or possession of property is within the jurisdiction of MTC not
the RTC

Since the purpose of an action for declaratory relief is to secure an authoritative statement
of the rights and obligations of the parties under a statute, deed, or contract for their
guidance in the enforcement thereof, or compliance therewith, and not to settle issues
arising from an alleged breach thereof, it may be entertained only before the breach or
violation of the statute, deed, or contract to which it refers. A petition for declaratory relief
gives a practical remedy for ending controversies that have not reached the state where
another relief is immediately available. Where the law or contract has already been
contravened prior to the filing of an action for declaratory relief, the courts can no longer
assume jurisdiction over the action. In other words, a court has no more jurisdiction over
an action for declaratory relief if its subject has already been infringed or transgressed
before the institution of the action.

In the present case, petitioners’ Complaint for quieting of title was filed after petitioners
already demanded and respondents refused to vacate the subject property. In fact, said
Complaint was filed only subsequent to the latter’s express claim of ownership over the
subject property before the Lupong Tagapamayapa, in direct challenge to petitioners’ title.

since petitioners averred in the Complaint that they had already been deprived of the
possession of their property, the proper remedy for them is the filing of an accion
publiciana or an accion reivindicatoria, not a case for declaratory relief. An accion
publiciana is a suit for the recovery of possession, filed one year after the occurrence of
the cause of action or from the unlawful withholding of possession of the realty. An accion
reivindicatoria is a suit that has for its object one’s recovery of possession over the real
property as owner
 SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO M. SABITSANA,
Petitioners, vs. JUANITO F. MUERTEGUI, represented by his Attorney-in-Fact
DOMINGO A. MUERTEGUI, JR., Respondent.

G.R. No. 181359 August 5, 2013

FACTS:

Petitioner Clemencio Sabitsana was the counsel of the respondent, Juanito Muertegui.
The dispute involved a parcel of land bought by Juanito by virtue of an unnotarized deed
of sale from Alberto Garcia. Juanito’s father and his brother Domingo, took actual
possession of the land. Later on, Garcia sold the same land to the petitioner this time,
through a notarized deed of sale.

When the respondents’ father passed away, the heirs applied for the registration and
coverage of the lot under Public Land Act or CA No. 141. Petitioner opposed the
application, claiming he was the true owner of the lot. Respondent filed for quieting of title
and preliminary injunction against petitioners Clemencio and his wife, Rosario, claiming
that they bought the land in bad faith and are exercising possession and ownership of the
same, which acts thus constitute a cloud over the title.

ISSUE:

Who between petitioners and respondent has a better right to the disputed lot?

RULING:

Respondent has a better right to the lot.

What applies in this case is Act No. 3344 as amended, which provides for the system of
recording of transactions over unregistered real estate. The said act expressly declares
that any registration made shall be without prejudice to a third party with a better right.

The sale to respondent Juanito was executed via an unnotarized deed of sale ten years
earlier than that of the sale to petitioners, though this was made via a notarized document.
Thus, Juanito who was the first buyer has a better right to the lot, while the subsequent
sale to petitioners is null and void, because when it was made, the seller Garcia was no
longer the owner of the lot.

The fact that the sale to Juanito was not notarized does not alter anything, since the sale
between him and Garcia remains valid nonetheless. Notarization, or the requirement of a
public document under the Civil Code is only for convenience, and not for validity or
enforceability. And because it remained valid as between Juanito and Garcia, the latter
no longer had the right to sell the lot to petitioners, for his ownership thereof had ceased.

Nor can petitioners’ registration of their purchase have any effect on Juanito’s rights. The
mere registration of a sale in one’s favor does not give him any right over the land if the
vendor was no longer the owner of the land, having previously sold the same to another
even if the earlier sale was unrecorded. Registration does not vest title; it is merely the
evidence of such title. Our land registration laws do not give the holder any better title
than what he actually has.
 SALVADOR V. PATRICIA

GR. NO. 195834 NOVEMBER 9, 2016

FACTS:

This is an action for injunction and quieting of title to determine who owns the property
occupied by the plaintiffs and intervenor, Ciriano Mijares.

Additionally, to prevent Patricia Inc., from evicting the plaintiffs from their respective
improvements along Juan Luna St., plaintiffs applied for a preliminary injunction in their
complaint pending the quieting of title on the merits.

Complaint-in-intervention - filed by the City of Manila as owner of the land occupied by

the plaintiffs and by Mijares as they were similarly situated as the other plaintiffs.

The preliminary injunction was granted. All parties agreed and admitted in evidence by
stipulation as to the authenticity of the documents. Hence, since the TCTs of both Patricia,
Inc. and the City of Manila are admitted as genuine, the question now is: Where are the
boundaries based on the description in the respective titles?

To resolve the above question, the RTC appointed 3 geodetic engineers as

commissioners. These commissioners ultimately submitted their reports.

RTC: It ruled in favor of the petitioners and against Patricia, Inc., permanently enjoining
the latter from doing any act that would evict the former from their respective premises
and collecting any rentals from them. It sided with two of the commissioners who had
found that the land belonged to the City of Manila.

CA: It reversed the RTC’s decision and dismissed the complaint. It declared that the
petitioners were without the necessary interest, either legal or equitable title to maintain
a suit for quieting of title. It also opined that the RTC should have conducted hearings on
the reports of the commissioners; ruled as highly improper the adjudication of the
boundary dispute in an action for quieting of title.

ISSUE:
WON the petitioners had the sufficient interest to bring the suit for quieting of title

RULING:

NO.

An action to quiet title or remove the clouds over the title is a special civil action.
The competent court is tasked to determine the respective rights of the complainant and
other claimants, not only to put things in their proper place, to make the one who has no
rights to said immovable respect and not to disturb the other, but also for the benefit of
both. The two indispensable requisites must concur, namely: (1) plaintiff or complainant
has a legal or an equitable title to or interest in the real property subject of the action; and
(2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy.

The boundary dispute should not be litigated in an action for quieting of title due to the
limited scope of action. The action for quieting of title is a tool specifically used to remove
of any cloud upon, doubt, or uncertainty affecting title to real property; it should not be
used for any other purpose. Second, the boundary dispute would essentially seek to alter
or modify either the Torrens title of the City of Manila or that of Patricia but any alteration
or medication either way should be initiated only by direct proceedings, not as an issue
incidentally raised by the parties herein.

To allow the boundary dispute to be litigated in the action for quieting of title would
invalidate Section 48 of the Property Registration Decree by virtue of its prohibition
against collateral attacks on Torrens Title. A collateral attack takes place when, in another
action to obtain a different relief, the certificate of title is assailed as an incident in said
action. This is exactly what the petitioners sought to do herein, seeking to modify or
otherwise cancel Patricia, Inc. title.

DIVINO

1. Barrido vs nonato

GR no 176492 oct 20 2014

Facts

Leonardo and marrieta’s marriage was dissolved du to psychological incapacity.

Leonardo filed a petition for partition of property consisting of house and lot.

Marrieta on the other hand claimed that the subject property has been sold to their
children Raymond and joseph.

She also moved for the dismissal of the action alleging that the MTCC has no
jurisdiction over the case, since and action for partition is an action incapable of
percuniary estimation.

MTCC ruled in favor of Marrieta.

Leonardo appealed the case before the RTC which then reversed the decision of the
MTCC, and ordered the partition of the property.

Marrieta brought the action before the CA thru petition for review, however the CA ruled
in Favor of Leonardo, stating that since the value of the property in question is only
P8080.00 clearly falls within the jurisdiction of the MTCC.

ISSUE: won the MTCC has jurisdiction over the petition for partition filed by Leonardo?

RULING: the supreme court ruled in favor of Leonardo.

“contrary to the contention of barrid, the MTCC, has jurisdiction to take cognizance of
real actons affecting title to real property or possession, or for the partition of, or
foreclosure of mortgage over real property” under section 33 of BP 129.

2. Roldan vs spouses barrios

GR no 214803 april 23, 2018

( SEE DIGEST ON PAGE 91 OF THE BOOK)

3. Singson vs Isabela sawmill

(SEE CITATION ON PAGE 95 OF THE BOOK)

4. THE LATE SPOUSES ALEJANDRO RAMIRO AND FELICISIMA LLAMDA, ET AL

V. SPOUSES BACAROON, GR. NO. 196874, FEBRUARY 6, 2019

(SEE DIGEST ON PAGE 97 OF THE BOOK)

5. VDA.DE PALANCA, ET AL V. CHUA KENG KIAN, ET AL. L-26430, MARCH 11,

1969
6. REFUGIA, ET AL. V. CA, ET AL. GR. NO. 118284, JULY 5, 1996

7. CANIZA V. CA, 335 PHIL 1107

8. TEN FORTY REALTY AND DEV CORP V. CRUZ, GR. NO. 151212, SEPTEMBER
10, 2003

9. ROSS RICA SALES CENTER, INC. ET AL. V. SPOUSES ONG, GR. NO. 132197,
AUGUST 16, 2005

10 QUINAGORAN V. CA, GR. NO. 155179, AUGUST 24, 2007

11. BERNARDO V. VILLEGAS, GR. NO. 183357, MARCH 15, 2010

12. HILARIO V. SALVADOR, GR. NO. 160384, APRIL 29, 2005

(SEE DIGEST ON PAGE 109 OF THE BOOK)

13. OUANO V. PGTT INTERNATIONAL NVESTMENT CORP, GR. NO. 134230, JULY
17, 2002

FALCULAN

TIJAM V. SIBONGHANOY

FACTS:

The spouses Tijam filed a case against the spouses Sibonghanoy to recover the sum of
P1,908.00, with legal interest, plus costs.

A writ of attachment was issued by the court against defendants’ properties, but the same
was dissolved upon the filing of a counter-bond by defendants and the Manila Surety and
Fidelity Co., Inc. (Surety).

The Court rendered judgment in favor of the plaintiffs and, after the same had become
final and executory, the Court issued a writ of execution against the defendants.

The writ having been returned unsatisfied, the plaintiffs moved for the issuance of a writ
of execution against the Surety’s bond. The Surety filed its opposition on these grounds:
(1) Failure to prosecute and (2) Absence of a demand upon the Surety for the payment
of the amount due under the judgment.
Thereafter the necessary demand was made, and upon failure of the Surety to satisfy the
judgment, the plaintiffs filed a second motion for execution against the counterbond.

Upon failure of Surety to file an answer, the Court granted the motion for execution and
the corresponding writ was issued.

Surety moved to quash the writ on the ground that the same was issued without the
required summary hearing provided for in Section 17 of Rule 59 of the Rules of Court. As
the Court denied the motion, the Surety appealed to the CA.

The CA affirmed the order appealed from.

Five days after the Surety received notice of the decision, it filed a motion asking for
extension of time within which to file a motion for reconsideration.

The CA granted the motion.

Two days later the Surety filed a MOTION TO DISMISS, alleging:

that appellee’s action was filed in the CFI for the recovery of the sum of P1,908.00 only;
that a month before that date Republic Act No. 296, otherwise known as the Judiciary Act
of 1948, had already become effective, Section 88 of which placed within the original
exclusive jurisdiction of inferior courts all civil actions where the value of the subject-
matter or the amount of the demand does not exceed P2,000.00, exclusive of interest
and costs; that the CFI therefore had no jurisdiction to try and decide the case. The CA
required the appellees to answer the motion to dismiss, but they failed to do so.

ISSUE:

Whether or not Surety can raise the question of lack of jurisdiction for the first time on
appeal.

RULING:

The rule is that jurisdiction over the subject matter is conferred upon the courts exclusively
by law, and as the lack of it affects the very authority of the court to take cognizance of
the case, the objection may be raised at any stage of the proceedings.

However, considering the facts and circumstances of the present case, We are of the
opinion that the Surety is now barred by laches from invoking this plea at this late hour
for the purpose of annuling everything done heretofore in the case with its active
participation.
The facts of this case show that from the time the Surety became a quasi-party, it could
have raised the question of the lack of jurisdiction of the CFI to take cognizance of the
present action by reason of the sum of money involved which, according to the law then
in force, was within the original exclusive jurisdiction of inferior courts. It failed to do so.
Instead, at several stages of the proceedings in the court a quo as well as in the Court of
Appeals, it invoked the jurisdiction of said courts to obtain affirmative relief and submitted
its case for a final adjudication on the merits.

It was only after an adverse decision was rendered by the CA that it finally woke up to
raise the question of jurisdiction.

A party may be estopped or barred from raising a question in different ways and for
different reasons. Thus we speak of estoppel in pais, or estoppel by deed or by record,
and of estoppel by laches.

Laches, in a general sense is failure or neglect, for an unreasonable and unexplained

length of time, to do that which, by exercising due diligence, could or should have been
done earlier; it is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either has abandoned it or
declined to assert it.

The doctrine of laches or of “stale demands” is based upon grounds of public policy which
requires, for the peace of society, the discouragement of stale claims and, unlike the
statute of limitations, is not a mere question of time but is principally a question of the
inequity or unfairness of permitting a right or claim to be enforced or asserted.

It has been held that a party can not invoke the jurisdiction of a court to sure affirmative
relief against his opponent and, after obtaining or failing to obtain such relief, repudiate
or question that same jurisdiction.

The Court frowns upon the “undesirable practice” of a party submitting his case for
decision and then accepting the judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse.

TUMPAG V. TUMPAG, GR. NO. 199133, SEPTEMBER 29, 2014

Facts:

The Plaintiff, Esperanza Tumpag is the absolute owner of a parcel of land, identified
as lot no. 1880-A containing an area of 12,992 square meters, more or less, situated in
Barangay Tuyom, Cauayan, Negros occidental. The Defendant, Samuel Tumpag, has
been occupying portion of not less than 1000 square meters of the said parcel of land for
more than 10 years, at the Tolerance of Ezperanza.
 Ezperanza wanted to recover the portion occupied by Samuel but Samuel refused to
vacate said portion he has occupied inspite of repeated demands from Ezperanza.

RTC ordered Samuel to return posession of subject portion of the property to

Esperanza and to pay for damages. However CA ruled that petitioner’s failure to allege
in her complaint the assessed value of the disputed property warranted the nullifiaction
of the RTC’s decision.

Issue:

Whether or not petitioner’s failure to allege in her complaint the assessed value of the
disputed property warranted the complaint’s dismissal.

Whether or not RTC lack jurisdiction over the case.

Held:

The SC held that CA’s dismissal of the petitioner’s complaint for recovery of
possession is erroneous and unwarranted. It is well-settled that jurisdiction over a subject
matter is conferred by law, not by the parties’ action or conduct, and is, likewise,
determined from the allegations in the complaint.

Although the petitioner failed to allege in her complaint the property’s assessed value,
The CA was fully aware of the copy of a Declaration of Real Property showing that the
subject property has a market value of P51,965.00 and assessed value of P20,790.00
attached to the petitioner’s complaint.

ZAMORA vs. CA

183 SCRA 279

FACTS:

This case involves a conflict of jurisdiction between the RTC and SEC. The
petitioners claim they are suing members of an unregistered association, so under the
jurisdiction of the regular courts. Private respondents disagree, insisting that they are
being sued in an intra-corporate dispute.
ISSUE:

Whether or not the SEC has jurisdiction over the case.

RULING:

Yes. It is a rule that jurisdiction over subject matter cannot be changed by

agreement of the parties.

It follows that as a rule the filing of a complaint with one court which has no
jurisdiction over it does not prevent the plaintiff from filing the same complaint later with
the competent court.

The mere fact that the petitioners first filed their complaint with the SEC did not
have the effect of precluding them from filing the same complaint with the CFI if this was
the court that was vested with appropriate jurisdiction.

KATON V. PALANCA JR., ET AL, GR. NO. 151149, SEPTEMBER 7, 2004

FACTS:

On August 2, 1963, petitioner Katon filed a request with the District Office of the Bureau
of Forestry for the re-classification of a piece of real property known as Sombrero Island
in Palawan for the purpose of eventual conversion or reclassification from forest to
agricultural land, and thereafter for Katon to apply for homestead patent.

Then, in 1965, the Director of Forestry informed the Director of Lands, that since the
subject land was no longer needed for forest purposes, the same is therefore certified
and released as agricultural land for disposition under the Public Land Act.

However, there were also several favorable endorsements that were made to survey the
island under the request of herein respondents. Then, the records show that, on
November 8, 1996, one of the respondents Juan Fresnillo filed a homestead patent
application for the portion of the island consisiting of 8.5 hectares and the respondent
Jesus Gapilango filed a homestead application on June 8, 1972. The respondent Manuel
Palanca, Jr. was issued a Homestead Patent No. 14527 and OCT No. G-7098 on March
3, 1875 with an area of 6.84 hectares of Sombrero Island.

Petitioner assails the validity of the homestead patents and original certificates of title
covering certain portions of Sombrero Island issued in favor of respondents on the ground
that the same were obtained through fraud. Petitioner prays for the reconveyance of the
whole island in his favor. The petitioner claims that he has the exclusive right to file an
application for homestead patent over the whole island since it was he who requested for
its conversion from forest land to agricultural land.

Respondents aver that they are all bona fide and lawful possessors of their respective
portions and have declared said portions for taxation purposes and that they have been
faithfully paying taxes thereon for twenty years. Respondents contend that the petitioner
has no legal capacity to sue insofar as the island is concerned because an action for
reconveyance can only be brought by the owner and not a mere homestead applicant
and that petitioner is guilty of estoppel by laches for his failure to assert his right over the
land for an unreasonable and unexplained period of time.

Timeline:

June 30, 1999. Respondents filed a Motion to Dimiss on the ground of the alleged

defiance by petitioner of the trial court’s Order to amend his Complaint so he could thus
effect a substitution by the legal heirs of the deceased Respondent Gapilango.

July 29, 1999. RTC granted the Motion to Dismiss.

December 17, 1999: RTC denied petitioner’s Motion for Reconsideration of the July 29,
1999 order for being a third and prohibited motion.

In his Petition for Certiorari before the CA, petitioner charged the trial court with grave
abuse of discretion on the ground that the denied Motion was his first and only Motion for
Reconsideration of the aforesaid Order.

Court of Appeals dismissed the complaint because of prescription invoking residual

prerogative.

ISSUE:

Whether or not it is correct for the CA to invoke its alleged residual prerogative under Sec.
1, Rule 9 in resolving the petition on an issue not raised in the petition.

HELD: YES.

Petitioner next submits that the CA erroneously invoked its residual prerogatives under
Section 1 of Rule 9 of the Rules of Court when it motu proprio dismissed the Petition for
lack of jurisdiction and prescription. According to him, residual prerogative refers to the
power that the trial court, in the exercise of its original jurisdiction, may still validly exercise
even after perfection of an appeal. It follows that such powers are not possessed by an
appellate court.

Petitioner has confused what the CA adverted to as its residual prerogatives under
Section 1 of Rule 9 of the Rules of Court with the residual jurisdiction of trial courts over
cases appealed to the CA.

Under Section 1 of Rule 9 of the Rules of Court, defenses and objections not pleaded
either in a motion to dismiss or in the answer are deemed waived, except when (1) lack
of jurisdiction over the subject matter, (2) litis pendentia, (3) res judicata and (4)
prescription are evident from the pleadings or the evidence on record. In the four excepted
instances, the court shall motu proprio dismiss the claim or action.

The motu proprio dismissal of a case was traditionally limited to instances when the court
clearly had no jurisdiction over the subject matter and when the plaintiff did not appear
during trial, failed to prosecute his action for an unreasonable length of time or neglected
to comply with the rules or with any order of the court. Outside of

these instances, any motu proprio dismissal would amount to a violation of the right of the
plaintiff to be heard.

Under the new rules, a court may motu proprio dismiss a claim when it appears from the
pleadings or evidence on record that it has no jurisdiction over the subject matter; when
there is another cause of action pending between the same parties for the same cause,
or where the action is barred by a prior judgment or by statute of limitations.

On the other hand, “residual jurisdiction” is embodied in Section 9 of Rule 41 of the

Rules of Court, as follows:

SEC. 9. Perfection of appeal; effect thereof. – A party’s appeal by notice of appeal is

deemed perfected as to him upon the filing of the notice of appeal in due time.

A party’s appeal by record on appeal is deemed perfected as to him with respect to the
subject matter thereof upon the approval of the record on appeal filed in due time.

In appeals by notice of appeal, the court loses jurisdiction over the case upon the
perfection of the appeals filed in due time and the expiration of the time to appeal of the
other parties.

In appeals by record on appeal, the court loses jurisdiction only over the subject matter
thereof upon the approval of the records on appeal filed in due time and the expiration of
the time to appeal of the other parties.
In either case, prior to the transmittal of the original record or the record on appeal, the
court may issue orders for the protection and preservation of the rights of the parties
which do not involve any matter litigated by the appeal, approve compromises, permit
appeals of indigent litigants, order execution pending appeal in accordance with Section
2 of Rule 39, and allow withdrawal of the appeal.

The residual jurisdiction of trial courts is available at a stage in which the court is normally
deemed to have lost jurisdiction over the case or the subject matter involved in the appeal.
This stage is reached upon the perfection of the appeals by the parties or upon the
approval of the records on appeal, but prior to the transmittal of the original records or the
records on appeal. In either instance, the trial court still retains its so-called residual
jurisdiction to issue protective orders, approve compromises, permit appeals of indigent
litigants, order execution pending appeal, and allow the withdrawal of the appeal.

The CAs motu proprio dismissal of petitioners’ Complaint could not have been based,
therefore, on residual jurisdiction under Rule 41. Undeniably, such order of dismissal was
not one for the protection and preservation of the rights of the parties, pending the
disposition of the case on appeal. What the CA referred to as residual prerogatives were
the general residual powers of the courts to dismiss an action motu proprio upon the
grounds mentioned in Section 1 of Rule 9 of the Rules of Court and under authority of
Section 2 of Rule 14 of the same rules.

Sidenote: SC dismissed the petitioner’s complaint due to lack of jurisdiction and lack of
cause of action (Sec. 2, Rule 3). Petitioner is not a proper party in the case because the
contested land was not privately owned by him prior to the issuance of the assailed
certificate of title to the defendant. He had never been privately titled in his name. A mere
homestead applicant, not being the real party in interest, has no cause of action in a suit
for reconveyance.

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MITSUBISHI MOTORS PHILIPPINES CORP. V. BUREAU OF CUSTOMS, GR. NO.

209830, JUNE 17, 2015

The instant case arose from a collection suitfor unpaid taxes and customs duties in the
aggregate amount of P46,844,385.00 filed by respondent against petitioner Mitsubishi
Motors Philippines Corporation.
Respondent alleged that from 1997 to1998, petitioner was able to secure tax credit
certificates (TCCs) from various transportation companies; after which, it made several
importations and utilized said TCCs for the payment of various customs duties and taxes
in the aggregate amount of P46,844,385.00.Believing the authenticity of the TCCs,
respondent allowed petitioner to use the same for the settlement of such customs duties
and taxes. However, a post-audit investigation of the Department of Finance revealed
that the TCCs were fraudulently secured with the use of fake commercial and bank
documents, and thus, respondent deemed that petitioner never settled its taxes and
customs duties pertaining to the aforesaid importations.

Initially, the RTC dismissedthe collection case due to the continuous absences of
respondent’s counsel during trial.On appeal to the CA,and eventually the Court,the said
case was reinstated and trial on the merits continued before the RTC

The RTC Ruling: the RTC granted petitioner’s Demurrer to Plaintiff’s Evidence, and
accordingly, dismissed respondent’s collection case on the ground of insufficiency of
evidence. The RTC opined that fraud is never presumed and must be established by clear
and convincing evidence, which petitioner failed to do, thus, necessitating the dismissal
of the complaint

The CA Ruling: The CA referred the records of the collection case to the CTA for proper
disposition of the appeal taken by respondent while the CA admitted that it had no
jurisdiction to take cognizance of respondent’s appeal, as jurisdiction is properly lodged
with the CTA, it nevertheless opted to relax procedural rules in not dismissing the appeal
outright.

ISSUE: Whether or not the Court of Appeals correctly referred the records of the collection
case to the Court of Tax Appeals for proper disposition of the appeal taken by
respondent?

RULING: The Court finds that the CA erred in referring the records of the collection case
to the CTA for proper disposition of the appeal taken by respondent.
When a court has no jurisdiction over the subject matter, the only power it has is to dismiss
the action.

LARESMA V. ABELLANA, GR. NO. 140973, NOVEMBER 11, 2004

FACTS: On May 24, 1994, Antonio P. Abellana filed a Complaint with the Regional Trial
Court (RTC) of Toledo, Cebu, Branch 29, against Laresma Justino Laresma, a farmer,
for recovery of possession of a parcel of agricultural land located in Tampa-an,
Aloguinsan, Cebu. He alleged, inter alia, that since 1985, Laresma had been a lessee of
a certain Socorro Chiong, whose agricultural land adjoined his own; and that sometime
in 1985, Laresma, by means of threat, strategy, and stealth, took possession of his
property and deprived him of its possession.[1] Abellana prayed that Laresma be ordered
to vacate the property and pay him actual damages, attorneys fees, and expenses of
litigation.

In his answer to the complaint, Laresma averred that the dispute between him and
Abellana was agrarian in nature, within the exclusive jurisdiction of the DAR, involving as
it did his right of possession covered by Certificate of Land Transfer (CLT) No. 0-031817
issued to his wife Praxedes. He alleged that the property titled in the name of Abellana
consisted of a portion of that property owned by the Spouses Vicente and Susana Paras
covered by Original Certificate of Title No. 780 which was placed under OLT under
Presidential Decree No. 27. Being a beneficiary of the agrarian reform program of the
government, his wife was issued CLT No. 0-031817 on July 13, 1982 over a portion of
the property, Lot No. 00013, with an area of 0.1700 hectares. Since then, he and his wife
became owners of the property and, as such, were entitled to the possession thereof.

The parties agreed to defer further proceedings for the conduct of an ocular inspection of
the property. A Report was submitted, where it was indicated that the parties had agreed
that the house of Laresma was located at Abellana’s property.

Laresma denied being the tenant of Abellana.

On October 30, 1998, the trial court rendered judgment in favor of Abellana and against
Laresma.

The court ruled that, as evidenced by the contract of lease executed by Praxedes
Laresma and Socorro Chiong, Laresma was the tenant of Chiong and not of Abellana.
Thus, the court had jurisdiction over the case. The court rejected the reports of Epan and
Navarro, and considered the same as barren of probative weight, considering that the
said reports failed to take into account the technical descriptions of Lot 4-C owned by
Chiong, Lot 4-E covered by TCT No. 47171, and Lot 00013 covered by CLT No. 0-
031817.

Hence, the present petition for review on certiorari under Rule 45 of the Rules of Court.

ISSUE: Whether the RTC had jurisdiction over the action of Abellana;

RULING: NO.

We agree with Abellana that the DARAB had no jurisdiction over his action against
Laresma. The bone of contention of the parties and the decisive issue in the trial court
was whether or not Lot No. 00013 covered by CLT No. 0-031817 is a portion of Lot 4-E
covered by TCT No. 47171 under the name of Abellana. This is the reason why the parties
agreed to have Lot No. 00013 resurveyed in relation to Lot 4-C owned by Socorro Chiong
and to Lot 4-E titled in the name of Abellana. After a calibration of the evidence on record
and the reports of Epan and Navarro, the trial court ruled that Lot No. 00013 formed part
of Lot 4-C owned by Socorro Chiong and not of Lot 4-E titled in the name of Abellana.

Laresma has not assailed the findings of the trial court in the petition at bar; hence, he is
bound by the said findings.

We agree with the ruling of the RTC that, as gleaned from the material averments of his
complaint, the action of Abellana against Laresma is not an agrarian dispute within the
exclusive jurisdiction of the DARAB. The well-entrenched principle is that the jurisdiction
of the court over the subject matter of the action is determined by the material allegations
of the complaint and the law, irrespective of whether or not the plaintiff is entitled to
recover all or some of the claims or reliefs sought therein. In Movers-Baseco Integrated
Port Services, Inc. v. Cyborg Leasing Corporation, we ruled that the jurisdiction of the
court over the nature of the action and the subject matter thereof cannot be made to
depend upon the defenses set up in the court or upon a motion to dismiss for, otherwise,
the question of jurisdiction would depend almost entirely on the defendant. Once
jurisdiction is vested, the same is retained up to the end of the litigation. We also held in
Arcelona v. Court of Appeals that, in American jurisprudence, the nullity of a decision
arising from lack of jurisdiction may be determined from the record of the case, not
necessarily from the face of the judgment only.

It must be stressed that the regular court does not lose its jurisdiction over an ejectment
case by the simple expedient of a party raising as a defense therein the alleged existence
of a tenancy relationship between the parties. But it is the duty of the court to receive
evidence to determine the allegations of tenancy. If, after hearing, tenancy had, in fact,
been shown to be the real issue, the court should dismiss the case for lack of jurisdiction.
We agree with the ruling of the trial court that based on the material allegations of
Abellana’s complaint and even on the admission of Laresma, the latter had never been
an agricultural tenant of Abellana. In fact, Abellana claimed that based on the CLT issued
to his wife, they became the owner of the property covered therein. As such, the DARAB
had no jurisdiction over the said action. The dispute between Abellana, as plaintiff, and
Laresma, as defendant, in the RTC involving the de jure possession of Lot 4-E covered
by TCT No. 47171 is not an agrarian dispute. Decisive of the issue is our ruling in Heirs
of the Late Herman Rey Santos v. Court of Appeals:

Rule II, Section 1 of the Revised Rules of Procedure of the DARAB, provides:

Section 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform

Adjudication Board shall have primary jurisdiction, both original and appellate, to
determine and adjudicate all agrarian disputes, cases, controversies, and matters or
incidents involving the implementation of the Comprehensive Agrarian Reform
Program under Republic Act No. 6657, Executive Order Nos. 229, 228, and 129-A,
Republic Act No. 3844, as amended, by Republic Act No. 6389, P.D. No. 27, and other
agrarian laws and their implementing rules and regulations.

Agrarian dispute is defined under Section 3(d) of Republic Act No. 6657 (CARP Law), as:

(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements,

whether leasehold, stewardship or, otherwise, over lands devoted to agriculture,
including disputes concerning farmworkers associations or representation of persons
in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions
of such tenurial arrangements.

It includes any controversy relating to compensation of lands acquired under this Act and
other terms and conditions of transfer of ownership from landowners to farmworkers,
tenants and other agrarian reform beneficiaries, whether the disputants stand in the
proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and
lessee.

Clearly, no agrarian dispute is involved in this case. In fact, both are contending parties
for the ownership of the subject property.

Laresma and Abellana have no tenurial, leasehold, or any agrarian relations whatsoever
that could have brought this controversy under the ambit of the agrarian reform laws.
Consequently, the DARAB has no jurisdiction over the controversy and should not have
taken cognizance of Abellana petition for injunction in the first place.
However, we find and so hold that the RTC had no jurisdiction over the action of
Abellana. In this case, Abellana filed his complaint against Laresma on May 24,
1994. Hence, the jurisdiction of the regular court over the nature of this action is
governed by Republic Act No. 7691, which took effect on April 15, 1994. Section 3
thereof amended Section 33 of Batas Pambansa (B.P.) Blg. 129, and reads:

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts,
and Municipal Circuit Trial Courts shall exercise:

(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the property or
interest therein does not exceed Twenty Thousand Pesos (P20,000.00) or, in civil
actions in Metro Manila, where such assessed value does not exceed Fifty Thousand
Pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorneys fees,
litigation expenses and costs: Provided, That in cases of land not declared for taxation
purposes, the value of such property shall be determined by the assessed value of the
adjacent lots.

In this case, the complaint of Abellana against Laresma for recovery of possession of real
property (accion publiciana) reads:

3. That plaintiff is the owner and possessor of Lot 4-E covered by TCT No. T-47171 of
the Registry of Deeds of the Province of Cebu located at Tampa-an, Aloguinsan, Cebu;

4. That defendant is the tenant of the land of Socorro P. Chiong, which adjoins the
parcel of land owned by the plaintiff as shown by a leasehold contract hereto attached
as Annex A and made an integral part hereof;

5. That sometime in 1985, by means of threats, strategy, and stealth, the herein
defendant took possession of the parcel of land owned by herein plaintiff, thus
effectively depriving plaintiff of the possession thereof;

6. That the defendants, while illegally occupying the land of herein plaintiff, cut trees,
and harvested the fruits of said land causing damages to the plaintiff in the amount of
P50,000.00;

7. That despite demand, defendant has refused to vacate said land and return the
possession thereof to herein plaintiff, thus compelling the plaintiff to file the present
action;

8. In filing the present action, the plaintiff engaged the services of counsel for
P10,000.00 and expects to incur expenses of litigation in the amount of P5,000.00.
The complaint does not contain any allegation of the assessed value of Lot 4-E covered
by TCT No. 47171. There is, thus, no showing on the face of the complaint that the RTC
had exclusive jurisdiction over the action of Abellana. Moreover, as gleaned from the
receipt of realty tax payments issued to Abellana, the assessed value of the property in
1993 was P8,300.00. Patently then, the Municipal Trial Court of Aloguinsan, Cebu, and
not the Regional Trial Court of Toledo City, had exclusive jurisdiction over the action of
Abellana. Hence, all the proceedings in the RTC, including its decision, are null and void.

HEIRS OF SEBE V. SEVILLA, ET AL. GR. NO. 174497

Facts:

Spouses Generoso and Aurelia Sebe had been the owner for over 40 years of two
unregistered lots in Dipolog City with a total assessed value of P9,910.00. Sevilla then
caused the Sebes to sign documents entitled affidavits of quitclaim. Being illiterate, they
relied on Sevilla’s explanation that what they signed were "deeds of real estate mortgage"
covering a loan that they got from him. Although the documents which turned out to be
deeds conveying ownership over the two lots to Sevilla for P10,000.00 were notarized,
the Sebes did not appear before any notary public. Using the affidavits of quitclaim, Sevilla
applied for and obtained free patent titles covering the two lots. Subsequently, he
mortgaged the lots to Technology and Livelihood Resource Center for P869,555.00.

Despite demands by the Sebes, Sevilla refused to return the lots, forcing them to hire a
lawyer and incur expenses of litigation. Spouses Sebe and their daughter, Lydia filed with
the RTC of Dipolog City a complaint against defendants Sevilla and Technology and
Livelihood Resources Center for Annulment of Document, Reconveyance and Recovery
of Possession of two lots, which had a total assessed value of P9,910.00, plus damages.
In his Answer Sevilla insisted that he bought the lots from the Sebes in a regular manner.
While the case was pending before the RTC, Generoso died so his wife and children
substituted him. Parenthetically, with Sevilla’s death in 2006, his heirs substituted him as
respondents in this case.

The RTC dismissed the case for lack of jurisdiction over the subject matter considering
that the ultimate relief that the Sebes sought was the reconveyance of title and possession
over two lots that had a total assessed value of less than P20,000.00. Under the law, said
the RTC, it has jurisdiction over such actions when the assessed value of the property
exceeds P20,000.00, otherwise, jurisdiction shall be with the first level courts. The RTC
concluded that the Sebes should have filed their action with the Municipal Trial Court
(MTC) of Dipolog City.

The Sebes then filed a motion for reconsideration. They pointed out that the RTC
mistakenly classified their action as one involving title to or possession of real property
when, in fact, it was a case for the annulment of the documents and titles that Sevilla got.
Since such an action for annulment was incapable of pecuniary estimation, it squarely fell
within the jurisdiction of the RTC as provided in Sec. 19 of Batas Pambansa 129, as
amended.

To prove their point the Sebes cited the cases of De Rivera and Copioso. But the RTC
denied the Sebes’ motion for reconsideration, pointing out that the Copioso ruling had
already been overturned by Spouses Huguete v. Spouses Embudo. Before Huguete,
cancellation of titles, declaration of deeds of sale as null and void and partition were
actions incapable of pecuniary estimation. Now, however, the jurisdiction over actions of
this nature, said the RTC, depended on the valuation of the properties. In this case, the
MTC had jurisdiction because the assessed value of the lots did not exceed P20,000.00.

Issue:

Whether the Sebes’s action involving the two lots falls within the jurisdiction of the RTC?

Held:

No. The Sebes’ claim that their action is, first, for the declaration of nullity of the
documents of conveyance that Sevilla tricked them into signing and, second, for the
reconveyance of the certificate of title for the two lots that Sevilla succeeded in getting.
The subject of their action is, they conclude, incapable of pecuniary estimation.

An action "involving title to real property" means that the plaintiff’s cause of action is based
on a claim that he owns such property or that he has the legal rights to have exclusive
control, possession, enjoyment, or disposition of the same. Title is the "legal link between
(1) a person who owns property and (2) the property itself."
"Title" is different from a "certificate of title" which is the document of ownership under the
Torrens system of registration issued by the government through the Register of Deeds.
While title is the claim, right or interest in real property, a certificate of title is the evidence
of such claim.

Another way of looking at it is that, while "title" gives the owner the right to demand or be
issued a "certificate of title," the holder of a certificate of title does not necessarily possess
valid title to the real property. The issuance of a certificate of title does not give the owner
any better title than what he actually has in law. Thus, a plaintiff’s action for cancellation
or nullification of a certificate of title may only be a necessary consequence of the
defendant’s lack of title to real property. Further, although the certificate of title may have
been lost, burned, or destroyed and later on reconstituted, title subsists and remains
unaffected unless it is transferred or conveyed to another or subjected to a lien or
encumbrance

Thus the Sebes claim ownership because according to them, they never transferred
ownership of the same to anyone. Such title, they insist, has remained with them
untouched throughout the years, excepting only that in 1991 they constituted a real estate
mortgage over it in Sevilla’s favor. The Sebes alleged that Sevilla violated their right of
ownership by tricking them into signing documents of absolute sale, rather than just a real
estate mortgage to secure the loan that they got from him. Assuming that the Sebes can
prove that they have title to or a rightful claim of ownership over the two lots, they would
then be entitled, first, to secure evidence of ownership or certificates of title covering the
same and, second, to possess and enjoy them. The court, in this situation, may in the
exercise of its equity jurisdiction and without ordering the cancellation of the Torrens titles
issued to Sevilla, direct the latter to reconvey the two lots and their corresponding Torrens
titles to them as true owners.

The present action is, therefore, not about the declaration of the nullity of the documents
or the reconveyance to the Sebes of the certificates of title covering the two lots. These
would merely follow after the trial court shall have first resolved the issue of which
between the contending parties is the lawful owner of such lots, the one also entitled to
their possession. Based on the pleadings, the ultimate issue is whether or not defendant
Sevilla defrauded the Sebes of their property by making them sign documents of
conveyance rather than just a deed of real mortgage to secure their debt to him. The
action is, therefore, about ascertaining which of these parties is the lawful owner of the
subject lots, jurisdiction over which is determined by the assessed value of such lots.

Here, the total assessed value of the two lots subject of the suit is P9,910.00. Clearly, this
amount does not exceed the jurisdictional threshold value of P20,000.00 fixed by law.
The other damages that the Sebes claim are merely incidental to their main action and,
therefore, are excluded in the computation of the jurisdictional amount

RUDOLF LIETZ HOLDINGS INC., V. REGISTER OF DEEDS OF PARANAQUE CITY,

344 SCRA 680

NATURE:

A petition for review on the decision rendered by RTC of Parañaque City, Metro Manila
involving questions of law.

FACTS:

Petitioner Corporation amended its Articles of Incorporation to change its name from
Rudolf Lietz, Incorporated to Rudolf Lietz Holdings, Inc. and such was approved by SEC.
As a consequence of its change of name, petitioner sought the amendment of the transfer
certificates of title over real properties owned by them, all of which were under the old
name. For this purpose, petitioner instituted a petition for amendment of titles with the
RTC Parañaque City.

The petition impleaded as respondent the Registry of Deeds of Pasay City, apparently
because the titles sought to be amended, all state that they were issued by the Registry
of Deeds of Pasay City. Petitioner likewise inadvertently alleged in the body of the petition
that the lands covered by the subject titles are located in Pasay City. Subsequently,
petitioner learned that the subject titles are in the custody of the Register of Deeds of
Parañaque City. Hence, petitioner filed an Ex-Parte Motion to Admit Amended Petition
impleading instead as respondent the Registry of Deeds of Parañaque City, and alleged
that its lands are located in Parañaque City.

In the meantime, however, the court a quo had dismissed the petition motu proprio on the
ground of improper venue, it appearing therein that the respondent is the Registry of
Deeds of Pasay City and the properties are located in Pasay City. Petitioner filed with the
lower court a Motion for Reconsideration but was denied. On the other hand, in view of
the dismissal of the petition, the lower court also denied the Ex-Parte Motion to Admit
Amended Petition.

The Solicitor General filed his Comment contending that the trial court did not acquire
jurisdiction over the res because it appeared from the original petition that the lands are
situated in Pasay City; hence, outside the jurisdiction of the Parañaque court. Since it
had no jurisdiction over the case, it could not have acted on the motion to admit amended
petition.

ISSUE:

Whether or not trial court motu proprio dismiss a complaint on the ground of improper
venue.

HELD:

Venue of real actions

This question has already been answered in Dacoycoy v. Intermediate Appellate Court,
where this Court held that it may not. The motu proprio dismissal of petitioner’s complaint
by respondent trial court on the ground of improper venue is plain error, obviously
attributable to its inability to distinguish between jurisdiction and venue.

Questions or issues relating to venue of actions are basically governed by Rule 4 of the
Revised Rules of Court. Jurisdiction over the subject matter or nature of an action is
conferred only by law.[16] It may not be conferred by consent or waiver upon a court which
otherwise would have no jurisdiction over the subject matter of an action. On the other
hand, the venue of an action as fixed by statute may be changed by the consent of the
parties, and an objection on improper venue may be waived by the failure of the defendant
to raise it at the proper time. In such an event, the court may still render a valid judgment.
Rules as to jurisdiction can never be left to the consent or agreement of the parties.
Venue is procedural, not jurisdictional, and hence may be waived. It is meant to provide
convenience to the parties, rather than restrict their access to the courts as it relates to
the place of trial.

