Batch 2 (Full Text)

G.R. No.
104796 March 6, 1998
SPOUSES ROSALINA S. DE LEON and ALEJANDRO L. DE LEON, petitioners,

vs.
THE COURT OF APPEALS, GLICERIO MA. ELAYDA II, FEDERICO ELAYDA and DANILO
ELAYDA, respondents.
MENDOZA, J.:
The question for decision is whether in assessing the docket fees to be paid for the filing of an action
for annulment or rescission of a contract of sale, the value of the real property, subject matter of the
contract, should be used as basis, or whether the action should be considered as one which is not
capable of pecuniary estimation and therefore the fee charged should be a flat rate of P400.00 as
provided in Rule 141, §7(b)(1) of the Rules of Court. The trial court held the fees should be based on
the value of the property, but the Court of Appeals reversed and held that the flat rate should be
charged. Hence this petition for review on certiorari.
The facts are as follows:
On August 8, 1991, private respondents filed in the Regional Trial Court of Quezon City a complaint
for annulment or rescission of a contract of sale of two (2) parcels of land against petitioners, praying
for the following reliefs:
1. Ordering the nullification or rescission of the Contract of Conditional Sale (Supplementary

Agreement) for having violated the rights of plaintiffs (private respondents) guaranteed to
them under Article 886 of the Civil Code and/or violation of the terms and conditions of the
said contract.
2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and
3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in

the amount of P100,000.00.
Other reliefs and remedies as are just and equitable in the premises are also prayed for. 1
Upon the filing of the complaint, the clerk of court required private respondents to pay docket and
legal fees in the total amount of P610.00, broken down as follows:
P450.00 — Docket fee for the Judicial Development Fund under

Official Receipt No. 1877773
150.00 — Docket fee for the General Fund under Official Receipt
No. 6834215
10.00 — for the Legal Research Fund under Official Receipt No.
6834450. 2
On September 26, 1991, petitioners moved for the dismissal of the complaint on the ground that the
trial court did not acquire jurisdiction over the case by reason of private respondents' nonpayment of
the correct amount of docket fees. Petitioners contended that in addition to the fees already paid
based on the claim for P100,000.00 for attorney's fees, private respondents should have paid docket
fees in the amount of P21,640.00, based on the alleged value of the two (2) parcels of land subject
matter of the contract of sale sought to be annulled. 3
On September 30, 1991, private respondents filed opposition to the motion to dismiss, arguing that
outright dismissal of their complaint was not warranted on the basis of the alleged nonpayment of
the correct amount of docket fees, considering that the amount paid by them was that assessed by
the clerk of court. 4 On October 9, 1991, petitioners filed a reply to which private respondents filed,
on October 17, 1991, a rejoinder.
On October 21, 1991, the trial court 5 denied petitioners' motion to dismiss but required private
respondents to pay the amount of docket fees based on the estimated value of the parcels of land in
litigation as stated in the complaint.
Private respondents filed a motion for reconsideration but their motion was denied by the trial court.
They therefore, brought the matter to the Court of Appeals which, on February 26, 1992, rendered a
decision 6 annulling the orders of the trial court. The appellate court held that an action for rescission
or annulment of contract is not susceptible of pecuniary estimation and, therefore, the docket fees
should not be based on the value of the real property, subject matter of the contract sought to be
annulled or rescinded. Petitioners moved for reconsideration, but their motion was denied in a
resolution dated March 25, 1992 of the appellate court. Hence, the petition for review on certiorari.
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 money claim 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-sum claimed, exclusive of interest, or the stated
value of the property in litigation, is:
1. Not more than P20,000.00 P120.00
2. More than P20,000.00 but less than P40,000.00 150.00
3. P40,000.00 or more but less than P60,000.00 200.00
7. For each P1,000.00 in excess of P150,000.00 5.00
(b) For filing:
1. Actions where the value of the subject matter

cannot be estimated P400.00
2. Special civil actions except judicial foreclosure of
mortgage which shall be governed by paragraph (a)
above 400.00
3. All other actions not involving property 400.00
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.
(emphasis added)
Petitioners argue that an action for annulment or rescission of a contract of sale of real property is a
real action and, therefore, the amount of the docket fees to be paid by private respondent should be
based either on the assessed value of the property, subject matter of the action, or its estimated
value as alleged in the complaint, pursuant to the last paragraph of §7(b) of Rule 141, as amended
by the Resolution of the Court dated September 12, 1990. Since private respondents alleged that
the land, in which they claimed an interest as heirs, had been sold for P4,378,000.00 to petitioners,
this amount should be considered the estimated value of the land for the purpose of determining the
docket fees.
On the other hand, private respondents counter that an action for annulment or rescission of a
contract of sale of real property is incapable of pecuniary estimation and, so, the docket fees should
be the fixed amount of P400.00 in Rule 141, §7(b)(1). In support of their argument, they cite the
cases of Lapitan v. Scandia, Inc. 7 and Bautista v. Lim. 8 In Lapitan this Court, in an opinion by
Justice J.B.L. Reyes, held:
A review of the jurisprudence of this Court indicates 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 courts of
first instance would depend on the amount of the claim. However, where the basic issue is
something other than the right to recover a sum of money, or where the money claim is
purely incidental to, or a consequence of, the principal relief sought, like in suits to have the
defendant perform his part of the contract (specific performance) and in actions for support,
or for annulment of a judgment or to foreclose a mortgage, 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 courts of first instance. The rationale of the rule is plainly
that the second class cases, besides the determination of damages, demand an inquiry into
other factors which the law has deemed to be more within the competence of courts of first
instance, which were the lowest courts of record at the time that the first organic laws of the
Judiciary were enacted allocating jurisdiction (Act 136 of the Philippine Commission of June
11, 1901).
Actions for specific performance of contracts have been expressly pronounced to be

