CIVIL PROCEDURE

TRAVENO v. BOBONGAN

FACTS
Traveño and his 16 co-petitioners allege that respondents Timog Agricultural Corporation (TACOR) and
Diamond Farms, Inc. (DFI) hired them to work at a banana plantation in Davao Del Norte; that TACOR and
DFI used different schemes to make it appear that they were hired through independent contractors who
later formed respondent Bobongon Banana Growers Multi-purpose Cooperative. Respondents allegedly
began utilizing harassment tactics to ease Traveno and others out of their jobs, changing their
compensation packages without DOLE approval, and soon stopped paying their salaries. Petitioners filed
for illegal dismissal with NLRC. DFI and TACOR contended that they merely extended assistance to the
landowners who formed Bobongan Cooperative; that they didn’t engage the services of petitioners.

Bobongan failed to file a position paper despite due notice, prompting the Labor Arbiter (LA) to consider
it to have waived its right to adduce evidence in its defense. Nothing was heard from Dole Asia Philippines.
The LA found Bobongan guilty of illegal dismissal; it dropped the complaints against DFI, TACOR and Dole.
The LA heavily relied on the Orders submitted by DFI. Petitioners partially appealed, but NLRC sustained
the LA’s ruling that the employer of petitioners is Bobongan. Hence, petitioners appealed to CA, which CA
dismissed on the ground that the certification against forum shopping was defective (only 19 out of 22
petitioners signed). Hence this present Petition for Review on Certiorari.

ISSUE/S
WON the CA should have dismissed the petition only with respect to the non-signing petitioners? – YES

RULING
CA should have dismissed the petition only as to the non-signing petitioners or merely dropped them as
parties to the case.

Citing Altres v. Empleo, the Court restates in capsule form the jurisprudential pronouncements already
reflected above respecting non-compliance with the requirements on, or submission of defective,
verification and certification against forum shopping: A distinction must be made between non-
compliance with the requirement on or submission of defective verification, and non-compliance with
the requirement on or submission of defective certification against forum shopping.

NON-COMPLIANCE/DEFECTIVE VERIFICATION NON-COMPLIANCE/DEFECTIVE CERTIFICATION

Non-compliance therewith or a defect therein GR. Non-compliance therewith or a defect therein
does not necessarily render the pleading fatally is generally not curable by its subsequent
defective. submission or correction thereof.

XPN. There is a need to relax the Rule on the

ground of “substantial compliance” or presence of
“special circumstances or compelling reasons.”
Verification is deemed substantially complied with The certification against forum shopping must be
when one who has ample knowledge to swear to signed by all the plaintiffs or petitioners in a case;
the truth of the allegations in the complaint or

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petition signs the verification, and when matters otherwise, those who did not sign will be
alleged in the petition have been made in good dropped as parties to the case.
faith or are true and correct.
GR. Must be signed by all.
XPN. Reasonable or justifiable circumstances
when all the plaintiffs or petitioners share a
common interest and invoke a common cause of
action or defense, the signature of only one of
them in the certification against forum shopping
substantially complies with the Rule.
The court may order its submission or correction GR. Must be executed by the party-pleader, not by
or act on the pleading if the attending his counsel.
circumstances are such that strict compliance with XPN. Reasonable or justifiable reasons where the
the Rule may be dispensed with in order that the party-pleader is unable to sign, he must execute
ends of justice may be served thereby. an SPA designating his counsel of record to sign on
his behalf.

On the substantive issues, there being no employer-employee relationship between petitioners and the
Cooperative’s co-respondents (DPI, DFI and TACOR), the latter are not solidarily liable with the
Cooperative for petitioners’ illegal dismissal and money claims. Since Bobongan is already dissolved,
petitioners are not precluded from pursuing any available remedies against its former members.

SWAGMAN v. CA

FACTS
Petitioner Swagman Hotels and Travel obtained 3 loans from private respondent Neal B. Christian
evidenced by promissory notes, payable after 3 years every 3 months. In 1998, less than 3 years from the
first loan, Christian demanded payment, and in 1999 filed with RTC a complaint for a sum of money and
damages against Swagman. Swagman raised as a defense lack of cause of action claiming that Christian
had no cause of action because the three promissory notes were not yet due and demandable.

RTC held that the first 2 notes are due and demandable, ordering Swagman to pay the principal amount.
RTC’s held that under Sec. 5, Rule 10 that a complaint which states no cause of action may be cured by
evidence presented without objection. Thus, even if the plaintiff had no cause of action at the time he
filed the instant complaint, as defendants’ obligation are not yet due and demandable then, he may
nevertheless recover on the first two promissory notes in view of the introduction of evidence showing
that the obligations covered by the two promissory notes are now due and demandable.

CA denied Swagman’s appeal and affirmed RTC’s decision in toto. CA held that Swagman failed to object
to Christian’s presentation of evidence that the promissory notes have become due and demandable. Sec.
5, Rule 10 allows a complaint which states no cause of action to be cured either by:
a) Evidence presented without objection; or
b) In the event of an objection sustained by the court, by amendment of the complaint with leave of court

ISSUE/S

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WON a complaint that lacks a cause of action at the time it was filed may be cured by the accrual of a
cause of action during the pendency of the case? – NO
a) Lacks cause of action – can’t be cured
b) Fails to state cause of action – can be cured by presenting evidence

RULING
Essential elements of a Cause of Action:
a) A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;
b) An obligation on the part of the named defendant to respect or not to violate such right; and
c) Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a
breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for
recovery of damages or other appropriate relief.

Rule 2: It is upon the occurrence of the last element that a cause of action arises. In this case, regardless
of the reduction of the interest and the payments made by Swagman in 1997, none of the three
promissory notes was due yet at the time the complaint was filed in 1999. The term of the principal loans
remained unchanged in that they were still due three years from the respective dates of the promissory
notes. Without a cause of action, the private respondent had no right to maintain an action in court, and
the trial court should have therefore dismissed his complaint.

Rule 10: RTC and CA’s interpretation of Sec. 5, Rule 10 is erroneous. Sec. 5 applies to situations wherein
evidence not within the issues raised in the pleadings is presented by the parties during the trial, and to
conform to such evidence the pleadings are subsequently amended on motion of a party. Thus, a
complaint which fails to state a cause of action may be cured by evidence presented during the trial.

However, the curing effect under Section 5 is applicable only if a cause of action in fact exists at the time
the complaint is filed, but the complaint is defective for failure to allege the essential facts.
For example, if a complaint failed to allege the fulfillment of a condition precedent upon which the cause
of action depends, evidence showing that such condition had already been fulfilled when the complaint
was filed may be presented during the trial, and the complaint may accordingly be amended thereafter.

Unless the plaintiff has a valid and subsisting cause of action at the time his action is commenced, the
defect cannot be cured or remedied by the acquisition or accrual of one while the action is pending, and
a supplemental complaint or an amendment setting up such after-accrued cause of action is not
permissible. The ratio is that a person should not be summoned before the public tribunals to answer
for complaints which are immature. An action prematurely brought is a groundless suit.

That, however, which is no cause of action whatsoever cannot by amendment or supplemental pleading
be converted into a cause of action: Nihil de re accrescit ei qui nihil in re quando jus accresceret habet.

Other Issues: Novation – SC held that there was novation, but Swagman did not renegade on its obligation.
It is only upon Swagman’s default that a cause of action.

TITLE

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FACTS
ISSUE/S
RULING