Dismissing the complaint on the ground of improper venue is certainly not the appropriate
course of action at this stage of the proceedings. 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.

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.

Amendments to pleadings are liberally allowed in furtherance of justice, in order that every
case may so far as possible be determined on its real facts, and in order to speed the trial
of cases or prevent the circuitry of action and unnecessary expense. The trial court,
therefore, should have allowed the amendment proposed by petitioner for in so doing, it
would have allowed the actual merits of the case to be speedily determined, without
regard to technicalities, and in the most expeditious and inexpensive manner.

The courts should be liberal in allowing amendments to pleadings to avoid multiplicity of

suits and in order that the real controversies between the parties are presented, their
rights determined and the case decided on the merits without unnecessary delay. This
liberality is greatest in the early stages of a lawsuit, especially in this case where the
amendment to the complaint was made before the trial of the case thereby giving
petitioner all the time allowed by law to answer and to prepare for trial.

DUERO V. CA. 373 SCRA 11

FACTS:

Sometime in 1988, according to petitioner, private Eradelentered and occupied

petitioner's land covered by Tax Declaration No. A-16-13-302, located in Baras, San
Miguel, Surigao del Sur. As shown in the tax declaration, the land had an assessed value
of P5,240. Petitioner informed respondent that the land was his, and requested the latter
to vacate the land. However, despite repeated demands, private respondent remained
steadfast in his refusal to leave the land.

On June 16, 1995, petitioner filed before the RTC a complaint for Recovery of Possession
and Ownership with Damages and Attorney's Fees against private respondent and two
others, namely, Apolinario and Inocencio Ruena.

Petitioner and the Ruenas executed a compromise agreement, which became the trial
court's basis for a partial judgment rendered on January 12, 1996. In this agreement, the
Ruenas recognized and bound themselves to respect the ownership and possession of
Duero. Herein private respondent Eradel was not a party to the agreement, and he was
declared in default for failure to file his answer to the complaint.

Petitioner presented his evidence ex parte on February 13, 1996. On May 8, 1996,
judgment was rendered in his favor, and private respondent was ordered to peacefully
vacate and turn over the lot.

On June 10, 1996, private respondent filed a Motion for New Trial, alleging that he has
been occupying the land as a tenant of Artemio Laurente, Sr., since 1958. He explained
that he turned over the complaint and summons to Laurente in the honest belief that as
landlord, the latter had a better right to the land and was responsible to defend any
adverse claim on it. However, the trial court denied the motion for new trial.

Private respondent then filed before the RTC a Petition for Relief from Judgment,
reiterating the same allegation in his Motion for New Trial. The RTC again denied the
Petition.

Private respondent filed a Motion for Reconsideration in which he alleged that the RTC
has no jurisdiction over the case since the value of the land is only P5,240, which is within
the jurisdiction of the MTC. However, the RTC denied the MR.

Private respondent filed with the Court of Appeals, a petition for certiorari which the latter
granted.

ISSUES:

1) Whether or not RTC has jurisdiction over the case

2) WON the private respondent Eradel is estopped from questioning the jurisdiction of
RTC after he has successfully sought affirmative relief therefrom

HELD:

1) None. The case falls under the jurisdiction of the MTC based on Republic Act 7691
amending BP 129.

2) No. For estoppel to apply, the action giving rise thereto must be unequivocal and
intentional because, if misapplied, estoppel may become a tool of injustice.

Private respondent, an unschooled farmer, in the mistaken belief that since he was merely
a tenant of the late Artemio Laurente Sr., his landlord, gave the summons to a Hipolito
Laurente, one of the surviving heirs of Artemio Sr., who did not do anything about the
summons. For failure to answer the complaint, private respondent was declared in
default.

He then filed a Motion for New Trial in the same court, but such was denied. He filed
before the RTC a Motion for Relief from Judgment. Again, the same court denied his
motion, hence he moved for reconsideration of the denial. In his Motion for
Reconsideration, he raised for the first time the RTC's lack of jurisdiction. This motion was
again denied.

Note that private respondent raised the issue of lack of jurisdiction, not when the case
was already on appeal, but when the case, was still before the RTC that ruled him in
default, denied his motion for new trial as well as for relief from judgment, and denied
likewise his two motions for reconsideration

The fundamental rule is that, the lack of jurisdiction of the court over an action cannot be
waived by the parties, or even cured by their silence, acquiescence or even by their
express consent. Further, a party may assail the jurisdiction of the court over the action
at any stage of the proceedings and even on appeal. The appellate court did not err in
saying that the RTC should have declared itself barren of jurisdiction over the action

Citing Javier v CA, the Court reiterated: Under the rules, it is the duty of the court to
dismiss an action 'whenever it appears that the court has no jurisdiction over the subject
matter.' (Sec. 2, Rule 9, Rules of Court)

FAUSTO V. MULTI AGRI-FOREST AND COMMUNITY DEVELOPMENT

COOPERATIVE, GR. NO. 213939, OCTOBER 12, 2016

LYLITH B. FAUSTO, JONATHAN FAUSTO, RICO ALVIA, ARSENIA TOCLOY,

LOURDES ADOLFO AND ANECITA MANCITA vs. MULTI AGRI-FOREST AND
COMMUNITY DEVELOPMENT COOPERATIVE (FORMERLY MAF CAMARINES SUR
EMPLOYEES COOPERATIVE, INC.)

(G.R.No. 213939, October 12, 2016)

Facts: Multi Agri-Forest and Community Development Cooperative4 (respondent) is a

registered credit cooperative wherein Lylith Fausto (Lylith), Jonathan Fausto (Jonathan),
Rico Alvia (Rico), Arsenia Tocloy (Arsenia), Lourdes Adolfo (Lourdes) and Anecita
Mancita (Anecita) (collectively, the petitioners) are active members.

On September 10, 1998, Lylith obtained a loan from the respondent in the amount of
P80,000.00, with due date on January 8, 1999.7 Subsequently, she secured another loan
in the amount of P50,000.00 which will fall due on March 14, 1999.8 Shortly thereafter,
she procured a third loan from the respondent also in the amount of P50,000.00. All of
the mentioned transactions were evidenced by separate promissory notes, with Anecita
and Lourdes signing as co-makers in the first and second loans, and Rico and Glicerio
Barce (Glicerio) in the third loan.

Similarly, on October 27, 1998, Jonathan obtained a loan from the respondent in the
amount of P60,000.00 to fall due on February 24, 1999, with Lylith and Glicerio as co-
makers. Thereafter, on December 10, 1998, he obtained a second loan in the amount of
P100,000.00, with Lylith and Arsenia as his co-makers. All five loans obtained by Lylith
and Jonathan were imposed with an interest of 2.3% per month, with surcharge of 2% in
case of default in payment of any installment due.

Lylith and Jonathan, however, failed to pay their loans despite repeated demands. Thus,
on December 12, 2000, the respondent, through its Acting Manager Ma. Lucila G. Nacario
(Nacario), filed five separate complaints for Collection of Sum of Money before the
Municipal Trial Court in Cities (MTCC) of Naga City against the petitioners

OLIVAREZ REALTY CORPORATION V. CASTILLO, GR. NO. 196251, JULY 9, 2014

Facts:

Castillo was the owner of a parcel of land covered by TCT 19972. The Philippine Tourism
Authority allegedly claimed ownership of the same parcel of land based on TCT 18493.

Castillo and Olivarez Realty Corporation, represented by Dr. Pablo Olivarez, entered into
a contract of conditional sale over the property. The details were as follows:

1. Under the deed of conditional sale, Castillo agreed to sell his property to Olivarez
Realty; with Olivarez Realty delivering the downpayment and the rest to be paid in 30
equal monthly installments every 8th of the month beginning in the month that the parties
would receive a decision voiding the PTA’s title to the property.

2. Under the same deed, Olivarez Realty will file the action against PTA with full
assistance of Castillo; and that should the petition be denied, Castillo shall reimburse all
the amounts paid by Olivarez Realty.

3. Under the same contract, Olivarez Realty undertook to pay the legitimate tenants of
the land disturbance compensation, while Castillo undertook to clear the land of the
tenants within 6 months from the signing of the deed; that should Castillo fail to clear the
land within 6 months, Olivarez Realty may suspend its monthly downpayment until the
tenants vacate the property.
4. The parties agreed that Olivarez Realty Corporation may immediately occupy the
property upon signing of the deed. Should the contract be cancelled, Olivarez Realty
Corporation agreed to return the property’s possession to Castillo and forfeit all the
improvements it may have introduced on the property.

Olivarez Realty failed to comply with the conditions, to wit: a) pay the full purchase price;
b) failed to file any action against PTA; c) failed to clear the land of the tenants nor paying
them disturbance compensation. For breaching the contract, Castillo prayed for
rescission of contract under Art. 1191 of Civil Code, plus damages.

In their defense, Olivarez Realty alleged that Castillo failed to fully assist in filing the action
against PTA; that Castillo failed to clear the property of the tenants within 6 months from
the signing of the deed. Thus, they had all the legal right to withhold the subsequent
payments to fully pay the purchase price.

Both RTC and CA ruled that Olivarez Realty breached the contract and ordered the
rescission of the sale plus damages.

HEIRS OF BAUTISTA V. LINDO, GR. NO. 208232, MARCH 10, 2014

Facts:

Alfredo R. Bautista (Bautista), petitioner’s predecessor, inherited in 1983 a free-patent

land located in Davao Oriental and covered by OCT No. (1572) P-6144.A few years later,
he subdivided the property and sold it to several vendees, herein respondents, via a
notarized deed of absolute sale dated May 30, 1991. Two months later, OCT No.(1572)
P-6144 was canceled and Transfer Certificates of Title (TCTs) were issued in favor of the
vendees.

On August 1994, Bautista filed a complaint for repurchase against respondents before
the RTC, anchoring his cause of action on Section 119 of Commonwealth Act No. (CA)
141, otherwise known as the “Public Land Act,” which reads:
“SECTION 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow, or
legal heirs, within a period of five years from the date of the conveyance.”

During the pendency of the action, Bautista died and was substituted by petitioner,
Efipania. Respondents, Sps. Lindo entered into a compromise agreement with
petitioners, whereby they agree to cede to Epifania 3,230 sq.m..portion of the property as
well as to waive, abandon, surrender, and withdraw all claims and counterclaims against
each other. RTC approve the compromise agreement on January 2011.

Other respondents, filed a Motion to Dismissed on February 2013 alleging lack of

jurisdiction of the RTC on the ground that the complaint failed to state the value of the
property sought to be recovered and alleges that the total value of the properties in issue
is only P16,500 pesos. RTC ruled in favor of the respondent dismissing the case.

Issue:

Whether or not the RTC erred in granting the motion for the dismissal of the case on the
ground of lack of jurisdiction over the subject matter.

Ratio:

Yes. Jurisdiction of courts is granted by the Constitution and pertinent laws. Jurisdiction
of RTCs, as may be relevant to the instant petition, is provided in Sec. 19 of BP 129.

Issue:

Whether the action filed by petitioners is one involving title to or possession of real
property or any interest therein or one incapable of pecuniary estimation.
Ratio:

The Court rules that the complaint to redeem a land subject of a free patent is a civil
action incapable of pecuniary estimation.

It is a well-settled rule that jurisdiction of the court is determined by the allegations in the
complaint and the character of the relief sought. In this regard, the Court, in Russell v.
Vestil, wrote that "in determining whether an action is one the subject matter of which is
not capable of pecuniary estimation this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is primarily for the
recovery of a sum of money, the claim is considered capable of pecuniary estimation, and
whether jurisdiction is in the municipal courts or in the RTCs would depend on the amount
of the claim." But where the basic issue is something other than the right to recover a sum
of money, where the money claim is purely incidental to, or a consequence of, the
principal relief sought, this Court has considered such actions as cases where the subject
of the litigation may not be estimated in terms of money, and, hence, are incapable of
pecuniary estimation.

TRAYVILLA V. SEJAS, GR. NO. 204970, FEBRUARY 1, 2016

An action for specific performance with prayer for reconveyance of a property was filed,
but the complaint did not allege the assessed value of the property. But the declaration in
the Amended Complaint stated that the property is valued at P6,000.00 based on the
handwritten document sued upon and the pleadings indicated that the property was
purchased for the price of P6,000.00. The relevance of the said alleged value of the
property was the subject that the SC discussed where it was

Issue: Whether or not the RTC has jurisdiction

Held: The action is one for specific performance. In other words, the aim is to secure the
claimed ownership and title to the property which qualified it as a real action.

Pursuant to Section 1, Rule 4 of the 1997 Rules of Civil Procedure, a real action is one
that affects title to or possession of real property, or an interest therein.
Since the action is a real action, petitioners should have observed the requirement under
A.M. No. 04-2-04-SC28 relative to declaring the fair market value of the property as stated
in the current tax declaration or zonal valuation of the Bureau of Internal Revenue (BIR).
Since no such allegation was made in the Amended Complaint, then the value of the
subject property as stated in the handwritten document sued upon and restated in the
Amended Complaint should be the basis for determining jurisdiction and the amount of
docket fees to be paid.

In the absence of the required declaration of the fair market value as stated in the current
tax declaration or zonal valuation of the property, it cannot be determined whether the
RTC or first level court has original and exclusive jurisdiction over the petitioners’ action,
since the jurisdiction of these courts is determined on the basis of the value of the
property.

Since the value of the subject property as stated in the Amended Complaint is just
P6,000.00, then the RTC did not have jurisdiction over petitioners' case in the first
instance; it should have dismissed Civil Case No. 4633-2K5. But it did not. In continuing
to take cognizance of the case, the trial court clearly committed grave abuse of discretion.

GARCIA

GOCHAN V. GOCHAN GR. NO. 146089 DECEMBER 13, 2001

FACTS:

Respondents were stockholders of the Felix Gochan and Sons Realty Corporation
and the Mactan Realty Development Corporation. Respondents offered to sell their
shares in the two corporations to the individual petitioners in consideration of the sum
of P200,000,000:00. Petitioners accepted and paid the said amount to respondents.

Respondents required individual petitioners to execute a promissory note. They

drafted the promissory note in his handwriting and had the same signed by the
 petitioners. Unbeknown to petitioners, the respondents inserted in the promissory
note a phrase that says, “said amount is in partial consideration of the sale."

Respondents filed a complaint against petitioners for specific performance and

damages alleging that the petitioners that offered to buy their shares of stock, in
consideration of P200M and multiple properties. Accordingly, respondents claimed
that they are entitled to the conveyance of the properties, in addition to the amount of
P200,000,000.00, which they acknowledge to have received from petitioners plus
damages.

Petitioners filed their answer, raising that the court is without jurisdiction because of
non-payment of the correct docket fees;

Trial court ruled in favor of the defendants. It cited that respondents paid the necessary
filing and docket fees of at least P165K.

MR denied. Petition for certiorari with CA dismissed. MR denied. Hence this petition.

ISSUE:

1. W/N the Court acquired jurisdiction over the case?

Held: NO. The rule is well-settled that the court acquires jurisdiction over any case only
upon the payment of the prescribed docket fees. In the case of Sun Insurance Office, Ltd.
(SIOL) v. Asuncion, this Court held that it is not simply the filing of the complaint or
appropriate initiatory pleading, but the payment of the prescribed docket fee that vests a
trial court with jurisdiction over the subject matter or nature of the action.

In the case of Sun Insurance, the SC ruled that in case the filing of the initiatory pleading
is not accompanied by payment of the docket fee, the court may allow payment of the fee
within a reasonable time but in no case beyond the applicable prescriptive period.
However, the liberal interpretation of the rules relating to the payment of docket fees as
applied in the case of Sun Insurance cannot apply to the instant case as respondents
have never demonstrated any willingness to abide by the rules and to pay the correct
docket fees. Instead, respondents have stubbornly insisted that the case they filed was
one for specific performance and damages and that they actually paid the correct docket
fees therefor at the time of the filing of the complaint.

2. What is the real nature of the case?

It is necessary to determine the true nature of the complaint in order to resolve the issue
of whether or not respondents paid the correct amount of docket fees therefor. In this
jurisdiction, the dictum adhered to is that the nature of an action is determined by the
allegations in the body of the pleading or complaint itself, rather than by its title or heading.
The caption of the complaint below was denominated as one for “specific performance
and damages.” The relief sought, however, is the conveyance or transfer of real property,
or ultimately, the execution of deeds of conveyance in their favor of the real properties
enumerated in the provisional memorandum of agreement. Under these circumstances,
the case below was actually a real action, affecting as it does title to or possession of real
property.

In the case at bar, therefore, the complaint filed with the trial court was in the nature of a
real action, although ostensibly denominated as one for specific performance.
Consequently, the basis for determining the correct docket fees shall be the assessed
value of the property, or the estimated value thereof as alleged by the claimant. Rule 141,
Section 7, of the Rules of Court, as amended by A.M. No. 00-2-01-SC, provides: in a real
action, the assessed value of the property, or if there is none, the estimated value thereof
shall be alleged by the claimant and shall be the basis in computing the fees.

WILMON AUTOSUPPLY CORP V. CA GR. NO. 97637 APRIL 10, 1992

Facts:

Wilmon was the lessee of a commercial building and bodegas standing on a registered
land owned in common by the Lacsons, Solinap, and Jaranilla. The leases were
embodied in deeds wherein one of the clauses provided for a reservation of rights in which
the seller has the right to encumber or sell the property provided that the transferee would
respect the lease of Wilmon. After the expiration of the lease period, the premises were
sold to Star Group Resources and Development.

Thereafter, the respondent filed against the petitioner, who stayed despite the expiration
of their lease contract, for unlawful detainer. The lessees refused to concede and even
impugned the right of the respondent to eject them. Petitioners filed a case in the RTC to
enforce their leasehold and pre-emptive rights, which include the declaration of the sale
null and void, their right of redemption, and to recover their two-month deposits against
the respondent in the dispute premises. Subsequently they filed a motion to dismiss the
ejectment case because of the case they filed with RTC.

ISSUE:

Whether or not an action of unlawful detainer filed in the MTC against a lessee grounded
on the expiration of the latter’s lease should be suspended by an action filed in the RTC
by the defendant lessee on the claim that he is entitled to a right of preemption of the
premises in question and wishes to have said right judicially enforced?

HELD:

NO. An ejectment suit cannot be suspended by an action filed in the RTC based on
tenant’s claim that his right of preemption was violated. The underlying reasons for the
this were that the actions in the RTC did not involve physical or de facto possession, and
on not a few occasions, that the case in the RTC was merely a ploy to delay disposition
of the ejectment proceeding, or that the issues presented in the former could quite as
easily be set up as defenses in the ejectment action and there resolved

It has also been decided in a long line of cases that cases wherein ownership is the issue
does not a bar or suspend ejectment cases.

The Court however stressed that 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 MTC
nevertheless have the undoubted competence to resolve “the issue of ownership x x only
to determine the issue of possession”

MONTEBLANCO V. HINIGIRAN SUGAR PLANTATION, GR. NO. L-43550,

NOVEMBER 27, 1936
Facts:

On September 18, 1924, a case was instituted in the justice of the peace court of
Hinigaran. The plaintiff amended his complaint praying that the defendant be ordered to
return to him the land described therein, having alleged in his former complaint that said
defendant and its co-defendants Siguenza and Coruña have been detaining it since
August 1924.

The justice of the peace court of Hinigaran, considering that the trial of the case devolved
upon the Court of First Instance of Occidental Negros, forwarded it to the latter court. The
Court of First Instance remanded the case to the justice of the peace court with
instructions to the effect that if it was of the opinion that the case did not come within its
jurisdiction it should issue an order to that effect and later inform the parties thereof so
that they might bring the action they deemed proper.

The justice of the peace court rendered its decision dismissing the case notifying the
parties that they could bring the action or actions they deemed proper in the competent
court. The plaintiff appealed from this decision to the Court of First Instance of Occidental
Negros which, after due hearing, again ordered the case remanded to the justice of the
peace court of Hinigaran, directing said court to try it and pass upon the questions raised
therein on the ground that it merely involved forcible entry and detainer which is of the
nature of those coming under its exclusive jurisdiction.

The justice of the peace court rendered its judgment which was declared null and void by
the lower court on the ground that said justice of the peace court had no jurisdiction to
render it.

Issue:

Whether or not the court erred in declaring the judgment of the justice of the peace court
of Hinigaran null and void.
Held:

No. It is known that under the law (Acts Nos. 3881 and 4115), justice of the peace courts
alone have jurisdiction in cases of forcible entry and detainer, when the action arising
therefrom is commenced within one year from the time said acts took place. It appears
from the complaint which gave rise to this case in the justice of the peace court of
Hinigaran that the detainer took place in the month of August 1924 and the complaint was
filed in the following month, on September 18, 1924, scarcely a month after the cause of
action had arisen.

Had the complaint been filed after the lapse of one year from the month of August 1924,
the justice of the peace court of Hinigaran would not have had jurisdiction to try the case.
When the case was remanded to it on June 15, 1925, the justice of the peace court still
had eleven months and some days of the which conferred, jurisdiction upon it, to try the
case, excluding, of course, from said computation the time it took the case to come and
go from said court to the Court of First Instance and from the latter to the former.

In order that justice of the peace courts in which a case for forcible entry and detainer is
brought may have jurisdiction to decide such case they must decide it within the shortest
time practicable, if possible within the year in which they have jurisdiction or, at most,
within three months after the expiration of said year, if the action is commenced on the
last days thereof which is the time when, as already stated, they have jurisdiction.

The purpose of the law in fixing at one year the period within which actions for forcible
entry and detainer may be brought, is undoubtedly to require cases of said nature to be
tried as soon as possible and decided promptly.

The parties and the justice of the peace court allowed not only the said eleven months
and some days but nearly about eight years to elapse without making any effort or taking
any action to terminate the case. With this inaction or rather neglect on their part, they
made it understood that they abandoned the case, particularly the plaintiff, being no
longer interested in the result thereof. There was necessity for the justice of the peace
court to revive it by ordering the hearing thereof.

For purposes of the law, the case had died in the justice of the peace court one year after
it had been remanded thereto by the Court of First Instance, with no step having been
taken towards its termination in one way or another. For the foregoing reasons, and not
for those stated in the order appealed from, said order is affirmed.

GERMAN MANAGEMENT AND SERVICES V. CA, GR. NO. 76217, SEPTEMBER 14,
1989

FACTS:
Spouses Jose are residents of Pennsylvania, Philadelphia, USA are owners of the land
situated in sitio Inarawan, San Isidro, Antipolo, Rizal. The spouses Jose executed a
special power of attorney authorizing petitioner German Management Services to develop
their property. They have already acquired the proper permits to do so but they discovered
that the land was occupied by the respondent with 20 other farmers (members of the
Concerned of Farmer’s Association.) These farmers have occupied the land for the last
twelve to fifteen years prior to the issuance of the permits and they already have their
crops all over the property. In short, they are in actual possession of the land.
Petitioners tried to forcibly drive the farmers away and; demolish and bulldoze their crops
and property. The respondents filed in CFI because they were deprived of their property
without due process of law by trespassing, demolishing and bulldozing their crops and
property situated in the land. CFI and RTC denied it but CA reversed the decision.
Petitioners tried to appeal the decision in CA but were denied thus this appeal
ISSUE:
W/N private respondents are entitled to file a forcible entry case against petitioner?

HELD:

Yes.The Court of Appeals need not require petitioner to file an answer for due
process to exist. The comment filed by petitioner on February 26, 1986 has sufficiently
addressed the issues presented in the petition for review filed by private respondents
before the Court of Appeals. Having heard both parties, the Appellate Court need not
await or require any other additional pleading. Moreover, the fact that petitioner was heard
by the Court of Appeals on its motion for reconsideration negates any violation of due
process.

Notwithstanding petitioner’s claim that it was duly authorized by the owners to

develop the subject property, private respondents, as actual possessors, can commence
a forcible entry case against petitioner because ownership is not in issue. Forcible entry
is merely a quieting process and never determines the actual title to an estate. Title is not
involved.

Although admittedly petitioner may validly claim ownership based on the muniments
of title it presented, such evidence does not responsively address the issue of prior actual
possession raised in a forcible entry case. It must be stated that regardless of the actual
condition of the title to the property, the party in peaceable quiet possession shall not be
turned out by a strong hand, violence or terror. Thus, a party who can prove prior
possession can recover such possession even against the owner himself. Whatever may
be the character of his prior possession, if he has in his favor priority in time, he has the
security that entitles him to remain on the property until he is lawfully ejected by a person
having a better right by accion publiciana or accion reivindicatoria.

Both the Municipal Trial Court and the Regional Trial Court have rationalized
petitioner’s drastic action of bulldozing and destroying the crops of private respondents
on the basis of the doctrine of selfhelp enunciated in Article 429 of the New Civil Code.
Such justification is unavailing because the doctrine of self-help can only be exercised at
the time of actual or threatened dispossession which is absent in the case at bar. When
possession has already been lost, the owner must resort to judicial process for the
recovery of property. This is clear from Article 536 of the Civil Code which states, “(I)n no
case may possession be acquired through force or intimidation as long as there is a
possessor who objects thereto. He who believes that he has an action or right to deprive
another of the holding of a thing, must invoke the aid of the competent court, if the holder
should refuse to deliver the thing.”

SAN MIGUEL PROPERTIES V. SECRETARY HERNANDO B. PEREZ, GR. NO.

166836, SEPTEMBER 4, 2013

FACTS:

Petitioner San Miguel Properties Inc. purchased from B.F. Homes, Inc. 2,130 residential
lots situated in its subdivision BF Homes Parañaque. The transactions were embodied in
three separate deeds of sale. The TCTs covering the lots bought under the first and
second deeds were fully delivered to San Miguel Properties, but 20 TCTs covering 20 of
the 41 parcels of land purchased under the third deed of sale, were not delivered to San
Miguel Properties. On its part, BF Homes claimed that it withheld the delivery of the 20
TCTs for parcels of land purchased under the third deed of sale because Atty. Orendain
had ceased to be its rehabilitation receiver at the time of the transactions after being
meanwhile replaced as receiver by FBO Network Management, Inc. on May 17, 1989
pursuant to an order from the SEC. BF Homes refused to deliver the 20 TCTs despite
demands. Thus, San Miguel Properties filed a complaint-affidavit in the Office of the City
Prosecutor of Las Piñas charging respondent directors and officers of BF Homes with
non-delivery of titles in violation of Section 25, in relation to Section 39, both of
Presidential Decree No. 957. At the same time, San Miguel Properties sued BF Homes
for specific performance in the HLURB praying to compel BF Homes to release the 20
TCTs in its favor. San Miguel Properties filed a motion to suspend proceedings in the
OCP Las Piñas, citing the pendency of BF Homes’ receivership case in the SEC. In its
comment/opposition, BF Homes opposed the motion to suspend. In the meantime,
however, the SEC terminated BF Homes’ receivership on September 12, 2000, prompting
San Miguel Properties to file on October 27, 2000 a reply to BF Homes’
comment/opposition coupled with a motion to withdraw the sought suspension of
proceedings due to the intervening termination of the receivership. The OCP Las Piñas
rendered its resolution, dismissing San Miguel Properties’ criminal complaint for violation
of Presidential Decree No. 957 on several grounds, one of which was that there existed
a prejudicial question necessitating the suspension of the criminal action until after the
issue on the liability of the distressed BF Homes was first determined by the SEC en banc
or by the HLURB.

ISSUE:

Whether the HLURB administrative case brought to compel the delivery of the TCTs could
be a reason to suspend the proceedings on the criminal complaint for the violation of
Section 25 of Presidential Decree No. 957 on the ground of a prejudicial question

HELD:

YES. BF Homes’ posture that the administrative case for specific performance in the
HLURB posed a prejudicial question that must first be determined before the criminal
case for violation of Section 25 of Presidential Decree No. 957 could be resolved is
correct. A prejudicial question is understood in law to be that which arises in a case the
resolution of which is a logical antecedent of the issue involved in the criminal case, and
the cognizance of which pertains to another tribunal. It is determinative of the criminal
case, but the jurisdiction to try and resolve it is lodged in another court or tribunal. It is
based on a fact distinct and separate from the crime but is so intimately connected with
the crime that it determines the guilt or innocence of the accused. The rationale behind
the principle of prejudicial question is to avoid conflicting decisions. The essential
elements of a prejudicial question are provided in Section 7, Rule 111 of the Rules of
Court, to wit: (a) the previously instituted civil action involves an issue similar or intimately
related to the issue raised in the subsequent criminal action, and (b) the resolution of such
issue determines whether or not the criminal action may proceed.

The determination of whether the proceedings ought to be suspended because of a

prejudicial question rested on whether the facts and issues raised in the pleadings in the
specific performance case were so related with the issues raised in the criminal complaint
for the violation of Presidential Decree No. 957, such that the resolution of the issues in
the former would be determinative of the question of guilt in the criminal case. An
examination of the nature of the two cases involved is thus necessary.

An action for specific performance is the remedy to demand the exact performance
of a contract in the specific form in which it was made, or according to the precise terms
agreed upon by a party bound to fulfill it. Evidently, before the remedy of specific
perfor-mance is availed of, there must first be a breach of the contract. The remedy has
its roots in Article 1191 of the Civil Code, which reads: Article 1191. The power to rescind
obligations is implied in reciprocal ones, in case one of the obligors should not comply
with what is incumbent upon him. The injured party may choose between the fulfillment
and the rescission of the obligation, with the payment of damages in either case. He may
also seek rescission, even after he has chosen fulfillment, if the latter should become
impossible.

The injured party may choose between specific performance or rescission with
damages. As presently worded, Article 1191 speaks of the remedy of rescission in
reciprocal obligations within the context of Article 1124 of the former Civil Code which
used the term resolution. The remedy of resolution applied only to reciprocal obligations,
such that a party’s breach of the contract equated to a tacit resolutory condition that
entitled the injured party to rescission. The present article, as in the former one,
contemplates alternative remedies for the injured party who is granted the option to
pursue, as principal actions, either the rescission or the specific performance of the
obligation, with payment of damages in either case.

Decree No. 957 is a law that regulates the sale of subdivision lots and condominiums
in view of the increasing number of incidents wherein “real estate subdivision owners,
developers, operators, and/or sellers have reneged on their representations and
obligations to provide and maintain properly” the basic requirements and amenities, as
well as of reports of alarming magnitude of swindling and fraudulent manipulations
perpetrated by unscrupulous subdivision and condominium sellers and operators, such
as failure to deliver titles to the buyers or titles free from liens and encumbrances.
Presidential Decree No. 957 authorizes the suspension and revocation of the registration
and license of the real estate subdivision owners, developers, operators, and/or sellers in
certain instances, as well as provides the procedure to be observed in such instances; it
prescribes administrative fines and other penalties in case of violation of, or non-
compliance with its provisions.

Worthy to note at this juncture is that a prejudicial question need not conclusively
resolve the guilt or innocence of the accused. It is enough for the prejudicial question to
simply test the sufficiency of the allegations in the information in order to sustain the
further prosecution of the criminal case. A party who raises a prejudicial question is
deemed to have hypothetically admitted that all the essential elements of the crime have
been adequately alleged in the information, considering that the Prosecution has not yet
presented a single piece of evidence on the indictment or may not have rested its case.
A challenge to the allegations in the information on the ground of prejudicial question is
in effect a question on the merits of the criminal charge through a non-criminal suit.

The action for specific performance, although civil in nature, could be brought only in
the HLURB. This situation conforms to the doctrine of primary jurisdiction. There has been
of late a proliferation of administrative agencies, mostly regulatory in function. It is in favor
of these agencies that the doctrine of primary jurisdiction is frequently invoked, not to
defeat the resort to the judicial adjudication of controversies but to rely on the expertise,
specialized skills, and knowledge of such agencies in their resolution. The Court has
observed that one thrust of the proliferation is that the interpretation of contracts and the
determination of private rights under contracts are no longer a uniquely judicial function
exercisable only by the regular courts.

The doctrine of primary jurisdiction has been increasingly called into play on matters
demanding the special competence of administrative agencies even if such matters are
at the same time within the jurisdiction of the courts. A case that requires for its
determination the expertise, specialized skills, and knowledge of some administrative
board or commission because it involves technical matters or intricate questions of fact,
relief must first be obtained in an appropriate administrative proceeding before a remedy
will be supplied by the courts although the matter comes within the jurisdiction of the
courts. The application of the doctrine does not call for the dismissal of the case in the
court but only for its suspension until after the matters within the competence of the
administrative body are threshed out and determined.

To accord with the doctrine of primary jurisdiction, the courts cannot and will not
determine a controversy involving a question within the competence of an administrative
tribunal, the controversy having been so placed within the special competence of the
administrative tribunal under a regulatory scheme. In that instance, the judicial process is
suspended pending referral to the administrative body for its view on the matter in dispute.
Consequently, if the courts cannot resolve a question that is within the legal competence
of an administrative body prior to the resolution of that question by the latter, especially
where the question demands the exercise of sound administrative discretion requiring the
special knowledge, experience, and services of the administrative agency to ascertain
technical and intricate matters of fact, and a uniformity of ruling is essential to comply with
the purposes of the regulatory statute administered, suspension or dismissal of the action
is proper.

It is not tenable for San Miguel Properties to argue that the character of a violation of
Section 25 of Presidential Decree No. 957 as malum prohibitum, by which criminal liability
attached to BF Homes’ directors and officers by the mere failure to deliver the TCTs,
already rendered the suspension unsustainable. The mere fact that an act or omission
was malum prohibitum did not do away with the initiative inherent in every court to avoid
an absurd result by means of rendering a reasonable interpretation and application of the
procedural law. Indeed, the procedural law must always be given a reasonable
construction to preclude absurdity in its application. Hence, a literal application of the
principle governing prejudicial questions is to be eschewed if such application would
produce unjust and absurd results or unreasonable consequences.

PORTILLO V. RODULF LIETZ, GR. NO. 196539, OCTOBER 10, 2012

Facts:

Marietta Portillo was promoted to Sales Representative and received a corresponding

increase in basic monthly salary sales and sales quota on her 10th year with Lietz, Inc.
In this regard, Portillo signed another letter agreement containing a “Goodwill Clause.”

Three years thereafter, Portillo resigned from her employment and demanded from Lietz
Inc. for the payment of her remaining salaries and commissions not paid to her upon such
resignation. Later, within the 3-year prohibitory period, Lietz learned that Portillo was hired
by Ed Keller Philippines, a direct competitor of Lietz, as head of its Pharma Raw Material
Department.

Portillo's demands from Lietz, Inc. for the payment of her remaining salaries and
commissions went unheeded. Lietz, Inc. gave Portillo the run around, on the pretext that
her salaries and commissions were still being computed. She filed a complaint with the
NLRC for non-payment of 1½ months’ salary, 2 months’ commission, 13th month pay,
plus moral, exemplary and actual damages and attorney’s fees.

In its position paper, Lietz admitted liability for Portillo’s money claims. However, Lietz
raised the defense of legal compensation, stating that Portillo’s money claims should be
offset against her liability to Lietz for liquidated damages for Portillo’s breach of the
“Goodwill Clause” in the employment contract when she became employed with Ed
Keller.

HELD:

Section 1, Rule 45 of the Rules of Court expressly provides that a party desiring to
appeal by certiorari from a judgment or final order or resolution of the Court of Appeals
may file a verified petition for review on certiorari. Considering that, in this case, appeal
by certiorari was available to Portillo, that available recourse foreclosed her right to resort
to a special civil action for certiorari, a limited form of review and a remedy of last
recourse, which lies only where there is no appeal or plain, speedy and adequate remedy
in the ordinary course of law.

A petition for review on certiorari under Rule 45 and a petition for certiorari under
Rule 65 are mutually exclusive remedies. Certiorari cannot co-exist with an appeal or any
other adequate remedy. If a petition for review is available, even prescribed, the nature
of the questions of law intended to be raised on appeal is of no consequence. It may well
be that those questions of law will treat exclusively of whether or not the judgment or final
order was rendered without or in excess of jurisdiction, or with grave abuse of discretion.
This is immaterial. The remedy is appeal, not certiorari as a special civil action.

DAI-CHI ELECTRONICS MANUFACTURING CORP. V. VILLARAMA,JR., 1994

FACTS:

On July 29, 1993, Dai-Chi filed a complaint for damages with the Pasig RTC, Br 156,
Pasig against Limjuco, a former employee. Dai-Chi alleged that Limjuco violated
paragraph five of their Contract of Employment, which provides: “That for a period of two
(2) years after termination of service from EMPLOYER, EMPLOYEE shall not in any
manner be connected, and/or employed, be a consultant and/or be an informative body
directly or indirectly, with any business firm, entity or undertaking engaged in a business
similar to or in competition with that of the EMPLOYER.”
Dai-Chi claimed that Limjuco became an employee of Angel Sound Philippines
Corporation, a corporation engaged in the same line of business as that of Dai-Chi, within
two years from January 30, 1992, the date of Limjuco's resignation. Dai-Chi further
alleged that Limjuco is holding the position of Head of the Material Management Control
Department, the same position he held while in the employ of Dai-Chi.

Dai-Chi sought to recover liquidated damages in the amount of P100,000.00, as expressly

provided for in paragraph 7of the contract.

RTC ruled that it had no jurisdiction over the subject matter of the controversy because
the complaint was for damages arising from employer-employee relations. Citing Article
217(4) of the Labor Code of the Philippines, as amended by R.A. No. 6715, it stated that
it is the Labor Arbiter which had original and exclusive jurisdiction over the subject matter
of the case.

Dai-Chi asks for the reversal of RTC's dismissal of the civil case, contending that the case
is cognizable by the regular courts. It argues that the cause of action did not arise from
employer-employee relations, even though the claim is based on a provision in the
employment contract.

ISSUE:

W/N RTC has jurisdiction over the present case.

HELD:

Yes. Petitioner does not ask for any relief under the Labor Code of the Philippines. It
seeks to recover damages agreed upon in the contract as redress for private respondent’s
breach of his contractual obligation to its damage and prejudice. Such cause of action is
within the realm of Civil Law, and jurisdiction over the controversy belongs to the regular
courts. More so when we consider that the stipulation refers to the post-employment
relations of the parties.

San Miguel was cited in Ocheda v. Court of Appeals, where the court held that when
the cause of action is based on a quasi-delict or tort, which has no reasonable causal
connection with any of the claims provided for in Article 217, jurisdiction over the action
is with the regular courts.
YUSEN AIR AND SEA SERVICES PHILS INC. V. VILLAMOR, 2005

FACTS

Petitioner hired respondent Villamor as branch manager in its Cebu Office. Later,
petitioner reclassified respondent’s position to that of Division Manager, which position
respondent held until his resignation on February 1, 2002. Immediately after his
resignation, respondent started working for Aspac International, a corporation engaged
in the same line of business as that of petitioner.

Thereafter, petitioner Yusen Air filed against respondent a complaint for injunction and
damages with prayer for a temporary restraining order in the RTC of Parañaque City, on
the ground that respondent violated the provision in his contract that he should not affiliate
himself with competitors for a period of two years from his resignation or separation from
petitioner company.

Respondent also filed against petitioner a case for illegal dismissal before the NLRC.
Instead of filing an answer to the case in the RTC, respondent moved for the dismissal of
said case, arguing that the RTC has no jurisdiction over the subject matter of said case
because an employer-employee relationship is involved.

Petitioner contends that its cause of action did not arise from employer-employee
relations even if the claim therein is based on a provision in its handbook.

ISSUE

W/N the RTC has jurisdiction over the present controversy.

HELD:
 YES. It is settled that these injunctive reliefs are preservative remedies for the
protection of substantive rights and interests. Injunction is not a cause of action in itself
but merely a provisional remedy, an adjunct to a main suit. When the act sought to be
enjoined ha[s] become fait accompli, only the prayer for provisional remedy should be
denied. However, the trial court should still proceed with the determination of the principal
action so that an adjudication of the rights of the parties can be had.

Jurisprudence has evolved the rule that claims for damages under paragraph 4 of
Article 217, to be cognizable by the Labor Arbiter, must have a reasonable causal
connection with any of the claims provided for in that article. Only if there is such a
connection with the other claims can a claim for damages be considered as arising from
employer-employee relations.

It is basic that jurisdiction over the subject matter is determined upon the allegations
made in the complaint, irrespective of whether or not the plaintiff is entitled to recover
upon the claim asserted therein, which is a matter resolved only after and as a result of a
trial. Neither can jurisdiction of a court be made to depend upon the defenses made by a
defendant in his answer or motion to dismiss. If such were the rule, the question of
jurisdiction would depend almost entirely upon the defendant.

SINGAPORE AIRLINES LTD., V. PANO, 1983

FACTS:

Carlos E. Cruz was offered employment Engineer Officer with the opportunity to
undergo a B-707 I conversion training course requiring him to enter into a bond with
Singapore Airlines Limited for 5 years. Claiming that Cruz had applied for leave without
pay and had gone on leave without approval of the application during the second year,
SIA filed suit for damages against Cruz and his surety, Villanueva, for violation of the
terms and conditions . The RTC dismissed the complaint on the ground oflack of
jurisdiction

ISSUE:

W/N properly cognizable by Courts of justice and not by the Labor Arbiters of the
National Labor Relations Commission
HELD:

YES. Upon the facts and issues involved, jurisdiction over the present controversy
must be held to belong to the civil Courts. While seemingly petitioner’s claim for damages
arises from employer-employee relations, and the latest amendment to Article 217 of the
Labor Code under PD No. 1691 and BP Blg. 130 provides that all other claims arising
from employer-employee relationship are cognizable by Labor Arbiters, in essence,
petitioner’s claim for damages is grounded on the “wanton failure and refusal” without just
cause of private respondent Cruz to report for duty despite repeated notices served upon
him of the disapproval of his application for leave of absence without pay. This, coupled
with the further averment that Cruz “maliciously and with bad faith” violated the terms and
conditions of the conversion training course agreement to the damage of petitioner
removes the present controversy from the coverage of the Labor Code and brings it within
the purview of Civil Law.