exclusively cognizable by courts of first instance: De Jesus vs. Judge Garcia, L-26816,
February 28, 1967; Manufacturer's Distributors, Inc. vs. Yu Siu Liong, L-21285, April 29,
1966. And no cogent reason appears, and none is here advanced by the parties, why an
action for rescission (or resolution) should be differently treated, a "rescission" being
counterpart, so to speak, of "specific performance". In both cases, the court would certainly
have to undertake an investigation into facts that would justify one act or the other. No award
for damages may be had in an action for rescission without first conducting an inquiry into
matters which would justify the setting aside of a contract, in the same manner that courts of
first instance would have to make findings of fact and law in actions not capable of pecuniary
estimation expressly held to be so by this Court, arising from issues like those raised in Arroz
v. Alojado, et al., L-22153, March 31, 1967 (legality or illegality of the conveyance sought for
and the determination of the validity of the money deposit made); De Ursua v. Pelayo, L-
13285, April 18, 1950 (validity of a judgment); Bunayog v. Tunas, L-12707, December 23,
1959 (validity of mortgage); Baito v. Sarmiento, L-13105, August 25, 1960 (the relations of
the parties, the right to support created by the relation, etc., in actions for support); De
Rivera, et al. v. Halili, L-15159, September 30, 1963 (the validity or nullity of documents upon
which claims are predicated). Issues of the same nature may be raised by a party against
whom an action for rescission has been brought, or by the plaintiff himself. It is, therefore,
difficult to see why a prayer for damages in an action for rescission should be taken as the
basis for concluding such action as one capable of pecuniary estimation — a prayer which
must be included in the main action if plaintiff is to be compensated for what he may have
suffered as a result of the breach committed by defendant, and not later on precluded from
recovering damages by the rule against splitting a cause of action and discouraging
multiplicity of suits.
Conformably with this discussion of actions "where the value of the case cannot be estimated," the
Court in Bautista v. Lim, held that an action for rescission of contract is one which cannot be
estimated and therefore the docket fee for its filing should be the flat amount of P200.00 as then
fixed in the former Rule 141, §141, §5(10). Said this Court:
We hold that Judge Dalisay did not err in considering Civil Case No. V-144 as basically one
for rescission or annulment of contract which is not susceptible of pecuniary estimation (1
Moran's Comments on the Rules of Court, 1970 Ed, p. 55; Lapitan vs. Scandia, Inc., L-
24668, July 31, 1968, 24 SCRA 479, 781-483).
Consequently, the fee for docketing it is P200, an amount already paid by plaintiff, now
respondent Matilda Lim. (She should pay also the two pesos legal research fund fee, if she
has not paid it, as required in Section 4 of Republic Act No. 3870, the charter of the U.P. Law
Center).
Thus, although eventually the result may be the recovery of land, it is the nature of the action as one
for rescission of contract which is controlling. The Court of Appeals correctly applied these cases to
the present one. As it said:
We would like to add the observations that since the action of petitioners [private
respondents] against private respondents [petitioners] is solely for annulment or rescission
which is not susceptible of pecuniary estimation, the action should not be confused and
equated with the "value of the property" subject of the transaction; that by the very nature of
the case, the allegations, and specific prayer in the complaint, sans any prayer for recovery
of money and/or value of the transaction, or for actual or compensatory damages, the
assessment and collection of the legal fees should not be intertwined with the merits of the
case and/or what may be its end result; and that to sustain private respondents' [petitioners']
position on what the respondent court may decide after all, then the assessment should be
deferred and finally assessed only after the court had finally decided the case, which cannot
be done because the rules require that filing fees should be based on what is alleged and
prayed for in the face of the complaint and paid upon the filing of the complaint.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Regalado, Melo, Puno and Martinez, JJ., concur.
Footnotes
1 Petition, Annex C, Rollo, pp. 39-40.
2 Rollo, p. 27.
3 Petition, Annex D, Rollo, p. 47.
4 Petition, Annex E, Rollo, p. 51-52.
5 Per Judge Teodoro P. Regino.
6 Per Justice Artemon D. Luna and concurred in by Justices Serafin E. Camilon and
Celso L. Magsino.
7 24 SCRA 479 (1968).
8 88 SCRA 479 (1979).

G.R. No. L-17299 July 31, 1963
JOSEFINA POTESTAS CABRERA and CRESENCIA POTESTAS OMULON, plaintiffs-appellees,

vs.
MARIANO T. TIANO, defendant-appellant.
Pablito C. Pielago for plaintiffs-appellees.