Stated differently, petitioner seeks protection under the civil laws and claims no
benefits under the Labor Code. The primary relief sought is for liquidated damages for
breach of a contractual obligation. The other items demanded are not labor benefits
demanded by workers generally taken cognizance of in labor disputes, such as payment
of wages, overtime compensation or separation pay. The items claimed are the natural
consequences flowing from breach of an obligation, intrinsically a civil dispute.

BF CORPORATION V. WERDENBERG INTERNATIONAL CORP, 2015

FACTS:

BF Corporation and respondent Shangri-La Properties, Inc. entered into the 1st
agreement whereby Shang engaged BF to construct the main structure of the EDSA
Plaza Project – the EDSA Shangri-La Mall – in Mandaluyong City.

While the construction work was in progress Shang once again hired BF for the expansion
of the project, the 2nd agreement. BF incurred delay in the construction work that SPI
considered as serious and substantial. BF contended that they had faithfully complied
with the first agreement until a fire broke out on damaging phase 1 of the project, Hence
SPI proposed the renegotiation of the agreement between them.

Parties entered into another agreement named “Agreement for the Execution of Builders
Work for the EDSA Plaza Project” (3rd agreement) that would cover the construction work
on said project until its eventual completion.
BF filed with the RTC of Pasig a complaint for the collection of the balance due under the
construction agreement. Named Defendants therein were Shang and members of its
board of directors – A. Ramos, Colayco, Obles, Lanuza Jr., Licauco&B.Ramos. Shang
and its co-defendants filed a motion to suspend proceedings instead of filing an answer.

Motion was anchored on the defendants allegation that the formal trade contract of the
the construction project provided for a clause requiring prior resort to arbitration before
judicial intervention.

BF opposed said motion stating that there was no formal contract between the parties
although they entered into an agreement. They emphasized that the agreement did not
provide for an arbitration thus cannot deprive the court of its jurisdiction.

Shang insisted that there was an arbitration clause in the existing contract between them.
It alleged that the suspension would not deprive the court of its jurisdiction and would
expedite the settlement proceedings rather than delay it.

In a rejoinder, BF reiterated that there was no arbitration clause in the contract bewtween
the parties. It averred that if there was an arbitration clause, suspension of the
proceedings was no longer proper and that defendants should be declared in default for
failure to answer within the reglementary period.

The RTC found that the arbitration clause did exist, however the lower court denied
motion to suspend proceedings and ruled in favor of BF.

Shang filed a motion for reconsideration but was denied because of lack of merit and
directed the other defendants to file their responsive pleading within the reglementary
period. Instead of filing an answer to the complaint, SPI filed a petition for Certiorari under
Rule 65 before the Court of appeals.

The Court of Appeals granted the petition and annulled and set aside the orders and
stayed the proceedings in the lower court. Hence, this petition.
ISSUE:

W/N the parties entered into an arbitrary agreement

HELD:

YES. Contracts constitute the law between the parties, and they are bound by its
stipulations. For as long as they are not contrary to law, morals, good customs, public
order, or public policy, the contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient.

The liability for liquidated damages is governed by Articles 2226 to 2228 of the Civil
Code, where the parties to a contract are allowed to stipulate on liquidated damages to
be paid in case of breach. It is attached to an obligation in order to ensure performance
and has a double function: (1) to provide for liquidated damages, and (2) to strengthen
the coercive force of the obligation by the threat of greater responsibility in the event of
breach. The amount agreed upon answers for damages suffered by the owner due to
delays in the completion of the project.

REPUBLIC V. SANDIGANBAYAN AND MACARIO ASISTIO, JR., 200 SCRA 667

FACTS:

In a Joint Letter-Complaint to the Ombudsman dated January 8,1989, Messrs.

Arnel Blancaflor and Rodolfo Santos, residents of Kalookan City, charged respondent
Macario Asistio, Jr., who is the incumbent Mayor of Kalookan City, with having violated
the Anti-Graft and Corrupt Practices Act (R.A. 3019).

In the said Complaint, they alleged that during his incumbency as Kalookan City
Mayor, respondent Asistio acquired wealth amounting to P17,264,722.90, which he
deposited in his personal account in the Republic Planters Bank, Sangandaan Branch,
Kalookan City. In support of their allegations, they attached the original copies of the bank
deposits and receipts which indicated the various sums deposited within the three-year
period and which had been machine validated. However, said amount was not reflected
in his SALN. The Preliminary Investigation was conducted by Special Prosecution Officer
Margarito P. Gervacio, Jr., before whom authenticated xerox copies of the original ledger
cards in the name of respondent Macario Asistio, Jr. were produced and presented by
the officer-in-charge of the Republic Planters Bank, Sangandaan Branch, Kalookan City.

ISSUE:

W/N the Sandiganbayan is the proper court to try the subject of the case.

RULING:

NO. In the light of the foreging pronouncements, there is no doubt that the power
of the present Special Prosecutor to conduct preliminary investigation and to prosecute
is subject to the following limitations: (a) it extends only to criminal cases within the
jurisdiction of the Sandiganbayan; and (b) the same may be exercised only by authority
of the Ombudsman.

The rule is settled that forfeiture proceedings are actions in remand, therefore, civil
in nature. Parenthetically, considering the limited authority of the present Special
Prosecutor, he is not allowed to file and prosecute forfeiture cases provided for under
Republic Act No. 1379 even if the same falls within the jurisdiction of the Sandiganbayan.

Nonetheless, while we do not discount the authority of the Ombudsman, we believe

and so hold that the exercise of his correlative powers to both investigate and initiate the
proper action for the recovery of ill-gotten and/or unexplained wealth is restricted only to
cases for the recovery of ill-gotten and/or unexplained wealth which were amassed after
February 25, 1986. Prior to said date, the Ombudsman is without authority to initiate such
forfeiture proceedings. The court uphold his authority to investigate cases for the forfeiture
or recovery of such ill-gotten and/or unexplained wealth amassed even before the
aforementioned date, pursuant to his general investigatory power under Section 15(1) of
Republic Act No. 6770.
 In the case at bar, the alleged unexplained wealth of respondent Macario Asistio, Jr.
was supposed to have been acquired from 1981 to 1983. Verily, the Ombudsman, like
the Special Prosecutor, is without authority to initiate and file the petition for forfeiture
against respondent Asistio.

It is our considered opinion, therefore, that in cases of unlawfully acquired wealth

amassed before February 25, 1986, as is the situation obtaining in the case at bar, it is
the Solicitor General who should file the petition for forfeiture. The reason is manifestly
supplied by an analysis of the interplay of antecedent legislation.

The Court further ruled that the authority restored to the then Tanodbayan to file
informations for cases cognizable by the Sandiganbayan does not include the filing of a
petition for forfeiture. The Solicitor General was, therefore, acting within the scope of his
authority when he filed the petition for forfeiture before the Sandiganbayan.

REPUBLIC V. SANDIGANBAYAN AND MARCOS, GR. NO. 152154, NOVEMBER 18,

2003

FACTS:

Respondents sought the reconsideration of the court’s decision which ordered the
forfeiture in favor of the Republic of the Philippines of the Swiss deposits in escrow at the
PNB. Respondent Imelda Marcos, in her motion for reconsideration, asks this Court to
set aside the aforesaid decision. Respondents alleged that a forfeiture proceedings under
RA. 1379, in relation to the executive orders are criminal/penal in nature, hence,
respondent has all the rights in favor of the accused under the constitution. Further, they
alleged that a summary judgment cannot be rendered in forfeiture proceedings.

ISSUE:

W/N the allegations of respondent is correct.

HELD:

No. The issue of the propriety of summary judgment was painstakingly discussed and
settled in our July 15, 2003 decision: A summary judgment is one granted upon motion
of a party for an expeditious settlement of the case, it appearing from the pleadings,
depositions, admissions and affidavits that there are no important questions or issues of
fact posed and, therefore, the movant is entitled to a judgment as a matter of law. A motion
for summary judgment is premised on the assumption that the issues presented need not
be tried either because these are patently devoid of substance or that there is no genuine
issue as to any pertinent fact. It is a method sanctioned by the Rules of Court for the
prompt disposition of a civil action where there exists no serious controversy. Summary
judgment is a procedural devise for the prompt disposition of actions in which the
pleadings raise only a legal issue, not a genuine issue as to any material fact.

A careful study of the provisions of RA 1379 readily discloses that the forfeiture
proceedings in the Sandiganbayan did not violate the substantive rights of respondent
Marcoses. These proceedings are civil in nature, contrary to the claim of the Marcoses
that it is penal in character.

In Almeda, Sr., et al. vs. Perez, et al., the court suggested a test to determine whether
the proceeding for forfeiture is civil or criminal. Forfeiture proceedings may be either civil
or criminal in nature, and may be in rem or in personam. If they are under a statute such
that if an indictment is presented the forfeiture can be included in the criminal case they
are criminal in nature, although they may be civil in form; and where it must be gathered
from the statute that the action is meant to be criminal in its nature it cannot be considered
as civil. If, however, the proceeding does not involve the conviction of the wrongdoer for
the offense charged the proceeding is of a civil nature; and under statutes which
specifically so provide, where the act or omission for which the forfeiture is imposed is not
also a misdemeanor, such forfeiture may be sued for and recovered in a civil action. The
rule is settled that forfeiture proceedings are actions in remand therefore civil in nature.

LEDESMA V. CA, GR. NO. 96914, JULY 23, 1992

Facts:

Petitioner Cecilia U. Ledesma is the owner-lessor of an apartment building. Two units

were leased by respondent Jose T. Dizon.
Said lease was originally covered by written contracts and except for the rates and
duration, the terms and conditions of said contracts were impliedly renewed on a ‘month
to month’ basis. One of the terms of the lease, that of monthly payments, was violated by
respondent.

Upon failure of respondent to honor the demand letters, petitioner referred the matter to
the Barangay for conciliation which eventually issued a certification to file action.
Petitioner was assisted by her son, Raymond U. Ledesma during the Barangay
proceeding as she was suffering from recurring psychological ailments as can be seen
from prescription and receipts by her psychiatrist.

Due to the stubborn refusal of the respondent to vacate the premises, petitioner was
constrained to retain the services of a lawyer to initiate the ejectment proceeding.

MTC ordered respondent to vacate. RTC affirmed the MTC.

Respondent however found favor in the CA because of lack of cause of action. CA held
that petitioner failed compliance with Sections 6 and 9 of PD 1508.

Petitioner submits that said issue, not having been raised by respondent in the court
below cannot be raised for the first time on appeal.

Issue:

W/N there is non-compliance with Sections 6 and 9 of PD 1508.

HELD:

NO. The Court do not agree with petitioner that the issue of non-compliance with
Sections 6 and 9 of P.D. 1508 was raised only for the first time in the Court of Appeals.
When private respondent stated that he was never summoned or subpoenaed by the
Barangay Chairman, he, in effect, was stating that since he was never summoned, he
could not appear in person for the needed confrontation of the parties before the Lupon
Chairman for conciliation and/or amicable settlement. Without the mandatory personal
confrontation, no complaint could be filed with the MTC. Private respondent’s allegation
in his Answer that he was never summoned or subpoenaed by the Barangay Chairman;
that plaintiff has no cause of action against him; and that the certification to file action was
improperly issued in view of the foregoing allegations thereby resulting in non-compliance
with the mandatory requirements of P.D. No. 1508, as stated in paragraph 8 of the Answer
are in substantial compliance with the raising of said issues and/or objections in the court
below.
 Petitioner tries to show that her failure to personally appear before the Barangay
Chairman was because of her recurring psychological ailments. But for the entire year of
1988, there is no indication at all that petitioner went to see her psychiatrist for
consultation. The only conclusion is that 1988 was a lucid interval for petitioner. There
was, therefore, no excuse then for her non-appearance at the Lupon Chairman’s office.

Petitioner’s non-compliance with Secs. 6 and 9 of P.D. 1508 legally barred her from
pursuing the ejectment case in the MTC of Manila. Having arrived at this conclusion, there
is no need for Us to discuss the other issues involved.

MALIGAYA

Miguel v Montanez,
G.R. No. 191336,
January 25, 2012

Doctrine: If the amicable settlement is repudiated by one party, either

expressly or impliedly, the other party has two options, namely, to enforce
the compromise in accordance with the Local Government Code or Rules of
Court as the case may be, or to consider it rescinded and insist upon his
original demand. This is in accord with Article 2041 of the Civil Code

Facts:

Respondent Jerry Montanez (Montanez) secured a loan of P143,864.00,

payable in one (1) year, or until February 1, 2002, from the petitioner. The
respondent gave as collateral therefor his house and lot.
Resp failed to pay the loan. The petitioner filed a complaint against the
respondent. The parties entered into a Kasunduang Pag-aayos wherein the
respondent agreed to pay his loan in installments in the amount of
P2,000.00 per month, and in the event the house and lot given as collateral
is sold, the respondent would settle the balance of the loan in full. However,
the respondent still failed to pay, the Lupong Tagapamayapa issued a
certification to file action in court in favor of the petitioner.

The petitioner filed before the MeTC of Makati City a complaint for
Collection of Sum of Money. In his Answer with Counterclaim, the
respondent raised the defense of improper venue considering that the
petitioner was a resident of Bagumbong, Caloocan City while he lived in San
Mateo, Rizal.

MeTC: ordered def Montanez to pay ptff.

RTC: Affirmed MeTC
CA: REVERSED and SET ASIDE RTC.

Issue:

(1) Whether or not the terms of the Kasunduang Pag-aayos is deemed

rescinded because of respondent’s failure to comply with it?

Held: Yes.
Because the respondent failed to comply with the terms of the Kasunduang
Pag-aayos, said agreement is deemed rescinded pursuant to Article 2041 of
the New Civil Code and the petitioner can insist on his original demand.
Perforce, the complaint for collection of sum of money is the proper remedy.

It is true that an amicable settlement reached at the barangay

conciliation proceedings, like the Kasunduang Pag-aayos in this case, is
binding between the contracting parties and, upon its perfection, is
immediately executory insofar as it is not contrary to law, good morals, good
customs, public order and public policy. This is in accord with the broad
precept of Article 2037 of the Civil Code, viz:

A compromise has upon the parties the effect and authority

of res judicata; but there shall be no execution except in
compliance with a judicial compromise.

Being a by-product of mutual concessions and good faith of the parties,

an amicable settlement has the force and effect of res judicata even if not
judicially approved.[17] It transcends being a mere contract binding only upon
the parties thereto, and is akin to a judgment that is subject to execution in
accordance with the Rules.

If the amicable settlement is repudiated by one party, either expressly

or impliedly, the other party has two options, namely, to enforce the
compromise in accordance with the Local Government Code or Rules of
Court as the case may be, or to consider it rescinded and insist upon his
original demand. This is in accord with Article 2041 of the Civil Code, which
qualifies the broad application of Article 2037, viz:

If one of the parties fails or refuses to abide by the

compromise, the other party may either enforce the
compromise or regard it as rescinded and insist upon his
original demand.

In the case of Leonor v. Sycip, the Supreme Court (SC) had the
occasion to explain this provision of law. It ruled that Article 2041 does not
require an action for rescission, and the aggrieved party, by the breach of
compromise agreement, may just consider it already rescinded, to wit:

It is worthy of notice, in this connection, that, unlike Article

2039 of the same Code, which speaks of "a cause of annulment
or rescission of the compromise" and provides that "the
compromise may be annulled or rescinded" for the cause therein
specified, thus suggesting an action for annulment or rescission,
said Article 2041 confers upon the party concerned, not a "cause"
for rescission, or the right to "demand" the rescission of a
compromise, but the authority, not only to "regard it as
rescinded", but, also, to "insist upon his original demand".
The language of this Article 2041, particularly when
contrasted with that of Article 2039, denotes that no
action for rescission is required in said Article 2041,
and that the party aggrieved by the breach of a
compromise agreement may, if he chooses, bring the
suit contemplated or involved in his original demand,
as if there had never been any compromise agreement,
without bringing an action for rescission thereof. He
need not seek a judicial declaration of rescission, for he
 may "regard" the compromise agreement already
"rescinded".

As so well stated in the case of Chavez v. Court of Appeals,[23] a party's

non-compliance with the amicable settlement paved the way for the
application of Article 2041 under which the other party may either enforce
the compromise, following the procedure laid out in the Revised
Katarungang Pambarangay Law, or consider it as rescinded and insist
upon his original demand.

In the instant case, the respondent did not comply with the terms and
conditions of the Kasunduang Pag-aayos. Such non-compliance may be
construed as repudiation because it denotes that the respondent did not
intend to be bound by the terms thereof, thereby negating the very purpose
for which it was executed. Perforce, the petitioner has the option either to
enforce the Kasunduang Pag-aayos, or to regard it as rescinded and insist
upon his original demand, in accordance with the provision of Article 2041
of the Civil Code. Having instituted an action for collection of sum of money,
the petitioner obviously chose to rescind the Kasunduang Pag-aayos.

Considering that the Kasunduang Pag-aayos is deemed rescinded by the

non-compliance of the respondent of the terms thereof, remanding the case
to the trial court for the enforcement of said agreement is clearly
unwarranted.
TEODORO I. CHAVEZ, petitioner, vs. HON. COURT OF APPEALS
and JACINTO S. TRILLANA
G.R. No. 159411
March 18, 2005

Facts:
In October 1994, petitioner Teodoro Chavez and respondent Jacinto Trillana
entered into a contract of lease[4] whereby the former leased to the latter his
fishpond at Sitio Pariahan, Taliptip, Bulacan, Bulacan, for a term of six (6)
years commencing from October 23, 1994 to October 23, 2000. The rental
for the whole term was two million two hundred forty thousand
(P2,240,000.00) pesos, of which one million (P1,000,000.00) pesos was to
be paid upon signing of the contract.

Paragraph 5 of the contract further provided that respondent shall undertake

all construction and preservation of improvements in the fishpond that may
be destroyed during the period of the lease, at his expense, without
reimbursement from petitioner.

In August 1996, a powerful typhoon hit the country which damaged the
subject fishpond. Respondent did not immediately undertake the necessary
repairs as the water level was still high. Three (3) weeks later, respondent
was informed by a barangay councilor that major repairs were being
undertaken in the fishpond with the use of a crane. Respondent found out
that the repairs were at the instance of petitioner who had grown impatient
with his delay in commencing the work.
After conciliation proceedings, an agreement was reached.

Alleging non-compliance by petitioner with their lease contract and the

foregoing Kasunduan, respondent filed a complaint on February 7, 1997
against petitioner before the RTC of Valenzuela City.

Petitioner filed his answer but failed to submit the required pretrial brief and
to attend the pretrial conference.
Petitioner contends that the Court of Appeals erred in ruling that the RTC of
Valenzuela City had jurisdiction over the action filed by respondent
considering that the subject matter thereof, his alleged violation of the lease
contract with respondent, was already amicably settled before the Office of
the Barangay Captain of Taliptip, Bulacan, Bulacan. Petitioner argued
that respondent should have followed the procedure for
enforcement of the amicable settlement as provided for in the
Revised Katarungang Pambarangay Law. Assuming arguendo that the
RTC had jurisdiction, it cannot award more than the amount stipulated in
the Kasunduan which is P150,000.00. In any event, no factual or legal basis
existed for the reimbursement of alleged advance rentals for the unexpired
portion of the lease contract as well as for moral and exemplary damages,
and attorneys fees.

Indeed, the Revised Katarungang Pambarangay Law[8] provides that an

amicable settlement reached after barangay conciliation proceedings has the
force and effect of a final judgment of a court if not repudiated or a petition
to nullify the same is filed before the proper city or municipal court within
ten (10) days from its date.[9] It further provides that the settlement may be
enforced by execution by the lupong tagapamayapa within six (6) months
from its date, or by action in the appropriate city or municipal court, if
beyond the six-month period.[10] This special provision follows the general
precept enunciated in Article 2037 of the Civil Code, viz.:

A compromise has upon the parties the effect and authority of res judicata;
but there shall be no execution except in compliance with a judicial
compromise.

Thus, we have held that a compromise agreement which is not contrary to

law, public order, public policy, morals or good customs is a valid contract
which is the law between the parties themselves. It has upon them the effect
and authority of res judicata even if not judicially approved, and cannot be
lightly set aside or disturbed except for vices of consent and forgery.
When the new Civil Code came into being, its Article 2041 x x x created for
the first time the right of rescission. That provision gives to the aggrieved
party the right to either enforce the compromise or regard it as rescinded and
insist upon his original demand. Article 2041 should obviously be deemed to
qualify the broad precept enunciated in Article 2037 that [a] compromise has
upon the parties the effect and authority of res judicata. (underscoring ours)

In exercising the second option under Art. 2041, the aggrieved party may, if
he chooses, bring the suit contemplated or involved in his original demand,
as if there had never been any compromise agreement, without bringing an
action for rescission.[15] This is because he may regard the compromise as
already rescinded[16] by the breach thereof of the other party.

Ruling:

The Revised Katarungang Pambarangay Law provides for a two-tiered

mode of enforcement of an amicable settlement, to wit: (a) by execution by
the Punong Barangay which is quasi-judicial and summary in nature on
mere motion of the party entitled thereto; and (b) an action in regular form,
which remedy is judicial.21However, the mode of enforcement does not rule
out the right of rescission under Art. 2041 of the Civil Code. The availability
of the right of rescission is apparent from the wording of Sec. 41722 itself
which provides that the amicable settlement "may" be enforced by execution
by the lupon within six (6) months from its date or by action in the
appropriate city or municipal court, if beyond that period. The use of the
word "may" clearly makes the procedure provided in the Revised
Katarungang Pambarangay Law directory23 or merely optional in
nature.
Thus, although the "Kasunduan" executed by petitioner and respondent
before the Office of the Barangay Captainhad the force and effect of a final
judgment of a court, petitioner’s non-compliance paved the way for the
application of Art. 2041 under which respondent may either enforce the
compromise, following the procedure laid out in the Revised Katarungang
Pambarangay Law, or regard it as rescinded and insist upon his original
demand. Respondent chose the latter option when he instituted Civil Case
No. 5139-V-97 for recovery of unrealized profits and reimbursement of
advance rentals, moral and exemplary damages, and attorney’s fees.
Respondent was not limited to claiming ₱150,000.00 because although he
agreed to the amount in the "Kasunduan," it is axiomatic that a compromise
settlement is not an admission of liability but merely a recognition that there
is a dispute and an impending litigation24 which the parties hope to prevent
by making reciprocal concessions, adjusting their respective positions in the
hope of gaining balanced by the danger of losing.25 Under the "Kasunduan,"
respondent was only required to execute a waiver of all possible claims
arising from the lease contract if petitioner fully complies with his
obligations thereunder.26 It is undisputed that herein petitioner did not.

MICHAEL SEBASTIAN v. ANNABEL LAGMAY NG

GR No. 164594

Apr 22, 2015

Sometime in 1997, Angelita Lagmay (Angelita), acting as representative and
attorney-in-fact of her daughter Annabel Lagmay Ng (Annabel), filed a
complaint before the Barangay Justice of Siclong, Laur, Nueva Ecija. She
sought to collect from Michael the sum of P350,000.00 that Annabel sent to
Michael. She claimed that Annabel and Michael were once sweethearts, and
that they agreed to jointly invest their financial resources to buy a truck. She
alleged that while Annabel was working in Hongkong, Annabel sent Michael
the amount of P350,000.00 to purchase the truck. However, after Annabel
and Michael's relationship has ended, Michael allegedly refused to return the
money to Annabel, prompting the latter to bring the matter before the
Barangay Justice.

On July 9, 1997, the parties entered into an amicable settlement, evidenced

by a document denominated as "kasunduan''[4] wherein Michael agreed to
pay Annabel the amount of P250,000.00 on specific dates. The kasunduan
was signed by Angelita (on behalf of Annabel), Michael, and the members of
the pangkat ng tagapagkasundo.
Angelita alleged that the kasunduan was not repudiated within a period of
ten (10) days from the settlement, in accordance with the Katarungang
Pambarangay Law embodied in the Local Government Code of 1991
[Republic Act (R.A.) No. 7160], and Section 14 of its Implementing Rules.
When Michael failed to honor the kasunduan, Angelita brought the matter
back to the Barangay, but the Barangay Captain failed to enforce the
kasunduan, and instead, issued a Certification to File Action.

After about one and a half years from the date of the execution of the
kasunduan or on January 15, 1999, Angelita filed with the Municipal Circuit
Trial Court (MCTC) of Laur and Gabaldon, Nueva Ecija, a Motion for
Execution of the kasunduan.

Michael moved for the dismissal of the Motion for Execution, citing as a
ground Angelita's alleged violation of Section 15, Rule 13 of the 1997 Rules of
Civil Procedure.

On January 17, 2000, the MCTC rendered a decision[5] in favor of Annabel.

Michael filed an appeal with the RTC arguing that the MCTC committed
grave abuse of discretion in prematurely deciding the case. Michael also
pointed out that a hearing was necessary for the petitioner to establish the
genuineness and due execution of the kasunduan.

The RTC, Branch 40 of Palayan City upheld the MCTC decision, finding
Michael liable to pay Annabel the sum of P250,000.00. It held that Michael
failed to assail the validity of the kasunduan, or to adduce any evidence to
dispute Annabel's claims or the applicability of the Implementing Rules and
Regulations of R.A. No. 7160.

Michael filed a Motion for Reconsideration arguing that:

(i) an amicable settlement or arbitration award can be enforced
by the Lupon within six (6) months from date of settlement or
after the lapse of six (6) months, by ordinary civil action in the
 appropriate City or Municipal Trial Court and not by a mere
Motion for execution; and
(ii) (ii) the MCTC does not have jurisdiction over the case since
the amount of P250,000.00 (as the subject matter of the
kasunduan) is in excess of MCTC's jurisdictional amount of
P200,000.00.

In its March 13, 2001 Order, the RTC granted Michael's Motion for
Reconsideration, and ruled that there is merit in the jurisdictional issue he
raised. It dismissed Angelita's Motion for Execution, and set aside the MCTC
Decision.

Angelita moved for the reconsideration of the March 13, 2001 Order, but the
motion was subsequently denied. Aggrieved, she filed a Petition for Review
with the CA.

On August 2, 2001, the CA initially dismissed the petition for review on a

mere technical ground of failure to attach the Affidavit of Service. Angelita
moved for reconsideration, attaching in her motion the Affidavit of Service.
The CA granted the motion.

On March 31, 2004, the CA rendered its decision granting the petition, and
reversing the RTC's decision. The CA declared that the "appropriate local
trial court" stated in Section 2, Rule VII of the Implementing Rules of R.A.
No. 7160 refers to the municipal trial courts. Thus, contrary to Michael's
contention, the MCTC has jurisdiction to enforce any settlement or
arbitration award, regardless of the amount involved.

The CA also ruled that Michael's failure to repudiate the kasunduan in

accordance with the procedure prescribed under the Implementing Rules of
R.A. No. 7160, rendered the kasunduan final. Hence, Michael can no longer
assail the kasunduan on the ground of forgery.

Issue:
Whether or not the MCTC has the authority and jurisdiction to execute the
kasunduan regardless of the amount involved.

Ruling:

The MCTC has the authority and jurisdiction

to enforce the kasunduan regardless of the amount involved.

The Court also finds that the CA correctly upheld the MCTC's jurisdiction to
enforce any settlement or arbitration .award issued by the Lupon.

We again draw attention to the provision of Section 417 of the Local

Government Code that after the lapse of the six (6) month period from the
date of the settlement, the agreement may be enforced by action in the
appropriate city or municipal court.

The law, as written, unequivocally speaks of the "appropriate city or

municipal court" as the forum for the execution of the settlement or
arbitration award issued by the Lupon. Notably, in expressly conferring
authority over these courts, Section 417 made no distinction with respect to
the amount involved or the nature of the issue involved. Thus, there can be
no question that the law's intendment was to grant jurisdiction over the
enforcement of settlement/arbitration awards to the city or municipal courts
regardless of the amount. A basic principle of interpretation is that words
must be given their literal meaning and applied without attempted
interpretation where the words of a statute are clear,' plain and free from
ambiguity.

DOCTRINE venue stipulations in a contract, while considered valid and

enforceable, do not as rule supersede the general rule set forth in Rule 4 of
the Revised Rules of Court. In the absence of qualifying or restrictive words,
they should be considered merely as an agreement on additional forum, not
as limiting venue to the specified place. They are not exclusive but, rather
permissive. For, to restrict venue only to that place stipulated in the
agreement is a construction purely based on technicality which, on the
contrary, should be liberally construed

Phil Banking Corp vs. Tensuan

228 SCRA 385
FACTS
· Petitioners filed a complaint with prayer for Preliminary
Attachment vs private respondents (Brinell Metal Works
Corporation and Spouses Jose and Nally Ang) for collection of a
loan evidenced by 2 promissory notes. This was granted by the
RTC Makati
· Private respondents then filed a motion to dismiss on the grounds:
o Lack of jurisdiction over persons of the defendants
o Improper venue
· RESPO CLAIM: summons were served on defendant corporation’s
customer who was not authorized to receive the same for and in
behalf of them.
o Also said the complaint is based on 2 promissory
notes that declare
§ “I/WE HEREBY EXPRESSLY SUBMIT TO THE
JURISDICTION OF THE COURTS OF MANILA,
ANY LEGAL ACTION WHICH MAY ARISE OUT
OF THIS PROMISSORY NOTE” (essentially,
sinasabi nila dapat sa Manila yung venue, not
Makati)
· RTC: Granted, agreed with improper venue issue raised à MR filed
by Petitioner
o Petitioner argued that there were no qualifying words
restricting venue to Manila. Plaintiff still has choice to file
action in place of residence (consent to be sued in stipulated
venue lang if ever)[cited Polytrade Corp v Blanco] à MR
DENIED.
 · RTC: Cited Bautista v Hon. De Borja
o neither party reserved the right to choose venue as
provided for in Section 2(b), Rule 4 of the Rules of
Court, as would have been done had the parties
intended to retain such right of election.
o Polytrade and Bautista case seem to contradict so rules need
to be defined
· R45 petition for review on certiorari to SC
ISSUE
1. WON the respondent court erred in holding that the venue
of the action was improperly laid.à YES

RATIO
WON the respondent court erred in holding that the venue of the
action was improperly laid.à YES
· Section 1(c), Rule of the Revised Rules of Court, a motion
to dismiss an action may be made within the time for
pleading on the ground that venue is improperly laid.
o The matter of venue is regulated by the Rules of Court,
so that the choice of venue is not left to the caprices
of plaintiff.
· As a general rule, all personal 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.
o However, by written agreement of the parties, the venue of an
action may be changed or transferred from one province to
another.
· when improper venue is not objected to in a motion to dismiss it is
deemed waived
o merely procedural, not jurisdictional matter è intended for
convenience of parties, do not relate to power, authority, or
jurisdiction over subject matter
· an agreement in a contract fixing the venue of actions arising
therefrom is a valid waiver of the venue as fixed by law.
 · The Bautista case came first, then the Polytrade decision came next.
Subsequent cases followed the rule set in Polytrade. “The
conclusion to be drawn from all these is that the more
recent jurisprudence shall properly be deemed
modificatory of the old ones.” [SEE DIGESTER’S NOTES
FOR FULL DISCUSSION ON THIS]
· CURRENT RULE: Venue stipulations in a contract, while
considered valid and enforceable, do not as rule
supersede the general rule set forth in Rule 4 of the
Revised Rules of Court. In the absence of qualifying or
restrictive words, they should be considered merely as an
agreement on additional forum, not as limiting venue to
the specified place. They are not exclusive but, rather
permissive.
o For, to restrict venue only to that place stipulated in the
agreement is a construction purely based on technicality
which, on the contrary, should be liberally construed.

DACOYCOY V. IAC G.R. # 74854

FACTS

· On March 22, 1983, Dacoycoy, a resident of Balanti, Cainta, Rizal,

filed before the Rizal RTC, a complaint against private respondent
de Guzman praying for the annulment of 2 deeds of sale involving a
parcel of riceland in Barrio Estanza, Lingayen, Pangasinan, the
surrender of the produce thereof and damages for private
respondent's refusal to have said deeds of sale set aside upon
petitioner's demand.

· On May 25, 1983, before summons could be served on de Guzman,

the RTC Executive Judge issued an order requiring counsel for
petitioner to confer with respondent trial judge on the matter of
venue. After said conference, the RTC dismissed the complaint on
the ground of improper venue.
 o It found, based on the allegations of the complaint, that
petitioner's action is a real action as it sought not only the
annulment of the aforestated deeds of sale but also the recovery
of ownership of the subject parcel of riceland located in
Pangasinan, outside its’ territorial jurisdiction.

· Petitioner appealed to the IAC, which affirmed the order of dismissal

of his complaint.

ISSUE
· W/N the trial court may motu proprio dismiss a complaint on the ground of
improper venue?? NO
HELD

· The motu proprio dismissal of petitioner's complaint by the RTC on

the ground of improper venue is plain error, attributable to its
inability to distinguish between jurisdiction and venue.

· Questions or issues relating to venue of actions are basically

governed by Rule 4 of the Revised Rules of Court. It is said that the
laying of venue is procedural rather than substantive. It
relates to the jurisdiction of the court over the person
rather than the subject matter. Provisions relating to
venue establish a relation between the plaintiff and the
defendant and not between the court and the subject
matter. Venue relates to trial not to jurisdiction, touches
more of the convenience of the parties rather than the substance of
the case.

· Jurisdiction treats of the power of the court to decide a case on the

merits; while venue deals on the locality, the place where the suit
may be had.

· In Luna vs. Carandang, we emphasized:

1. A Court of First Instance has jurisdiction over suits involving
title to, or possession of, real estate wherever situated in the
Philippines, subject to the rules on venue of actions;
 2. Rule 4, Section 2, of the Rules of Court requiring that an action
involving real property shall be brought in the Court of First
Instance of the province where the land lies is a rule on venue
of actions, which may be waived expressly or by implication.

· In the instant case, even granting for a moment that the action of petitioner is a
real action, respondent trial court would still have jurisdiction over
the case, it being a regional trial court vested with the exclusive
original jurisdiction over "all civil actions which involve the title to,
or possession of, real property, or any interest therein . . ." in
accordance with Section 19 (2) of Batas Pambansa Blg. 129. With
respect to the parties, there is no dispute that it acquired jurisdiction
over the plaintiff Dacoycoy, the moment he filed his complaint for
annulment and damages. Respondent trial court could have
acquired jurisdiction over the defendant either by his voluntary
appearance in court and his submission to its authority, or by the
coercive power of legal process exercised over his person.
o Although petitioner contends that, he requested the City Sheriff
of Olongapo City or his deputy to serve the summons on de
Guzman at his residence, it does not appear that said service had
been properly effected or that private respondent had appeared
voluntarily in court or filed his answer to the complaint. At this
stage, respondent trial court should have required petitioner to
exhaust the various alternative modes of service of summons
under Rule 14 of the Rules of Court, i.e., personal service under
Section 7, substituted service under Section 8, or service by
publication under Section 16 when the address of the defendant
is unknown and cannot be ascertained by diligent inquiry.
o 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 CFI (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.

IAC decision is reversed and set aside. The complaint before the RTC is
revived and reinstated.

Manila Railroad Co vs. Attorney General

20 Phil 523

FACTS
On Dec 1907, Manila Railroad Co. began an action in CFI Tarlac for the
condemnation of 69,910 sq. m. real estate located in Tarlac. This is for
construction of a railroad line "from Paniqui to Tayug in Tarlac,"
Before beginning the action, Mla Railroad had caused to be made a thorough
search in the Office of the Registry of Property and of the Tax where the lands
sought to be condemned were located and to whom they belonged. As a result
of such investigations, it alleged that the lands in question were located in
Tarlac.
After filing and duly serving the complaint, the plaintiff, pending final
determination of the action, took possession of and occupied the lands
described in the complaint, building its line and putting the same in
operation.
On Oct 4, Mla Railroad gave notice to the defendants that on Oct. 9, a motion
would be made to the court to dismiss the action upon the ground that the
court had no jurisdiction of the subject matter, it having just been
ascertained by the plaintiff that the land sought to be condemned was
situated in the Province of Nueva Ecija, instead of the Province of Tarlac, as
alleged in the complaint. This motion was heard and, after due
consideration, the trial court dismissed the action upon the ground
presented by the plaintiff.
ISSUES/RULING
WON CFI Tarlac has power and authority to take cognizance of
condemnation of real estate located in another province

Ruling
YES, Sections 55 and 56[1] of Act No. 136 of the Philippine Commission confer
perfect and complete jurisdiction upon the CFI of these Islands with respect
to real estate. Such jurisdiction is not made to depend upon locality. There is
no suggestion of limitation. The jurisdiction is universal. It is nowhere
provided, that a CFI of one province, regularly sitting in said province, may
not under certain conditions take cognizance of an action arising in another
province or of an action relating to real estate located outside of the
boundaries of the province to which it may at the time be assigned.
Procedure does not alter or change that power or authority; it simply directs
the manner in which it shall be fully and justly exercised. To be sure, in
certain cases, if that power is not exercised in conformity with the provisions
of the procedural law, purely, the court attempting to exercise it loses the
power to exercise it legally. This does not mean that it loses jurisdiction of
the subject matter. It means simply that he may thereby lose jurisdiction of
the person or that the judgment may thereby be rendered defective for lack
of something essential to sustain it.
As to the subject matter, nothing can change the jurisdiction of the court over
diminish it or dictate when it shall attach or when it shall be removed. That
is a matter of legislative enactment which none but the legislature may
change. On the other hand, the jurisdiction of the court over the person is, in
some instances, made to defend on the consent or objection, on the acts or
omissions of the parties or any of them. Jurisdiction over the person,
however, may be conferred by consent, expressly or impliedly given, or it
may, by an objection, be prevented from attaching or removed after it has
attached.

Sweet Lines, Inc. v. Teves

G.R. No. L-37750, 19 May 1978, 83 SCRA 361

FACTS:

Atty. Leovigildo Tandog and Rogelio Tiro bought tickets for Tagbiliran City
via the port of Cebu. Since many passengers were bound for Surigao, “M/S
Sweet Hope” would not be proceeding to Bohol. They went to the proper
branch office and were relocated to “M/S Sweet Town” where they were
forced to agree “to hide at the cargo section to avoid inspection of the officers
of the Philippines Coastguard.” They were exposed to the scorching heat of
the sun and the dust coming from the ship’s cargo of corn grits and their
tickets were not honored so they had to purchase a new one. Because of the
terrible experience they had, they sued Sweet Lines for damages and for
breach of contract of carriage before the Court of First Instance of Misamis
Oriental who dismissed the complaint for improper venue. A motion was
premised on the condition printed at the back of the tickets and was later
dismissed. Hence this instant petition for prohibition for preliminary
injunction.

ISSUE:

Whether or not, a common carrier engaged in inter-island shipping stipulate

thru condition printed at the back of passage tickets to its vessels that any
and all actions arising out of the contract of carriage should be filed only in a
particular province or city.

HELD:

No. Actions arising out of the contract of carriage should be filed not only in
a particular province or city. Contract of adhesions are not the kind of
contract where the parties sit down to deliberate, discuss and agree
specifically on all its terms, but rather, one which respondents took no part
at all in preparing. It is only imposed upon them when they paid for the fare
for the freight they wanted to ship.
We find and hold that Condition No. 14 printed at the back of the passage
tickets should be held as void and unenforceable for the following reasons:

1. Circumstances obligation in the inter-island ship will prejudice rights and

interests of innumerable passengers in different parts of the country who,
under Condition No. 14, will have to file suits against petitioner only in the
City of Cebu;

2. Subversive of public policy on transfers of venue of actions; and

3. Philosophy underlying the provisions of transfers of venue of actions is the

convenience of the plaintiffs as well as his witnesses and to promote the ends
of justice.

Hence, petition for prohibition is hereby dismissed. The restraining order is

LIFTED and SET ASIDE.

Lantin vs. Lantion

Gr No. 160053
August 28, 2006

FACTS:
Spouses Lantin took several dollar and peso loans from Planters
Development Bank (PDB) and executed mortgages and promissory notes to
cover the loans. The Lantins defaulted on their loans so PDB foreclosed on
the properties to partially satisfy the Lantins’ debt. Subsequently, the Lantins
filed a
Complaint for Declaration of Nullity and/or Annulment of Sale and/or
Mortgage, Reconveyance, Discharge of Mortgage, Accounting, Permanent
Injunction, and Damages with the RTC of Lipa City, Batangas against PDB.
According to the Lantins, the REM only covered the peso loans which they
have already paid off, and not the dollar loans. PDB filed a motion to dismiss
on the ground of improper venue since according to their agreement the
venue of any suit should be Metro Manila. Judge (Jane Aurora) Lantion
dismissed the complaint because of improper venue. Lantins asked for a
reconsideration which was denied. Lantins claim that since they are assailing
the validity of the loan documents, then the stipulation stating that Metro
Manila should be the venue of any suit is also in question. They also argue
that the venue stipulated in the agreement is not the exclusive venue
stipulation covered by Section 4(b) of the Rules on Civil Procedure.

ISSUE:
Whether the stipulation on the loan agreement is an exclusive venue
stipulation under Sec. 4(b) of the Rules

HELD:
Yes. WHEREFORE, the petition is DISMISSED. The assailed orders dated
May 15, 2003 and September15, 2003 of the Regional Trial Court of Lipa
City, Batangas, in Civil Case No. 2002-0555 are AFFIRMED.