Prud. V. Villafuerte for defendant-appellant.
PAREDES, J.:
Ciriaco Potestas and Gregoria Blanco, were parents of five children, Isabelo, Lourdes, Clemente,
Josefina, and Cresencia. Gregoria died before the second world war, together with Clemente, single.
During their lifetime, the spouses acquired properties, among which was a parcel of agricultural land,
of about seven (7) hectares, located at barrio Manga, municipality of Tangub, Misamis Occidental,
planted to coconuts and fruit-bearing trees. On July 2, 1947, Ciriaco, the surviving husband and
three (3) children (Isabelo, Lourdes and Cresencia), purportedly sold the above mentioned parcel to
herein defendant Mariano T. Tiano, for P3,500.00. At the time of the sale, Cresencia was a minor,
and the other child, Josefina, did not sign the deed of sale, and did not know about the transaction.
Under date of June 20, 1957, in action for "Partition and Recovery of Real Estate, with Damages"
was filed by Josefina and Cresencia against Tiano. In the complaint, it was alleged that they were
entitled to a portion of the land, since Josefina did not sign the sale and Crescencia was a minor;
that defendant Tiano had usurped the portions belonging to them, to their damage and prejudice in
the amount of P7,000.00, which consisted of their share in the produce of the property, during the
period of defendant's possession.
In answer, defendant claimed that the plaintiffs herein knew of the sale and that he was not aware of
any defect in the title of his vendors. As a Special Defense, defendant alleged that he was the
absolute owner of the land by acquisitive prescription of ten (10) years, from the date of purchase.
Before the trial, the parties agreed to a stipulation of facts, parts of which recite —
xxx xxx xxx
3. That at the time of the sale, appearing in Doc. No. 54, Page 81, Book No. 7, S. 1947, in
the book of Notary Public Basilio Binaoro of Tangub, Mis. Occ., Cresencia was a minor being
only 16 years old, while Josefina who was long married and of legal age did not know about
the sale and/or did not give her consent to the same;
4. That the plaintiffs commenced this case against the defendant on June 20, 1957 and the
judicial summons was issued by the Clerk of Court on June 21, 1957, but defendant received
the same on July 2, 1957.
After the hearing, the court a quo rendered the following judgment —
WHEREFORE, premises considered, the court hereby renders judgment declaring that the
plaintiffs are entitled each to 1/8 of the property in question and therefore Judgment is
hereby ordered declaring them entitled to partition the property in question in proportion of
1/8 each of them, plus damages for both of them in the amount of P1,000.00 and attorney's
fees in the amount of P200.00.
The trial court in the same decision, commissioned the Deputy Provincial Sheriff, to partition the
property in question and render a report within 30 days. Defendant moved for a reconsideration of
the decision, contending that prescription had already set in, and his (defendant's) title, had become
irrevocable, and that the award of damages had no factual and legal basis. The motion for
reconsideration was denied on March 5, 1960. The Commissioner's report, partitioning the property
was submitted on April 11, 1960. Defendant perfected his appeal on May 9, 1960, and on May 14,
1960, the same was given due course and elevated to this Court.
In claiming that prescription had taken place, appellant insists that the period should be counted
from the date the summons was served on him, which was on July 2, 1957. It was agreed, however,
that the complaint for the recovery of the land in question was presented on June 20, 1957, and the
summons was sent out the following day. The Civil Code, provides that—
The prescription of actions is interrupted when they are filed before the court, when there is a
written extra-judicial demand by the creditors, and when there is any written
acknowledgment of the debt of the debtor. (Art. 1155)
Since the sale of the property took place on July 2, 1947, the ten (10) year period within which to file
the action had not yet elapsed on June 20, 1957, when the complaint was presented. While it is true
that the sale in question had taken place before the effectivity of the new Civil Code and the law then
on matter of prescription was Act No. 190, said law, however, contained no specific provision on the
interruption of the prescriptive period; and the established rule then, as it is the rule now, is that the
commencement of the suit prior to the expiration of the applicable limitation period, interrupts the
running of the statute, as to all parties to the action (34 Am. Jur., Sec. 247, pp. 202-203; Peralta, et
al. v. Alipio, G. R. No. L-8273, Oct. 24, 1955). The fact that summons was only served on defendant
on July 2, 1957, which incidentally and/or coincidentally was the end of the ten (10) year period, is of
no moment, since civil actions are deemed commenced from date of the filing and docketing of the
complaint with the Clerk of Court, without taking into account the issuance and service of summons
(Sotelo v. Dizon, et al., 67 Phil. 573). The contention that the period was not interrupted, until after
defendant received the summons is, therefore, without legal basis.
Defendant-appellant claims that he had already acquired full ownership of the property in question
because the judicial summons, which could civilly interrupt his possession (Art. 1123, N.C.C.), was
received by him only on July 2, 1957. Conceding, for the purposes of argument, that the article cited
is applicable, still appellant cannot avail himself of acquisitive prescription, for the simple reason that
no finding was made by the trial court that his possession from the time of the sale (July 2, 1947),
was with just title, in good faith, in the concept of an owner, public, peaceful, adverse and
uninterrupted (Arts. 1117 & 1118, N.C.C.). Good faith is a question of fact which must be proved
(Art. 1127, N.C.C.). For the purposes of acquisitive prescription, just title must also be proved, it is
never presumed (Art. 1131, N.C.C.). The factual requisite of adverse possession do not appear in
the stipulation of facts and the trial court did not make findings to this effect. These circumstances
could and/or should have been ventilated, had the appeal been taken to the Court of Appeals.
Defendant, however, having chosen to appeal the decision directly to this Court, he is deemed to
have waived questions of fact and raised only questions of law. There being no factual finding by the
lower court of the presence of the requisites of acquisitive prescription this Court has to reject, as did
the trial court, said defense. Moreover, on July 2, 1957, when the summons was received, the ten
(10) years necessary for acquisitive prescription had not yet elapsed. In fact, said period terminated
on that very day.1äw phï1.ñët
As to the award of damages, We find Ourselves devoid of ample authority to review the same, since
it involves appreciation of facts. It cannot be denied, as found by the lower court, that plaintiffs herein
are entitled to a share in the land. Verily, they should also share in the produce, which, admittedly,
was enjoyed by the defendant-appellant herein.
WHEREFORE, the decision appealed from should be, as it is hereby affirmed. Costs against
appellant in both instances.
Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Barrera, Dizon, Regala and Makalintal, JJ.,
concur.
The Lawphil Project - Arellano Law Foundation