RATIO:
Under Section 4 (b) of Rule 4 of the 1997Rules of Civil Procedure, the general
rules on venue of actions shall not apply where the parties, before the filing
of the action, have validly agreed in writing on an exclusive venue. The mere
stipulation on the venue of an action, however, is not enough to preclude
parties from bringing a case in other venues. The parties must be able to
show that such stipulation is exclusive. In the absence of qualifying or
restrictive words, the stipulation should be deemed as merely an agreement
on an additional forum, not as limiting venue to the specified place. Under
the agreement, it is clear that the Lantins and PDB agreed that any suit
arising from the contract should be brought exclusively in the proper Makati
court (or to any court that PDB wants to), as the Lantins had waived the right
to choose the venue of the action. The Lantins only assailed of the coverage
of the loan agreement and the validity of the loan agreement itself. since the
issues of whether the mortgages should be properly discharged and whether
these also cover the dollar loans, arose out of the said loan documents, the
stipulation on venue is also applicable thereto.
NOTE
: Lantins also raised the following arguments re: venue: (1) the rule on venue
of action was established for the convenience of the Lantins, and (2) since
the complaint involves several causes of action which did not arise solely
from or connected with the loan documents, the cited venue stipulation
should not be made to apply. The agreement between the Lantins and PDB
states
that: “[i]
n the event of suit arising out of or in connection with this mortgage and/or
the promissory note/s secured by this mortgage, the parties hereto agree to
bring their causes of auction (sic) exclusively in the proper court of Makati,
Metro Manila or at such other venue chosen by the Mortgagee, the
Mortgagor waiving for this purpose any other venue. I/We further submit
that the venue of any legal action arising out of this note shall exclusively
be at the proper court of Metropolitan Manila, Philippines or any other
venue chosen by the BANK, waiving for this purpose any other venue
provided by the Rules of Court.

LANGKAAN REALTY DEVELOPMENT, INC., petitioner, vs.

UNITED COCONUT PLANTERS BANK, and HON.
COURT OF APPEALS, respondents.
Facts:
Petitioner Langkaan Realty Development Corporation (LANGKAAN, for
brevity) was the registered owner of a 631,693 square meter parcel of land.
On April 8, 1983, petitioner LANGKAAN executed a Real Estate
Mortgage over property in favor of private respondent United Coconut
Planter’s Bank (UCPB) as a security for a loan obtained from the bank by
Guimaras Agricultural Development, Inc. (GUIMARAS) in the amount of
P3,000,000.00.[1] LANGKAAN and GUIMARAS agreed to share in the total
loan proceeds that the latter may obtain from UCPB.[2] Subsequently,
another loan of P2,000,000.00 was obtained by GUIMARAS, totaling its
obligation to the bank to P5,000,000.00. The loan was fully secured by the
real estate mortgage which covered all obligations obtained from UCPB by
either GUIMARAS or LANGKAAN “before, during or after the constitution”
of the mortgage.[3] Also provided in the mortgage agreement is an
acceleration clause stating that any default in payment of the secured
obligations will render all such obligations due and payable, and that UCPB
may immediately foreclose the mortgage.[4]
GUIMARAS defaulted in the payment of its loan obligation.[5] On July 28,
1986, private respondent UCPB filed a “Petition for Sale under Act No.
3135[6], as amended”, with the Office of the Clerk of Court and Ex-officio
Sheriff of RTC of Imus, Cavite. The “petition” was given due course, and a
Notice of Extra-judicial Sale of LANGKAAN’s property was issued by Acting
Clerk of Court II and Ex-officio Sheriff Regalado Eusebio on August 4, 1986,
setting the sale on August 29, 1986 at the main entrance of the Office of the
Clerk of Court of RTC of Imus.[7]The Notice of Extra-judicial Sale was
published in the “Record Newsweekly”,[8] and was certified by Court Deputy
Sheriff Nonilon A. Caniya to have been duly posted.[9]
On August 29, 1986, the mortgaged property was sold for P3,095,000.00
at public auction to private respondent UCPB as the highest bidder, and a
corresponding Certificate of Sale was issued in favor of the bank.
As petitioner LANGKAAN failed to redeem the foreclosed property
within the redemption period, the title of the property was consolidated in
the name of UCPB on December 21, 1987, and a new Transfer Certificate of
Title with no. T-232040 was issued in the latter’s favor.
On March 31, 1989, LANGKAAN, through counsel, Atty. Franco L. Loyola
wrote UCPB a letter offering to buy back the foreclosed property for
P4,000,000.00.[10] This offer was rejected by the bank in a letter dated May
22, 1989, stating that the current selling price for the property was already
P6,500,000.00.[11]
On May 30, 1989, petitioner LANGKAAN filed a Complaint for
Annulment of Extra-judicial Foreclosure and Sale, and of TCT No. 232040
with Damages, with the RTC of Imus, Cavite, docketed as Civil Case No. 360-
89.
After trial, the RTC of Imus ruled in favor of private respondent UCPB,
and dismissed the petition of LANGKAAN for lack of merit. On appeal, the
Court of Appeals affirmed en toto the decision of the RTC of Imus. The
petitioner filed a Motion for Reconsideration which was denied by the Court
of Appeals in a Resolution dated July 28, 1999. Hence this petition.

Issue: Whether or not the extra-judicial foreclosure sale is valid and legal
on account of the alleged non-compliance with the provisions of Act No. 3135
on venue, posting and publication of the Notice of Sale, and of the alleged
defects in such Notice.
Held: Yes, the extra-judicial foreclosure sale is valid and legal.
After a careful analysis of the issue set forth by the petitioner, we find the
same not to involve a pure question of law[15] It has been our consistent ruling
that the question of compliance or non-compliance with notice and
publication requirements of an extra-judicial foreclosure sale is a factual
issue binding on this Court.[16] In the case of Reyes vs. Court of Appeals, we
declined to entertain the petitioner’s argument as to lack of compliance with
the requirements of notice and publication prescribed in Act No. 3135, for
being factual.[17] Hence, the matter of sufficiency of posting and publication
of a notice of foreclosure sale need not be resolved by this Court, especially
since the findings of the Regional Trial Court thereon were sustained by the
Court of Appeals. Well-established is the rule that “factual findings of the
Court of Appeals are conclusive on the parties and carry even more weight
when the said court affirms the factual findings of the trial court.”[18]
The RTC found the posting of the Notice of Sale to have been duly
complied with, thus:

“As regards the posting of the notices of sale, Deputy Sheriff Nonilon Caniya
has categorically declared that he posted the same in three conspicuous
places, to wit: (1) Municipal Hall of Dasmarinas, Cavite, (2) Barangay Hall
of Langkaan, and (3) in the place where the property is located (Exh. “6”).
He added gratuitously that he even posted it at the Dasmarinas Public
Market. Such being the case, the negative testimony of Virgilio Mangubat, a
retired sheriff of Trece Martires City, to the effect that he did not see any
notice posted in the Bulletin Board of Dasmarinas, Cavite cannot prevail over
the positive testimony of Deputy Sheriff Caniya. In like manner, the general
denial advanced by Barangay Captain Benjamin Sangco of Langkaan that no
notice was posted at the bulletin board of said barangay in August, 1986
cannot take precedence over the positive declaration of Deputy Sheriff
Caniya who is presumed to have performed his duties as such. Credence is
generally accorded the testimonies of (sic) sheriff who is presumed to have
performed their (sic) duties in regular manner.

In the case at bar, the Real Estate Mortgage contract contains the
following stipulation on the venue of the auction sale, viz:

It is hereby agreed that in case of foreclosure of this mortgage under Act

3135, as amended, and Presidential Decree No. 385, the auction sale shall be
held at the capital of the province, if the property is within the territorial
jurisdiction of the province concerned, or shall be held in the city, if the
property is within the territorial jurisdiction of the city concerned.”[23]

The foreclosed property is located in Dasmarinas, a municipality in

Cavite. Dasmarinas is within the territorial jurisdiction of the province of
Cavite, but not within that of the provincial capital, Trece Martires City, nor
of any other city in Cavite. The territorial jurisdiction of Dasmarinas is
covered by the RTC of Imus,[24] another municipality in Cavite..
Section 18 of B.P. Blg. 129[29] provides for the power of the Supreme Court
to define the territorial jurisdiction of the Regional Trial Courts. Pursuant
thereto, the Supreme Court issued Administrative Order No. 7[30], placing the
municipalities of Imus, Dasmarinas and Kawit within the territorial
jurisdiction of the RTC of Imus.[31] On the other hand, Section 2 of Act 3135
refers to the venue of an extra-judicial foreclosure sale.[32]
Well-known is the basic legal principle that venue is waivable. Failure of
any party to object to the impropriety of venue is deemed a waiver of his right
to do so. In the case at bar, we find that such waiver was exercised by the
petitioner.
An extra-judicial foreclosure sale is an action in rem, and thus requires
only notice by publication and posting to bind the parties interested in the
foreclosed property. No personal notice is necessary.
 From 1986 to April 1989, despite knowledge of the foreclosure sale of
their property, the President of petitioner LANGKAAN did not take any step
to question the propriety of the venue of the sale. Nowhere can it be found
that the petitioner objected to or opposed the holding of the sale at the RTC
of Imus. By neglecting to do so, petitioner LANGKAAN is deemed to have
waived its right to object to the venue of the sale, and cannot belatedly raise
its objection in this petition filed before us.

Auction in Manila Inc. vs. Luyaben

Gr No. 173979
Feb 12, 2007

Facts:

Luyaben filed a complaint for damages against Auction in Malinta, Inc. in

RTC-Kalinga where Luyaben resides. Auction moved to dismiss the
complaint on the ground of improper venue by invoking the following
stipulation in their agreement: ALL COURT LITIGATION PROCEDURES
SHALL BE CONDUCTED IN THE APPROPRIATE COURTS OF
VALENZUELA CITY, METRO MANILA.

Issue:

Did the stipulation in the Agreement effectively limit the venue of the case
exclusively to the proper court of Valenzuela City?

Held:

No. Mere stipulation on the venue of an action is not enough to preclude

parties from bringing a case in other venues. It must be shown that such
stipulation is exclusive. In the absence of qualifying or restrictive
words, such as “exclusively” and “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.

Antonio Chua vs. Total Office Products & Services (Topros) Inc
Facts:

Respondent Total Office Products and Services, Inc., (TOPROS) lodged

a complaint for annulment of contracts of loan and real estate mortgage
against herein petitioner Antonio T. Chua before the Regional Trial Court of
Pasig City.

The said suit sought to annul a loan contract allegedly extended by petitioner
to respondent TOPROS in the amount of ten million four hundred thousand
pesos (P10,400,000) and the accessory real estate mortgage contract
covering two parcels of land situated in Quezon City as collateral, alleging
that there was no authority granted to Chua (its president) by the corporation
to enter into a contract of loan. It was alleged that the contracts were
fictitious.

Petitioner Chua filed a motion to dismiss on the ground of improper

venue. He contended that the action filed by TOPROS affects title to or
possession of the parcels of land subject of the real estate mortgage. Thus
should have been filed in the Regional Trial Court of Quezon City where the
encumbered real properties are located, instead of Pasig City where the
parties reside.

RTC Judge deny motion to dismiss. She reasoned that the action to
annul the loan and mortgage contracts is a personal action and thus, the
venue was properly laid in the RTC of Pasig City where the parties reside.

Petitioner moved for a reconsideration of the said order, which Judge

denied. Hence, petitioner filed with the CA however CA dismissed said
petition.
 CA applied Hernandez v. Rural Bank of Lucena, Inc. and ruled that an
action for the cancellation of a real estate mortgage is a personal action if the
mortgagee has not foreclosed the mortgage and the mortgagor is in
possession of the premises, as neither the mortgagor’s title to nor possession
of the property is disputed.

Undeterred, petitioner elevated before SC a petition for review raising the

following issue:

ISSUE: Whether or not an action to annul a loan and mortgage contract duly
alleged as fictitious with absolutely no consideration is a personal action or
real action.
Held:
In affirming the CA, the SC ruled….it is a personal Action.

Well – settled is the rule that an action to annul a contract of loan and its accessory
real estate mortgage is a personal action. In personal action the plaintiff seeks the
recovery of personal property, the enforcement of a contract or the recovery of damages.
In contrast, in a real action, the plaintiff seeks the recovery of real property, or, as
indicated in Section 2(a), Rule 4 of the then Rules of Court, a real action is an action
affecting title to real property or for the recovery of possession, or for partition or
condemnation of, or foreclosure of mortgage on real property.
In this case, ownership of the parcels of land subject of the questioned
real estate mortgage was never transferred to petitioner, but remained with
TOPROS. Thus, no real action for the recovery of real property is involved.
This being the case, TOPROS’ action for annulment of the contracts of loan
and real estate mortgage remains a personal action.

And thus falls under the catch-all provision on personal actions under
paragraph (b) of the above-cited section, to wit:

SEC. 2 (b) Personal actions. – All other actions may be commenced

and tried where the defendant or any of the defendants resides or may
be found, or where the plaintiff or any of the plaintiffs resides, at the
election of the plaintiff.

In the same vein, the action for annulment of a real estate mortgage in the
present case must fall under Section 2 of Rule 4, to wit:
 SEC. 2. Venue of personal actions. – All other actions may be
commenced and tried where the plaintiff or any of the principal
plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a non-resident defendant where
he may be found, at the election of the plaintiff.

Thus, Pasig City, where the parties reside, is the proper venue of the
action to nullify the subject loan and real estate mortgage contracts. The
Court of Appeals committed no reversible error in upholding the orders of
the Regional Trial Court denying petitioner’s motion to dismiss the case on
the ground of improper venue.

Adelaida Infante vs. Aran Builders Inc.

Gr No. 156596
August 24, 2007

Facts:

Before the RTC of Muntinlupa City, presided over by Judge Perello was an
action for revival of judgment filed on June 6, 2001 by Aran Builders, Inc.
against Adelaida Infante.

The judgment sought to be revived was rendered by the RTC of Makati City
in an action for specific performance and damages, where it ruled in favor of
R and ordered P to execute a deed of sale of a lot in Ayala Alabang, to register
the said deed and deliver title to R, and to pay the taxes of the said lot. The
same judgment ordered R to pay P the sum of P321,918.25 upon P's
compliance with the aforementioned order. R sought to revive the judgment
since P refused to comply to the court’s order.

P filed a motion to dismiss the action for revival of judgment on the grounds
that the Muntinlupa RTC has no jurisdiction over the persons of the parties
and that venue was improperly laid. R opposed the motion.
Muntinlupa RTC denied P’s MTD. Stating that the reason that the case to be
revived was heard in the Makati RTC was only because there was still no RTC
in Muntinlupa City. With the creation of the RTCs of Muntinlupa City,
matters involving properties located in this City, and cases involving
Muntinlupa City residents were all ordered to be litigated before these
Courts. Since the subject lot of the case to be revived is located in Muntinlupa
City, RTC of Muntinlupa is the correct venue.

P appealed to the CA and asserts that the complaint for specific performance
and damages before the Makati RTC is an action in personam and, therefore,
the suit to revive the judgment therein is also personal in nature; and that,
consequently, the venue of the action for revival of judgment is either Makati
City or Parañaque City where private respondent and petitioner respectively
reside, at the election of private respondent.

CA held that since the judgment sought to be revived was rendered in an

action involving title to or possession of real property, or interest therein,
the action for revival of judgment is then an action in rem which should be
filed with the RTC of the place where the real property is located.

Issues/Held:

WoN the revival of judgment is a real action- YES

WoN Muntinlupa RTC is the correct venue for the revival of judgment
rendered by Makati RTC- YES
Ratio:

Section 6, Rule 39 of the 1997 Rules of Civil Procedure provides that after the
lapse of 5 years from entry of judgment and before it is barred by the statute
of limitations, a final and executory judgment or order may be enforced by
action. The Rule does not specify in which court the action for revival of
judgment should be filed.

In Aldeguer v. Gemelo,[3] the Court held that:

 x x x an action upon a judgment must be brought either
in the same court where said judgment was rendered or in the
place where the plaintiff or defendant resides, or in any other
place designated by the statutes which treat of the venue
of actions in general.

It must be noted that other provisions in the rules of procedure which fix
the venue of actions in general must be considered.

Under the present Rules of Court, Sections 1 and 2 of Rule 4 provide:

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.

xxxx

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.

Thus, the proper venue depends on the determination of whether the present
action for revival of judgment is a real action or a personal action.

P cites the case of Aldeguer to support her claim but misunderstood the
doctrine to mean that any action for revival of judgment should be
considered as a personal one. The Court specified that the judgment sought
to be revived in said case was a judgment for damages. The judgment
subject of the action for revival did not involve or affect any title to or
possession of real property or any interest therein. P also cited the case of
Donnelly, but the judgment to be revived in the said case was for a collection
of a sum money which is a personal action. Clearly, the Court's classification
in Aldeguer and Donnelly of the actions for revival of judgment as being
personal in character does not apply to the present case.

The allegations in the complaint for revival of judgment determine whether

it is a real action or a personal action.

The previous judgment has conclusively declared private respondent's right

to have the title over the disputed property conveyed to it. It is, therefore,
undeniable that R has an established interest over the lot in
question; and to protect such right or interest, private respondent brought
suit to revive the previous judgment. The sole reason for the present
action to revive is the enforcement of private respondent's
adjudged rights over a piece of realty. Verily, the action falls
under the category of a real action, for it affects private
respondent's interest over real property.

The present case for revival of judgment being a real action, the
complaint should indeed be filed with the Regional Trial Court of the place
where the realty is located.

According to Sec.18 of BP129, the Supreme Court shall define the territory
over which a branch of the Regional Trial Court shall exercise its authority.
The territory thus defined shall be deemed to be the territorial area of the
branch concerned for purposes of determining the venue of all suits.

Originally, Muntinlupa City was under the territorial jurisdiction of the

Makati Courts. However, Section 4 of RA No. 7154, entitled An Act to Amend
Section Fourteen of BP 129, Otherwise Known As The Judiciary
Reorganization Act of 1981, took effect on September 4, 1991. Said law
provided for the creation of a branch of the RTC in Muntinlupa. Thus, it is
now the RTC in Muntinlupa City which has territorial jurisdiction or
authority to validly issue orders and processes concerning real property
within Muntinlupa City.
 WHEREFORE, the petition is DENIED. The Decision dated August
12, 2002 and Resolution dated January 7, 2003 of the Court of Appeals are
AFFIRMED.

GUINO

118. PEDRO GAYON V. SILVESTRE GAYON

G.R. No. L-28394, November 26, 1970

Facts:

On July 31, 1967, Pedro Gayon filed a complaint against spouses Silvestre Gayon and
Genoveva de Gayon alleging that on October 1, 1952, a deed of sale was executed in
favor of Pedro Gelera to sell an unregistered land for Php 500.00 including improvements
subject for redemption within 5 years or not later than October 1, 1957. The right of
Redemption was not exercised by Silvestre, Genoveva or any of their heirs or successors.
On March 21, 1961, Pedro Gelera and his wife Estelita sold the land to Pedro Gayon for
Php 614.00. Since 1961 improvements were introduced and taxes were fully paid until
1967. Genoveva filed an answer alleging that her husband Silvestre Gayon died on
January 6, 1954, that the deed where they sold property to Gelera was fake, her signature
was forged, and they never executed such document, and that complaint is malicious .
Being the brother of Silvestre, Pedro did not exert efforts for the amicable settlement of
the case before filling his complaint. She prayed, therefore, that the same be dismissed
and that plaintiff be sentenced to pay damages. On September 19, 1967, lower court
dismissed for Silvestre was dead, the absolute owner and the wife has nothing to do with
it. MR was also denied, hence this petition.

ISSUE: W/N Pedro’s failure to compromise bars suits against the Silvestre and
Genoveva?

RULING: No.
Art. 222 of our Civil Code provides: “No suit shall be filed or maintained between members
of the same family unless it should appear that earnest efforts toward a compromise have
been made, but that the same have failed, subject to the limitations in article 2035.”

Genoveva is plaintiff’s sister-in-law, whereas her children are his nephews and/or nieces,
not part of enumeration provided under Article 217. Silvestre Gayon must necessarily be
excluded as party in the case at bar, it follows that the same does not come within the
purview of Art. 222, so failure to seek compromise before filing of complaint does not bar
the same. The order appealed from is hereby set aside and the case remanded to the
lower court for the inclusion, as defendant or defendants therein, of the administrator or
executor of the estate of Silvestre Gayon or heirs if in absence.

119. GAUDENCIO GUERRERO, vs. RTC OF ILOCOS NORTE, BR. XVI, JUDGE
LUIS B. BELLO, JR. G.R. No. 109068 January 10, 1994

FACTS:
Petitioner filed a complaint of accion publiciana against private respondent of which
assumed another dimension when it was dismissed by respondent Judge on the
ground that the parties being brother-in-law the complaint should have alleged that
earnest efforts were first exerted towards a compromise. Admittedly, the complaint
does not allege that the parties exerted earnest towards a compromise and that the
same failed. It was only on December 7, 1992, at the pre-trial conference, that the
relationship of petitioner Gaudencio Guerrero and respondent Hernando was noted
and so the private respondent was given 5 days to file his motion and amended
complaint. On December 11, 1992, Guerrero moved to reconsider the December 7,
1992 Order. On December 22, 1992, respondent Judge denied the motion for
reconsideration. On January 29, 1993, the 5-day period having expired without
Guerrero amending his complaint, respondent Judge dismissed the case, declaring
the dismissal however to be without prejudice. Hence, Guerrero appeals by way of
this petition for review the dismissal by the court a quo.
ISSUE:

1. WON the absence of an allegation in the complaint that earnest efforts towards a
compromise were exerted, which efforts failed, is a ground for dismissal for lack of
jurisdiction.

2. WON brothers or sisters by affinity are considered members of the same family
contemplated in ART. 217, par. (4) and ART. 222 of the NCC, as well as a compromise
before a suit between them may be instituted and maintained.

RULING:

1. The attempt to compromise as well as the inability to succeed is a condition

precedent to the filing of a suit between members of the same family, absent
such allegation in the complaint being assailable at any stage of the
proceeding, even on appeal, for lack of cause of action.

2. No. As early as two decades ago, we already ruled in Gayon v. Gayon that the
enumeration of "brothers and sisters" as members of the same family does not
comprehend "sisters-in-law". In that case, then Chief Justice Concepcion emphasized
that "sisters-in-law" (hence, also "brothers-in-law") are not listed under Art. 217 of the
New Civil Code as members of the same family. Since Art. 150 of the Family Code
repeats essentially the same enumeration of "members of the family", we find no
reason to alter existing jurisprudence on the matter. Consequently, the court a quo
erred in ruling that petitioner Guerrero, being a brother-in-law of private respondent
Hernando, was required to exert earnest efforts towards a compromise before filing
the present suit.

120. HIYAS SAVINGS AND LOAN BANK, INC., V. JUDGE ACUNA,

GR.NO. 154132, AUGUST 31, 2006

FACTS:

Alberto Moreno , respondent filed with the RTC of Caloocan a complaint against Hiyas
Savings and Loan Bank, Inc his wife Remedios, the spouses Felipe and Maria Owe and
the Register of Deeds of Caloocan City for cancellation of mortgage. He contended that
he did not secure/ sign any loan from petitioner, or execute any contract of mortgage in
its favor; and his wife was acting in conspiracy with Hiyas and the spouses Owe, who
were benefited from the loan, made it appear that he signed the contract of mortgage and
he could not have executed the contract because he was working abroad. Hiyas filed a
Motion to Dismiss on the ground that private respondent failed to comply with Article 151
of Family Code. Alberto asserts that since three of the party-defendants are not members
of his family the ground relied upon by Hiyas in its Motion to Dismiss is inapplicable . RTC
denied motion to dismiss. Court agreed with Moreno. Petitioner filed a motion for partial
reconsideration. RTC again denied motion of partial reconsideration ruling that failure to
allege in complaint that earnest effort towards a compromise were made by plaintiff is not
a ground for motion to dismiss.

ISSUE: W/N HIYAS SAVINGS and LOAN BANK, INC. can invoke Article 151 of
the Family Code.

RULING:

No. The Court has ruled that the requirement under Article 151 of the Family Code is
applicable only in cases which are exclusively between or among members of the same
family, it necessarily follows that the same may be invoked only by a party who is a
member of that same family.

Hence, once a stranger becomes a party to a suit involving members of the same family,
the law no longer makes it a condition precedent that earnest efforts be made towards a
compromise before the action can prosper.
 121. EMILIA O'LACO and HUCO LUNA vs. VALENTIN CO CHO CHIT, O LAY
KIA and COURT OF APPEALS, G.R. No. 58010. March 31, 1993 .

Facts:

On 31 May 1943, the Philippine Sugar Estate Development sold a parcel of land situated
at Oroquieta St., Sta. Cruz, Manila with the Deed of Absolute name to Emilia O’Laco as
vendee and a new title issued in her name. On 1960, Co Cho Chit and his wife, O Lay
Kia, also Emilia’s older half-sister, sued Emilia O’Laco and her husband for selling the
same parcel of land to the Catholic Archbishop of Manila and for recovery of the sold lot
claiming that they were the real owners of the property and the legal title was only place
in the name of Emilia. They claimed that Emilia breached the trust when she sold the lot
to the Archbishop of Manila. Emilia answered that she bought the property with her own
money, and that she only left the Deed of Absolute Sale and the title to Co Cho Chit and
her sister for safekeeping. When she asked that the documents be returned to her, her
sister and Co Cho Chit claimed that they were misplaced or lost, and in view of the loss,
she asked for the issuance of a new title from the CFI of Manila which was granted to her.
RTC found no trust relation between parties and dismissed the complaint. Court of
Appeals set aside the decision of the trial court and ordered O’Laco to pay the sum
representing the value of the property sold to the Archbishop of Manila.

ISSUE: Whether or not O Lay Kia and Co Cho Chit’s complaint fails to allege that
earnest efforts towards a compromise were exerted considering the suit is between
family member.

RULING:

NO. The complaint made by O Lay Kia and Co Cho Chit is valid. The present action is
between members of the same family since petitioner Emilia O'Laco and respondent O
Lay Kia are half-sisters. Consequently, there should be an averment in the compliant that
earnest efforts toward a compromise have been made, pursuant to Art. 222 of the New
Civil Code, or a motion to dismiss could have been filed under Sec. 1, par. (j), Rule 16 of
the Rules of Court. For, it is well-settled that the attempt to compromise as well as the
inability to succeed is a condition precedent to the filing of a suit between members of the
same family. Hence, the defect in the complaint is assailable at any stage of the
proceedings, even on appeal, for lack of cause of action.
 122. APRIL MARTINEZ, FRITZ DANIEL MARTINEZ and MARIA OLIVIA
MARTINEZ, vs.

RODOLFO G. MARTINEZ, G.R. No. 162084, June 28, 2005

FACTS:

The spouses Daniel P. Martinez, Sr. and Natividad de Guzman-Martinez were the owners
of a parcel of land by TCT No. 54334, as well as the house constructed thereon. On
March 6, 1993, Daniel, Sr. executed a Last Will and Testament directing the subdivision
of the property into three lots. He then handed down the three lots to each of his sons,
namely, Rodolfo, Manolo and Daniel, Jr.; Manolo was designated as the administrator of
the estate. After the death of the spouses, Rodolfo found a deed of sale purportedly
signed by his father on September 15, 1996, where the latter appears to have sold Lot
18-B-2 to Manolo and his wife Lucila. He also discovered that TCT No. 237936 was issued
to the vendees based on the said deed of sale. Rodolfo filed a complaint for annulment
of deed of sale and cancellation of TCT No. 237936 against his brother Manolo and his
sister-in-law Lucila before the RTC.

In the meantime, the spouses Manolo and Lucila Martinez wrote Rodolfo, demanding that
he vacate the property. Rodolfo ignored the letter and refused to do so. This prompted
the said spouses to file a complaint for unlawful detainer against Rodolfo in the MTC of
Manila. They alleged that they were the owners of the property covered by TCT No.
237936, and that pursuant to Presidential Decree (P.D.) No. 1508, the matter was
referred to the barangay for conciliation and settlement, but none was reached. They
appended the certification to file action executed by the barangay chairman to the
complaint.
In Rodolfo’s answer he alleged that the complaint failed to state a condition precedent,
namely, that earnest efforts for an amicable settlement of the matter between the parties
had been exerted, but that none was reached. He also pointed out that the dispute had
not been referred to the barangay before the complaint was filed. Hence this petition.

ISSUE: WON Art. 150 of the Family Code or earnest efforts for amicable
settlement is necessary before the filing of this case.

RULING: No.

The petitioners were able to comply with the requirements of Article 151 of the Family
Code because they alleged in their complaint that they had initiated a proceeding against
the respondent for unlawful detainer in the Katarungang Pambarangay, in compliance
with P.D. No. 1508; and that, after due proceedings, no amicable settlement was arrived
at, resulting in the barangay chairman’s issuance of a certificate to file action. The Court
rules that such allegation in the complaint, as well as the certification to file action by the
barangay chairman, is sufficient compliance with article 151 of the Family Code. It bears
stressing that under Section 412(a) of Republic Act No. 7160, no complaint involving any
matter within the authority of the Lupon shall be instituted or filed directly in court for
adjudication unless there has been a confrontation between the parties and no settlement
was reached.

123. MAURO BLARDONY, JR. v. HON. JOSE L. COSCOLLUELA, JR.

GR. NO. 70261, FEBRUARY 28, 1990

FACTS:

The petitioner and the private respondent Ma. Rosario Araneta Blardony are spouses.
During their marriage, they begot 1 child named Patricia Araneta Blardony. Due to
irreconcilable differences, petitioner and private respondent separated in March 1981. On
different dates, the spouses executed different agreements such as MOA. On May 3,
1982, the Ma. Rosario filed a Petition for Dissolution of Conjugal Partnership and Partition
of Conjugal Partnership Properties in the CFI of Rizal, Br 306, in Makati. The husband, in
his answer, admitted that he had abandoned the conjugal home since March 1981; that
before the filing of the petition, they tried to file a joint petition for the dissolution of their
conjugal partnership but their attempt failed due to their inability to agree upon the
equitable partition of their conjugal partnership properties.

On Oct 8, 1982, the husband filed a MD the petition on jurisdictional grounds, claiming
that it should have been filed first in the Lupon Tagapamayapa as provided in P.D. 1508,
becuase both are residents of the same Municipality of Makati. Mrs. Blardony opposed
the MD. Nevertheless, Judge Segundo Soza dismissed her petition for her failure, as
plaintiff, to comply with Sec 6 of P.D. 1508. Mrs. Blardony filed a MR. In the meantime,
the courts were reorganized and the case was transferred to Br146 of RTC Makati,
presided over by Judge Jose Coscolluela, Jr. On Aug 9, 1983, Judge Coscolluela set
aside Judge Soza's order of dismissal and the latter's MR of that order was denied by the
court. Hence, this petition for certiorari under Rule 65 of the Rules of Court.

ISSUE: WON the parties could go directly to court without passing through the Lupon
Tagapamayapa, as provided in Sec 6 of P.D. 1508.

RULING:

The petition has no merit. While the referral of a case to the Lupon Tagapayapa is a
condition precedent for filing a complaint in court, it is not a jurisdictional requirement, "its
non-compliance cannot affect the jurisdiction which the court has already acquired over
the subject matter or over the person of the defendant. Petitioner waived the pre-litigation
conciliation procedure prescribed in P.D. No. 1508 when he did not file a motion to dismiss
the complaint on that score, but filed his answer thereto wherein he prayed the court to
make an equitable partition of the conjugal properties.

Furthermore, under Sec 6 of P.D. 1508, the complaint may be filed directly in a competent
court without passing the Lupon Tagapayapa. Respondent Judge correctly observed that:
“the issues of support pendente lite and delivery of personal properties belonging to the
conjugal partnership, although not coupled in the strict sense of the word with the instant
petition, are essentially involved in this petition becuase of the minority of Patricia Araneta
Blardony who, as of this date, is not yet 8 years old, and because the resolution or
decision of this court on the pending petition would be incomplete without a clear cut
disposition on the partition of the personal and real properties of the conjugal partnership
and consequent delivery thereof to the proper parties. WHEREFORE, finding no
reversible error in the orders complained of, the petition for certiorari is denied for lack of
merit

124. LIBRADA M. AQUINO vs. ERNEST S. AURE G.R. No. 153567 February 18,
2008
 FACTS:

Aure Lending filed a Complaint for ejectment against Aquino. In their Complaint, Aure and
Aure Lending alleged that they acquired the subject property from a Deed of Sale. Aquino
countered that the Complaint lacks cause of action for Aure and Aure Lending do not
have any legal right over the subject property. MeTC rendered in favor of Aquino and
dismissed the Complaint for ejectment of Aure and Aure Lending for non-compliance with
the barangay conciliation process, among other grounds. The MeTC observed that Aure
and Aquino are residents of the same barangay but there is no showing that any attempt
has been made to settle the case amicably at the barangay level. RTC affirmed. CA
reversed the MeTC and RTC Decisions and remanding the case to the MeTC for further
proceedings and final determination of the substantive rights of the parties.

ISSUE: WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY

CONCILIATION PROCEEDINGS IS A JURISDICTIONAL DEFECT THAT WARRANTS
THE DISMISSAL OF THE COMPLAINT.

RULING:

NO. There is no dispute herein that the present case was never referred to the Barangay
Lupon for conciliation before Aure and Aure Lending instituted Civil Case No. 17450. In
fact, no allegation of such barangay conciliation proceedings was made in Aure and Aure
Lending’s Complaint before the MeTC. Non-compliance with the condition precedent
prescribed by P.D. 1508 could affect the sufficiency of the plaintiff's cause of action and
make his complaint vulnerable to dismissal on ground of lack of cause of action or
prematurity; but the same would not prevent a court of competent jurisdiction from
exercising its power of adjudication over the case before it, where the defendants, as in
this case, failed to object to such exercise of jurisdiction in their answer and even during
the entire proceedings a quo.

The trial court cannot motu proprio dismiss the case. The 1997 Rules of Civil Procedure
provide only three instances when the court may motu proprio dismiss the claim, and that
is when the pleadings or evidence on the record show that (1) the court has no jurisdiction
over the subject matter; (2) there is another cause of action pending between the same
parties for the same cause; or (3) where the action is barred by a prior judgment or by a
statute of limitations. Thus, it is clear that a court may not motu proprio dismiss a case on
the ground of failure to comply with the requirement for barangay conciliation, this ground
not being among those mentioned for the dismissal by the trial court of a case on its own
initiative.

125. APOLINAR R. ROYALES v. IAC G.R. No. L-65072 January 31, 1984

FACTS:

The spouses Apolinar R. Royales and Presentacion Gregorio, petitioners herein, are the
lessees of a residential house owned by respondent Jose. Planas instituted before the
then City Court of Manila an ejectment suit against petitioners. Issues having been joined,
trial on the merits ensued. Respondent Planas testified on his own behalf and was cross-
examined by petitioners' counsel.. After the decision had become final and executory,
Planas filed a motion for execution and the same was granted by the court. Execution of
the judgment was however restrained by the Regional Trial Court of Manila upon the filing
by petitioners of a petition for certiorari and prohibition with preliminary injunction, wherein
they assailed the said decision on ground of lack of jurisdiction, allegedly arising from
failure of respondent Planas to submit the dispute to the Barangay Lupon for conciliation
as required by P.D. 1508.

The Regional Trial Court handed down a decision declaring the judgment of the trial court
null and void for having been rendered without jurisdiction. Having found that "the parties
in the case are residents not only of the same city, but of the same barangay,
Reconsideration of the decision having been denied, respondent Planas appealed to the
Intermediate Appellate Court, vacating the judgment of the RTC thus confirming the
decision of the City Court of Manila. Unable to obtain a reconsideration thereof, petitioners
filed the instant petition before this Court.

ISSUE: Whether or not the omission to barangay conciliation process prior to the
filing of an action in court is fatal to the case?

RULING:

NO. In disputes covered by P.D. 1508, as in the case at bar, the barangay conciliation
process is a pre-condition for the filing of an action in court. There is no dispute that prior
to the filing of the complaint, the case was never referred to the Barangay Lupon for
conciliation. In fact, respondent Planas failed to allege in his complaint compliance with
this condition precedent.

Ordinarily, non-compliance with the condition precedent prescribed by P.D. 1508 could
affect the sufficiency of the plaintiff's cause of action and make his complaint vulnerable
to dismissal on ground of lack of cause of action or prematurity; but the same would not
prevent a court of competent jurisdiction from exercising its power of adjudication over
the case before it, where the defendants, as in this case, failed to object to such exercise
of jurisdiction in their answer and even during the entire proceedings a quo. Furthermore,
it has also been held that after voluntarily submitting a cause and encountering an
adverse decision on the merits, it is too late for the loser to question the jurisdiction or
power of the court. And it is not right for a party who has affirmed and invoked the
jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards
deny that same jurisdiction to escape a penalty.

126. DANTE M. PASCUAL, represented by REYMEL R. SAGARIO, vs. MARILOU M.

PASCUAL. G.R. No. 157830. November 17, 2005

Facts:

Dante is a permanent resident of the U.S., who appointed Sagario as his attorney-in-fact
through a SPA to file a case for the cancellation and/or annulment of title, Deed of
Absolute Sale, and for the reconveyance of property with damages. Marilou filed a motion
to dismiss and contented that there was non-compliance with requirement of the LGC
and that there must have been a confrontation before the Lupon Chairman or Pangkat,
before filing a claim in court. RTC granted the respondent's motion to dismiss. Where real
property or interest therein is involved, the dispute shall be filed before the barangay
where the property is located, regardless of the residence of the parties. Petitioner's
motion for reconsideration was denied. The court was of the opinion that the attorney-in-
fact shall be deemed the real party in interest, he was therefore obliged to bring the case
before the barangay. Hence petitioner elevated the case to the SC.

ISSUE: WON the trial court dismissal is correct.

RULING: No.

The plaintiff not the Attorney-in-fact is the real-party-in-interest. The Lupon shall have no
jurisdiction over disputes where the parties are not actual residents of the same city or
municipality, except where the barangays in which they actually reside adjoin each other.
To construe the express statutory requirement of actual residency as applicable to the
attorney-in-fact of the party-plaintiff, as contended by respondent, would abrogate the
meaning of a “real party in interest” as defined in Section 2 of Rule 314 of the 1997 Rules
of Court vis-a-vis Section 3 of the same Rule which was earlier quoted but misread and
misunderstood by respondent.

In fine, since the plaintiff-herein petitioner, the real party in interest, is not an actual
resident of the barangay where the defendant-herein respondent resides, the local lupon
has no jurisdiction over their dispute, hence, prior referral to it for conciliation is not a pre-
condition to its filing in court.

The RTC thus erred in dismissing petitioner’s complaint.

127. JOSE AUDIE ABAGATNAN, JOSEPHINE A. PARCE, JIMMY ABAGATNAN,

JOHN ABAGATNAN, JENALYN A.DELEON, JOEY ABAGATNAN, JOJIE
ABAGATNAN, and JOY ABAGATNAN VS. SPOUSES JONATHAN CLARITO
and ELSA CLARITO
G.R. No. 211966 August 7, 2017

FACTS:
Wenceslao Abagatnan and Lydia Capote bought land in Barangay Cogon in Roxas City
from Mateo Ambrad and Soterafia Clarito. Lydia died, so property passed to petitioners.
Wenceslao then allowed Sps. Clarito (distant relatives) to construct a house of light
materials on the said land, subject to the condition that they would vacate if he needs it.
When offered to sell the property to Clarito they declined, so Petitioners sent them a letter
requiring that they vacate the lot, but they refused. Petitioners filed a Complaint for
Unlawful Detainer and Damages before the MTC. It is noted that it alleged that prior
conciliation proceedings before the barangay is not a prerequisite for the action, since not
all petitioners lived in that barangay (Jimmy, Laguna; Jenalyn, Pasig). Clarito, argue that
such is a mandatory requirement that cannot be dispensed with, especially since Jimmy
and Jenny executed SPAs in favour of Josephine Parce, a resident of the barangay. MTC
ruled in favor of petitioners. RTC denied appeal. CA dismissed the complaint, it held that
the complaint should be dismissed for lack of prior referral to the Katarungang
Pambarangay. Majority of petitioners resided in the barangay, and the 2 out-of-town
petitioners executed a SPA. Since respondents lived in the same barangay, the dispute
is within the Lupon Tagapamayapa’s authority. MR denied, so petitioners filed the petition
for review with SC.

ISSUE: WON the prior barangay conciliation is necessary, despite the fact that not all
of the parties reside in the same city or municipality?

RULING: NO.

Parties who do not actually reside in the same city or municipality, or in adjoining
barangays are not required to submit the dispute to the lupon before they go to court.
Citing Pascual v. Pascual and Banting v. Sps Maglapuz, the Court stated that the
requirement pertains to the real parties in interest. It cannot be applied to an attorney-in-
fact, as an interpretation espousing such would abrogate the definition of a real party in
interest.

In this case, the Complaint alleged that not all real parties in interest resided in Roxas
City, therefore the lupon has no jurisdiction over the dispute, and prior referral for
barangay conciliation is not a precondition to filing in court. The fact that a SPA was
executed in favour of Josephine is irrelevant insofar as the actual residence requirement
under the LGC is concerned.

128. JIMMY BANTING, ALFRED REYES AND MAXIMA ARCENO REYES,

PETITIONERS, VS. SPS. JOSE MAGLAPUZ AND RAYMUNDA BANDIN MAGLAPUZ,
RESPONDENTS. G.R. NO. 158867, August 22, 2006
FACTS:

An ejectment complaint was filed with the MeTC entitled, "Sps. Jose Maglapuz &
Raymunda Bandin-Maglapuz,represented by their Attorney-in-Fact Rosalinda Maglapuz-
Agulay, It involved the right to possession of a parcel of land located at No. 405 Real
Street, Talon I, Las Piñas City, containing an area of 258 square meters. The complaint
alleged that spouses Alfred and Maxima Reyes (Spouses Reyes) paid rent to the
Spouses Jose and Raymunda Maglapuz (Spouses Maglapuz) for the use of the property
from 1994 to August 1997, that beginning September 1997, however, Spouses Reyes
stopped paying rent, SPOUSES Maglapuz demanded payment but when no payment
was made, Spouses Maglapuz filed said Civil Case No. 5663 against Spouses Reyes
impleading Jimmy Banting (Banting) with whom Spouses Reyes entered into a
partnership for the operation of a grocery store on the subject property. The MeTC
rendered judgment in favor of Spouses Maglapuz. Spouses Reyes and Banting appealed
to the RTC. the RTC dismissed the appeal, thus the case was elevated to the CA who
dismissed the case. Hence this petition.

ISSUE: WON the dismissal is correct.