G.R. Nos. 79937-38 February 13, 1989
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon
City and MANUEL CHUA UY PO TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco,
Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.
GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a
case when the correct and proper docket fee has not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with
the Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire
insurance policy with a prayer for the judicial declaration of its nullity against private respondent
Manuel Uy Po Tiong. Private respondent as declared in default for failure to file the required answer
within the reglementary period.
On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial
Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment
which was docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and thereafter
including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought, among
others, the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney's
fees, expenses of litigation and costs of the suit. Although the prayer in the complaint did not
quantify the amount of damages sought said amount may be inferred from the body of the complaint
to be about Fifty Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket fee which prompted
petitioners' counsel to raise his objection. Said objection was disregarded by respondent Judge Jose
P. Castro who was then presiding over said case. Upon the order of this Court, the records of said
case together with twenty-two other cases assigned to different branches of the Regional Trial Court
of Quezon City which were under investigation for under-assessment of docket fees were
transmitted to this Court. The Court thereafter returned the said records to the trial court with the
directive that they be re-raffled to the other judges in Quezon City, to the exclusion of Judge Castro.
Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-
8752-RTC directing the judges in said cases to reassess the docket fees and that in case of
deficiency, to order its payment. The Resolution also requires all clerks of court to issue certificates
of re-assessment of docket fees. All litigants were likewise required to specify in their pleadings the
amount sought to be recovered in their complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was
temporarily assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of
assessment of the docket fee paid by private respondent and, in case of deficiency, to include the
same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August
30,1984, an amended complaint was filed by private respondent including the two additional
defendants aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his
assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the
case to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the
Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did not
indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a
"Compliance" and a "Re-Amended Complaint" stating therein a claim of "not less than Pl0,000,000.
00 as actual compensatory damages" in the prayer. In the body of the said second amended
complaint however, private respondent alleges actual and compensatory damages and attorney's
fees in the total amount of about P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order admitting the second amended
complaint and stating therein that the same constituted proper compliance with the Resolution of this
Court and that a copy thereof should be furnished the Clerk of Court for the reassessment of the
docket fees. The reassessment by the Clerk of Court based on private respondent's claim of "not
less than P10,000,000.00 as actual and compensatory damages" amounted to P39,786.00 as
docket fee. This was subsequently paid by private respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of
Judie Asuncion dated January 24, 1986.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16,
1986, or some seven months after filing the supplemental complaint, the private respondent paid the
additional docket fee of P80,396.00.1
On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks
annulment of the order
(a) denying petitioners' motion to dismiss the complaint, as amended, and
(b) granting the writ of preliminary attachment, but giving due course to the portion
thereof questioning the reassessment of the docketing fee, and requiring the
Honorable respondent Court to reassess the docketing fee to be paid by private
respondent on the basis of the amount of P25,401,707.00. 2
Hence, the instant petition.
During the pendency of this petition and in conformity with the said judgment of respondent court,
private respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did
not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and
proper docket fee. Petitioners allege that while it may be true that private respondent had paid the
amount of P182,824.90 as docket fee as herein-above related, and considering that the total amount
sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket
fee that should be paid by private respondent is P257,810.49, more or less. Not having paid the
same, petitioners contend that the complaint should be dismissed and all incidents arising therefrom
should be annulled. In support of their theory, petitioners cite the latest ruling of the Court
in Manchester Development Corporation vs. CA, 4 as follows:
The Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee. An amendment of the complaint or similar pleading will not
thereby vest jurisdiction in the Court, much less the payment of the docket fee based
on the amounts sought in the amended pleading. The ruling in the Magaspi Case in
so far as it is inconsistent with this pronouncement is overturned and reversed.
On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively
to Civil Case No. Q41177 for at the time said civil case was filed in court there was no
such Manchester ruling as yet. Further, private respondent avers that what is applicable is the ruling
of this Court in Magaspi v. Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction
over the case even if the docket fee paid was insufficient.
The contention that Manchester cannot apply retroactively to this case is untenable. Statutes
regulating the procedure of the courts will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retrospective in that sense and to
that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the
docket fee is an indispensable step for the perfection of an appeal. In a forcible entry and detainer
case before the justice of the peace court of Manaoag, Pangasinan, after notice of a judgment
dismissing the case, the plaintiff filed a notice of appeal with said court but he deposited only P8.00
for the docket fee, instead of P16.00 as required, within the reglementary period of appeal of five (5)
days after receiving notice of judgment. Plaintiff deposited the additional P8.00 to complete the
amount of the docket fee only fourteen (14) days later. On the basis of these facts, this court held
that the Court of First Instance did notacquire jurisdiction to hear and determine the appeal as the
appeal was not thereby perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen
by sending it through registered mail to the Office of the Solicitor General in 1953 but the required
filing fee was paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship.
This Court ruled that the declaration was not filed in accordance with the legal requirement that such
declaration should be filed at least one year before the filing of the petition for citizenship.
Citing Lazaro, this Court concluded that the filing of petitioner's declaration of intention on October
23, 1953 produced no legal effect until the required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an
original petition for quo warranto contesting the right to office of proclaimed candidates which was
mailed, addressed to the clerk of the Court of First Instance, within the one-week period after the
proclamation as provided therefor by law.10 However, the required docket fees were paid only after
the expiration of said period. Consequently, this Court held that the date of such payment must be
deemed to be the real date of filing of aforesaid petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before
a court will act on a petition or complaint. However, we also held that said rule is not applicable when
petitioner seeks the probate of several wills of the same decedent as he is not required to file a
separate action for each will but instead he may have other wills probated in the same special
proceeding then pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only
upon payment of the docket fee regardless of the actual date of its filing in court. Said case involved
a complaint for recovery of ownership and possession of a parcel of land with damages filed in the
Court of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the
sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the complaint
sought that the Transfer Certificate of Title issued in the name of the defendant be declared as null
and void. It was also prayed that plaintiff be declared as owner thereof to whom the proper title
should be issued, and that defendant be made to pay monthly rentals of P3,500.00 from June 2,
1948 up to the time the property is delivered to plaintiff, P500,000.00 as moral damages, attorney's
fees in the amount of P250,000.00, the costs of the action and exemplary damages in the amount of
P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee
to which an opposition was filed by the plaintiff alleging that the action was for the recovery of a
parcel of land so the docket fee must be based on its assessed value and that the amount of P60.00
was the correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint to include the Republic as the
defendant. In the prayer of the amended complaint the exemplary damages earlier sought was
eliminated. The amended prayer merely sought moral damages as the court may determine,
attorney's fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the
amended complaint. The opposition notwithstanding, the amended complaint was admitted by the
trial court. The trial court reiterated its order for the payment of the additional docket fee which
plaintiff assailed and then challenged before this Court. Plaintiff alleged that he paid the total docket
fee in the amount of P60.00 and that if he has to pay the additional fee it must be based on the
amended complaint.
The question posed, therefore, was whether or not the plaintiff may be considered to have filed the
case even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the
case was deemed filed only upon the payment of the correct amount for the docket fee regardless of
the actual date of the filing of the complaint; that there was an honest difference of opinion as to the
correct amount to be paid as docket fee in that as the action appears to be one for the recovery of
property the docket fee of P60.00 was correct; and that as the action is also one, for damages, We
upheld the assessment of the additional docket fee based on the damages alleged in the amended
complaint as against the assessment of the trial court which was based on the damages alleged in
the original complaint.
However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an