RULING:

Yes. It is settled that the requirement under Section 412 of the Local Government Code
that a case be referred for conciliation before the Lupon as a precondition to its filing in
court applies only to those cases where the real parties-in-interest actually reside in the
same city or municipality. Here, the complaint filed with the MeTC specifically alleged that
the parties reside in different barangays and cities.

As to the jurisdiction of the MeTC, this can be determined from the complaint itself. It
plainly states that the last demand was made by respondents upon petitioners on August
9, 1999. The complaint for ejectment was filed on September 21, 1999 or before the lapse
of the one-year period. It was therefore properly filed with the MeTC.

All told, the appeal of petitioners fell short even on the merits. It was properly dismissed
by the RTC. The Court of Appeals did not err in sustaining the RTC.
 129. SAME AS ROYALES VS IAC

130. MANUEL A. RAMOS, v. THE HONORABLE COURT OF APPEALS and

DOMINGO RAMOS G.R. No. 85475. June 30, 1989

FACTS:

Domingo Ramos authorized his brother Manuel to sell his share of lands owned by them
in common with their other brothers and sisters. Manuel did. Later, Domingo revoked the
power of attorney and demanded an accounting from Manuel. Manuel refused. Domingo
then filed a complaint with the Punong Barangay of Pampanga, Buhangin District, Davao
City. Manuel appeared but Domingo did not on the schedule hearing by the Punong Bgy.
Domingo was represented, however, by his wife who said her husband wanted to avoid
a direct confrontation with his brother. She requested that the Punong Bgy issue a
certification that no settlement had been reached so a complaint could be filed in court.
The Punong Bgy complied. Thereupon, Domingo sued Manuel in the RTC Davao, also
for accounting, in Civil Case No. 18560-87. Manuel moved to dismiss the complaint on
the ground of non-compliance with the requirements of PD1508. He cited the failure of
the Punong Bgy to refer the dispute to the Pangkat ng Tagapagkasundo after the
unsuccessful mediation proceedings convened by him. The motion was denied. Manuel
then filed with this Court a petition for certiorari which was referred to the CA. CA denied
the petition. It held that there was no need for such referral because Domingo had clearly
indicated, by his refusal to appear before the Punong Bgy, that no extrajudicial settlement
was possible between him and his brother. Manuel questioned this decision.

Issue:

WoN the referral to the Pangkat was no longer necessary.

RULING:

No. The dispute should not have ended with the mediation proceedings before the
Punong Barangay because of his failure to affect a settlement. It was not for the Punong
Barangay to say that referral to the Pangkat was no longer necessary merely because
he himself had failed to work out an agreement between the parties. The Pangkat could
have exerted more efforts and succeeded (where he had not) in resolving the dispute.
If the complainant refuses to appear before the Punong Barangay, he is barred from
seeking judicial recourse for the same course of action. The parties must appear in
person without assistance of counsel, except minors and incompetents.

MALIGAYA

MOTE

ERNESTO ALDEGUER, plaintiff-appellee, vs. MARTIN GEMELO and VICENTE

GEMELO,defendants-appellants.
G.R. No. L-46045 July 31, 1939

FACTS:

This is an action brought in the Court of First Instance of Iloilo for the execution of a
judgment for damages, rendered by the Court of First Instance of Occidental Negros. The
judgment was rendered against Vicente Gemelo alone, but in action for execution thereof,
Martin Gemelo was joined as defendant.

Defendants interposed an appeal raising questions of law and impugning the jurisdiction
of CFI Iloilo. They contended that since it was CFI of Negros Occidental which rendered
the judgment whose execution is sought, the action for its enforcement should also be
brought in said court.

ISSUE:
Whether or not CFI Iloilo is a proper venue to enforce the action for execution.

RULING:

Yes.

There is no question that judgment was rendered more than five (5) years ago.
Consequently, section, 447 of the Code of Civil Procedure, which provides that said
judgment may be enforced by an action instituted in regular form, that is, by complaint, is
applicable. In the case of Compañia General de Tabacos vs. Martinez and Nolan (29
Phil., 515), this court said that after the lapse of five (5) years, the judgment "is reduced
to a mere right of action in favor of the person whom it favors which must be enforced, as
are all other ordinary actions, by the institution of a complaint in the regular form."
Although section 447 is silent as to the place where the complaint should be filed, there
is, however, section 377 of the same Code, which fixes the venue of actions in general.
The action for the execution of a judgment for damages is a personal one, and under
section 377 above-mentioned, it should be brought in any province where the plaintiff or
the defendant resides, at the election of the plaintiff. As the action in the present case
was brought in Iloilo where the plaintiff resides, we hold that it was duly brought therein.

The entire reasoning of the appellants on this question is based on American authorities
relative to the writ known as scire facias. However, we have already stated in the case of
Compañia General de Tabacos vs. Martinez and Nolan, supra, that the remedy of scire
facias is not available in the Philippines. The proceedings of scire facias "are not original
action, but mere continuances of the former suit and supplementary remedies to aid in
the recovery of the debt evidenced by the original judgment". The action in the present
case is an original action, and not a mere incident of the primitive suit or a mere auxiliary
and supplementary remedy. It is a new and independent action for the recovery of a debt
evidenced by the original judgment. In other words, it is an action based on a judgment,
or what is called in English an action upon a judgment. The American doctrine is uniform
in the sense that whereas the remedy of scire facias, which is a mere incident of the
original suit, must be instituted in the court where said suit was brought

, an action upon a judgment must be brought either in the same court where said
judgment was rendered or in the place where the plaintiff or defendant resides, or in any
other placed designated by the statutes which treat of the venue of actions in general.
UNITED OVERSEAS BANK PHILS. (formerly WESTMONT BANK), Petitioner, vs.
ROSEMOORE MINING & DEVELOPMENT CORP. and DRA. LOURDES PASCUAL,
Respondents.

G.R. Nos. 159669 & 163521 March 12, 2007

FACTS:

Respondent Rosemoore Mining and Development Corporation (Rosemoore), a Philippine

mining corporation with offices at Quezon City, applied for and was granted by petitioner
Westmont Bank (Bank) a credit facility. To secure the credit facility, a lone real estate
mortgage agreement was executed by Rosemoore and Dr. Lourdes Pascual (Dr.
Pascual), Rosemoore’s president in the City of Manila. The agreement, however, covered
six (6) parcels of land located in San Miguel, Bulacan (Bulacan properties), all registered
under the name of Rosemoore, and two (2) parcels of land, situated in Gapan, Nueva
Ecija (Nueva Ecija properties), owned and registered under the name of Dr. Pascual.

Upon default of Rosemoore, the Bank caused the foreclosure extra-judicially the Bulacan
and Nueva Ecija properties, the Bank as highest bidder. As a result, Rosemoore filed
separate complaints against the Bank, one before Manila RTC and Malolos RTC.

The complaint before Manila RTC was captioned as “Damages, Accounting and Release
of Balance of Loan and Machinery and for Injunction”. This was opposed by the Bank for
improper venue. The lower court as well as CA ruled in favor of Rosemoore.

On the otherhand, the complaint before Malolos RTC was a Petition for Injunction with
Damages with Urgent Prayers for TROand/or Preliminary Injunction and for nullification
of the foreclosure of Bulacan and Nueva Ecija properties. The Bank argued that Malolos
RTC was an improper venue since the properties were situated in Nueva Ecija. The trial
court ruled in favor of Rosemoore ruling the foreclosure of REM as null and void. CA also
ruled in favor of Rosemoore.

ISSUE:

Whether or not, the venue for foreclosure sale is properly laid in Malolos RTC?

RULING:

Yes.
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 Rosemoore, 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.

The rule on venue of real actions is provided in Section 1, Rule 4 of the 1997 Rules of
Civil Procedure, 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 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.

PHILIPPINE BANK OF COMMUNICATIONS and ROMEO G. DELA ROSA,

Petitioners, vs. ELENITA B. TRAZO, Respondent.

G.R. No. 165500 August 30, 2006

FACTS:

Respondent Elenita B. Trazo opened a payroll account with China Banking Corporation
(CBC). Petitioner Romeo G. dela Rosa (Dela Rosa), PBCOM assistant vice-president,
instructed CBC to credit all accounts under its payroll with the medical and clothing
subsidy for the year 1998 with the amount of P7,000.00 for such annual subsidy.

However on 1997, respondent Trazo as project manager of information technology and

management group, resigned from her work thus Dela Rosa wrote to CBC thru William
Lim (Lim) , CBC’s senior assistant vice-President to debit from the respondent account
the amount of P7, 000.

Meanwhile, respondent Trazo drew checks against her current account in favor of Bliss
Development Corporation (BDC) and the House of Sara Lee Phils., Inc. However, the
checks were dishonored by CBC due to insufficiency of funds. As a consequence, she
instituted an action for damages before RTC QC against Dela Rosa, PBCOM, Lim and
CBC. She averred that Dela Rosa has no authority to order the debiting of her account
through Lim without her knowledge and consent.

Petitioners filed a motion for extension while respondent move to declare Dela Rosa,
PBCOM, Lim and CBC in default. Subsequently, Dela Rosa and PBCOM filed a Motion
to Dismiss on the ground of improper venue. Lim and CBC also file their Motion to Dismiss
on the ground that the complaint failed to state cause of action.

RTC dismissed the complaint for improper venue and for failure to state cause of action.
Hence the respondent filed a Notice of Appeal. CA ruled in favor of respondent. According
to the Court of Appeals, absent any qualifying or restrictive words, a stipulation on venue
should be considered merely as an agreement on an additional forum, and not to be
considered as limiting venue to the specified place.

ISSUE:

Whether or not the venue is properly laid in RTC –QC.

RULING:

NO.

Accordingly, only CBC and not the petitioner who can move for dismissal of the case on
ground of improper venue.

The Application for New Current Accounts, which embodies the terms and conditions of
respondent Trazo’s relationship with CBC, contains a stipulation on venue, to wit:

“In case of litigation hereunder, venue shall be in the City Court or Court of First Instance
of Manila as the case may be for determination of any and all questions arising
thereunder”

Since they are privy to and covered by the contract containing the venue stipulation.
Indeed, the dispositive portion of the RTC decision shows that the dismissal on the ground
of improper venue was effective only as against CBC and Lim. As CBC and Lim did not
appeal the decision of the Court of Appeals reversing the RTC ruling, such decision has
become final and executory as regards its disposition on the issue regarding venue.

Nevertheless, it was incorrect for the RTC to dismiss the complaint on the ground of
improper venue. The parties must be able to show that the stipulation is exclusive. Thus,
sans words expressing the parties’ intention to restrict the filing of a suit in a particular
place, courts will allow the filing of a case in any of the venues prescribed by law or
stipulated by the parties, as long as the jurisdictional requirements are followed. The
subject clause contains no qualifying nor restrictive words, such as "must," or
"exclusively," as would indicate the parties’ intention "mandatorily to restrict the venue of
actions to the courts of (Manila) only."

Where the venue stipulation contained the word "shall," we held that the stipulations of
the parties "lack qualifying or restrictive words to indicate the exclusivity of the agreed
forum," and therefore "the stipulated place is considered only as an additional, not a
limiting venue." Consequently, the dismissal by the RTC of the complaint against CBC
and Lim on ground of improper venue is erroneous, and was correctly reversed by the
Court of Appeals.

MARIANO L. GUMABON, JOSEFA GUMABON TOLENTINO, TERESA GUMABON

EUGENIO, MARIO GUEVARRA, FAUSTINO GUMABON ONDEVILLA, WILFREDO
GUMABON, GUILLERMO GUMABON, BRAULIO GUMABON and NOEL DOLOJAN,
petitioners, vs. AQUILINO T. LARIN, respondent.

G.R. No. 142523 November 27, 2001

FACTS:

Petitioners executed in favor of respondent Aquilino Larin a "Deed of Sale With Right of
Repurchase" over a parcel of land located in Pangdara, Candaba, Pampanga. The terms
of repurchase, spelled out in the deed, were that the vendors, or any one of them, could
repurchase the property, or their respective undivided shares, "at any time, from the date
of the contract, after each harvest of each crop year," by repaying Larin the purchase
price and such other sums of money as might have been or be advanced to them.

Thirty-nine years later, petitioners filed a complaint against respondent before the
Regional Trial Court ("RTC") of Quezon City, seeking the return of the certificate of title
from Larin who, it was alleged, refused to hand over the certificate despite the full
payment, nearly seven times the original amount, of their loan. In his answer with
counterclaim, respondent averred that the transaction was not, as petitioners so asserted,
an equitable mortgage but a true sale with a right to repurchase; that no repurchase
amount was paid to him; and that the period for the right of repurchase had already
prescribed

Respondent moved for the dismissal of the case. In due time, the trial court dismissed the
complaint on the ground that, being a real action, the case should have been filed before
the RTC of Pampanga, not the RTC of Quezon City. Petitioners emphasized that
respondent Larin never assailed, at any stage theretofore, the venue of the case nor
raised in issue the competence of the RTC of Quezon City to try the case.

ISSUE:

Whether or not a trial court judge can motu proprio dismiss an action for its improper
venue.

RULING:

NO.

Under Section 4, Rule 4, of the old rules,3 such an agreement to venue may be impliedly
made by the defendant when he fails to seasonably object to it. While the present 1997
Rules of Civil Procedure, particularly Section 1, Rule 9,4thereof, does not contain
provisions similar to Sections 3 and 4 of the old rules, the deletion, however, cannot be
taken to mean that objection to venue may still be made in an answer if no motion to
dismiss is filed.

As so aptly observed by Mr. Justice Jose A.R. Melo during the deliberations, the motu
propriodismissal of a case was traditionally limited to instances when the court
clearly had no jurisdiction over the subject matter and when the plaintiff did not
appear during trial, failed to prosecute his action for an unreasonable length of
time or neglected to comply with the rules or with any order of the court. Outside
of these instances, any motu proprio dismissal would amount to a violation of the
right of the plaintiff to be heard. Except for qualifying and expanding Section 2,7 Rule
9, and Section 3,8 Rule 17, of the Revised Rules of Court, the amendatory 1997 Rules of
Civil Procedure9 brought about no radical change. Under the new rules, a court may motu
proprio dismiss a claim when it appears from the pleadings or evidence on record that it
has no jurisdiction over the subject matter; when there is another cause of action pending
between the same parties for the same cause, or where the action is barred by a prior
judgment or by statute of limitations. Improper venue not being included in the
enumeration, it should follow that motu proprio dismissal on said ground would
still not be allowed under the 1997 Rules of Civil Procedure. Sections 6,10 Rule 16,
of the 1997 Rules of Civil Procedure further provides that if no motion to dismiss has been
filed, any of the grounds for dismissal provided under the rules, including improper venue,
may be pleaded as an affirmative defense in the answer, and upon the discretion of the
court, a preliminary hearing may be made thereon as if a motion to dismiss has been
filed. But, as it is, improper venue not having been so raised by respondent as a ground
to dismiss, he must be deemed to have waived the same.
PILIPINAS SHELL PETROLEUM CORPORATION,Petitioner vs. ROYAL FERRY
SERVICES, INC., Respondent

G.R. No. 188146 February 1, 2017

FACTS:

Royal Ferry Services Inc. (Royal Ferry) is a corporation duly organized and existing under
Philippine law.5According to its Articles of Incorporation, Royal Ferry's principal place of
business is located at 2521 A. Bonifacio Street, Bangkal, Makati City. However, it
currently holds office at Room 203, BF Condominium Building, Andres Soriano comer
Solano Streets, Intramuros, Manila.

Royal Ferry filed a verified Petition for Voluntary Insolvency upon the approval and
authorization of its Bad of Directors before the Regional Trial Court of Manila. Thus, RTC
declared it insolvent.

Pilipinas Shell Petroleum Corporation (Pilipinas Shell) filed before the RTC Manila a
Formal Notice of Claim asserted that Royal Ferry owed them the amount of P2,000,000
+ and a Motion to Dismiss on the ground that the Petition was filed in the wrong venue. It
argued that the Insolvency Law provides that a petition for insolvency should be filed
before the court with territorial jurisdiction over the corporation's residence. Since Royal
Ferry's Articles of Incorporation stated that the corporation's principal office is located at
2521 A. Bonifacio St., Bangkal, Makati City, the Petition should have been filed before
the Regional Trial Court of Makati and not before the Regional Trial Court of Manila. RTC
denied the MD. However, it reconsidered its previous decision and stated that, a
corporation cannot change its place of business without amending its Articles of
Incorporation. Therefore it granted the dismissal of the Petition of the respondent.

Upon appeal, the CA reinstated the insolvency proceeding. CA stated that Manila was a
proper venue since the cities of Makati and Manila are part of one region, or even a
province, city or municipality, if Section 51 of the Corporation Code of the Philippines is
taken by analogy.
ISSUE:

Whether or not RTC Manila is the proper venue for insolvency proceeding in this case?

RULING:

Yes.

Insolvency proceedings are defined as the statutory procedures by which a debtor obtains
financial relief and undergoes judicially supervised reorganization or liquidation of its
assets for the benefit of its creditors.

Section 14 of the Insolvency Law specifies that the proper venue for a petition for
voluntary insolvency is the Regional Trial Court of the province or city where the
insolvent debtor has resided in for six (6) months before the filing of the petition.In
this case, the issue of which court is the proper venue for respondent's Petition for
Voluntary Insolvency comes from the confusion on an insolvent corporation's residence.

Jurisdiction is acquired based on the allegations in the complaint. The relevant portion of
respondent's Petition for Voluntary Insolvency reads:

Petitioner was incorporated on 18 October 1996 with principal place of business in

2521 A. Bonifacio Street, Bangkal, Makati City. At present and during the past
six months, [Royal Ferry] has held office in Rm. 203 BF Condo Building,
Andres Soriano cor. Solana St., Intramuros, Manila, within the jurisdiction of
the Honorable Court, where its books of accounts and most of its remaining assets
are kept.

To determine the venue of an insolvency proceeding, the residence of a corporation

should be the actual place where its principal office has been located for six (6) months
before the filing of the petition. If there is a conflict between the place stated in the articles
of incorporation and the physical location of the corporation's main office, the actual place
of business should control.

Requiring a corporation to go back to a place it has abandoned just to file a case is the
very definition of inconvenience. There is no reason why an insolvent corporation should
be forced to exert whatever meager resources it has to litigate in a city it has already left.
In any case, the creditors deal with the corporation's agents, officers, and employees in
the actual place of business. To compel a corporation to litigate in a city it has already
abandoned would create more confusion.

Moreover, the six (6)-month qualification of the law's requirement of residence

shows intent to find the most accurate location of the debtor's activities. If the
address in a corporation's articles of incorporation is proven to be no longer
accurate, then legal fiction should give way to fact.

RODRIGO B. SUPENA, Petitioner, v. JUDGE ROSALIO G. DE LA ROSA,

Respondent.

[A.M. No. RTJ-93-1031. January 28, 1997]

FACTS:

Mortgagee BPI Agicltural Development Bank (BAID) decided to extrajudicially foreclose

the Real Estate Mortgage executed by mortgagor PQL Realty Inc., (PQL) in the former's
favor. Accordingly, BAID petitioned the Ex-Officio Sheriff of Manila to take the necessary
steps for the foreclosure of the mortgaged property and its sale to the highest bidder.

By the ex parte petition filed by the mortgagor on the ground that the parties have ageeed
to hold the foreclosure proceedings in Makati and not in Manila, RTC Manila held in
abeyance the scheduled public auction sale. According to the complainant/ mortgagee
this is an improper cancellation since no notice and hearing happened.

Respondent , in his comment, maintains that he held the foreclosure in abeyance to

determine first whether the venue of foreclosure was improperly laid in light of the
stipulation in their Loan Agreement.

ISSUE:

Whether or not the foreclosure proceeding is properly laid?

RULING:

We have three different types of sales, namely: an ordinary execution sale, a judicial
foreclosure sale, and an extrajudicial foreclosure sale. An ordinary execution sale is
governed by the pertinent provisions of Rule 39 of the Rules of Court on Execution,
Satisfaction and Effect of Judgments. Rule 68 of the Rules, captioned Foreclosure of
Mortgage, governs judicial foreclosure sales. On the other hand, Act No. 3135, as
amended by Act No. 4118, otherwise known as "An Act to Regulate the Sale of Property
under Special Powers Inserted in or Annexed to Real Estate Mortgages," applies in cases
of extrajudicial foreclosure sales of real estate mortgages.

If the main concern of respondent judge in holding in abeyance the auction sale in Manila
scheduled on May 26, 1993 was to determine whether or not venue of the execution sale
was improperly laid, he would have easily been enlightened by referring to the correct
law, definitely not the Rules of Court, which is Act No. 3135, as amended particularly
Sections 1 and 2, viz:

"SECTION 1. When a sale is made under a special power inserted in or attached to any
real estate mortgage hereafter made as security for the payment of money or the
fulfillment of any other obligation, the provisions of the following sections shall govern as
to the manner in which the sale and redemption shall be effected, whether or not provision
for the same is made in the power.

SEC. 2. Said sale cannot be made legally outside of the province in which the property
sold is situated; and in case the place within said province in which the sale is to be made
is the subject of stipulation, such sale shall be made in said place or in the municipal
building of the municipality in which the property or part thereof is situated."

Here, the real property subject of the sale is situated in Felix Huertas Street, Sta. Cruz,
Manila. Thus, by express provision of Section 2, the sale cannot be made outside of
Manila. Moreover, were the intention of the parties be considered with respect to venue
in case the properties mortgaged be extrajudicially foreclosed, they even unequivocably
stipulated in the Deed of Real Estate Mortgage itself under paragraph 15 that:

"xxx xxx xxx

It is hereby agreed that in case of foreclosure of this mortgage under Act 3135, as
amended by Act 4118, the auction sale, in case of properties situated in the province,
shall be held at the capital thereof."

SILANGAN TEXTILE MANUFACTURING CORPORATION, TRADEWORLD

SYNERGY, INCORPORATED, and CELLU INDUSTRIES, INCORPORATED,
Petitioners,* vs. HON. AVELINO G. DEMETRIA, PRESIDING JUDGE, REGIONAL
TRIAL COURT, LIPA CITY, BRANCH 85, and LUZON SPINNING MILLS,
INCORPORATED, Respondents.

G.R. No. 166719 March 12, 2007

FACTS:

Respondent Luzon Spinning Mills, INc., (LSMI)filed a complaint for Collection of Sum of
Money before RTC Lipa against the Petitioner Silangan Textile Manufacturing Corp
(SMTC) for all the yarn deliverd by the former to the latter as evidenced by receipts.

Allegedly SMTC issued postdated checks as payment, however the same had been
dishonored for the reason “Drawn against insufficient fund”. Despite demand by LSIM,
SMTC failed and refused to comply. RTC issued a writ of preliminary attachment against
STMC’s properties. This time, there was already a criminal case instituted by LSMI
against Silangans for violation of BP 22. Thus SMTC move to dismiss the civil case
against it and to discharge the attachment, which the court denied.

SMTC elevated the case to CA via petition for Certiorari 65 which was dismissed.

ISSUE:

Whether or not the court is correct in granting the writ of preliminary attachment in favor
of the respondent LSMI?

RULING:

Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable
the attaching party to realize upon relief sought and expected to be granted in the main
or principal action.20 Being an ancillary or auxiliary remedy, it is available during the
pendency of the action which may be resorted to by a litigant to preserve and protect
certain rights and interests therein pending rendition, and for purposes of the ultimate
effects, of a final judgment in the case. They are provisional because they constitute
temporary measures availed of during the pendency of the action and they are ancillary
because they are mere incidents in and are dependent upon the result of the main
action.21

A writ of preliminary attachment is a species of provisional remedy. As such, it is a

collateral proceeding, permitted only in connection with a regular action, and as one of its
incidents; one of which is provided for present need, or for the occasion; that is, one
adapted to meet a particular exigency.
In this case, the Court lifted the writ of preliminary attachment as a consequence of the
dismissal by this Court of the Civil Case for Collection of Sum of Money (for the civil case
is deemed instituted in criminal case for BP 22)

ALBERTO SIEVERT, petitioner,

vs.
COURT OF APPEALS, HON. JUDGE ARTEMON D. LUNA and AURELIO
CAMPOSANO, respondents.
G.R. No. 84034 December 22, 1988

FACTS:

Petitioner Sievert received by mail a Petition for Issuance of Preliminary Attachment filed
with RTC Manila. Obviously, he had not received any summons or any copy of complaint
against him in a Civil Case.

On the hearing, counsel for petitioner object to the jurisdiction of the court over the person
of the petitioner on the ground that no summons had been served upon him on the main
case,thus jurisdiction over the person of the petitioner had not been acquired.

RTC manila denied the objection citing Rule 57 of the Rules of Court. Petitioner filed a
Petition for Certiorari with CA which dismissed the same.

ISSSUE:

Whether or not respondent Judge may issue a writ of preliminary attachment against
petitioner before summons is served on the latter

RULING:

Under Sec. 1, Rule 57, it is clear that, at the commencement of the action, a party may
have the property of the adverse party attached as security. The resolution of this issue
depends, therefore, on what is meant by "Commencement of the action." Moran, citing
American jurisprudence on this point, stated thus: "Commencement of action. — Action
is commenced by filing of the complaint, even though summons is not issued until a later
date. Thus, a writ of preliminary attachment may issue upon filing of the complaint even
before issuance of the summons.

There is no question that a writ of preliminary attachment may be applied for a plaintiff "at
the commencement of the action or at any time thereafter" in the cases enumerated in
Section 1 of Rule 57 of the Revised Rules of Court. The issue posed in this case, however,
is not to be resolved by determining when an action may be regarded as having been
commenced, a point in time which, in any case, is not necessarily fixed and Identical
regardless of the specific purpose for which the determination is to be made. The critical
time which must be Identified is, rather, when the trial court acquires authority under law
to act coercively against the defendant or his property in a proceeding in attachment. We
believe and so hold that critical time is the time of the vesting of jurisdiction in the court
over the person of the defendant in the main case.

Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable
the attaching party to realize upon relief sought and expected to be granted in the main
or principal action. A court which has not acquired jurisdiction over the person of
defendant, cannot bind that defendant whether in the main case or in any ancillary
proceeding such as attachment proceedings. The service of a petition for preliminary
attachment without the prior or simultaneous service of summons and a copy of the
complaint in the main case — and that is what happened in this case — does not of
course confer jurisdiction upon the issuing court over the person of the defendant.

Valid service of summons and a copy of the complaint will in such case vest jurisdiction
in the court over the defendant both for purposes of the main case and for purposes of
the ancillary remedy of attachment. In such case, notice of the main case is at the same
time notice of the auxiliary proceeding in attachment. Where, however, the petition for
a writ of preliminary attachment is embodied in a discrete pleading, such petition must
be served either simultaneously with service of summons and a copy of the main
complaint, or after jurisdiction over the defendant has already been acquired by such
service of summons. Notice of the separate attachment petition is not notice of the main
action. Put a little differently, jurisdiction whether ratione personae or ratione materiae
in an attachment proceeding is ancillary to jurisdiction ratione personae or ratione
materiae in the main action against the defendant. If a court has no jurisdiction over the
subject matter or over the person of the defendant in the principal action, it simply has
no jurisdiction to issue a writ of preliminary attachment against the defendant or his
property.

In the case at bar, the want of jurisdiction of the trial court to proceed in the main case
against the defendant is quite clear. It is not disputed that neither service of summons
with a copy of the complaint nor voluntary appearance of petitioner Sievert was had in
this case. Yet, the trial court proceeded to hear the petition for issuance of the writ.
SOFIA TORRES, FRUCTOSA TORRES, HEIRS OF MARIO TORRES and SOLAR
RESOURCES, INC.,Petitioners,
vs.
NICANOR SATSATIN, EMILINDA AUSTRIA SATSATIN, NIKKI NORMEL SATSATIN
and NIKKI NORLIN SATSATIN, Respondents.
G.R. No. 166759 November 25, 2009

FACTS:

The siblings Sofia, Fructosa and Mario each owned a parcel of land located in Cavitte.
The respondent Nicanor Satsatin, asked their mother Agripina if they wanted to sell the
property. Upon consultation with her daughter and son, they authorized Nicanor to sell
the said property to Solar Resources, Inc. (solar).

Allegedly, Solar already paid the purchase price and yet Nicanor did not remit the money
to them. Instead they’ve lerned that Nicanor acquired a house and lot and a car and
registered them in the name of his unemployed children.

Subesquently, Nicanor was able to remit a portion of the purchase price and despite
demand, Nicanor dd not pay the balance thereof compelling the Petitioners to institute a
complaint for sum of money and damages against the respondents before RTC
Dasmarinas, Cavite.

Thereafter, Petitioners file an ex-parte Motion for Issuance of a Write of Attachment

alleging that the respondents are about to depart from the Philippines and that they have
properties in the nearby provinces.

Upon posting of the bond, the RTC ordered to serve the writ of Attachment and directed
the sheriff to attach the estate, real or personal of the respondents. A copy of the writ was
served to the respondents and levied the real and personal properties including
household appliances, cars and parcel of land in Manila. Thereafter, a summon together
with a copy of the complaint was also served.

The respondent, filed their ANnswer as well as Motion to Discharge Writ of Attachment
on the grounds of : the bond was issued before the issuance of the writ of attachment;
the writ of attachment was issued before the summons was received by the respondents;
the sheriff did not serve copies of the application for attachment, order of attachment,
plaintiffs’ affidavit, and attachment bond, to the respondents; the sheriff did not submit a
sheriff’s return in violation of the Rules; and the grounds cited for the issuance of the writ
are baseless and devoid of merit.

RTC denied the motion until they post a counterbond. The Urgent Motion to Lift/Set side
the Writ was also denied by the court. Hence, filed a petition for certiorari before CA on
the ground that there is a grave abuse of discretion when the lower cout denied their
motion even ithas no jurisdiction over the person of respondents when the Writ was issued
to them. CA ruled in favor of the respondents.

ISSUE:

Whether or not, the CA is correct in lifting the writ of preliminary Attachment

RULING:

A writ of preliminary attachment is defined as a provisional remedy issued upon order of

the court where an action is pending to be levied upon the property or properties of the
defendant therein, the same to be held thereafter by the sheriff as security for the
satisfaction of whatever judgment that might be secured in the said action by the attaching
creditor against the defendant.

The CA correctly found that there was grave abuse of discretion amounting to lack of or
in excess of jurisdiction on the part of the trial court in approving the bond posted by
petitioners despite the fact that not all the requisites for its approval were complied with.
In accepting a surety bond, it is necessary that all the requisites for its approval are met;
otherwise, the bond should be rejected.

Every bond should be accompanied by a clearance from the Supreme Court showing that
the company concerned is qualified to transact business which is valid only for thirty (30)
days from the date of its issuance. However, it is apparent that the Certification issued by
the Office of the Court Administrator (OCA) at the time the bond was issued would clearly
show that the bonds offered by Western Guaranty Corporation may be accepted only in
the RTCs of the cities of Makati, Pasay, and Pasig. Therefore, the surety bond issued by
the bonding company should not have been accepted by the RTC of Dasmariñas, Branch
90, since the certification secured by the bonding company from the OCA at the time of
the issuance of the bond certified that it may only be accepted in the above-mentioned
cities. Thus, the trial court acted with grave abuse of discretion amounting to lack of or in
excess of jurisdiction when it issued the writ of attachment founded on the said bond.

Moreover, in provisional remedies, particularly that of preliminary attachment, the

distinction between the issuance and the implementation of the writ of attachment is of
utmost importance to the validity of the writ. The distinction is indispensably necessary to
determine when jurisdiction over the person of the defendant should be acquired in order
to validly implement the writ of attachment upon his person.

This Court has long put to rest the issue of when jurisdiction over the person of the
defendant should be acquired in cases where a party resorts to provisional remedies. A
party to a suit may, at any time after filing the complaint, avail of the provisional remedies
under the Rules of Court. Specifically, Rule 57 on preliminary attachment speaks of the
grant of the remedy "at the commencement of the action or at any time before entry of
judgment." This phrase refers to the date of the filing of the complaint, which is the
moment that marks "the commencement of the action." The reference plainly is to a time
before summons is served on the defendant, or even before summons issues.

it is indispensable not only for the acquisition of jurisdiction over the person of the
defendant, but also upon consideration of fairness, to apprise the defendant of the
complaint against him and the issuance of a writ of preliminary attachment and the
grounds therefor that prior or contemporaneously to the serving of the writ of attachment,
service of summons, together with a copy of the complaint, the application for attachment,
the applicant’s affidavit and bond, and the order must be served upon him.

In the instant case, assuming arguendo that the trial court validly issued the writ of
attachment on November 15, 2002, which was implemented on November 19, 2002, it is
to be noted that the summons, together with a copy of the complaint, was served only on
November 21, 2002.

RICARDO CUARTERO, Petitioner, v. COURT OF APPEALS, ROBERTO

EVANGELISTA and FELICIA EVANGELISTA, Respondents.
G.R. No. 102448. August 5, 1992

FACTS:

Petitioner Cuartero filed a complaint against respondents Evangelista spouses for sum of
money and damages with a prayer for a writ of preliminary attachment before RTC-QC.
The court granted the issuance of the writ.

The said writ together with complaint and summons were simultaneously served to the
respondents. Thereafter, the sheriff levied and pulled out the properties of the
respondents pursuant to the court order.

Respondents moved to discharge the writ for being irregularly and improperly issued.
RTC denied. Thus, respondents filed a special civil action for certiorari with CA. CA ruled
in favor of the respondents on the ground that the trial court did not acquire jurisdiction
over the person of defendants. (Adapting Sievert ruling)

ISSUE:

Whether or not the CA is correct in lifting the writ of preliminary attachment

RULING:

A writ of preliminary attachment is defined as a provisional remedy issued upon

order of the court where an action is pending to be levied upon the property or
properties of the defendant therein, the same to be held thereafter by the sheriff as
security for the satisfaction of whatever judgment might be secured in said action
by the attaching creditor against the defendant.

Under section 3, Rule 57 of the Rules of Court, the only requisites for the issuance of the
writ are the affidavit and bond of the applicant. No notice to the adverse party or hearing
of the application is required inasmuch as the time which the hearing will take could be
enough to enable the defendant to abscond or dispose of his property before a writ of
attachment issues. In such a case, a hearing would render nugatory the purpose of this
provisional remedy. The ruling remains good law.

In Davao Light and Power, Co. Inc. v. Court of Appeals, supra, the phrase "at the
commencement of the action" is interpreted as referring to the date of the filing of the
complaint which is a time before summons is served on the defendant or even before
summons issues. The Court added that —

". . . after an action is properly commenced — by filing of the complaint and the payment
of all requisite docket and other fees — the plaintiff may apply and obtain a writ of
preliminary attachment upon the fulfillment of the pertinent requisites laid down by law,
and that he may do so at any time, either before or after service of summons on the
defendant. And this, indeed, has been the immemorial practice sanctioned by the courts:
for the plaintiff or other proper party to incorporate the application for attachment in the
complaint or other appropriate pleading (counter-claim, crossclaim, third-party-claim) and
for the Trial Court to issue the writ ex-parte at the commencement of the action if it finds
the application otherwise sufficient in form and substance."cralaw virtua1aw library

It is clear from our pronouncements that a writ of preliminary attachment may issue even
before summons is served upon the defendant. However, we have likewise ruled that the
writ cannot bind and affect the defendant until jurisdiction over his person is eventually
obtained. Therefore, it is required that when the proper officer commences
implementation of the writ of attachment, service of summons should be simultaneously
made.

It must be emphasized that the grant of the provisional remedy of attachment

practically involves three stages: first, the court issues the order granting the
application; second, the writ of attachment issues pursuant to the order granting
the writ; and third, the writ is implemented. For the initial two stages, it is not
necessary that jurisdiction over the person of the defendant should first be
obtained. However, once the implementation commences, it is required that the
court must have acquired jurisdiction over the defendant for without such
jurisdiction, the court has no power and authority to act in any manner against the
defendant. Any order issuing from the Court will not bind the defendant.

G.R. No. 93262 December 29, 1991

DAVAO LIGHT & POWER CO., INC., petitioner,
vs.
THE COURT OF APPEALS, QUEENSLAND HOTEL or MOTEL or QUEENSLAND
TOURIST INN, and TEODORICO ADARNA, respondents.

FACTS:

Petitioner Davao Light, filed a complaint for recovery of sum of money and damages
against the respondents before RTC Davao City. The complaint contained an ex parte
application for writ of preliminary attachment.

RTC granted the ex parte application. Thus, the summons, copy of the complaint and the
writ of attachment and a copy of the bond were served on respondents. Pursuant to the
said writ, the Sheriff seized properties of the respondents.

The respondents file a motion to Discharge the Attachment for lack of jurisdiction to issue
the same, because the lower court had not yet acquired jurisdiction over the cause and
the persons of the defendants when it issued. The motion was denied. However, by way
of certiorari, CA annulled the RTC decision citing the ruling in Sievert.
ISSUE:

Whether or not a writ of preliminary attachment may issue ex parte against a defendant
before acquisition of jurisdiction of the latter’s person by service of summons or his
voluntary submission to the court’s authority

RULING:

Yes.

A preliminary attachment may be defined, paraphrasing the Rules of Court, as the

provisional remedy in virtue of which a plaintiff or other party may, at the commencement
of the action or at any time thereafter, have the property of the adverse party taken into
the custody of the court as security for the satisfaction of any judgment that may be
recovered. It is a remedy which is purely statutory in respect of which the law requires a
strict construction of the provisions granting it. Withal no principle, statutory or
jurisprudential, prohibits its issuance by any court before acquisition of jurisdiction over
the person of the defendant.

Rule 57 in fact speaks of the grant of the remedy "at the commencement of the
action or at any time thereafter." The phase, "at the commencement of the action,"
obviously refers to the date of the filing of the complaint — which, as above pointed
out, is the date that marks "the commencement of the action;" and the reference
plainly is to a time before summons is served on the defendant, or even before
summons issues. What the rule is saying quite clearly is that after an action is
properly commenced — by the filing of the complaint and the payment of all
requisite docket and other fees — the plaintiff may apply for and obtain a writ of
preliminary attachment upon fulfillment of the pertinent requisites laid down by
law, and that he may do so at any time, either before or after service of summons
on the defendant. And this indeed, has been the immemorial practice sanctioned
by the courts: for the plaintiff or other proper party to incorporate the application
for attachment in the complaint or other appropriate pleading (counter-claim,
cross-claim, third-party claim) and for the Trial Court to issue the writ ex-parte at
the commencement of the action if it finds the application otherwise sufficient in
form and substance.

For the guidance of all concerned, the Court reiterates and reaffirms the proposition that
writs of attachment may properly issue ex parte provided that the Court is satisfied that
the relevant requisites therefor have been fulfilled by the applicant, although it may, in its
discretion, require prior hearing on the application with notice to the defendant; but that
levy on property pursuant to the writ thus issued may not be validly effected unless
preceded, or contemporaneously accompanied, by service on the defendant of summons,
a copy of the complaint (and of the appointment of guardian ad litem, if any), the
application for attachment (if not incorporated in but submitted separately from the
complaint), the order of attachment, and the plaintiff's attachment bond.

JOSEPHINE CRUZ MALOLOS represented by her HEIRS EMMANUEL, MARIA

MARINELA and MARIA MARJORIE, all surnamed MALOLOS, Petitioners, v. ASIA
PACIFIC FINANCE CORPORATION and HONORABLE JOSE P. ALEJANDRO,
Presiding Judge of Branch XXVI of the Court of First Instance of Manila,
Respondents.
G.R. No. L-55702. January 7, 1987

FACTS:

Petitioner Malolos is represented by her heris (all petitioners). Whereas the respondent
APCOR is a quasi-banking institution.

APCOR purchased from Francisco Liner a postdated check issued in favor of Fransico
Liner by Malolos. On purchase, Francisco Liner execute a Deed of Assignment, endorsed
the same in favor of the respondent.

The check was later dishonored for the reason of account closed. Respondent demanded
from Francisco liner as well from petitioner as drawer but it remained unpaid. Thus the
respondent filed a complaint for sum of money with preliminary attachment, alleging that
a writ of preliminary attachment may be issued to serve as security for the satisfaction of
any judgment that may be recovered therein. This was granted by the lower court. Hence,
the writ was issued. By virtue thereof, the levy was annotated upon the residential
property of the petitioner in Manila.

Malolos died and her counsel move to dismiss the complaint pursuant to Sec. 21 Rule 3
of the Rules of Court. RTC denied the motion and ruled in favor of the respondent.

ISSUE:

Whether or not the lower court is correct in granting the writ of preliminary attachment
even the main case did not survive by the death of the petitioner. (or is the case among
the exception to the non-survival of money claims under Rule 3)

RULING:

There is no question that the action in the court below is for collection or recovery of
money.
It is already a settled rule that an action for recovery of money or for collection of a debt
is one that does not survive and upon the death of the defendant the case should be
dismissed to be presented in the manner especially provided in the Rules of Court. This
is explicitly provided in Sec. 21, Rule 3 of the Rules of Court which states that:

"SEC. 21. Where claim does not survive. — When the action is for recovery of money,
debt or interest thereon, and the defendant dies before final judgment in the Court of First
Instance, it shall be dismissed to be prosecuted in the manner especially provided in
these rules.

In the present case, the money claim arose out of a pure and simple debt, which as afore-
mentioned, under the provision of Rule 3, Sec. 21 of the Rules of Court shall be dismissed
and must be brought before the probate court. . The fact that a writ attachment has been
issued cannot provide an excuse for such deviation, as a writ of attachment is a remedy
ancillary to the principal proceedings.