action for torts and damages and specific performance with a prayer for the issuance of a temporary
restraining order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory
injunction during the pendency of the action against the defendants' announced forfeiture of the sum
of P3 Million paid by the plaintiffs for the property in question, the attachment of such property of
defendants that may be sufficient to satisfy any judgment that may be rendered, and, after hearing,
the issuance of an order requiring defendants to execute a contract of purchase and sale of the
subject property and annul defendants' illegal forfeiture of the money of plaintiff. It was also prayed
that the defendants be made to pay the plaintiff jointly and severally, actual, compensatory and
exemplary damages as well as 25% of said amounts as may be proved during the trial for attorney's
fees. The plaintiff also asked the trial court to declare the tender of payment of the purchase price of
plaintiff valid and sufficient for purposes of payment, and to make the injunction permanent. The
amount of damages sought is not specified in the prayer although the body of the complaint alleges
the total amount of over P78 Millon allegedly suffered by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee
based on the nature of the action for specific performance where the amount involved is not capable
of pecuniary estimation. However, it was obvious from the allegations of the complaint as well as its
designation that the action was one for damages and specific performance. Thus, this court held the
plaintiff must be assessed the correct docket fee computed against the amount of damages of about
P78 Million, although the same was not spelled out in the prayer of the complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on
September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the
amount of damages in the body of the complaint. The prayer in the original complaint was
maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and
other cases that were investigated. On November 12, 1985, the trial court directed the plaintiff to
rectify the amended complaint by stating the amounts which they were asking for. This plaintiff did
as instructed. In the body of the complaint the amount of damages alleged was reduced to
P10,000,000.00 but still no amount of damages was specified in the prayer. Said amended
complaint was admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee
regardless of the actual date of filing in court," this Court held that the trial court did not acquire
jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the
amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there
was no such original complaint duly filed which could be amended. Consequently, the order
admitting the amended complaint and all subsequent proceedings and actions taken by the trial
court were declared null and void.13
The present case, as above discussed, is among the several cases of under-assessment of docket
fee which were investigated by this Court together with Manchester. The facts and circumstances of
this case are similar to Manchester. In the body of the original complaint, the total amount of
damages sought amounted to about P50 Million. In the prayer, the amount of damages asked for
was not stated. The action was for the refund of the premium and the issuance of the writ of
preliminary attachment with damages. The amount of only P210.00 was paid for the docket fee. On
January 23, 1986, private respondent filed an amended complaint wherein in the prayer it is asked
that he be awarded no less than P10,000,000.00 as actual and exemplary damages but in the body
of the complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said amended
complaint was admitted and the private respondent was reassessed the additional docket fee of
P39,786.00 based on his prayer of not less than P10,000,000.00 in damages, which he paid.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16,
1986, private respondent paid an additional docket fee of P80,396.00. After the promulgation of the
decision of the respondent court on August 31, 1987 wherein private respondent was ordered to be
reassessed for additional docket fee, and during the pendency of this petition, and after the
promulgation of Manchester, on April 28, 1988, private respondent paid an additional docket fee of
P62,132.92. Although private respondent appears to have paid a total amount of P182,824.90 for
the docket fee considering the total amount of his claim in the amended and supplemental complaint
amounting to about P64,601,620.70, petitioner insists that private respondent must pay a docket fee
of P257,810.49.
The principle in Manchester could very well be applied in the present case. The pattern and the
intent to defraud the government of the docket fee due it is obvious not only in the filing of the
original complaint but also in the filing of the second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided
by this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government,
this Court held that the court a quo did not acquire jurisdiction over the case and that the amended
complaint could not have been admitted inasmuch as the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for considering that, unlike
Manchester, private respondent demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the decision in Manchester must have had
that sobering influence on private respondent who thus paid the additional docket fee as ordered by
the respondent court. It triggered his change of stance by manifesting his willingness to pay such
additional docket fee as may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the
total amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly
authorized docket clerk or clerk in-charge should determine and, thereafter, if any amount is found
due, he must require the private respondent to pay the same.
Thus, the Court rules as follows:
1. 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. Where 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 or reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which
shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may
also allow payment of said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in
the pleading, or if specified the same has been left for determination by the court, the additional filing
fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court
or his duly authorized deputy to enforce said lien and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is
hereby instructed to reassess and determine the additional filing fee that should be paid by private
respondent considering the total amount of the claim sought in the original complaint and the
supplemental complaint as may be gleaned from the allegations and the prayer thereof and to
require private respondent to pay the deficiency, if any, without pronouncement as to costs.
SO ORDERED.
Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin,
Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.
Footnotes
1 Annexes 1, 1-A, 1-B of Comment of private respondent.
2 Page 34, Decision of the Court of Appeals; p. 57 Rollo.
3 Annex 2 to Memorandum of private respondent.
4 149 SCRA 562 (1987).
5 115 SCRA 193, 204 (1982).
6 People vs. Sumilang, 77 Phil. 764 (1946); Alday vs. Camilon, 120 SCRA 521
(1983) and Palomo Building Tenants Association, Inc. vs. Intermediate Appellate
Court, 133 SCRA 168 (1984).
7 57 Phil. 552 (1932).
8 SCRA 65 (1964).
9 12 SCRA 450 (1964).
10 Section 173, Revised Election Code.
11 28 SCRA 3301 (1969).
12 Supra.
13 Supra, pp. 567-568.