Allowing the private respondent to attach petitioners’ properties for the benefit of
her claim against the estate would give an undue advantage over other creditors
against the estate. (Gruenberg v. Court of Appeals, supra) citing Dy v. Enage,
supra). Therefore, under the same principle, a writ of attachment already issued in
connection with a money claim which has to be dismissed because of the death of
the defendant before final judgment cannot provide an exception to the general
rule, and must accordingly be dissolved.

virtua1aw l

ELEAZAR V. ADLAWAN, Petitioner, v. HON. JUDGE VALERIANO P. TOMOL, as

Presiding Judge of Branch XI of RTC-Cebu (formerly Branch XI, CFI-Cebu), Branch
XXVII of RTC-Cebu, with Station in Lapu-Lapu City (formerly Branch XVI, CFI-Cebu,
Presided over by former Judge Ceferino E. Dulay), and ABOITIZ COMPANY, INC.,
Respondents.
G.R. No. 63225. April 3, 1990

FACTS:

Petitioner Adlawan was awarded by the NIA and Bureau of Public Highways for the
constructions of various infrastructure projects of the Government. He sought financial
assistance and support from respondent Aboitiz and Company, Inc. For his failure to pay,
the respondent then filed before CFI Cebu a complaint for the collection of a sum of
money and damages including an ex-parte application for the issuance of a writ of
preliminary attachment against the property of petitioner.
The Executive Judge without notice and hearing issued an order directing the issuance
of a writs of preliminary attachment. They were issued to Sheriff of Cebu, Davao, Dvao
del Sur and Quezon City.

Thereafter, the respondent filed an Urgent Ex-Parte Motion asking the court that it be
allowed to take possession and custody of the attached properties to protect its interest.
The petitioner file a motion to Set Aside the Ex-Parte Writ of Preliminary Attachment. The
RTC then lifter the said writ. The three deputy sheriffs implemented the lifting of
attachment.

Nonetheless, the properties of the petitioner were then seized by virtue of the decision of
RTC in replevin case filed by the respondent.

ISSUE:

Whether or not after the attachment of petitioner’s properties was dissolved and
discharged because it was found by respondent Judge to be wrongful and illegal, does
not constitute grave and manifest abuse of discretion on the part of the same respondent
judge TO REFUSE to implement his own order for the return of the attached properties
to petitioner simply because private respondent suddenly dismissed its complaint

RULING:

Petitioner’s properties were attached on the strength of the writs of preliminary attachment
issued without notice and hearing by the executive judge. These attached properties were
given to the custody of private respondent, Aboitiz and Company, Inc. Petitioner then filed
a Motion to Dissolve the Writ of Attachment which was granted by respondent Judge
Tomol. Thus, petitioner was able to recover some of his properties. But on the following
day, this order was stayed by the same respondent judge leaving the rest of petitioner’s
properties with private Respondent. Later, private respondent withdrew its complaint
which was confirmed by respondent Judge Tomol. Petitioner Adlawan filed a motion to
have the rest of his properties returned but respondent judge refused to act on said motion
due to cases filed by both parties in the different branches of the Court of First Instance
of Cebu relating to the same case.

There is no question that the order dated July 6, 1982 of respondent Judge Valeriano P.
Tomol, Jr. lifting and vacating the order granting the writ of preliminary attachment is a
valid order, issued while he had jurisdiction over the case. The execution of aforesaid
order of July 6, 1982 was stayed for a period of fifteen (15) days on motion of the plaintiff
to enable the latter to question the propriety or impropriety of the same in the appellate
court. Instead, plaintiff filed a civil case for delivery of Personal Properties with Replevin
and Damages with another branch of the CFI of Cebu. Accordingly, having failed to
appeal or question the aforementioned order in the appellate court as originally
manifested, the same became final and executory.

It is basic that once a judgment becomes final, the prevailing party is entitled as a matter
of right to a Writ of Execution, and the issuance thereof is the Court’s ministerial duty. 17

But as earlier stated, the reasons advanced by respondent Judge Tomol for denying the
enforcement of his order dated July 6, 1982 which lifted the writ of attachment and the
restoration of the seized properties to the defendant petitioner herein are: [a] the filing by
private respondent of Civil Case No. 619-L with Branch XVI of CFI-Lapu-Lapu City for
delivery of Personal Properties with Replevin and Damages which as a consequence, the
same properties involved in this case were seized under a writ of replevin upon order of
aforesaid court and [b] the filing by petitioner of Civil Case No. 22265 before Branch X of
the Court of First Instance of Cebu, for damages.

Hence, the issues in this case center on the nature and purpose of the writ of attachment

"A writ of preliminary attachment is a provisional remedy issued upon order of the court
where an action is pending to be levied upon the property or properties of the defendant
therein, the same to be held thereafter by the Sheriff as security for the satisfaction of
whatever judgment might be secured in said action by the attaching creditor against the
defendant."

The provisional remedy of attachment is available in order that the defendant may
not dispose of his property attached, and thus secure the satisfaction of any
judgment that may be secured by plaintiff from defendant. The purpose and
function of an attachment or garnishment is two-fold. First, it seizes upon property
of an alleged debtor in advance of final judgment and holds it subject to
appropriation thus prevents the loss or dissipation of the property by fraud or
otherwise. Second, it subjects to the payment of a creditor’s claim property of the
debtor in those cases where personal service cannot be obtained upon the debtor.
This remedy is to secure a contingent lien on defendant’s property until plaintiff
can, by appropriate proceedings, obtain a judgment and have such property
applied to its satisfaction, or to make some provision for unsecured debts in cases
where the means of satisfaction thereof are liable to be removed beyond the
jurisdiction, or improperly disposed of or concealed, or otherwise placed beyond
the reach of creditors.

Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable
the attaching party to realize upon relief sought and expected to be granted in the main
or principal action.

The remedy of attachment is adjunct to the main suit, therefore, it can have no
independent existence apart from a suit on a claim of the plaintiff against the defendant.
In other words, an attachment or garnishment is generally ancillary to, and dependent on,
a principal proceeding, either at law or in equity, which has for its purpose a determination
of the justice of a creditor’s demand.

During the life of the attachment, the attached property continues in the custody of the
law, the attaching officer being entitled to its possession and liability for its safe keeping.

Based on the above-cited principles, it is obvious that the writ of preliminary

attachment issued is already dissolved and rendered non-existent in view of the
withdrawal of the complaint by Aboitiz and Company, Inc. More importantly, even
if the writ of attachment can be considered independently of the main case, the
same, having been improperly issued as found by respondent Judge Tomol
himself, is null and void and cannot be a justification for holding petitioners’
properties in custodia legis any longer.

.com:cralaw

BAC MANUFACTURING and SALES CORPORATION, Petitioner, v. COURT OF

APPEALS and WYNNER GARMENTS MANUFACTURING, INC., Respondents.
G.R. No. 96784. August 2, 1991

FACTS:

Petitioner, as assignee of certain rights of one BOXTER LIMITED under various contracts
for clothing, entered into with the respondents, filed a complaint against the latter with the
Regional Trial Court of Makati (Branch 145), National Capital Judicial Region. Embodied
in the complaint is an application for the issuance of a writ of preliminary attachment.
Supporting it is an affidavit of its general manager which is attached to the complaint. A
writ of preliminary attachment was issued on 10 October 1986. No summons and a copy
of the complaint were, however, served upon Private Respondent.

A levy on attachment was made upon the machineries of private respondent by Deputy
Sheriff Ruben S. Nequinto of the aforesaid Branch 145 of the trial court a quo.

Neither the Alias Summons nor the order granting the issuance of the writ of preliminary
attachment or the writ of attachment itself was served on the private respondent before
or at the time the levy was made.

Private respondent filed a motion to dismiss the complaint and to dissolve the attachment
for failure of petitioner to prosecute its case for an unreasonable length of time and that
no copies of the summons and order of attachment were served upon it. Petitioner filed
its opposition thereto alleging therein that it could not, inspite of its diligent efforts, locate
private respondent’s principal office address. Trial Court denied the motion to dismiss.
Hence the respondent appealed to CA which sustains private respondent’s stating that
Since private respondent was not validly or properly served with summons, the court
below did not acquire jurisdiction over it, The fact that the Sheriff and the petitioner herein
could not locate the principal office of private respondent is of no consequence, for
whenever the address of a defendant is unknown and cannot be ascertained by diligent
inquiry, service of summons may, by leave of court, be effected by publication pursuant
to Section 16 of Rule 14 of the Rules of Court. The trial court then acted with grave abuse
of discretion when he ordered the attachment of the property of private Respondent. (b)
Settled is the rule that where plaintiff fails to prosecute his action for an unreasonable
length of time, the action may be dismissed upon motion of defendant or upon the court’s
own motion.

Petitioner sought to reconsider the above decision in its motion filed on 4 January 1990
alleging therein that (a) private respondent’s voluntary appearance via the filing of its
answer and motion to dismiss has rendered the petition, which is founded on lack of
summons and failure to prosecute, moot and academic, and (b) private respondent’s
reliance on technicalities cannot defeat the ends of substantial justice whose issues have
been joined by the filing of the answer.

ISSUE:

Whether or not the CA is correct in dissolving the writ of attachment?

RULING:

Yes.

A court which has not acquired jurisdiction over the person of the defendant cannot bind
the defendant, whether in the main case or in the proceedings for the ancillary remedy of
attachment. In the relatively recent case of Sievert v. Court of Appeals, Et Al., We ruled:
"Attachment is an ancillary remedy. It is not sought for its own sake but rather to
enable the attaching party to realize upon relief sought and expected to be granted
in the main or principal action. A court which has not acquired jurisdiction over the
person of the defendant, cannot bind that defendant whether in the main case or in any
ancillary proceeding such as attachment proceedings. The service of a petition for
preliminary attachment without the prior or simultaneous service of summons and a copy
of the complaint in the main case — and that is what happened in this case — does not
of course confer jurisdiction upon the issuing court over the person of the defendant.
Ordinarily, the prayer in a petition for a writ of preliminary attachment is embodied or
incorporated in the main complaint itself as one of the forms of relief sought in such
complaint. Thus, valid service of summons and a copy of the complaint will in such case
vest jurisdiction in the court over the defendant both for purposes of the main case and
for purposes of the ancillary remedy of attachment. In such case, notice of the main case
is at the same time notice of the auxiliary proceeding in attachment. Where, however, the
petition for a writ of preliminary attachment is embodied in a discrete pleading, such
petition must be served either simultaneously with service of summons and a copy of the
main complaint, or after jurisdiction over the defendant has already been acquired by
such service of summons. Notice of the separate attachment petition is not notice of the
main action. Put a little differently, jurisdiction whether ratione personae or ratione
materiae in an attachment proceeding is ancillary to jurisdiction ratione personae or
ratione materiae in the main action against the defendant. If a court has no jurisdiction
over the subject matter or over the person of the defendant in the principal action, it simply
has no jurisdiction to issue a writ of preliminary attachment against the defendant or his
property

RODIL

Calo vs. Roldan

G.R. No. L-825

July 20, 1948

FACTS: This is a petition for writ of certiorari against Judge Arsenio Roldan on the ground
of exceeding his jurisdiction and acted with grave abuse of discretion in appointing a
receiver of certain lands and their fruits. Regino Relova and Teodula Bartolome filed a
complaint against Tranquilino Calo and Doroteo San Jose for conniving with each other,
and through the use of force, stealth, threats, and intimidation, intend to enter and work
or harvest existing fruits may be found in the lands allegedly owned and possessed by
the plaintiffs. The plaintiffs prayed for the issuance of the preliminary injunction (WOPI)
to be issued ex parte to immediately restrain, enjoin, and prohibit the defendants and their
agents from entering and interfering with the harvest of the lands belonging to the
plaintiffs. The defendants opposed the WOPI on the ground that they are owners of the
lands and have been in actual possession thereof since 1925. The CFI Judge denied the
petition for the WOPI on the ground that the defendants were in actual possession of said
lands. MR was filed but was not decided by the CFI. Plaintiffs then filed an urgent petition
ex-parte praying that the MR of the order denying their petition for WOPI be granted
and/or for the appointment of the receiver of the properties on the ground that: a. Plaintiffs
have interest in properties in question and the fruits were in danger of being lost unless a
receiver is appointed b. The appointment of a receiver was the most convenient and
feasible means of preserving, administering, and or disposing of the properties in litigation
which included their fruits Judge Roldan decided to consider the MR and granted the
appointment of a receiver. Issue:

ISSUE: WON it is proper for the plaintiffs to apply and be granted of the preliminary
attachment?

HELD: According to the complaint filed by the plaintiffs, their action is one of ordinary
injunction, for they alleged that they are the owners of the lands, and were in actual
possession thereof and that the defendants with any legal right and through the use of
force, stealth, threat, and intimidation, intend to enter the lands in violation of the plaintiff’s
proprietary rights. In the present case, the plaintiffs alleged that they are the owners and
were in actual possession of the lands described in the complaint and their fruits, the
action of injunction filed by them is the proper and adequate remedy in law, for a judgment
in favor of plaintiffs would quiet their title to said lands. The provisional remedies (PRs)
denominated attachment, preliminary injunction, receivership, and delivery of personal
property, provided in Rules 59, 60, 61, and 62 of the ROC, are remedies to which parties
litigant may resort for the preservation or protection of their rights or interest, and for no
other purpose, during the pendency of the principal action. If by the nature of such action
does not require such protection or preservation, said remedies cannot be applied for and
granted. To each kind of action, a proper provisional remedy is provided by law. The
Rules of Court clearly specify the case in which they may be properly granted. Attachment
may be issued only in the case or actions specifically stated in section 1, Rule 59, in order
that the defendant may not dispose of his property attached, and thus secure the
satisfaction of any judgment that may be recovered by plaintiff from defendant. For that
reason a property subject of litigation between the parties, or claimed by plaintiff as his,
cannot be attached upon motion of the same plaintiff.

The special remedy of preliminary prohibitory injunction (PPI) lies when the plaintiff’s
principal action is an ordinary action of injunction, that is when the relief demanded in the
complaint consists in restraining the commission or continuance of the act complained of,
either perpetually or for a limited period, or other conditions required by Section 3 of Rule
60 are present. The purpose of this PR is to preserve the status quo of the things subject
of the action or the relation between the parties, in order to protect the rights of the plaintiff
respecting the subject of the action during the pendency of the suit.

If no PPI were issued, the defendant may, before final judgment, do or continue the doing
of the act which the plaintiff asks the court to restrain, thus make ineffectual the final
judgment granting the relief sought by the plaintiff. But, a WOPI should not be granted to
take the property out of the possession of one party to place it in the hands of another
whose title has not been clearly established.

A receiver may be appointed to take charge of personal or real property which is the
subject of an ordinary civil action, when it appears that the party applying for the
appointment of a receiver has an interest in the property or fund which is subject of the
action or litigation.

According to law, the PR proper to plaintiff’s action of injunction is a PPI, if plaintiff’s theory
as set forth in the complaint, that he is the owner and in actual possession of the premises
is correct. But as the lower court found at the hearing of the petition for preliminary
injunction that the defendants were in possession of the lands, the lower court acted in
accordance with law in denying the petition.

From the foregoing it appears evident that the respondent judge acted in excess of his
jurisdiction in appointing a receiver. Appointment of a receiver is not proper or does not
lie in an action of injunction such as the one filed by the plaintiff. The petition for
appointment of a receiver filed by the plaintiffs is based on the ground that it is the most
convenient and feasible means of preserving, administering and disposing of the
properties in litigation; and according to plaintiffs' theory or allegations in their complaint,
neither the lands nor the palay harvested therein, are in litigation.

The litigation or issue raised by plaintiffs in their complaint is not the ownership or
possession of the lands and their fruits. It is whether or not defendants intend or were
intending to enter or work or harvest whatever existing fruits could then be found in the
lands described in the complaint, alleged to be the exclusive property and in the actual
possession of the plaintiffs. It is a matter not only of law but of plain common sense that
a plaintiff will not and legally cannot ask for the appointment or receiver of property which
he alleges to belong to him and to be actually in his possession.

MABANAG vs. GALLEMORE,

G.R. No. L-825

July 20, 1948

FACTS:Mabanag filed an action to recover P735.18, an amount said to have been paid
by the plaintiff to the defendant for two parcels of land whose sale was afterward annulled.
The defendant is said to be residing in Los Angeles, California, U. S. A. He has no
property in the Philippine except an alleged debt owing him by a resident of the
municipality of Occidental Misamis. This debt, upon petition of the plaintiff, after the filing
of the complaint and before the suit was dismissed, was attached to the extent of plaintiff's
claim for the payment of which the action was brought. But the attachment was dissolved
in the same order dismissing the case the opining that it is has no authority nor jurisdiction
to render judgment against the herein defendant, Joseph M. Gallemore for being a non-
resident.

ISSUE:whether or not the dismissal is proper?

HELD: NO. Rules of Court provides:

If any of the defendants does not reside and is not found in the Philippines, and
the action effects the personal status of the plaintiff, or any property of the
defendant located in the Philippines, the action may be commenced and tried in
the province where the plaintiff resides or the property, or any portion thereof, is
situated or found.

As a general rule, when the defendant is not residing and is not found in the Philippines,
the Philippine courts cannot try any case against him because of impossibility of acquiring
jurisdiction over his person, unless he voluntarily appears in court. But when the action ...
is intended to seize or dispose of any property, real or personal, of the defendant, located
in the Philippines, it may validly be tried by the Philippine courts, for then, they have
jurisdiction over the res, i.e. ... the property of the defendant, and their jurisdiction over
the person of the non-resident is not essential

Attachment or garnishment of property of a non-resident defendant confers jurisdiction

on the court in an otherwise personal action. The main action in an attachment or
garnishment suit is in rem until jurisdiction of the defendant is secured. Thereafter, it is in
personam and also in rem, unless jurisdiction of the res is lost as by dissolution of the
attachment. If jurisdiction of the defendant is acquired but jurisdiction of the res is lost, it
is then purely in personam. . . a proceeding against property without jurisdiction of the
person of the defendant is in substance a proceeding in rem; and where there is
jurisdiction of the defendant, but the proceedings against the property continues, that
proceedings is none the less necessarily in rem, although in form there is but a single
proceeding.

Tested by severaldecisions and authorities, the Court has acquired jurisdiction of the
case at bar by virtue of the attachment of the defendant's credit. Those authorities and
decisionsare in agreement that though no jurisdiction is obtained over the debtor's person,
the case may proceed to judgment if there is property in the custody of the court that can
be applied to its satisfaction.
 SALGADO vs COURT OF APPEALS and PHILIPPINE COMMERCIAL &
INDUSTRIAL BANK

G.R. No. 55381

March 26, 1984

FACTS:Philippine Commercial and Industrial Bank filed an action against petitionersto

recover on a promissory note in the amount of P1,510,905.96, inclusive of interest and
other bank charges. The Bank further prayed for the issuance of a writ of attachment. As
grounds therefor it alleged that petitioners had fraudulently misappropriated and/or
converted to their own personal use and benefit the sugar proceeds given as security for
the payment of the indebtedness and that there is no sufficient security for the claim
sought to be enforced by the action. Petitioners Salgado moved to quash the writ of
attachment on the ground that respondent Bank made fraudulent misrepresentation in
securing the writ by deleting the words "R E M" or "Real Estate Mortgage" from the xerox
copy of the promissory note attached to the complaint, thereby "making it appear that the
note was unsecured when in truth and in fact it was fully secured by a series of valid and
existing real estate mortgages duly registered and annotated in the titles of the affected
real properties in favor of the plaintiff Bank." In the same motion, petitioners stressed the
lack of factual basis of the Bank’s claim as to their alleged fraudulent misappropriation or
conversion of the sugar proceeds given as security for their obligation.

ISSUE:Is the issuance of the attachment valid?

HELD: NO. The chief purpose of the remedy of attachment is to secure a contingent lien
on defendant’s property until plaintiff can, by appropriate proceedings, obtain a judgment
and have such property applied to its satisfaction, or to make some provision for
unsecured debts in cases where the means of satisfaction thereof are liable to be
removed beyond the jurisdiction, or improperly disposed of or concealed, or otherwise
placed beyond the reach of creditors.

The grounds upon which attachment may issue are set forth in Section 1, Rule 57 of the
Rules of Court. But quite apart from the grounds stated therein, it is further provided in
Section 3 of Rule 57 that "an order of attachment shall be granted only when it is made
to appear by the affidavit of the applicant or some other person who personally knows the
facts, that . . . there is no other sufficient security for the claim sought to be enforced by
the action."cralaw virtua1aw library

In the instant case, the allegation in the affidavit of the Bank’s Credit Division Manager,
Mrs. Helen Osias, to the effect that "there is no sufficient security for the claim sought to
be enforced by this action" has been shown to be false. It is undisputed that the note sued
upon "is fully secured by a series of valid and existing real estate mortgages duly
registered and annotated in the titles of the affected real property in favor of the plaintiff
Bank."

Liberty Insurance Corporation v. CA

G.R. No. 104405

May 13, 1993

Imperial Organizations put up a performance bond with Liberty Insurance to ensure

compliance of the concerts entered by the former with Coca-Cola Bottlers Philippines. In
turn, Liberty Insurance required Imperial Organizations, Jose Imperial, AtillaArkin and
Carmen Madlangbayan to execute an indemnity agreement in its favour to indemnify it
for any and all damages which it may incur by reason of the bund. While the concerts
took place, Imperial Organizations and private respondents failed to comply with their
obligations, as a result of which petitioner Liberty Insurance paid to Coca-cola the P3M
bond. Petitioner Liberty made demands upon the private respondents based on the
indemnity bond but to no avail. Petitioner filed with RTC a complaint for damages with
application for the issuance of a writ of preliminary attachment against respondents. RTC
issued Order allowing issuance of writ, stating that there could have been fraud
committed. Arkin filed a motion to Quash/recall Writ of Attachment but this was denied.
Arkin filed MR. The Judge reversed the prior Order of denial of the Motion to Quash and
thus directed the lifting of the writ of preliminary attachment because a close examination
of the evidence shows that the delivery of the “fake collaterals” were made 2 days after
the issuance of the surety bond. Thus it was not prior or simultaneous with the execution
of the Surety bond. On the claim that Arkin removed or disposed of his property with intent
to defraud his creditors, plaintiff did not prove the intent of Arkin to defraud creditors.
Aggrieved, Petitioner filed Petition for Certiorari with the CA. CA dismissed petition on the
ground that petitioner did not file MR.
ISSUE:Was the writ of preliminary attachment properly issued?

HELD: YES. In an action against a party who has been guilty of fraud in contracting the
debt or incurring the obligation upon which the action is brought, Section 1 (d) of Rule 57
authorizes the plaintiff or any proper party to have the property of the adverse party
attached as security for the satisfaction of any judgment that may be recovered therein.

To sustain an attachment on this ground, it must be shown that the debtor in contracting
the debt or incurring the obligation intended to defraud the creditor. The fraud must relate
to the execution of the agreement and must have been the reason which induced the
other party into giving consent which he would not have otherwise given. To constitute a
ground for attachment in Section 1 (d), Rule 57 of the Rules of Court, fraud should be
committed upon contracting the obligation sued upon. A debt is fraudulently contracted if
at the time of contracting it the debtor has a preconceived plan or intention not to pay, as
it is in this case.

It has been established that all the collaterals given by the respondent Arkin as security
for the bond were either fraudulent or heavily encumbered. Records show that the TCT
issued by the ROD used as one of the collaterals, turned out to be fake and spurious.
Likewise, the supposed lien-free motor vehicle offered as collateral turned out to be
heavily mortgaged and was even disposed of without informing petitioner. Furthermore,
it has also been proven that subsequent to the issuance of the surety bond, respondent
Arkin started disposing of his other properties. Prior to the filing of the complaint,
respondent not only had sold the motor vehicle given as collateral but that his two other
condominium units, were also alienated in favor of a company of which respondent Arkin
is the president. All these circumstances unerringly point to the devious scheme of
respondent Arkin to defraud petitioner.

BUYCO VS BARAQUIA

GR. NO. 84034

December 22, 1988

FACTS: Baraquiafiled a complaint for the establishment of a permanent right of way,

injunction and damages with preliminary injunction and TRO to enjoin the Buycos from
closing off a private road which he uses as an access to his farm from the public highway.
The RTC granted the preliminary injunction – but after a while, the RTC dismissed the
claim for failure to establish the requisites to establish the right of way, thus, the
preliminary injunction was lifted. Baraquia filed a notice of appeal while Buyco filed a
partial notice of appeal. Baraquia filed a motion to cite Buyco in contempt for closing the
road which was a violation of the injunction. RTC stated that the injunction remained valid
and held petitioners in contempt. Petitioner moved for reconsideration and was granted
by the court.

ISSUE:Whether or not the lifting of a writ of preliminary injunction due to the dismissal of
the complaint is immediately executor, even if the dismissal of the complaint is pending
appeal.

HELD: YES. A writ of preliminary injunction is an order granted at any stage of an action
or proceeding prior to the judgment or final order, requiring a party or a court, agency or
a person to refrain from a particular act or acts. It is merely a provisional remedy, adjunct
to the main case subject to the latters outcome. It is not a cause of action in itself. Being
an ancillary or auxiliary remedy, it is available during the pendency of the action which
may be resorted to by a litigant to preserve and protect certain rights and interests therein
pending rendition, and for purposes of the ultimate effects, of a final judgment in the case.
The writ is provisional because it constitutes a temporary measure availed of during the
pendency of the action and it is ancillary because it is a mere incident in and is dependent
upon the result of the main action. In the case at bar, the writ of preliminary injunction was
granted by the lower court upon respondents showing that he and his poultry business
would be injured by the closure of the subject road. After trial, however, the lower court
found that respondent was not entitled to the easement of right of way prayed for, having
failed to prove the essential requisites for such entitlement, hence, the writ was lifted. The
present case having been heard and found dismissible as it was in fact dismissed, the
writ of preliminary injunction is deemed lifted, its purpose as a provisional remedy having
been served, the appeal therefrom notwithstanding.

SPOUSES AREVALO vs. PLANTERS DEVELOPMENT BANK and THE REGISTER

OF DEEDS OF PARAÑAQUE CITY

G.R. No. 193415

April 18, 2012

FACTS: Petitioners obtained from respondent Bank a 2,100,000 loan secured by a

mortgage on their property situated in Muntinlupa.₱Due to their failure to pay the loaned
amount, the Bank undertook to extra-judicially foreclose the mortgage. Petitioners filed
the FirstComplaint wherein they asked for the nullification of interests, penalties and other
charges, as well as for specific performance with anapplication for a TRO and writ of
preliminary injunction to enjoin the then impending auction sale. During the pendency of
the FirstComplaint, petitioners filed yet another Complaint with the trial court. This time,
they prayed for the nullification of the real estate mortgage,the extra-judicial foreclosure
sale, and the subsequent proceedings, with a prayer for preliminary injunction and TRO.
The trial court refused to issue a writ of preliminary injunction in favor of petitioner
Spouses Daisy and Socrates M. Arevalo (Spouses Arevalo) based on their failure to
comply with Section 2 of the Procedure in Extra-Judicial or Judicial Foreclosure of Real
Estate Mortgages (Procedure on Foreclosure)issued by this Court.Spouses Arevalo filed
a Rule 65 Petition with the CA to assail the Orders of the trial court involving the non-
issuance of the injunctive writ.Meanwhile, proceedings for the First Complaint ensued at
the trial court. Acting on the Motion to Dismiss filed by respondent Bank, the trial court
granted the motion and dismissed the First Complaint for lack of cause of action.

ISSUE:Should the writ in question be issued?

HELD: NO. The Court rules that upon dismissal of the First Complaint by the trial court
on 27 October 2009, the issue of whether the writ of injunction should issue has become
moot. Although both parties failed to raise this particular argument in their submissions,
we deny the instant Petition on this ground.There remains no actual controversy in the
instant Petition because the First Complaint has already been dismissed by the trial court.
Upon its dismissal, the question of the non-issuance of a writ of preliminary injunction
necessarily died with it.

A writ of preliminary injunction is a provisional remedy. It is auxiliary to, an adjunct of, and
subject to the outcome of the main case. Thus, a writ of preliminary injunction is deemed
lifted upon dismissal of the main case, any appeal therefrom notwithstanding. It is well-
settled that the sole object of a preliminary injunction, whether prohibitory or mandatory,
is to preserve the status quo until the merits of the case can be heard. It is usually granted
when it is made to appear that there is a substantial controversy between the parties and
one of them is committing an act or threatening the immediate commission of an act that
will cause irreparable injury or destroy the status quo of the controversy before a full
hearing can be had on the merits of the case.

FEDERATED REALTY CORPORATION vs. COURT OF APPEALS and REPUBLIC

OF THE PHILIPPINES, through the Commanding General of the Armed Forces of
the Philippines – Visayas Command (AFP-VISCOM)
 G.R. No. 127967

December 14, 2005

FACTS: Petitioner FRC is the registered owner of a 543-square meter lot in Apas, Lahug,
Cebu City, covered by Transfer Certificate of Title (TCT) No. 119929. FRC hired workers
to fence the said lot in preparation for the construction of a commercial building thereon.
However, the fence construction was halted when Captain Rogelio Molina arrived with a
jeepload of fully-armed men from the AFP-VISCOMM, and ordered FRC’s workers to stop
building the structure per instructions of AFP-VISCOMM Commanding General Romeo
Zulueta. Intimidated, FRC’s men stopped working. FRC filed a Complaint12 for injunction
and damages with the Regional Trial Court (RTC) of Cebu against Captain Rogelio Molina
and six John Does. The complaint was later amended to implead the Republic of the
Philippines (Republic) through the AFP-VISCOMM and its Commanding General Romeo
Zulueta. FRC sought the issuance of a temporary restraining order (TRO) and/or writ of
preliminary injunction, to order the respondents to cease, desist and refrain from
threatening, intimidating and harassing the workers constructing its fence and to cease,
desist and refrain from committing acts of intrusion into and deprivation of subject land,
and to cease, desist and refrain from harassing, disturbing and interfering with its peaceful
and lawful possession and enjoyment thereof.the trial court granted FRC’s application for
preliminary injunction which writ it later made permanent The trial court found that the
subject property is in the possession of FRC and its predecessor-in-interest and ruled
that FRC’s assertion of ownership is supported by a TCT which must be upheld until
nullified by a competent court in a proper proceeding. In all probability, the Republic would
prevent the construction of FRC’s fence, if not provisionally prevented by court order,
thereby making injunction a proper relief, the lower court noted.

Aggrieved, the Republic filed with the Court of Appeals (CA) on 24 November 1995 a
petition for certiorari under Rule 65 with an urgent prayer for TRO and/or preliminary
injunction seeking to set aside the 12 October 1995 Orderof the trial court. CA
promulgated its assailed Decision granting the Republic’s petitionratiocinating that FRC
does not have a clear and unmistakable right over the subject property on the ground that
"the subject lot not only adjoins military structures, but the main entrance thereof carries
the arch of the AFP-VISCOMM identifying beyond peradventure of doubt that one is
entering the premises of the AFP.

ISSUE: Whether or not injunction lies in favor of FRC to prevent the Republic from
interfering in the exercise of its rights of ownership over the subject property.

HELD: In a long line of cases, this Court has held that injunction is a preservative remedy
aimed at protecting substantive rights and interests. The very foundation of the jurisdiction
to issue a writ of injunction rests in the existence of a cause of action and in the probability
of irreparable injury, inadequacy of pecuniary compensation and the prevention of
multiplicity of suits. Where facts are not shown to bring the case within these conditions,
the relief of injunction should be refused.

Thus, to be entitled to injunctive relief, the following must be shown: (1) the invasion of a
right sought to be protected is material and substantial; (2) the right of complainant is
clear and unmistakable; and (3) there is an urgent and paramount necessity for the writ
to prevent serious damage.

FRC had sufficiently established the existence of a right to be protected by a writ of

injunction.Time and again, we have upheld the fundamental principle in land registration
that a certificate of title serves as evidence of an indefeasible and incontrovertible title to
the property in favor of the person whose name appears therein.In the instant case, it is
undisputed that FRC is a holder of a certificate of title over the lot in question. Records
show that each of FRC’s predecessors-in-interest was likewise a holder of an indefeasible
title.

Anent the third requisite, the appellate court ruled that in the event of a permanent
injunction the Republic stands to suffer greater injury compared to FRC, as a private
commercial building within a camp will pose serious danger and damage to military
operations.However, we cannot overemphasize that until FRC’s title is annulled in a
proper proceeding, the Republic has no enforceable right over the subject property.
Neither military operational integrity nor national defense vests title to property in favor of
the government. Hence, the CA was in error in enjoining enforcement of the lower court’s
order, as injunction does not protect rights not in esse. The possibility of irreparable
damage, without proof of violation of an actually existing right, is not a ground for
injunction.

PHILIPPINE NATIONAL BANK v. RJ VENTURES REALTY & DEVELOPMENT

CORPORATION, ET AL.

G.R. No. 164548

FACTS: First Women's Credit Corporation (FWCC) received an invitation to bid from PNB
anent the sale of an 8,000 square meter property and to which it acceded. FWCC
assigned all its rights, claims, interest, and title over the Buendia Property to RJVRD. The
latter assumed the right to purchase the Buendia Property and the obligations of FWCC
to PNB on the balance of the bid price. Respondents further posited that PNB initially
refused to finance the entire balance of the purchase price except to the extent of seventy-
five percent (75%) thereof. However, PNB finally agreed to grant a loan to RJVRD
equivalent to eighty percent (80%) of the purchase price or for the amount of
P2,944,000,000.00. The grant was conditioned on the deposit by RJVRD with PNB of an
additional ten percent (10%) of the purchase price. RJVRD and PNB executed a Loan
Agreement, a Deed of Sale and a Real Estate Mortgage. PNB required the
redenomination of RBN's loan as a condition for its restructuring. On 25 January 1999,
PNB, through its counsel, sent RBN a demand letter, requiring the latter to settle their
outstanding account of P841,460,891.91. PNB made a demand to RBN to turnover the
possession and/or control of Broasting Equipment Inventory located at No. 33, Dominican
Hills, Baguio City. Respondents RJ Ventures Realty & Development Corporation filed a
Complaint for Injunction with Prayer for Issuance of Temporary Restraining Order and
Writ of Preliminary Injunction against petitioner PNB and Juan S. Baun, Jr. with the RTC
Makati. In support of its Application for the Issuance of a Temporary Restraining Order
and a Writ of Preliminary Injunction, respondents alleged that RJVRD and RNB would
suffer great and irreparable injury by the extrajudicial foreclosure of the property. RTC
after a series of motions granted the writ which was later on after being lifted in once
instance, was reinstated by CA.

ISSUE:Whether respondents RJVRD and RBN are entitled to the Writ of Preliminary
Injunction?

HELD: YES. Foremost, we reiterate that the sole object of a preliminary injunction is to
maintain the status quo until the merits can be heard. For a Writ of Preliminary Injunction
to issue, the following requisites must be present, to wit: (1) the existence of a clear and
unmistakable right that must be protected, and (2) an urgent and paramount necessity for
the writ to prevent serious damage. Indubitably, this Court has likewise stressed that the
very foundation of the jurisdiction to issue a writ of injunction rests in the existence of a
cause of action and in the probability of irreparable injury, inadequacy of pecuniary
compensation and the prevention of multiplicity of suits. Sine dubio, the grant or denial of
a writ of preliminary injunction in a pending case rests in the sound discretion of the court
taking cognizance of the case since the assessment and evaluation of evidence towards
that end involve findings of facts left to the said court for its conclusive determination.69
Hence, the exercise of judicial discretion by a court in injunctive matters must not be
interfered with except when there is grave abuse of discretion.

First, respondents were able to establish a clear and unmistakable right to the possession
of the subject collaterals. Evidently, as owner of the subject collaterals that stand to be
extrajudicially foreclosed, respondents are entitled to the possession and protection
thereof. Second, there is an urgent and paramount necessity to prevent serious damage.
Indeed, an injunctive remedy may only be resorted to when there is a pressing necessity
to avoid injurious consequences which cannot be remedied under any standard
compensation.

ROXAS - INJUNCTION

AUSTRALIAN PROFESSIONAL REALTY, INC., JESUS GARCIA, and LYDIA

MARCIANO, vs. MUNICIPALITY OF PADRE GARCIA BATANGAS PROVINCE,

G. R. No. 183367 : March 14, 2012

Facts:

Fire razed to the ground the old public market of respondent Municipality of Padre Garcia,
Batangas. The municipal government, invited petitioner Australian Professional Realty,
Inc. (APRI) to rebuild the public market and construct shopping center. A Memorandum
of Agreement (MOA) was executed between petitioner APRI and respondent,
represented by Mayor Gutierrez.

Victor Reyes was elected as municipal mayor of respondent. Respondent, through Mayor
Reyes, initiated a Complaint for Declaration of Nullity of Memorandum of Agreement with
Damages before the Regional Trial Court (RTC) of Rosario, Batangas.

The RTC issued an Order declaring petitioners in default and allowing respondent to
present evidence ex parte. The RTC ruled that the Memorandum of Agreement is hereby
declared null and void for being contrary to law and public policy and the structures found
within the unfinished PADRE GARCIA SHOPPING CENTER are hereby declared
forfeited in favor of the Municipality of Padre Garcia.

After learning of the adverse judgment, petitioners filed a Petition for Relief from
Judgment. This Petition was denied by the RTC. Petitioners later filed before the CA a
Petition for Certiorari and Prohibition. Also, petitioners filed before the CA a Motion for the
Issuance of Status Quo Order and Motion for Issuance of Temporary Restraining Order
and/or Writ of Preliminary Injunction. The CA issued a Resolution denying the said
motion.

Issue:
Whether the CA committed grave abuse of discretion in denying petitioners’ Motion for
the Issuance of Status Quo Order and Motion for Issuance of Temporary Restraining
Order and/or Writ of Preliminary Injunction (Motion for Injunction).

Ruling: NO. The CA did not commit grave abuse of discretion. Essential to granting the
injunctive relief is the existence of an urgent necessity for the writ in order to prevent
serious damage.

A TRO issues only if the matter is of such extreme urgency that grave injustice and
irreparable injury would arise unless it is issued immediately. Under Section 5, Rule
58 of the Rule of Court,14 a TRO may be issued only if it appears from the facts
shown by affidavits or by the verified application that great or irreparable injury
would be inflicted on the applicant before the writ of preliminary injunction could
be heard.

Thus, to be entitled to the injunctive writ, petitioners must show that (1) there exists a
clear and unmistakable right to be protected; (2) this right is directly threatened by an act
sought to be enjoined; (3) the invasion of the right is material and substantial; and (4)
there is an urgent and paramount necessity for the writ to prevent serious and irreparable
damage.

In this case, no grave abuse of discretion can be imputed to the CA. This is so because
APRI has no clear legal right. A perusal of the Motion for Injunction and its accompanying
Affidavit filed before the CA shows that petitioners rely on their alleged right to the full and
faithful execution of the MOA. However, their rights under the MOA have already been
declared inferior or inexistent in relation to respondent in the RTC case, under a judgment
that has become final and executory. At the very least, their rights under the MOA are
precisely disputed by respondent.

Hence, there can be no "clear and unmistakable" right in favor of petitioners to

warrant the issuance of a writ of injunction. Where the complainant’s right or title
is doubtful or disputed, injunction is not proper.

PHILIPPINE PORTS AUTHORITY vs. CIPRES STEVEDORING & ARRASTRE, INC.,

G.R. No 145742 July 14, 2005
Facts:
Petitioner Philippine Ports Authority (PPA) awarded respondent Cipres Stevedoring
and Arrastre, Inc. (CISAI) permits of varied durations to operate the cargo handling
operations in Dumaguete City. In 1991, petitioner awarded an eight-year contract to
respondent expiring on 31 December 1998.
In 1990, PPA issued an administrative order which requires public bidding in the
award of contracts for cargo handling services. Upon expiration of its contract, respondent
were given hold-over permits by petitioner. While respondents second hold-over permit
was still in effect, petitioner issued another administrative order which amended by
substitution the administrative order issued in 1990. It expressly provides that all contract
for cargo handling services of more than three (3) years shall be awarded through public
bidding.
Pursuant to the new administrative order, petitioner set the deadline for the
submission of the technical and financial bids. Contending that this action on the part of
petitioner was in derogation of its vested right over the operation of cargo handling
enterprise, respondent initiated an action for specific performance, injunction with
application for preliminary mandatory injunction and temporary restraining order before
the RTC.
Respondent alleged in its complaint that the administrative order issued in 1990
explicitly provides that cargo handling contractors with existing or expired contracts but
were able to obtain a satisfactory performance rating were entitled to a renewal of their
respective cargo handling contracts with petitioner; thus, as respondent was given a
rating of very satisfactory in 1998, it follows that its cargo handling agreement should have
been renewed after its expiration. Respondent likewise claimed that the approval and
implementation of the new administrative order was plainly arbitrary.
The RTC granted respondents prayer for a temporary restraining order.
Petitioner filed a manifestation with urgent motion for reconsideration to the aforesaid
order of the trial court. Petitioner argued that the court a quo did not have the requisite
jurisdiction to issue the assailed temporary restraining order. This motion was denied.
Petitioner seasonably sought reconsideration. The trial court set aside the injunctive
writ it previously issued. Respondent filed a motion for reconsideration but was denied.
Respondent filed a petition for certiorari under Rule 65 before the Court of Appeals.
The CA nullified the Order of the trial court and granted the petition ordering the RTC to
issue a writ of preliminary injunction and the PPA to desist from conducting the public
bidding effective until and after the case a quo shall have been finally decided.
Petitioner sought the reversal of the decision of the appellate court on the following
grounds a) That P.D. No. 1818 as amended by R.A. 8975 and reiterated in Administrative
Circular of the SC, bans the issuance of writs of preliminary injunctions in cases involving
government infrastructure projects and service contracts which includes arrastre and
stevedoring contracts; b). That CISAI has no clear legal right to an injunctive writ since it
acquired no vested rights because its hold-over capacity could be revoked at any given
time.

The main provision of P.D. No. 1818 provides:

SECTION 1. No court in the Philippines shall have jurisdiction to issue any
restraining order, preliminary injunction, or preliminary mandatory injunction in
any case, dispute, or controversy involving an infrastructure project, or a mining,
fishery, forest or other natural resource development project of the government, or
any public utility operated by the government, including among others public
utilities for the transport of the goods or commodities, stevedoring and arrastre
contracts, to prohibit any person or persons, entity or government official from
proceeding with, or continuing the execution or implementation of any such
project, or the operation of such public utility, or pursuing any lawful activity
necessary for such execution, implementation or operation.