G.R. No. 75919 May 7, 1987
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,

vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS,
ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.
Tanjuatco, Oreta and Tanjuatco for petitioners.
Pecabar Law Offices for private respondents.
RESOLUTION
GANCAYCO, J.:
Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987
and another motion to refer the case to and to be heard in oral argument by the Court En Banc filed
by petitioners, the motion to refer the case to the Court en banc is granted but the motion to set the
case for oral argument is denied.
Petitioners in support of their contention that the filing fee must be assessed on the basis of the
amended complaint cite the case of Magaspi vs. Ramolete. 1 They contend that the Court of Appeals erred in that
the filing fee should be levied by considering the amount of damages sought in the original complaint.
The environmental facts of said case differ from the present in that —
1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land
with damages.2 While the present case is an action for torts and damages and specific performance
with prayer for temporary restraining order, etc.3
2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the
defendant to the property, the declaration of ownership and delivery of possession thereof to
plaintiffs but also asks for the payment of actual moral, exemplary damages and attorney's fees
arising therefrom in the amounts specified therein. 4 However, in the present case, the prayer is for
the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against
the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in
question, to attach such property of defendants that maybe sufficient to satisfy any judgment that
maybe rendered, and after hearing, to order defendants to execute a contract of purchase and sale
of the subject property and annul defendants' illegal forfeiture of the money of plaintiff, ordering
defendants jointly and severally to pay plaintiff actual, compensatory and exemplary damages as
well as 25% of said amounts as maybe proved during the trial as attorney's fees and declaring the
tender of payment of the purchase price of plaintiff valid and producing the effect of payment and to
make the injunction permanent. The amount of damages sought is not specified in the prayer
although the body of the complaint alleges the total amount of over P78 Million as damages suffered
by plaintiff.5
3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the
action in the Magaspi case. The complaint was considered as primarily an action for recovery of
ownership and possession of a parcel of land. The damages stated were treated as merely to the
main cause of action. Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee were
paid. 6
In the present case there can be no such honest difference of opinion. As maybe gleaned from the
allegations of the complaint as well as the designation thereof, it is both an action for damages and
specific performance. The docket fee paid upon filing of complaint in the amount only of P410.00 by
considering the action to be merely one for specific performance where the amount involved is not
capable of pecuniary estimation is obviously erroneous. Although the total amount of damages
sought is not stated in the prayer of the complaint yet it is spelled out in the body of the complaint
totalling in the amount of P78,750,000.00 which should be the basis of assessment of the filing fee.
4. When this under-re assessment of the filing fee in this case was brought to the attention of this
Court together with similar other cases an investigation was immediately ordered by the Court.
Meanwhile plaintiff through another counsel with leave of court filed an amended complaint on
September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as co-plaintiff and by
emanating any mention of the amount of damages in the body of the complaint. The prayer in the
original complaint was maintained. After this Court issued an order on October 15, 1985 ordering the
reassessment of the docket fee in the present case and other cases that were investigated, on
November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the
amounts which they are asking for. It was only then that plaintiffs specified the amount of damages
in the body of the complaint in the reduced amount of P10,000,000.00. 7 Still no amount of damages
were specified in the prayer. Said amended complaint was admitted.
On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of
P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not consider
the damages to be merely an or incidental to the action for recovery of ownership and possession of
real property. 8 An amended complaint was filed by plaintiff with leave of court to include the
government of the Republic as defendant and reducing the amount of damages, and attorney's fees
prayed for to P100,000.00. Said amended complaint was also admitted. 9
In the Magaspi case, the action was considered not only one for recovery of ownership but also for
damages, so that the filing fee for the damages should be the basis of assessment. Although the
payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that
since the payment was the result of an "honest difference of opinion as to the correct amount to be
paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings thereafter
had were proper and regular." 10 Hence, as the amended complaint superseded the original complaint, the allegations of
damages in the amended complaint should be the basis of the computation of the filing fee. 11
In the present case no such honest difference of opinion was possible as the allegations of the complaint, the designation and the prayer
show clearly that it is an action for damages and specific performance. The docketing fee should be assessed by considering the amount of
damages as alleged in the original complaint.
As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon
payment of the docket fee regardless of the actual date of filing in court . 12 Thus, in the present case the trial
court did not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the amendment of the complaint
thereby vest jurisdiction upon the Court. 13 For an legal purposes there is no such original complaint that was duly filed which could be
amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are
null and void.
The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the
docket fee should be the amount of damages sought in the original complaint and not in the
amended complaint.
The Court cannot close this case without making the observation that it frowns at the practice of
counsel who filed the original complaint in this case of omitting any specification of the amount of
damages in the prayer although the amount of over P78 million is alleged in the body of the
complaint. This is clearly intended for no other purpose than to evade the payment of the correct
filing fees if not to mislead the docket clerk in the assessment of the filing fee. This fraudulent
practice was compounded when, even as this Court had taken cognizance of the anomaly and
ordered an investigation, petitioner through another counsel filed an amended complaint, deleting all
mention of the amount of damages being asked for in the body of the complaint. It was only when in
obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of
damages be specified in the amended complaint, that petitioners' counsel wrote the damages sought
in the much reduced amount of P10,000,000.00 in the body of the complaint but not in the prayer
thereof. The design to avoid payment of the required docket fee is obvious.
The Court serves warning that it will take drastic action upon a repetition of this unethical practice.
To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar
pleadings should specify the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be considered in the assessment of the filing
fees in any case. Any pleading that fails to comply with this requirement shall not bib accepted nor
admitted, or shall otherwise be expunged from the record.
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee.
An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court,
much less the payment of the docket fee based on the amounts sought in the amended pleading.
The ruling in the Magaspi case 14 in so far as it is inconsistent with this pronouncement is overturned and reversed.
WHEREFORE, the motion for reconsideration is denied for lack of merit.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Bidin, Sarmiento and Cortes, JJ., concur.
Paras, J., took no part.
Footnotes
1 115 SCRA 193.
2 Supra, p. 194.
3 P. 64, Rollo.
4 Magaspi vs. Ramolete, supra, pp. 114-115.
5 Pp. 65-66, Rollo.
6 Magaspi case, supra, p. 194. Pp.

7 121-122, Rollo.
8 Magaspi vs. Ramolete, supra, pp. 199-200.
9 Pp. 201-202, Rollo.
10 Supra, 115 SCRA 204-205.
11 Supra, 115 SCRA 205.
12 Supra,115 SCRA 204, citing Malimit vs. Degamo, G.R.No. L-17850, Nov. 28,
1964, 12 SCRA 450, 120 Phil 1247; Lee vs. Republic, L-15027, Jan 31, 1964, 10
SCRA 65.
13 Gaspar vs. Dorado, L-17884, November 29,1965 15 SCRA 331; Tamayo vs. San
Miguel Brewery,G.R.No. L-17449, January 30, 1964; Rosario vs. Carandang, 96 Phil
845; Campos Rueda Corp. vs. Hon. Judge Bautista, et al., G.R. No. L-18452, Sept.
29, 1962
14 Supra.
EN BANC
[G.R. No. L-32170. March 31, 1971.]
CITIZENS’ SURETY & INSURANCE COMPANY, INC., Petitioner, v. HON. JUDGE

A. MELENCIO-HERRERA, SANTIAGO DACANAY, and JOSEFINA
DACANAY, Respondents.
Dayos, Tesoro & Gloria, Jr. for Petitioner.
Respondent Judge for and in his own behalf.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; ACTION IN PERSONAM; PERSONAL SERVICE OF