Rep. Act No. 8975 states:

SEC. 3. Prohibition on the Issuance of Temporary Restraining Orders,

Preliminary Injunctions and Preliminary Mandatory Injunctions. 'No court, except
the Supreme Court, shall issue any temporary restraining order, preliminary
injunction or preliminary mandatory injunction against the government, or any of
its subdivision, officials or any person or entity, whether public or private, acting
under the government's direction, to restrain, prohibit or compel the following acts:
(b) Bidding or awarding of contract/project of the national government as
defined under Section 2 hereof; . .
Issue:
Whether or not the Court of Appeals erred in ordering the RTC to issue the writ of
preliminary injunction to CISAI.
Ruling:
Yes.
Finally, it is settled that the sole object of a preliminary injunction, may it be prohibitory
or mandatory, is to preserve the status quo until the merits of the case can be heard and
the final judgment rendered. The status quo is the last actual peaceable uncontested
status which preceded the controversy.
 In the case at bar, respondent sought the issuance of a writ for preliminary injunction
in order to prevent the cessation of cargo handling services in the port of Dumaguete City
to the detriment and prejudice of the public, shipper, consignees and port workers.
However, the factual backdrop of this case establishes that respondents eight-year
contract for cargo handling was already terminated and its continued operation in the port
of Dumaguete City was merely by virtue of a second hold-over permit granted by
petitioner. xxx
By its nature, the hold-over permit was merely temporary in nature and may be
revoked by petitioner at anytime. As we declared in the case of Anglo-Fil Trading
Corporation, hold-over permits are merely temporary and subject to the policy and
guidelines as may be implemented by petitioner. The temporary nature of the hold-over
permit should have served as adequate notice to respondent that, at any time, its authority
to remain within the premises of the port of Dumaguete City may be terminated. Unlike
the contract for cargo handling services previously entered into by petitioner and
respondent, whose terms and conditions were agreed upon by the parties herein and
which clearly provided for a specific period of effectivity as well as a stipulation regarding
the notice of violation, the hold-over permit was unilaterally granted by petitioner pursuant
to its authority under the law.
Based on the foregoing, it is clear that at the time of the institution of this suit,
respondent no longer possessed any contract for its continued operation in Dumaguete
City and its stay in the port of said city was by virtue of a mere permit extended by
petitioner revocable at anytime by the latter. Obviously, the writ of preliminary injunction
issued by the Court of Appeals granted respondent the authority to maintain its cargo
handling services despite the absence of a valid cargo handling agreement between
respondent and petitioner. For this reason, we hold that the Court of Appeals erred in
ordering the court a quo to issue the writ of preliminary injunction in favor of respondent.

Capitol Medical Center, Inc. v. Court of Appeals

GR L-82499 | 178 SCRA 493 | October 13, 1989

DOCTRINE

The sole object of a preliminary injunction, whether prohibitory or mandatory, is to

preserve the status quo until the merits of the case can be heard. The status quo
is the last actual peaceable uncontested status which preceded the controversy
(Rodulfa vs. Alfonso, 76 Phil. 225). It may only be resorted to by a litigant for the
preservation or protection of his rights or interests and for no other purpose during
the pendency of the principal action (Calo vs. Roldan, 76 Phil. 445). It should only
be granted if the party asking for it is clearly entitled thereto (Climaco vs. Macaraeg,
4 SCRA 930; Subido vs. Gopengco 27 SCRA 455; Police Commission vs. Bello, 37
SCRA 230).

FACTS

- Petitioner Capitol Medical Center, Inc. (CMCI), a hospital corporation, opened

and operated the Capitol Medical Center College (the “school”).

o The college offered a four-year nursing course, and two-year courses on

midwifery and medical secretarial courses.

o Halfway through the first semester, the faculty demanded that they be
granted vacation leave and sick leave privileges.

o Despite the dialogues between the administration led by its president,

petitioner Dra. Clemente, and the faculty, no agreement was reached.

o The hostilities aggravated. The CMCI Board, through its resolution,

authorized petitioner Clemente to close down the school, which then
resulted to a demonstration by the students and teachers.

o Finally, a public announcement was posted which ordered for the closing
down of the school, and that students were advised to transfer to other
schools.

- Petitioner CMCI then wrote (twice) to the Department of Culture and Sports
(DECS), informing them of the closing down of the school.

o DECS approved for a “gradual closing down” of the school. However,

CMCI only intended to “inform” them of their action.

o Teachers, students, and parents requested to open the school until the
end of the school year.
 o An agreement was prepared by the DECS, but CMCI wanted to include
a stipulation providing that no rallies or demonstrations are to be held
until the end of the school year.

o The agreement, however, was not signed; the school did not reopen.

- Private respondents (students and parents) filed a class suit.

o Respondents prayed for the reopening of the school until the end of the
school year.

- The RTC granted the petition ordering petitioners to reopen the school and allow
its students to enroll in their respective courses.

- The CA affirmed the decision of the trial court.

o That petitioners had no right to close the school for the enrollment of the
students created a binding contract between the parties

o That the school should continue to operate until the students shall have
finished their courses

Hence, this petition for review.

ISSUE

W/N the writ of preliminary injunction, preserving the status quo, is proper – NO

RULING & RATIO

1. NO

- The preliminary injunction, which reverts to the status quo, does more than
what it should do.

- The status quo being referred to is the time prior to the closing of the school

o This was the time when the schools were deserted; the students
and teachers refused to hold classes; demonstrations are taking
place
 - “[T]he continued operation of the CMCC futile and untenable. The college
had no reason to remain open under the situation which the private
respondents themselves brought about.”

VICTORINA MEDINA v. CITY SHERIFF

GR No. 113235, Jul 24, 1997

FACTS:

Private respondents, as lessors, filed an unlawful detainer case against herein petitioners,
the lessees, but before the institution of this action, respondents had earlier sold the
subject property to another person.

Thereafter, the MTC of Manila rendered a decision in favor the lessors. When the
respondents tried to move for the execution of the MTC decision, petitioners opposed
thereto on the ground of supervening event of respondent’s loss of ownership over the
subject property. Inspite of the opposition, the lower court, nevertheless, granted the
motion for execution.

Consequently, petitioners filed a case of Damages with preliminary injunction and/or

Temporary Restraining Order in the RTC of Manila but said court dismissed the said case.
On appeal, the Court of Appeals likewise denied petitioner’s motion for the issuance of
the preliminary injunction. Hence, this petition.

ISSUE:

WON THE PETITIONER HAS A CLEAR LEGAL RIGHT AND ENTITLED AS A MATTER
OF RIGHT TO THE WRIT OF EXECUTION.

HELD:

The Supreme Court ruled that the instant petition should be dismissed, there being no
grave abuse of discretion on the part of respondent court in denying petitioner’s
application for preliminary injunction.

To be entitled to the injunctive writ, they must show that there exists a right to be
protected, which is directly threatened by an act sought to be enjoined. In the
instant case, petitioners clearly possessed no legal right that merits the protection
of the courts through the writ of preliminary injunction, considering that the ground
relied upon by petitioners remains unresolved and does not confirm the existence
of a clear right in favor of herein petitioners.
Furthermore, there must be a showing that the invasion of the right is material and
substantial and that there is an urgent and paramount necessity for the writ to prevent
serious damage. Complainant’s right must be clear and unmistakable

In the absence of a clear legal right, the issuance of the writ constitutes grave abuse of
discretion. Where the complainant’s right or title is doubtful or disputed, injunction is not
proper. The possibility of irreparable damage of without proof of an actual existing right is
not a ground for injunction. In the instant case, the enforcement of the writ of execution,
which would evict them from their homes, is manifestly prejudicial to petitioners’ interest.
However, they possess no clear legal right that merits the protection of the courts through
the writ of preliminary injunction. Their right to possess the property in question has been
declared inferior or inexistent in relation to the plaintiff in the ejectment case below after
a judgment which has become final and executory. Petitioners’ ground for the issuance
of the writ of prohibition and/or certiorari before the Court of Appeals is the presence of a
supervening event that renders execution unjust or inequitable. Said issue remains
unresolved in the main case still pending and does not confirm the existence of a clear
right in favor of petitioners. At best, they can obtain the suspension of the enforcement of
the writ of execution or other similar relief on equitable grounds.

PHILIPPINE AIRLINES, INC., petitioner, vs., NATIONAL LABOR RELATIONS

COMMISSION, FERDINAND PINEDA and GODOFREDO CABLING, respondents.
[G.R. No. 120567. March 20, 1998]

Facts:

Private respondents are flight stewards of the petitioner. Both were dismissed from the
service for their alleged involvement in the currency smuggling in Hong Kong. Aggrieved
by said dismissal, private respondents filed with the NLRC a petition for injunction. The
NLRC issued a temporary mandatory injunction enjoining petitioner to cease and desist
from enforcing its Memorandum of dismissal.

In support of the issuance of the writ of temporary injunction, the NLRC adopted
the view that: (1) private respondents cannot be validly dismissed on the strength of
petitioner's Code of Discipline which was declared illegal by this Court for the reason that
it was formulated by the petitioner without the participation of its employees (2) the
whimsical, baseless and premature dismissals of private respondents which "caused
them grave and irreparable injury" is enjoinable as private respondents are left "with no
speedy and adequate remedy at law' except the issuance of a temporary mandatory
injunction; (3) the NLRC is empowered not only to restrain any actual or threatened
commission of any or all prohibited or unlawful acts but also to require the performance
of a particular act in any labor dispute, which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party; and (4) the temporary mandatory power
of the NLRC was recognized by this Court.

Petitioner moved for reconsideration arguing that the NLRC erred in granting a
temporary injunction order when it has no jurisdiction to issue an injunction or restraining
order since this may be issued only under Article 218 of the Labor Code if the case
involves or arises from labor disputes.

The NLRC denied petitioner's motion for reconsideration. The now petitioner, for
one, cannot validly claim that NLRC cannot exercise its injunctive power under Article
218 (e) of the Labor Code on the pretext that what NLRC have here is not a labor dispute
as long as it concedes that as defined by law, Labor Dispute includes any controversy or
matter concerning terms or conditions of employment.

Issue: WON the NLRC even without a complaint for illegal dismissal filed before the labor
arbiter, entertain an action for injunction and issue such writ enjoining petitioner Philippine
Airlines, Inc. from enforcing its Orders of dismissal against private respondents, and
ordering petitioner to reinstate the private respondents to their previous positions.

Ruling: No.

It is an essential requirement that there must first be a labor dispute between the
contending parties before the labor arbiter. In the present case, there is no labor dispute
between the petitioner and private respondents as there has yet been no complaint for
illegal dismissal filed with the labor arbiter by the private respondents against the
petitioner. The petition for injunction directly filed before the NLRC is in reality an action
for illegal dismissal.

Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order granting
private respondents' petition for injunction and ordering the petitioner to reinstate private
respondents. Under the Labor Code, the ordinary and proper recourse of an illegally
dismissed employee is to file a complaint for illegal dismissal with the labor arbiter. In the
case at bar, private respondents disregarded this rule and directly went to the NLRC
through a petition for injunction praying that petitioner be enjoined from enforcing its
dismissal orders. Furthermore, an examination of private respondents' petition for
injunction reveals that it has no basis since there is no showing of any urgency or
irreparable injury which the private respondents might suffer.
 An injunction, as an extraordinary remedy, is not favored in labor law considering
that it generally has not proved to be an effective means of settling labor disputes. It has
been the policy of the State to encourage the parties to use the non-judicial process of
negotiation and compromise, mediation and arbitration. Thus, injunctions may be issued
only in cases of extreme necessity based on legal grounds clearly established, after due
consultations or hearing and when all efforts at conciliation are exhausted which factors,
however, are clearly absent in the present case.

Injunction is a preservative remedy for the protection of one's substantive rights or

interest. It is not a cause of action in itself but merely a provisional remedy, an adjunct to
a main suit. It is resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard of compensation. The
application of the injunctive writ rests upon the existence of an emergency or of a special
reason before the main case be regularly heard. The essential conditions for granting
such temporary injunctive relief are that the complaint alleges facts which appear to be
sufficient to constitute a proper basis for injunction and that on the entire showing from
the contending parties, the injunction is reasonably necessary to protect the legal rights
of the plaintiff pending the litigation. Injunction is also a special equitable relief granted
only in cases where there is no plain, adequate and complete remedy at law

An injury is considered irreparable if it is of such constant and frequent recurrence that

no fair and reasonable redress can be had therefor in a court of law, or where there is no
standard by which their amount can be measured with reasonable accuracy, that is, it is
not susceptible of mathematical computation. It is considered irreparable injury when it
cannot be adequately compensated in damages due to the nature of the injury itself or
the nature of the right or property injured or when there exists no certain pecuniary
standard for the measurement of damages.

SPS. ABELARDO & CONCHITA LOPEZ, and SPS. ANTONIO & CONCHITA
MANANSALA, petitioners,

vs.

COURT OF APPEALS and ROBERTO VALLARTA, respondents.

G. R. No. 110929 January 20, 2000

FACTS:

This case stemmed from a complaint for recovery of possession, damages and injunction,
filed by private respondent against petitioners. The complaint alleges, inter alia: that
respondent had been in actual, peaceful and lawful possession of Lots 3305, 3329, 3331
and 3324 with a combined area of 57 hectares, situated at sitio Teracan, Consuelo,
Macabebe, Pampanga, except for the short interruption in 1981 until October 17, 1981;
that on June 2, 1981, respondent filed a fishpond application for lease agreement
covering Lots No. 3324, 3329 and 3331 covering 40,1449 hectares; that on July 22, 1981,
the Minister of Natural Resources declared a portion of Masantol, Pampanga, containing
an area of 4,574.8 hectares, including the area applied for by private respondent as
alienable and disposable for fishpond development; that on July 13, 1988, the Department
of Agriculture, Regional Office No. III, San Fernando, Pampanga, issued a report of
inspection declaring respondent and one Guil Rivera in actual possession of their
respective fishpond areas and have fully developed the same since 1976; that on October
17, 1990, petitioners unlawfully entered and occupied 34 hectares of the respondent's
fishpond ejecting him from the same.

Respondent prays that he be restored possession of the lots in question and that a
preliminary injunction be issued to maintain the status quo.

Traversing respondent's allegations, petitioners contend that they have been in actual
physical and peaceful possession of the land since time immemorial; that in 1976
petitioners and private respondent entered into an agreement whereby the latter will
provide capital for the development of the fishpond while petitioners labor and
management, the income to be divided between them; that the relationship went on
smoothly until 1981 when they were ejected from the premises by one Marcelino Marcos;
that they filed an ejectment complaint before the courts; that the Supreme Court in a
decision promulgated on June 30, 1987 in G.R. No. 74957 upheld their possession; that
sometime in April 1990, petitioners were physically ejected from the land by respondent
but returned to the land on August 17, 1990; that since October 17, 1990 up to the filing
of the complaint, respondent has been harassing them with threats and arson.

A hearing on the application for preliminary injunction was held on December 29, 1992
with private respondent presenting his evidence. wp Based on the evidence presented,
the trial court on December 29, 1992 granted respondent's prayer for injunction .

Petitioners moved for the inhibition of the presiding judge which was granted by the court
on January 7, 1993. On January 8, 1993, pursuant to the trial court's order, a writ of
preliminary mandatory injunction was issued.

Petitioners assailed the aforesaid orders before the Court of Appeals which dismissed the
same. The motion for reconsideration was likewise denied on July 5, 1993.

Petitioners now come to this Court arguing that the issuance of the writ of preliminary
mandatory injunction ordering them to surrender the possession and control of the
fishpond effectively transferred the possession thereof from petitioner to private
respondent in violation of the settled jurisprudence that injunction cannot be used or
resorted to, to take possession of the property from one person to another. Petitioners
likewise assert that the issuance of the writ of preliminary mandatory injunction and
placing the private respondent in possession of the disputed lot virtually resolved the
issue of possession and disposed of the main case without hearing on the merits, leaving
no issue for the trial court to decide save that of damages.

ISSUE:

WON the issuance of the writ of preliminary injunction is proper.

HELD:

Injunction is a preservative remedy for the protection of one's substantive right or interest.
It is not a cause of action in itself but merely a provisional remedy, an adjunct to a main
suit. It is resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard compensation. The
application of the injunctive writ rests upon the existence of an emergency or of a special
reason before the main case can be regularly heard.

The essential conditions for granting such temporary injunctive relief are that the
complaint alleges facts which appear to be sufficient to constitute a proper basis for
injunction and that on the entire showing from the contending parties, the injunction is
reasonably necessary to protect the legal rights of the plaintiff pending the litigation. Two
requisites are necessary if a preliminary injunction is to issue, namely, the existence of a
right to be protected and the facts against which the injunction is to be directed are
violative of said right. In particular, for a writ of preliminary injunction to issue, the
existence of the right and the violation must appear in the allegation of the complaint and
a preliminary injunction is proper only when the plaintiff (private respondent herein)
appears to be entitled to the relief demanded in his complaint.

In the case at bar, private respondent has sufficiently established his right over the subject
fishpond.
 Transfield Philippines, Inc. v. Luzon Hydro Corp.

GR No. 146717 (22 November 2004)

SUBJECT MATTER: Special Laws; Letters of Credit; Independence Principle

CASE SUMMARY:

Transfield, as a contractor, undertook to construct a hydro-electric power station and

complete the same on or before June 1, 2000. To secure the performance of its obligation.
Transfield opened 2 letters of credits from ANZ Banking Group and Security Bank in favor
of Luzon. Nonetheless, Transfield was unable to complete the project on the target date
allegedly due to force majeure. Both Transfield and Luzon filed before separate arbitration
tribunals, ICC and CIAC respectively, to determine whether force majeure would justify
the delay. Pending the arbitration proceeding, Transfield filed a complaint for preliminary
injunction against the respondent banks to restrain them from paying on the securities
and also against Luzon to prevent it from calling on the securities. RTC issued a TRO but
denied the application for writ of preliminary injunction. CA affirmed RTC. N.B. When the
TRO expired, Luzon was able to withdraw from ANZ.

DOCTRINES:

Under the independence principle, banks assume no liability or responsibility for the form,
sufficiency, accuracy, genuineness, falsification or legal effect of any document, or for the
general and/or particular conditions stipulated in the documents or superimposed
thereon, nor do they assume any liability or responsibility for the description, quantity,
weight, quality, condition, packing, delivery, value or existence of the goods represented
by any documents, or for the good faith or acts and/or omissions, solvency, performance
or standing of the consignor, the carriers, or the insurers of the goods, or any other
person.

The independence principle liberates the issuing bank from the duty of ascertaining
compliance by the parties in the main contract.

FACTS:

Transfield and Luzon entered into a Turnkey Contract whereby Transfield undertook, as
a contractor, to construct a 70-Megawatt hydro-electric power station at the Bakun River
in Benguet and Ilocos Sur.
The contract provides that:

(1) the target completion date of the project is on June 1, 2000, or such date
as may be agreed upon; and

(2) petitioner is entitled to claim extensions of time (EOT) for reasons

enumerated in the contract e.g. variations, force majeure, and delays
caused by Luzon itself.

It was also agreed upon that in case of dispute, the parties are bound to settle their
differences through mediation, conciliation and such other means enumerated in
the contract.

To secure the performance of the obligation, Transfield opened in favor of Luzon, 2

standby letters of credits with ANZ and SBC, each in the amount of US$8.99M.

Nonetheless, in the course of construction, Transfield sought various EOT to complete

the project. The request for extensions were allegedly due to force majeure occasioned
by typhoon Zeb, barricades, and demonstrations, which prevented the on-time completion
of the project.

Luzon denied Transfield’s requests for EOT.

Luzon filed a Request for Arbitration before the Construction Industry Arbitration
Commission (CIAC), while Transfield filed a Request for Arbitration before the
International Chamber of Commerce (ICC). These arbitration proceedings would resolve
the issues: (1)WON the alleged forcemajeure would justify the EOT sought by Transfield,
(2)WON Luzon had the right to terminate the contract for Transfield’s failure to complete
the project on target date.

Meanwhile, Transfield wrote letters to ANZ and SBC advising them of the arbitration
proceedings. Transfield asserted that Luzon had no right to call on the securities until the
resolution of the issued before CIAC and ICC. Transfield also warned the banks that any
transfer, release, or disposition of the securities in favor of Luzon would constrain it to
hold respondent banks liable for liquidated damages.

Despite the Transfield’s letters, the banks informed Transfield that they would pay on the
Securities if and when Luzon calls on them.

Transfield filed a complaint for injunction with prayer for TRO and writ of preliminary
injunction before the RTC. Transfield sought to restraint banks from calling on the
securities and the respondent banks from paying on the securities.
RTC –denied the application for writ of preliminary injunction. Applying the “Independent
Contract” principle, Luzon should be allowed to draw on the securities for liquidated
damages. Banks were mere custodians of the funds and were obligated to transfer the
same to the beneficiary for as long as the latter could submit the required certification of
its claims. Luzon, as the ultimate beneficiary, may also invoke the “independent contract”
principle.

CA - issued a TRO but failed to act on the application for preliminary injunction until the
TRO expired.

N.B. As soon as the TRO expired, Luzon went to ANZ bank and withdrew US$ 4.9M.

- CA affirmed RTC decisions; Luzon could call on the securities pursuant to the first
principle in credit law that the credit itself is independent of the underlying transaction and
that as long as the beneficiary complied with the credit.

ISSUE/S:

WON injunction is the proper remedy to restrain the allegedly wrongful draws on the
securities. (NO)

Petitioner’s argument:

o RTC and CA improperly relied on the “independence principle” on the letters of

credit when this case falls within the “fraud exception rule”.

o Luzon knowing misinterpreted the existence of delay despite its knowledge that
the issue was still pending arbitration to be able to draw against the securities.

o Luzon should be ordered to return proceeds of the securities.

o Injunction was the appropriate remedy obtainable from the local courts.

Respondent SBC’s argument:

o Invoking the independence principle, it was under no obligation to look into the
validity or accuracy of the certification submitted by Luzon or into the latter’s
capacity or entitlement to so certify.

Respondent ANZ’s argument:

 o Its actions could not be regarded as unjustified in the view of the prevailing
independence principle under which it had no obligation to ascertain the truth
of Luzon’s allegations (Similar to SBC)

HOLDING/RATIO:

1. No, injunction is not a remedy in this case.

Fraud is an exception to the independence principle and the remedy for fraudulent abuse
is injunction. However, injunction should not be granted unless: (a) there is a clear proof
of fraud; (b) the fraud constitutes fraudulent abuse of the independent purpose of the
letter of credit and not only fraud under the main agreement; and (c) irreparable injury
might follow if injunction is not granted or the recovery of damages would be seriously
damaged.

In this case, Transfield failed to show that it has a clear and unmistakable right to restrain
Luzon’s call on the securities. The contract was plain and unequivocal in that it conferred
upon Luzon the right to draw upon the securities in case of default. Also, nothing in the
contract would indicate that all disputes regarding delay should first be settled through
arbitration before Luzon would be allowed to call upon the securities.

Generally, injunction is a preservative remedy for the protection of one's substantive right
or interest; it is not a cause of action in itself but merely a provisional remedy, an adjunct
to a main suit. The issuance of the writ of preliminary injunction as an ancillary or
preventive remedy to secure the rights of a party in a pending case is entirely within the
discretion of the court taking cognizance of the case, the only limitation being that this
discretion should be exercised based upon the grounds and in the manner provided by
law.51

Before a writ of preliminary injunction may be issued, there must be a clear showing by
the complaint that there exists a right to be protected and that the acts against which the
writ is to be directed are violative of the said right.52 It must be shown that the invasion
of the right sought to be protected is material and substantial, that the right of complainant
is clear and unmistakable and that there is an urgent and paramount necessity for the writ
to prevent serious damage.53 Moreover, an injunctive remedy may only be resorted to
when there is a pressing necessity to avoid injurious consequences which cannot be
remedied under any standard compensation.
In the instant case, petitioner failed to show that it has a clear and unmistakable right to
restrain LHC's call on the Securities which would justify the issuance of preliminary
injunction.

FELIX DE GUZMAN OCAMPO, represented by GEORGE BUTLER, JR., , v. ALICIA

SISON VDA. DE FERNANDEZ and LETICIA S. FERNANDEZ

GR. NO. 164529 : June 19, 2007

FACTS:

Central to the Petition at bar is a piece of property, consisting of a residential lot and
improvement, located along 13th Avenue, Murphy, Cubao, Quezon City (subject
property). It was previously registered under Transfer Certificate of Title (TCT) No. 49804
in the name of Iluminada G. Piano (Iluminada), married to Ramon Piano (Ramon).4

According to petitioner Felix, the spouses Piano took custody of George, Jr. as soon as
the latter was born in 1947. George, Jr. is purportedly an illegitimate son of Corporal
George Butler of the United States Army with Ms. Ermina Fornolles. Although there is no
allegation or evidence presented that they complied with the legal adoption process, the
spouses Piano, during their lifetime, maintained custody of and raised George, Jr. as their
own son.5 Apparently, Ramon passed away before his wife. On 1 February 1990,
Iluminada, already a widow, executed a document supposedly bequeathing to George,
Jr. the ownership and administration of all her properties, including the subject property,
which served as her residence, and other properties which she leased out.

About a year later, George, Jr. met Emy Ramos (Emy), who hailed from Pangasinan.
George, Jr. and Emy developed an intimate relationship and, shortly after, Emy came to
live with Iluminada and George, Jr. on the subject property.

Iluminada died sometime in 1997. It appears that by said time, George, Jr. and Emy had
already parted ways. George, Jr. continued to live on the subject property with his family
until their possession was disturbed by herein respondent Leticia S. Fernandez (Leticia),
who instituted with the MeTC a suit for unlawful detainer against George, Jr., docketed
as Civil Case No. 22375.

It was only then that George, Jr. found out that the subject property was supposedly
transferred by Iluminada to herein respondent Alicia Sison vda. de Fernandez (Alicia) by
virtue of a Deed of Sale, dated 21 December 1993, for a consideration of ₱580,000.00.7
On 6 September 1996, Alicia then conveyed the subject property via a Deed of Absolute
Sale8 to her daughter and co-respondent Leticia for ₱500,000.00. Shortly thereafter, or
on 26 September 1996, the subject property was registered in respondent Leticia’s name
under TCT No. N-165230.9

Respondent Leticia prevailed in MeTC Civil Case No. 22375,10 and since George, Jr. did
not interpose any appeal within the reglementary period, the judgment therein became
final and executory, and a writ of execution was issued to enforce the same.11 George,
Jr. was thus served by the Sheriff of Quezon City with a Notice to Vacate the subject
property.

This prompted George, Jr. to file with the RTC Civil Case No. Q-01-44582, against
respondents Alicia and Leticia, as well as Emy,12 the MeTC, and the Office of the Sheriff
and the Register of Deeds of Quezon City, for Recovery of Ownership/Reconveyance,
Temporary Restraining Order/Preliminary Injunction and Damages. The original
Complaint13 filed with the RTC was in the name of George, Jr. as "the administrator,
acknowledged son and for or in behalf of the other heirs" of Iluminada.

ISSUE:

Won the petitioner is entitled to the injunctive writ.

HELD:

It is a well-settled rule that the sole object of a preliminary injunction, whether prohibitory
or mandatory, is to preserve the status quo until the merits of the case can be heard. It is
usually granted when it is made to appear that there is a substantial controversy between
the parties and one of them is committing an act or threatening the immediate commission
of an act that will cause irreparable injury or destroy the status quo of the controversy
before a full hearing can be had on the merits of the case.26

To be entitled to the injunctive writ, the applicant must show that there exists a right to be
protected which is directly threatened by an act sought to be enjoined. Furthermore, there
must be a showing that the invasion of the right is material and substantial and that there
is an urgent and paramount necessity for the writ to prevent serious damage. The
applicant's right must be clear and unmistakable. In the absence of a clear legal right, the
issuance of the writ constitutes grave abuse of discretion. Where the applicant's right or
title is doubtful or disputed, injunction is not proper. The possibility of irreparable damage
without proof of an actual existing right is not a ground for injunction.

A clear and positive right especially calling for judicial protection must be shown.
Injunction is not a remedy to protect or enforce contingent, abstract, or future rights; it will
not issue to protect a right not in esse and which may never arise, or to restrain an act
which does not give rise to a cause of action. There must exist an actual right. There must
be a patent showing by the applicant that there exists a right to be protected and that the
acts against which the writ is to be directed are violative of said right.28

In the present Petition, petitioner Felix miserably failed to establish such a clear and
positive right that would entitle him to the issuance of the injunctive writ prayed for.

Atty. Orocio vs. Anguluan

GR No. 179892-93; 30 January 2009

Facts:

NAPOCOR passed a resolution approving the grant of a monthly welfare

allowance equivalent to 10% of basic pay to all its employees effective 1 October 1978.
This was called the NAPOCOR Welfare Fund. Later on NAPOCOR passed a resolution
lowering it to 5%. After 2 decades Congress passed EPIRA which directed the
reorganization of NAPOCOR. Following the directive of EPIRA NAPOCOR abolished the
fund. Later on NAPOCOR was approved to release P184M from the fund for distribution
to members who resigned, retired or separated. Anguluhan however issued a
memorandum that allowed the release to separated members only to the exclusion of
those who resigned, retired or separated prior to the EPIRA.

Segovia, Baysic and affected employees affected represented by Atty. Orocio filed
with the RTC a petition for mandamus with a prayer for a TRO against NPC. Orocio and
his clients settled for a contingency fee of 15%. The parties settled for a compromise
agreement which granted earning differential to the affected members and allowed Orocio
to collect 15% from it as attorney’s fees.

RTC issued a writ of execution for Orocio to collect his attorney’s fees. A notice of
garnishment was also issued. But, respondents contended that the amount Orocio based
his 15% fees was merely an estimate. Respondents appealed to the CA which issued a
TRO. The CA held that Orocio may only collect P1M on the basis of quantum meruit
because the employees settled through a compromise agreement and not won by Orocio
in a trial.

Issue:

Whether the Atty. Orocio may collect 15% of the amount stated in the Compromise
Agreement.
Ruling:

No. First, herein respondents are not clients of Orocio they are in fact the opponents of
Orocio’s clients. There had been no objection by his client’s when he partially collected
from payments by NAPOCOR to them. His clients do not claim any damage or injury by
the issuance of the writ of execution. The 15% to be collected by Orocio is from the
agreement with his clients that he will only collect contingency fees. This kind of
arrangement is allowed by law subject to Canon 20 which provides that a lawyer shall
charge fair and reasonable fees. The principle of quantum meruit may be a basis for
determining reasonable attorney’s fees. This principle may apply even if there is already
an agreed written fee as long as the court finds it unconscionable.

The SC found Orocio to have worked diligently and if it were not for him there would have
been no compromise agreement. However, the attorney’s fees had to be reduced to 10%
which is also the percentage allowed by the labor code. The practice of law is a profession
and not a moneymaking venture.

TOLENTINO

182. Ravago v. Esso Eastern Marine & Trans-Global

FACTS:

Trans-Global Maritime Agency is the Phil agent of Singapore-based Esso Eastern Marine
(now Petroleum Shipping). Ravago was hired as a seaman onboard various Esso vessels
(34 separate and unconnected fixed-period contracts, by 3 different companies Esso
Tankers, Esso Intl Shipping, Esso Eastern Marine; total of 22 years). Under a new
contract, he was ordered to report on Sept 1992 for a medical pre-employment
examination which he passed and attended the pre-departure orientation seminar after/
On Oct 1992, a stray bullet hit Ravago on the left leg while waiting for a bus ride in Cubao.
His wife informed EIS of the incident for the purpose of availing medical benefits. The
doctor opined that Ravago would not be able to cope with the job of a seaman and
suggested that he be given a desk job. Ravago’s left leg became shorter and resulted in
a limp when walking. Instead of rehiring him, and after Ravago’s execution of a Quitclaim,
EIS paid him his Career Employment Incentive Plant and tax refund amounting to 162k.
Ravago filed a complaint for illegal dismissal with prayer for reinstatement with POEA

LA: illegally dismissed. NLRC: affirmed

Esso Eastern Marine and Trans-Global filed with the CA:

o Petition for certiorari

o Urgent Application for the issuance of a TRO and writ of preliminary

injunction which it granted

- Ravago filed a motion to set aside Resolution granting TRO, arguing that the case
was a labor dispute wherein an injunction is proscribed under Art. 254

- Respondents countered that the case did not involve a labor dispute but a money
claim against an employer as a result of termination of employment

- CA: reversed NLRC decision

o Injunction made permanent

o An injunction is a preservative remedy issued for the protection of a

substantive right or interest, an antidote resorted to only when there is
pressing necessity to avoid injurious consequences which cannot be
rendered under any standard compensation

ISSUE:

WON the CA erred in issuing a restraining order and the writ of preliminary injunction

Held:

Reliance on Art. 254 is misplaced. The law proscribes the issuance of injunctive relief
only in those cases involving or growing out of a labor dispute. Moreover, said article
specifically provides that the NLRC may grant injunctive relief under Art. 218 thereof.

The case at bar neither involves nor grows out of a labor dispute. It did not involve the
fixing of terms or conditions of employment or representation of persons with respect
thereto. Ravago’s complaint revolves around the issue of his alleged dismissal from office
and his claim for backwages, damages and attorney’s fees.

Besides, the anti-injunction policy of the Labor Code, basically is freedom at the
workplace. It is more appropriate in the promotion of the primacy of free collective
bargaining and negotiations, including voluntary arbitration, mediation and conciliation as
modes of settling labor and industrial disputes.

Generally, an injunction is a preservative remedy for the protection of a person’s

substantive rights/interests. It is not a cause of action in itself but a mere provisional
remedy, an appendage to the main suit. Pressing necessity requires that it should be
resorted only to avoid injurious consequences which cannot be remedied under any
measure of consideration. The application of an injunctive writ rests upon the presence
of an exigency or of an exceptional reason before the main case can be regularly heard.
The indispensable conditions for granting such temporary injunctive relief are:

a. that the complaint alleges facts which appear satisfactory to establish a proper
basis for injunction, and

b. that on the entire showing from the contending parties, the injunction is reasonably
necessary to protect the legal rights of the plaintiff pending the litigation.

Case at bar: Respondents’ petition contains facts sufficient to warrant the issuance of an
injunction under Art. 218(3) of the Labor Code. Further, respondents had already posted
a surety bond more than adequate to cover the judgment award.

183. Paul G. Roberts, et al. v. Court of Appeals

FACTS

Petitioners, who are corporate officers and members of the Board of Pepsi Cola Products
Phils., Inc. were prosecuted in connection with the Pepsi “Number Fever” promotion by
handlers of the supposedly winning “349” Pepsi crowns. Of the four cases filed against
the petitioners, probable cause was found by the investigating prosecutor only for the
crime of estafa, but not for the other alleged offenses.

On 12 April 1993, the information was filed with the trial court without anything
accompanying it. A copy of the investigating prosecutor’s Joint Resolution was forwarded
to and received by the trial court only on 22 April 1993. However, no affidavits of the
witnesses, transcripts of stenographic notes of the proceedings during the preliminary
investigation, or other documents submitted in the course thereof were found in the
records of the case as of 19 May 1993.

On 15 April 1993, petitioners Roberts, et al. filed a petition for review to the Department
of Justice seeking the reversal of the finding of probable cause by the investigating
prosecutor. They also moved for the suspension of the proceedings and the holding in
abeyance of the issuance of warrants of arrest against them. Meanwhile, the public
prosecutor also moved to defer the arraignment of the accused-appellants pending the
final disposition of the appeal to the Department of Justice.

On 17 May 1993, respondent Judge Asuncion issued the challenged order (1) denying,
on the basis of Crespovs. Mogul, the foregoing motions respectively filed by the
petitioners and the public prosecutor, and directing the issuance of the warrants of arrest
“after June 1993” and setting the arraignment on 28 June 1993. In part, respondent judge
stated in his order that since the case is already pending in this Court for trial, following
whatever opinion the Secretary of Justice may have on the matter would undermine the
independence and integrity his court. To justify his order, he quoted the ruling of the
Supreme Court in Crespo, which stated:

In order therefor to avoid such a situation whereby the opinion of the Secretary of Justice
who reviewed the action of the fiscal may be disregarded by the trial court, the Secretary
of Justice should, as far as practicable, refrain from entertaining a petition for review or
appeal from the action of the fiscal, when the complaint or information has already been
filed in Court. The matter should be left entirely for the determination of the Court.

Petitioners went to the Court of Appeals (CA), arguing that the respondent judge had not
the slightest basis at all for determining probable cause when he ordered the issuance of
warrants of arrest. After finding that a copy of the public prosecutor’s Joint Resolution had
in fact been forwarded to, and received by, the trial court on 22 April 1993, the CA denied
petitioners’ application for writ of preliminary injunction. The CA ruled that the Joint
Resolution “was sufficient in itself to have been relied upon by respondent Judge in
convincing himself that probable cause indeed exists for the purpose of issuing the
corresponding warrants of arrest” and that the “mere silence of the records or the absence
of any express declaration” in the questioned order as to the basis of such finding does
not give rise to an adverse inference, for the respondent Judge enjoys in his favor the
presumption of regularity in the performance of his official duty. Roberts, et al. sought
reconsideration, but meanwhile, the DOJ affirmed the finding of probable cause by the
investigating prosecutor. The CA therefore dismissed the petition for mootness.

ISSUE:

WON the Supreme Court determine in this proceedings the existence of probable cause
either for the issuance of warrants of arrest against the petitioners or for their prosecution
for the crime of estafa?

HELD:

NO.

the Supreme Court MAY NOT determine in this [sic] proceedings the existence of
probable cause either for the issuance of warrants of arrest against the petitioners or for
their prosecution for the crime of estafa.

Ordinarily, the determination of probable cause is not lodged with this Court. Its duty in
an appropriate case is confined to the issue of whether the executive or judicial
determination, as the case may be, of probable cause was done without or in excess of
jurisdiction or with grave abuse of discretion amounting to want of jurisdiction. This is
consistent with the general rule that criminal prosecutions may not be restrained or stayed
by injunction, preliminary or final.

There are, however, exceptions to the foregoing rule. But the Court refused to reevaluate
the evidence to determine if indeed there is probable cause for the issuance of warrants
of arrest in this case. For the respondent judge did not, in fact, find that probable cause
exists, and if he did he did not have the basis therefor. Moreover, the records of the
preliminary investigation in this case are not with the Court. They were forwarded by the
Office of the City Prosecutor of Quezon City to the DOJ in compliance with the latter's 1st
Indorsement of 21 April 1993. The trial court and the DOJ must be required to perform
their duty.

184. Dimayuga vs Fernandez

FACTS:

Plaintiffs are Chiropractic Doctors, practicing their profession in the city of Manila, and
that they are graduates of reputable American universities, and have complied with all the
rules and regulations of such universities, which are required for the issuance of the
degree of Doctor of Chiropractics.

"That the plaintiffs are exercising the profession of chiropractics after having duly paid the
license fee reacquired by Internal Revenue Law." That the plaintiff, Dimayuga, appeared
before the Honorable Secretary of the Interior, the Honorable Director Health and the
Board of Medical Examiners, for the purpose of submitting to, and taking, an examination,
if any was required. That he was advised that he could practice his profession so long as
there is no express provision against it. That the Board of Medical Examiners informed
plaintiff that it could not give him any examination, because no one of its members had
any knowledge of chiropractics. That the Director of Health held that he did not have any
objection to the plaintiff's practicing chiropractics in the Philippine Islands so long as there
is no complaint against his treatment. "That there is no law prohibiting directly or indirectly
or regulating in any manner the practice of the chiropractics in the Philippine Islands."

That the defendants, with full knowledge of such facts, and in flagrant violation of the
constitutional right is of the plaintiffs, are, with the use of force, about to arrest and
persecute them in the exercise of their profession in the city of Manila, and to illegally
prohibit their practice, as evidenced by a written opinion of Mr. Torres, as fiscal of the city
of Manila, and that their arrest would be without any legal right or authority. That, on
account of such illegal acts, the plaintiffs have been damaged in the sum of P10,000, and
they have no speedy or adequate remedy at law.
ISSUE:

WON the prosecution will be restrained or stayed by injunction

HELD:

The writ of prohibition in somewhat sui generis, and in more of less in the sound legal
discretion of the court and in intended to prevent the unlawful and oppressive exercise of
legal authority, and to bring about the orderly administration of justice.

It appears that the defendants are acting upon the written advice of the city attorney as
to the construction of the law. The Mayor had a right to as that official for his legal opinion
and rely upon it, and he has a right to give it. The record simply shows that the defendants
are seeking to discharge their official duties as they understand them, and there in
evidence that either of they are acting from malicious or dishonest motives. Neither in
there any evidence that the defendants are threatening plaintiffs with daily arrest or a
number of oppressive prosecutions, or that they are disposed to involve them in
expensive litigation.

It does not appear that the defendants are threatening to or will, make numerous arrests
of the plaintiffs at least until such time as the law of the case is finally settled. There is no
allegation that Fiscal Torres was not acting in good faith in the giving of his advice, or that
he is not honest in his opinion. The very most that is charged against him is that he is
mistaken in the construction of a law, which has never been judicially construed and which
can be construed in the case now pending, to which one of the plaintiffs is a party.

The court declines to pass upon the constitutional questions presented and hold that the
temporary injunction should be dissolved and the demurrer sustained, with leave to
plaintiffs to file an amended complaint within ten days from the promulgation of this
decision.

185. Fortun vs Garcia

FACTS:
Petition on its face is indicative of a possible harrassment to which Judge Fortun was
subjected by reason of his official action, the letter-complaint coming from a member of
the bar who had lost six of the nine cases in petitioner's sala and the supporting affidavit
coming from a disgruntled former employee, this Court issued a temporary restraining
order, and, in the same resolution of March 25, 1974, require comment from the
respondents.

Only respondent City Fiscal filed a comment on May 6, 1974. There was no explicit denial
of certain allegations indicative of the hostility manifested towards petitioner Judge.
Instead, the ten-page comment relied on what was considered to be applicable decisions.
There was no effort to refute the allegation that there was a failure to abide by the
requirements of Presidential Decree No. 77, but, it was argued that there was substantial
compliance..

Thus "Under date of September 17th, 1973, Atty. Martin Vera Cruz, a disgruntled barrister
who lost 6 out of the 9 cases he filed before petitioner's sala, sent a letter, not to the City
Fiscal, but to Atty. Andres Bersales, President of the Zamboanga del Sur Chapter of the
Integrated Bar, asking, in effect, that administrative charges be initiated against petitioner
for alleged misuse of his travel allowances.

The five of them, without the concurrence or attendance of the remaining 4 members of
the 9-man Board of Directors of the Integrated Bar Chapter of Zamboanga del Sur on so
important a subject, peremptorily passed resolution no. 7 resolving to file not only
administrative but criminal charges against petitioner. The resolution discloses 2 things:
first, it is not reflective of the collective will of the IBP Chapter concerned because it was
a divided Board that acted on it and, second, the five members who voted for it without
the participation of the 4 others have 'axes to grind' against petitioner. Two of them, Atty.
Bersales and Zulueta, invariably lost their cases before petitioner's sala while Atty.
Pielago and Carpio are subordinates of Atty. Bersales in the Governor's Office."

To indicate that the complaint was filed as a manifestation of vindictiveness and for the
humiliation of petitioner judge, the reply characterized the resolution of the Integrated Bar
of the Philippines chapter as having been "railroaded," petitioner not having been given a
chance to explain his side contrary to procedural due process.
No effort was made either by respondent City Fiscal or any of the private respondents to
dispel in any way the grave doubts raised as to the bona fides in the filing of this complaint
against petitioner. A memorandum was submitted by petitioner. Respondents maintained
their silence. The only explanation appears to be their realization that the petition is
meritorious

ISSUE:

WON the prohibition will lie

HELD:

YES.

At the outset, reference was made to the invocation by petitioner-judge of the leading
Dimayuga decision. Seven years after its promulgation, in 1930 to be precise, it was relied
upon in Tong v. Santamaria & Standard Oil Co. Justice Villamor as ponente stressed
that "the remedy of prohibition is somewhat sui generis, and is one more or less of legal
discretion, and is intended to prevent the oppressive exercise of legal authority." Such
categorical enunciation of one of the most highly valued principles of equity ought to have
cautioned respondent City Fiscal against, in the language of then President of the
Integrated Bar of the Philippines, retired Justice J. B. L. Reyes, acting with "unseemly
haste." This is one occasion then that calls for the exercise of the equitable powers of this
Court to repudiate what was clearly an "oppressive exercise of legal authority."

The characterization by retired Justice J. B. L. Reyes, then President of the Integrated

Bar of the Philippines, of the "unseemly haste" that marked the actuation of respondent
members of the Board of Directors of the Integrated Bar Chapter of Zamboanga del Sur,
Pagadian City Chapter, appears to be rather mild all things considered. He pointed out
that there was a violation of the cardinal principles of fairness and due process that
underlie the Rule of Law. Petitioner-Judge was not heard; he was denied the opportunity
to defend himself against the accusation. There was, on the part of private respondents
then, a failure to abide by a Resolution of the Integrated Bar stressing that precisely
integration could shield "the judiciary which traditionally cannot defend itself except within
its own forum, from the assaults that politics and self- interest may level at it, and assist
it to maintain its integrity impartiality and independence.'"

186. Brocka vs Enrile

FACTS:

Jeepney strike called by the Alliance of Concerned Transport Organization (ACTO) a

demonstration held in sympathy of this strike, forcibly and violently dispersed a petitioners
arrested by Northern Police District Officers – Jan 28 ‘85/ Petitioners charged with Illegal
Assembly RPC146 par.3 in 3 crim cases filed before RTC QC. All petitioners released on
bail – P3,000 each EXCEPT for Lino Brocka, Ben Cervantes, Cosme Garcia and Rodolfo
Santos (Brocka, et al.), who were charged as leaders of the offense of Illegal Assembly
for whom no bail was recommended.

Urgent petition for bail filed before the RTC a daily hearings held between Feb.1-7 1985
a On Feb. 7 or 9 1985, RTC QC Judge Miriam Defensor Santiago ordered Brocka, et al’s
provisional release; recommended bail at P6,0000 each a Brocka, et al filed respective
bail bonds but despite service of release order, Brocka, et al remained in detention a
respondents-police officers invoked Preventive Detention Action (PDA) allegedly issued
against Brocka, et al on Jan. 28 ’85 Neither original nor certified true copy of this PDA
was shown to Brocka, et al.

On Feb 11 1985, Brocka, et al charged with Inciting to Sedition in 3 crim cases; hasty and
spurious filing of a second offense.
 · Brocka, et al released provisionally on Feb.14 ’85 on orders of then Pres. Marcos
a release narrated in Court’s resolution in petition for habeas corpus filed by Sedfrey
Ordonez in behalf of Brocka, et al:

· Hence, this petition. Brocka, et al contend:

1. bad faith and/or harassment sufficient bases for enjoining their criminal
prosecution

2. second offense of Inciting to Sedition manifestly illegal – premised on one

and the same act of participating in the ACTO jeepney strike a matter of defense
in sedition charge so, only issue here is…

ISSUE: Whether or not criminal prosecution of a case may be enjoined

HELD:

YES.

The court ruled in favor of Brocka, et al. and enjoin their criminal prosecution for the
second offense of inciting to sedition.

· GEN. RULE: Criminal prosecution may not be restrained or stayed by injunction,

preliminary or final

· EXCEPTIONS:

1. To afford adequate protection to the constitutional rights of the accused

2. When necessary for the orderly administration of justice or to avoid

oppression or multiplicity of actions

3. When there is no prejudicial question which is subjudice

 4. When the acts of the officer are without or in excess of authority

5. Where the prosecution is under an invalid law, ordinance or regulation

6. When double jeopardy is clearly apparent

7. When the court has no jurisdiction over the offense

8. Where it is a case of persecution rather than prosecution

9. Where the charges are manifestly false and motivated by lust for vengeance

10. When there is clearly no prima facie case against the accused and a motion to
quash on that ground had been denied

11. Preliminary injunction has been issued by the SC to prevent the

threatened unlawful arrest of petitioners

In the case at bar, criminal proceedings had become a case of persecution, have been
undertaken by state officials in bad faith:

1. Respondents invoked a spurious PDA in refusing Brocka, et al’s release from

detention BUT this PDA was issued on Jan.28 ’85 and invoked only on Feb.9 ’85
upon receipt of TC’s order of release a violates guideline that PDA shall be invoked
within 24 hrs in Metro, Manila or 48 hours outside Metro, Manila

Despite subpoenas for PDA’s production, prosecution merely presented a

purported xeerox copy of it a violates Court pronouncement that “individuals
against whom PDAs have been issued should be furnished with the original, and
the duplicate original, and a certified true copy issued by the official having official
custody of the PDA, at the time of the apprehension (Ilagan v Enrile)

2. SolGen’s manifestation: Brocka, et al should have filed a motion to quash the

information instead of a petition for Habeas Corpus

The Court agreed with the contention of the SolGen. However, it noted that such course
of action would have been a futile move, considering the circumstances then prevailing:

1. Spurious and inoperational PDA

 2. Sham and hasty Preliminary Investigation

Clear signals that the prosecutors intended to keep Brocka, et al in detention until the
second offense could be facilitated and justified without need of issuing a warrant of arrest
anew

"Infinitely more important than conventional adherence to general rules of criminal

procedure is respect for the citizen's right to be free not only from arbitrary arrest and
punishment but also from unwarranted and vexatious prosecution.

If there is manifest bad faith that accompanies the filing of criminal charges (as in this
case where petitioners were barred from enjoying provisional release until such time that
charges were filed) and where a sham preliminary investigation was hastily conducted
THEN charges that are filed as a result should lawfully be enjoined.

The petition is hereby GRANTED. The trial court is PERMANENTLY ENJOINED from
proceeding in any manner with the cases subject of the petition. No costs.

187. Gov. Garcia vs Jose

FACTS:
Petitioners Version
The Cebu South Reclamation Project is a FOUR BILLION PESO project of the RP, funded
out of a loan taken from the Government of Japan, through its international financing
institution, the Overseas Economic Cooperation Fund (OECF). The loan was made
possible by virtue of an Exchange of Notes between the Governments of the Republic of
the Philippines and Japan. The project is an integral part of the Third Phase of the Metro
Cebu Development Projects (MCDP III).
On 19 January 1996, PR Malayan Integrated Industries Corporation (MALAYAN), filed a
case fo "Specific Performance, Declaration of Nullity, Damages and Injunction, with Writ
of Preliminary Injunction and Temporary Restraining Order against herein petitioners in
the RTC of Cebu City.
During the summary hearing to determine whether the TRO should issue, defendants
questioned the jurisdiction of the court to issue the same, citing Section 1 of Presidential
Decree No. 1818. It was also pointed out that Administrative, Circular 13-93, pursuant to
P.D. 1818, and in implementation of the policy behind the law, prohibited all judges of all
courts from issuing TRO's and/or writs of preliminary injunction against the
implementation of government infrastructure projects.
In gross violation of the law and the circulars of the Honorable Supreme Court, however,
respondent judge issued a temporary restraining order.

Private Respondents Version

On May 22, 1967, Proclamation No. 200-A was issued which reserved for national
improvement purposes, a certain parcel of land of the public domain situated in the
foreshore of the District of San Nicolas, Pardo, Cebu City and Tangkey, Talisay, Cebu.
This area was transferred and relinquished by the President of the Philippines to the
Province of Cebu in behalf of the government, subject to private rights, if any there be.

On January 11, 1973, Presidential Decree No. 3-A was issued which decreed that the
reclamation of land under water, whether foreshore or inland, throughout the Philippines
belong to and are owned by and limited to the national government or to any person
authorized by it under a proper contract.

The Province of Cebu and private respondent entered into, signed and executed a
Confirmatory Agreement dated November 1979, by virtue of which the services of
MALAYAN was contracted to undertake the preparation and making of the said Detailed
and Integrated Development Plan on Land use, etc., of the Cebu South Reclamation
Project at no cost to the Province of Cebu.

The said Confirmatory Agreement acknowledged that it was the private respondent which
made initial investments in the Cebu South Reclamation Project and the entity granted
the right of first refusal or option rights to undertake the project.

On January 24, 1980, the PEA and the City of Cebu entered into a Memorandum of
Understanding which recognized the pre-emptive right of plaintiff to undertake the Project
as recognized in the Presidential directive dated August 13, 1979.

A memorandum of understanding with respect to the Cebu South Reclamation project

wherein, paragraph 6 of its Section II, it provided that the City of Cebu was obliged "to
accord pre-emptive rights for the actual prosecution of the reclamation project to private
entities which have made initial investments on the project", which entity is no other than
herein plaintiff. This option of first refusal or pre-emptive rights of plaintiff to undertake the
actual prosecution of the project has never been cancelled, or rescinded.

The herein private respondent filed this case for injunction when the respondents issued
an invitation to bidders. Exhibit "A-21" particularly section 3.2 thereof which provides "for
the conduct of tenders and subsequent evaluation of bids" for the Cebu South
Reclamation Project. In, other words, the petitioners were going to entertain bids from
private contractors for the undertaking of the Cebu South Reclamation Project in violation
of the preemptive rights or right of first refusal of private respondent to prosecute the
project.

ISSUE:

Whether or not respondent judge gravely abused his discretion in issuing the orders dated
22 February 1996 and 18 March 1996, in contumacious violation of Presidential Decree
No. 1818, and Supreme Court Administrative Circulars Nos. 13-93 and 68-94.

HELD:

Sec. 1 of PD 1818 distinctly provides that "noo court in the Philippines shall have
jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory
injunction in any case, dispute, or controversy involving an infrastructure project . . . of
the government, . . . to prohibit any person or persons, entity or government official from
proceeding with, or continuing the execution or implementation of any such project, . . .
or pursuing any lawful activity necessary for such execution, implementation or
operation." At the risk of being repetitious, we stress that the foregoing statutory provision
expressly deprives courts of jurisdiction to issue injunctive writs against the
implementation or execution of an infrastructure project.

In the case at bar, the assailed March 18, 1996 Order of respondent judge specifically
enjoined petitioners from implementing their Memorandum of Agreement dated
September 11, 1995 (except as to the Cebu South Coastal Road), which pertains to the
implementation of the Metro Cebu Development Project, Phase III, a major component of
which is the Cebu South Reclamation Project. The petitioners were also enjoined from
acting on or implementing all other contracts involving the said reclamation project. The
issuance of said writ of preliminary injunction evidently constitutes a blatant violation of
PD 1818. The assailed Order is therefore void for being issued with grave abuse of
discretion and without jurisdiction.

Itis clear that the respondent judge gravely abused his discretion in issuing the Writ of
Preliminary Injunction. Section 3, Rule 58 of the Rules of Court, enumerates the grounds
for the issuance of a preliminary injunction. Although private respondent alleged these
grounds, respondent judge had the duty to take judicial notice of PD 1818 and PD 1594.
These laws, based on the foregoing discussion, ineludibly show that private respondent
had no right to the relief it sought. It is well-settled that, "before a writ of preliminary
injunction may be issued, there must be a clear showing, by the complaint that there
exists a right to be protected, and that the acts against which the writ is to be directed are
violative of the said right." In hindsight, the respondent judge's grant of the writ is truly
regrettable, as it unnecessarily delayed the implementation of an important infrastructure
project, a delay which had far-reaching consequences on the economic development and
interest of Cebu, as well as the nation.

188. Bacolod City Water District vs Labayen

FACTS:
Respondent City opposed the Schedule of Automatic Water Rates Adjustments for the
years 1999, 2000 and 2001published by the petitioner. It alleged that the proposed water
rates would violate due process as they were to be imposed without the public hearing.
Hence, it prayed that before the hearing of the main case, a temporary restraining order
or a preliminary injunction be issued.
On February 24, 2000. On the same date requested, respondent court heard respondents
application for temporary restraining order and issued an Order commanding petitioner
to stop, desist and refrain from implementing the proposed water rates.
On December 21, 2000, respondent court issued the assailed Decision granting the final
injunction which allegedly confirmed the previous preliminary injunction.
Petitioner filed its Motion for Reconsideration of the assailed Decision on January 11,
2001 asserting, among others, that the case was not yet ripe for decision when the court
granted the final injunction, the petitioner having had no opportunity to file its answer,
avail of the mandatory pre-trial conference and have the case tried on the merits.
ISSUE:
Whether or not preliminary injunction had been issued
HELD:
No.
The sequence of events and the proceedings that transpired in the trial court make a clear
conclusion that the Order issued was a temporary restraining order and not a preliminary
injunction.
Given the previous undeviating references to it as a temporary restraining order,
respondents cannot now consider it as a preliminary injunction to justify the validity of the
assailed Decision. The attendant facts and circumstances clearly show that the
respondent trial court issued a temporary restraining order.
Injunction is a judicial writ, process or proceeding whereby a party is ordered to do or
refrain from doing a certain act. It may be the main action or merely a provisional remedy
for and as an incident in the main action.]
The main action for injunction is distinct from the provisional or ancillary remedy of
preliminary injunction which cannot exist except only as part or an incident of an
independent action or proceeding. As a matter of course, in an action for injunction, the
auxiliary remedy of preliminary injunction, whether prohibitory or mandatory, may issue.
Under the law, the main action for injunction seeks a judgment embodying a final
injunction which is distinct from, and should not be confused with, the provisional remedy
of preliminary injunction, the sole object of which is to preserve the status quo until the
merits can be heard. A preliminary injunction is granted at any stage of an action or
proceeding prior to the judgment or final order. It persists until it is dissolved or until the
termination of the action without the court issuing a final injunction.
A restraining order, on the other hand, is issued to preserve the status quo until the
hearing of the application for preliminary injunction which cannot be issued ex parte.
Under Rule 58 of the Rules of Court, a judge may issue a temporary restraining order
with a limited life of twenty (20) days from date of issue. If before the expiration of the
twenty (20)-day period the application for preliminary injunction is denied, the temporary
restraining order would be deemed automatically vacated. If no action is taken by the
judge on the application for preliminary injunction within the said twenty (20) days, the
temporary restraining order would automatically expire on the 20th day by the sheer force
of law, no judicial declaration to that effect being necessary.[47]
Hence, in the case at bar, since no preliminary injunction was issued, the temporary
restraining order granted automatically expired after twenty (20) days under the Rules.
The fact that respondent court merely ordered the respondent[,] its agents,
representatives or any person acting in his behalf to stop, desist and refrain from
implementing in their billings the new water rate increase which will start on March 1,
2000[48] without stating the period for the restraint does not convert the temporary
restraining order to a preliminary injunction.
The rule against the non-extendibility of the twenty (20)-day limited period of effectivity of
a temporary restraining order is absolute if issued by a regional trial court. The failure of
respondent court to fix a period for the ordered restraint did not lend the temporary
restraining order a breath of semi-permanence which can only be characteristic of a
preliminary injunction. The twenty (20)-day period provided by the Rules of Court should
be deemed incorporated in the Order where there is an omission to do so. It is because
of this rule on non-extendibility that respondent City was prompted to move that hearings
be set for its application of a preliminary injunction. Respondent City cannot take
advantage of this omission by respondent trial court.
189. Chiao Liong Tan vs CA

FACTS:

Petitioner Chiao Liong Tan claims to be the owner of a motor vehicle, particularly
described as Isuzu Elf van, 1976 Model that he purchased in March 1987. As owner
thereof, petitioner says he has been in possession, enjoyment and utilization of the said
motor vehicle until his older brother, Tan Ban Yong, the private respondent, took it from
him.

Petitioner relies principally on the fact that the van is registered in his name under
Certificate of Registration. He claims in his testimony before the trial court that the said
motor vehicle was purchased from Balintawak Isuzu Motor Center for a price of over
P100, 000. 00; that he sent his brother to pay for the van and the receipt fro payment was
placed in his name because it was his money that was used to pay for the vehicle; that
he allowed his brother to use the van because the latter was working for his company,
the CLT Industries; and that his brother later refused to return the van to him and
appropriated the same for himself.

On the other hand, private respondent testified that CLT Industries is a family business
that was placed in petitioner’s name because at that time he was then leaving for the
United Stated and petitioner remaining Filipino in the family residing in the Philippines.
When the family business needed a vehicle in 1987 for use in the deliver of machinery to
its customers, he asked petitioner to look for a vehicle and gave him the amount of
P5,000.00 to be deposited as down payment for the van, which would be available in
about a month. After a month, he himself paid the whole price out of a loan of P140,
000.00 from his friend Tan Pit Sin. Nevertheless, respondent allowed the registration of
the vehicle in petitioner’s name. It was also their understanding that he would keep the
van for himself because CLT Industries was not in a position to pay him. Hence, from the
time of the purchase, he had been in possession of the vehicle including the original
registration papers thereof, but allowing petitioner from time to time to use the van for
deliveries of machinery.
After hearing, the trial court found for the private respondent. Finding no merit in the
appeal, the Court of Appeals affirmed the decision of the trail court.

ISSUE:

WON ownership may be decided in a proceeding for replevin.

HELD:

The Court observes that the action by petitioner as plaintiff in the trial court was only one
for Replevin and Damages. Since replevin is only a provisional remedy where the replevin
plaintiff claims immediate delivery of personal property pending the judgment of the trial
court in a principal case, the petitioner should have filed in the trial court as a main case
an action to recover possession of the Isuzu Elf van which was in the possession of the
private respondent. Logically, the basis of petitioner's cause of action should have been
his ownership of said van.

It is true that the judgment in a replevin suit must only resolve in whom is the right of
possession. Primarily, the action of replevin is possessory in character and determines
nothing more than the right of possession. However, when the title to the property
is distinctly put in issue by the defendant’s plea and by reason of this policy to settle
in one action all the conflicting claims of the parties to the possession of the property
in controversy, the question of ownership may be resolved in the same proceeding.

Furthermore, a replevin action is primarily one for the possession of personalty,

yet it is sufficiently flexible to authorize a settlement of all equities between the
parties, arising or growing out of the main controversy. Thus, in an action
for replevin where the defendant is adjudged to possession, he need not go to another
forum to procure relief for the return of the replevied property or secure judgment for the
value of the property in case the adjudged return thereof could not be had.

190. BA Finance Corporation v. Hon. Court of Appeals and Roberto M. Reyes

FACTS:

Spouses Manahan executed a promissory note binding themselves to pay Carmasters,

Inc., P83,080.00 in 36 monthly installments. To secure payment, the Manahan spouses
executed a deed of chattel mortgage over a motor vehicle, a Ford Cortina. Carmasters
later assigned the promissory note and the chattel mortgage to petitioner BA Finance
Corporation with the conformity of the Manahans. When the latter failed to pay the
installments, petitioner sent demand letters. The demands not having been heeded,
petitioner filed a complaint for replevin with damages against the spouses, as well as
against a John Doe, praying for the recovery of the vehicle with an alternative prayer for
the payment of a sum of money should the vehicle not be returned. The lower court issued
a writ of replevin.

The service of summons upon the spouses Manahan was caused to be served by
petitioner. The original of the summons had the name and the signature of private
respondent Roberto M. Reyes indicating that he received a copy of the summons and the
complaint. Petitioner, through its Legal Assistant, issued a certification to the effect that it
had received from Orson R. Santiago, the deputy sheriff of the RTC the Ford Cortina
seized from private respondent Roberto M. Reyes, the John Doe referred to in the
complaint, in Sorsogon, Sorsogon. Consequently, the lower court came out with an order
of seizure.

A few months later, the court issued an order dismissing the caste for failure to prosecute
and further ordering the plaintiff to return the property seized with all its accessories to
defendant John Doe in the person of Roberto M. Reyes.

The order was recalled, but summons still could not be served on the Manahans. So, the
trial court dismissed the case and ordered that the vehicle be returned to Reyes. The CA
affirmed.

On appeal, the CA denied petitioner’s motion for reconsideration.

ISSUE:

Whether or not a mortgagee can maintain an action for replevin against any possessor of
the object of a chattel mortgage even if the latter were not a party to the mortgage.

HELD:

No. Replevin is both a form of principal remedy and of a provisional relief. It may refer
either to the action itself, i.e., to regain the possession of personal chattels being
wrongfully detained from the plaintiff by another, or to the provisional remedy that would
allow the plaintiff to retain the thing during the pendency of the action and hold it pendente
lite. The action is primarily possessory in nature and generally determines nothing more
than the right of possession. The person in possession of the property sought to be
replevied is ordinarily the proper and only necessary party defendant, and the plaintiff is
not required to so join as defendants other persons claiming a right on the property but
not in possession thereof. The Rules of Court allows an application for the immediate
possession of the property but the plaintiff must show that he has a good legal basis, i.e.,
a clear title thereto, for seeking such interim possession.

Where the right of the plaintiff to the possession of the specific property is so conceded
or evident, the action need only be maintained against him who so possesses the
property. The court, in an earlier case held that persons having a special right of property
in the goods the recovery of which is sought, such as a chattel mortgagee, may maintain
an action for replevin therefor. Where the mortgage authorizes the mortgagee to take
possession of the property on default, he may maintain an action to recover possession
of the mortgaged chattels from the mortgagor or from any person in whose hands he may
find them.

A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to, the possession of
the property unless and until the mortgagor defaults and the mortgagee thereupon seeks
to foreclose thereon. Since the mortgagee’s right of possession is conditioned upon the
actual fact of default which itself may be controverted, the inclusion of other parties, like
the debtor or the mortgagor himself, may be required in order to allow a full and conclusive
determination of the case. When the mortgagee seeks a replevin in order to effect the
eventual foreclosure of the mortgage, it is not only the existence of, but also the
mortgagor’s default on, the chattel mortgage that, among other things, can properly
uphold the right to replevy the property. The burden to establish a valid justification for
that action lies with the plaintiff. An adverse possessor, who is not the mortgagor, cannot
just be deprived of his possession, let alone be bound by the terms of the chattel mortgage
contract, simply because the mortgagee brings up an action for replevin.

191. TILLSON vs.CA

FACTS:

Tillson brought suit in the RTC Pasig against La Pierre for “specific performance and
damages with prayer for preliminary injunction and restraining order.” It was docketed as
Civil Case No. 54587. Briefly, Tillson’s complaint alleged that: 1) he entered into a contract
with La Pierre for the construction of yacht 1, it was Seacraft International Corporation
that actually undertook the construction of the boat, advances on the price being made
by Tillson, and the money thus advanced was, however, used by La Pierre and Seacraft
for the construction of yacht 2. Only Seacraft filed an answer; La Pierre failed to answer
within the reglementary period and was consequently declared in default.
The Court thereafter received Tillson’s evidence against La Pierre ex parte and on the
basis thereof, rendered judgment by default against La Pierre. The judgment became
final and executory, no appeal having been taken by La Pierre. The action however
continued as regards his co-defendant Seacraft.

At Tillson’s instance, the Trial Court authorized execution of the default judgment against
La Pierre. The Sheriff levied on, and subsequently took possession of, the 2 yachts above
mentioned.

Seacraft filed a third-party claim in respect of both vessels in accordance with Section 17,
Rule 39 of the ROC, contending that the yachts belonged to it, and not to La Pierre. The
execution sale of yacht 1 was then scheduled and held by the Sheriff, resulting in the
boat’s being struck off to Tillson as the highest bidder. Yacht 2 was somehow delivered
by the Sheriff to Tillson’s counsel. It was thereafter moved by Tillson to the Manila Yacht
Club.

But a claim for yacht 2 was being put forth by a certain Cooney, grounded on a
compromise agreement between him and La Pierre. Indeed, there was then pending in
another branch of the same RTC an action which had been commenced by Cooney
against La Pierre, docketed as Civil Case No. 55152. Said Branch issued orders directing
the sheriff to take immediate possession of the yacht 2 and deliver it to Cooney after the
expiration of five days.
Tillson promptly instituted a certiorari action in the CA, praying for nullification of that
order. The CA dismissed Tillson’s action.

Cooney next turned his attention to yacht 1 which, as above stated, had been earlier
acquired by Tillson at the auction sale. Cooney filed with the RTC Manila an action against
Tillson for annulment of the sale and for delivery thereof to him by way of replevin. In his
complaint he alleged that by a deed of sale executed on by Seacraft he had become
owner of yacht. Judge Jaguros ordered the issuance of “the corresponding Writ of
Replevin of Personal Property,” The “writ of replevin” issued on the same day but, as will
shortly be narrated, custody of the vessel was not taken by the Sheriff until three days
later.

Cooney filed a “Manifestation/Motion” stating that when the Sheriff went to the place
where the vessel was moored, he discovered that “the number of the boat (sought to be
seized) had been deliberately tampered with,” . . Cooney filed an amended adding to his
prayer the request that the Sheriff “deposit (the yacht) for safekeeping with the Philippine
Coast Guard, pending determination and/or resolution by this Honorable Court of this
motion.” On the same day, the Court granted the motion and ordered (a) “the sheriff to
deposit the boat for safekeeping with the Philippine Coast Guard. The Sheriff took custody
of the yacht 1 and delivered it for safekeeping to the Coast Guard.

On the following day, Tillson’s counsel filed an “Appearance and Urgent Ex-Parte Motion.”
Tillson also filed thru counsel an “Urgent Motion for Approval of Bond (and) Surrender of
[yacht 1],” submitting a bond and praying that the boat seized from him by the sheriff “be
ordered returned/surrendered/released to Tillson, in accordance with Section 5 of Rule
60 of the ROC.” A copy of the motion and the bond was sent by registered mail to and in
due course received by Cooney’s attorney.

However, the Trial Court refused to order re-delivery of the boat to Tillson. It held that the
provision for the return of seized property on a counterbond in Rule 60—. . . is not exactly
applicable to the situation . . . because said provision presupposes that possession is to
be given to the plaintiff, however, . . . the writ precisely ordered that the possession and
control of [yacht 1] . . . be put under the Coast Guard which is a disinterested third person;
. . . (and to) transfer . . . possession and control of the boat to either party would render
the case moot and academic.

Once again, Tillson went to the CA. He filed a petition for certiorari, prohibition and
mandamus to nullify the above Order and compel re-delivery of the yacht 1 to him. Once
again, the verdict of the Appellate Tribunal went against Tillson.
ISSUE:

WON Tillson, as defendant in the replevin action had properly complied with the requisites
of Rule 60 for the return to him of the seized vessel

HELD:

YES

The term replevin is popularly understood as “the return to or recovery by a person of

goods or chattels claimed to be wrongfully taken or detained upon the person’s giving
security to try the matter in court and return the goods if defeated in the action;” “the writ
by or the common-law action in which goods and chattels are replevied,” i.e., taken or
gotten back by a writ for replevin;” and to replevy, means to recover possession by an
action of replevin; to take possession of goods or chattels under a replevin order.

Bouvier’s Law Dictionary defines replevin as “a form of action which lies to regain the
possession of personal chattels which have been taken from the plaintiff unlawfully . . .,
(or as) the writ by virtue of which the sheriff proceeds at once to take possession of the
property therein described and transfer it to the plaintiff upon his giving pledges which are
satisfactory to the sheriff to prove his title, or return the chattels taken if he fail so to do;
the same authority states that the term, “to replevy” means “to re-deliver goods which
have been distrained to the original possessor of them, on his giving pledges in an action
of replevin.” The term therefore may refer either to the action itself, for the recovery of
personality, or the provisional remedy traditionally associated with it, by which possession
of the property may be obtained by the plaintiff and retained during the pendency of the
action. In this jurisdiction, the provisional remedy is identified in Rule 60 of the ROC as
an order for delivery of personal property.

That the action commenced by Cooney against Tillson, in the Manila RTC Manila was
one for replevin — and the provisional remedy therein applied for, the writ or order of
delivery just described — hardly admits of doubt. The facts set out in his complaint and
the affidavit accompanying it, as well as his filing of a bond in double the value of the
property sought to be recovered, show that Cooney filed the action precisely with Rule 60
in mind. This is evident from a perusal of Sections 1 and 2 of the Rule.

The plaintiff must also give a bond, executed to the defendant in double the value of the
property as stated in the affidavit aforementioned, for the return of the property to the
defendant if the return thereof be adjudged, and for the payment to the defendant of such
sum as he may recover from the plaintiff in the action.

As will be noted, Cooney’s complaint incorporates the factual allegations necessary to

bring his cause within the operation of Rule 60 of the ROC. In his complaint he asserts
that he is the owner of the yacht 1 in virtue of a deed of sale executed in his favor by
Seacraft; that he was being deprived of possession thereof by Tillson, who was acting in
conspiracy with the Sheriff and other persons; that as owner, he was entitled to a
“preliminary order for the immediate delivery” upon “a bond in a reasonable amount” and,
“after trial of the issues,” to have his ownership vindicated and recover damages from the
defendants.

And that it was so understood by the RTC can scarcely be doubted, too. Judge Jaguros
directed the issuance of “the corresponding Writ of Replevin of Personal Property.”
Moreover, a writ denominated “writ of replevin” issued on the same day, pursuant to which
the sheriff took possesion of yacht 1.

The case is not removed from the operation of Rule 60 by the fact that after the property
was taken from the defendant it was not turned over to the plaintiff Cooney (but) to the
Coast Guard, on instructions of the Trial Court. That circumstance is totally
inconsequential.

For one thing, it does not alter the reality of the defendant’s loss of possession; it is
unreasonable to approve of the taking of the boat from his possession pursuant to Rule
60, and then deny him the remedies prescribed by that self same rule; and if the seizure
was not effected in accordance with Rule 60, then the seizure was unjustified.

For another, property seized under a writ of delivery or replevin is not supposed to be
turned over to the plaintiff until after the lapse of five 5 days, a proposition that is made
plain by Section 6 of Rule 60:
Hence, whether the property remained with the sheriff, or was given over to another officer
designated by the Court is of no significance, and certainly should not be taken as
disabling the defendant from moving for the return of the property to him by either of the
modes set out in Section 5 of Rule 60: (1) by objecting to the sufficiency of the plaintiff’s
replevin bond, or (2) if he does not so object, by filing a counter-bond “in double the value
of the property as stated in the plaintiff’s affidavit.”

192. Filinvest Credit Corporation vs CA

FACTS:

Spouses Edilberto and Marciana Tadiaman, residents of Cabanatuan City, purchased a

10-wheeler Izusu cargo truck from Jordan Enterprises, Inc., in Quezon City, in
installments. Said spouses executed a promissory note for P196,680.00 payable in 24
monthly installments in favor of Jordan Enterprises, Inc., and a Chattel Mortgage over the
motor vehicle purchased to secure the payment of the promissory note. Jordan
Enterprises, Inc. assigned its rights and interests over the said instruments to Filinvest
Finance and Leasing Corporation, which in turn assigned them to plaintiff-appellant
Filinvest Credit Corporation.

Subsequently, the spouses Tadiaman defaulted in the payment of the installments due
on the promissory note, and plaintiff-appellant filed an action for replevin and damages
against them with the court below. Upon motion of the plaintiff-appellant, a writ of replevin
was issued, and the truck was seized in the province of Isabela, by persons who
represented themselves to be special sheriffs of the court, but who turned out to be
employees of the plaintiff-appellant. The truck was brought by such persons all the way
back to Metro Manila.

Thereafter, defendant spouses filed a counterbond, and the lower court ordered the return
of the truck. This was not immediately implemented because the defendant spouses were
met with delaying tactics of the plaintiff-appellant, and when they finally recovered the
truck, they found the same to be "cannibalized".

RTC ruled in favor of the plaintiffs. CA Affirmed.

ISSUE:

WON writ of replevin is an appropriate action to recover possession preliminary to the

extrajudicial foreclosure of a chattel mortgage
HELD:

YES.

The SC held that Replevin is, the appropriate action to recover possession preliminary to
the extrajudicial foreclosure of a chattel mortgage. Filinvest did in fact institute such an
action and obtained a writ of replevin. And, by filing it, Filinvest admitted that it cannot
acquire possession of the mortgaged vehicle in an orderly or peaceful manner.
Accordingly, it should have left the enforcement of the writ in accordance with Rule 60 of
the Rules of Court which it had voluntarily invoked.It must be observed that the trial court
erred in holding that the action for replevin was "not in order as [Filinvest] is not the owner
of the property (Sec, 2 par. (a) Rule 60)."11 It is not only the owner who can institute a
replevin suit.

Upon the default by the mortgagor in his obligations, Filinvest, as a mortgagee, had the
right to the possession of the property mortgaged preparatory to its sale in a public
auction.12 However, for employing subterfuge in seizing the truck by misrepresenting its
employees as deputy sheriffs and then hiding and cannibalizing it, Filinvest committed
bad faith in violation of Article 19 of the Civil Code which provides:

Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.

193. Oscar Fernandez vs International Corporate Bank

FACTS:

Petitioners purchased a Nissan Sentra Sedan through a financing scheme of the private
respondent, and the chattel mortgage was executed in favor of the financing institution.
The total amount to be paid for 48 monthly installments would amount to P553,944.

Due to the respondent bank's "greedy desire" to unjustly enrich itself at the expense of
the petitioners, the former filed an unfounded complaint for a sum of money with replevin
before the MTC of Pasay City.

Considering that the principal amount involved was P553,944, petitioners filed an Answer
mentioning in the special and affirmative defenses a Motion to Dismiss, for lack of
jurisdiction, but this was denied on February 10, 1997 and was received on February 20,
1997. A Motion for Reconsideration was then submitted on April 2, 1997.

Aside from that, petitioners contested the venue considering that the principal office of
the respondent bank was in Makati, while their residence was in QC.
The Motion for Reconsideration was denied on May 9, 1997 and received by them on
May 29, 1997.

When the respondent bank filed its complaint with prayer for the issuance of a Writ of
Replevin on November 28, 1997, the monthly installments were almost fully paid; they
would have been fully paid on November 26, 1997. Furthermore, the car's mileage at the
time of illegal seizure was only 28,464 kilometers. They could not have been considered
in default at the time the complaint was filed, considering that: (a) they attempted many
times to pay the bank their installments for the months of August, September, October,
1996, and up to the time of the filing of the case, they had not received any statement of
delinquency as mandated by RA3165 (Truth in Lending Act).

If at all, petitioners added, the baseless filing of the case was deliberately done to enrich
the bank at the expense of the petitioners which [was] tantamount to simple robbery. They
even tried consigning the P69,168 through a Manager's Check dated January 7, 1997 for
the months of August to February, 1997, or beyond the four months installment in
advance but were similarly refused by the court for no valid reason.

Their petition for the outright dismissal of the complaint, as well as the lifting of the Writ
of Replevin was denied even if the amount of P553,344 representing the value of the
chattel was beyond the jurisdiction of the court.

To be precise, MTC Order states:

As to the question of jurisdiction the complaint shows that the amount plaintiff seeks
to recover is P190,635, which is well within the jurisdiction of this Honorable Court.
Likewise the attached Promissory Note in the Complaint also contains stipulation as
to the venue agreed upon by the parties in case an action is filed in court, in which
case this court has jurisdiction.The Motion to Dismiss on ground of lack of jurisdiction
is likewise denied for being unmeritorious.

PETITIONERS’ ARGUMENT:

1. The jurisdiction of the MTC of Pasay City is strictly limited within the confines of the
boundary limits of Pasay City, B.P. 129, Sec. 28.

2. The MTC's jurisdiction is limited to not more than two hundred thousand pesos.

3. Assuming that the MTC of Pasay City has jurisdiction to try and decide the case
and to issue the ancillary writ of replevin, the CA erred in sanctioning the order of the
MTC in denying Petitioners' Motion for Redelivery of the vehicle which was filed within
five days after such seizure, which in essence was an outright departure from the
express provision of the law and the settled jurisprudence on the matter.
 4. The bank's Memorandum dated July 5, 1999 should be stricken off and ordered
expunged from the records for being fatally defective in form and substance. No
Annexes to said Memorandum were attached to petitioners' copy, thereby making said
memorandum fatally defective because the annexes were integral parts of the
memorandum itself. Up to this late date, respondent Premiere Insurance and Surety
Corporation has not submitted its memorandum and may therefore be deemed to
have admitted the entire text of the Petition to be true, valid and binding against it.

RESPONDENT’S ARGUMENT:

CA ruled that the MTC of Pasay City had jurisdiction over civil cases in which the amount
of the demand did not exceed P200,000 exclusive of interest, damages and attorney's
fees. The basic claim in the present case was P190,635.90; hence, the MTC had
jurisdiction.

CA further held that the objection to the impropriety of the venue should have been raised
in a motion to dismiss before the filing of a responsive pleading. The said issue, however,
was raised for the first time only in petitioners' Answer.

Lastly, the CA agreed with the MTC that the Writ of Replevin could be validly executed
anywhere in Metro Manila because Section 27, Chapter III of B.P. 129, authorized the
establishment of the MTC of Metro Manila with 82 branches. Therefore, any branch — in
this case, Branch 44 which was stationed in Pasay — could issue writs and processes
that could validly be served and executed anywhere within Metro Manila.

ISSUE:

May the Writ of Replevin issued by the MTC of Pasay City be enforced outside the city?
YES

HELD:

A writ of replevin issued by the Metropolitan Trial Court of Pasay City may be served and
enforced anywhere in the Philippines. Moreover, the jurisdiction of a court is determined
by the amount of the claim alleged in the complaint, not by the value of the chattel seized
in ancillary proceedings.

The Petition has no merit.

Petitioners argue that the Writ of Replevin issued by the MTC of Pasay could be enforced
only within the confines of Pasay City. In support, they cite Section 28 of Batas Pambansa
(BP) 129, which states:
 Sec. 28. Other Metropolitan Trial Courts. — The Supreme Court shall constitute
Metropolitan Trial Courts in such other metropolitan areas as may be established by
law whose territorial jurisdiction shall be co-extensive with the cities and
municipalities comprising the metropolitan area.

Every Metropolitan Trial Judge shall be appointed to a metropolitan area which shall
be his permanent station and his appointment shall state the branch of the court and
the seat thereof to which he shall be originally assigned. A Metropolitan Trial Judge
may be assigned by the Supreme Court to any branch within said metropolitan area
as the interest of justice may require, and such assignment shall not be deemed an
assignment to another station within the meaning of this section.9

We are not convinced. Under the Resolution of the Supreme Court en banc dated January
11, 1983, providing for the interim rules and guidelines relative to the implementation of
BP 129, a writ of replevin like the one issued in the present case may be served anywhere
in the Philippines. Specifically, the said Resolution states:

3. Writs and processes. —

(a) Writs of certiorari, prohibition, mandamus, quo, warranto, habeas corpus and
injunction issued by a regional trial court may be enforced in any part of the region.

(b) All other processes, whether issued by a regional trial court or a metropolitan trial
court, municipal trial court or municipal circuit trial court may be served anywhere in
the Philippines, and, in the last three cases, without a certification by the judge of
the regional trial court. 10

Thus, the Writ of Replevin issued by Judge Paas, which obviously does not fall under
item "a" of the above-cited Rule, may be validly enforced anywhere in the Philippines.
Petitioners confused the jurisdiction of a court to hear and decide a case on the one hand
with, on the other, its power to issue writs and processes pursuant to and in the exercise
of said jurisdiction. Applying the said Rule, Malaloan v. Court of Appeals reiterated the
foregoing distinction between the jurisdiction of the trial court and the administrative area
in which it could enforce its orders and processes pursuant to the jurisdiction conferred
on it:

The rule enumerates the writs and processes which, even if issued by a regional trial
court, are enforceable only within its judicial region. In contrast, it unqualifiedly
provides that all other writs and processes, regardless of which court issued the
same, shall be enforceable anywhere in the Philippines. No legal provision, statutory
or reglementary, expressly or impliedly provides a jurisdictional or territorial limit to
its area of enforceability. On the contrary, the provision of the interim Rules expressly
authorizes its enforcement anywhere in the country, since it is not among the
processes specified in paragraph (a) and there is no distinction or exception made
regarding the processes contemplated in paragraph (b).