SUMMONS REQUIRED. — We agree with respondent Judge that the action of plaintiff
petitioner, being in personam, the Court could not validly acquire jurisdiction on a non-
appearing defendant, absent a personal service of summons within the forum. We have
explicitly so ruled in Pantaleon v. Asuncion, 105 Phil. 765, pointing out without such
personal service, any judgment on a non-appearing defendant would be violative of due
process. In the aforecited case this Court, through Justice Roberto Concepcion, now
Chief Justice, ruled as follows: . . . "It is a well-settled principle of Constitutional Law
that, in an action strictly in personam, like the one at bar, personal service of
summons, within the forum, is essential to the acquisition of jurisdiction over the
person of the defendant, who does not voluntary submit himself to the authority of the
court. In other words, summons by publication cannot — consistently with the due
process clause in the Bill of Rights — confer upon the court jurisdiction over said
defendants.’Due process of law requires personal service to support a personal
judgment, and, when the proceeding is strictly in personam brought to determine the
personal rights and obligations of the parties, personal service within the state or a
voluntary appearance in the case is essential to the acquisition of jurisdiction so as to
constitute compliance with the constitutional requirement of due process. . . .’Although
a state legislature has more control over the form of service on its own residents than
nonresidents, it has been held that in actions in personam . . . service by publication on
resident defendants who are personally within the state and can be found therein is not
"due process of law," and statute allowing it is unconstitutional.’ (16A C.J.S., pp. 786,
789; Emphasis our)"
2. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CREDITORS; REMEDY AGAINST

ABSCONDING DEBTORS. — The proper recourse for a creditor in the same situation as
petitioner is to locate properties, real or personal, of the resident defendant debtor with
unknown address and cause them to be attached under Rule 57, Sec. l(f), in which
case, the enactment converts the action into a proceeding in rem or quasi in rem and
the summons by publication may then accordingly be deemed valid and effective But
because debtors who abscond and conceal themselves are also quite adept at
concealing their properties, the dismissal of the case below by respondent Judge should
be set aside and the case held pending in the court’s archives, until petitioner as
plaintiff succeed in determining the whereabouts of the defendants’ person or
properties and causes valid summons to be served personally or by publication as the
case may be. In this manner, the tolling of the period of prescription for as long as the
debtor remains in hiding would properly be a matter of court record, and he can not
emerge after a sufficient lapse of time from the dismissal of the case to profit from his
own misdeed and claim prescription of his just debt.
DECISION
REYES, J.B.L., J.:
Petitioner Citizens’ Surety & Insurance Company, Inc. seeks review of an order of
respondent Judge in Civil Case No. 77134 of the Court of First Instance of Manila,
Branch XVII, entitled "Citizens’ Surety & Insurance Co., Inc. v. Santiago Dacanay and
Josefina Dacanay," dismissing the complaint for lack of proper service of summons
upon defendants.
The record is to the effect that petitioner had filed its complaint in the Court below,
alleging that at request of defendant Santiago Dacanay, the plaintiff Surety Company
had issued its Surety Bonds Nos. 4942 and 4944, the first, in favor of Gregorio Fajardo
to guarantee payment of a P5,000-promissory note executed by said Dacanay, and the
second, in favor of Manufacturers Bank & Trust Co., to guarantee payment of another
promissory note in like amount; that in consideration of said bonds, Santiago and
Josefina Dacanay executed Indemnity Agreements, binding themselves jointly and
severally to indemnify plaintiff for any losses, costs and expenses which it might sustain
in connection with the issuance of the bonds aforesaid, with interest at 12% per
annum; that as additional security, the Dacanays mortgaged to plaintiff a parcel of land
in Baguio City, covered by Certificate of Title No. T-8116, the mortgage having been
duly recorded; that the promissory notes were not paid .and as a result, plaintiff Surety
was compelled to pay P5,000.00 to Gregorio Fajardo and P4,081.69 to the
Manufacturers’ Bank; that the Dacanays failed to reimburse the Surety for such
payments, whereupon the Surety caused the extrajudicial foreclosure of the mortgage
to pay its claim of P12,941.69 representing its payments, interest and stipulated
liquidated damages: that at the foreclosure sale, the land mortgaged was sold to
plaintiff, as highest bidder, for the sum of P2,000.00 — leaving an unsatisfied balance
of P10,491.69, that plaintiff sought to recover from defendants Dacanay, plus 10%
thereof as attorneys’ fees, and the costs.
At petitioner’s request, respondent Judge caused summons to be made by publication

in the newspaper Philippines Herald. But despite the publication and deposit of a
prepaid copy of the complaint at the Manila post office, defendants did not appear
within the period of 60 days from last publication, as required by the summons.
Plaintiff then asked that defendants be declared in default; but :instead, the Judge, by
order of May 16, 1970, asked it to show cause why the action should not be dismissed,
the suit being in personam and defendants not having appeared. Then, on May 29,
1970, respondent Judge dismissed the case, despite plaintiff Surety’s argument that the
summons by publication was sufficient and valid under section 16 of Rule 14 of the
Revised Rules of Court.
We agree with respondent Judge that the action of plaintiff petitioner, being in
personam, the Court could not validly acquire jurisdiction on a non-appearing
defendant, absent a personal service of summons within the forum. We have explicitly
so ruled in Pantaleon v. Asunción, 105 Phil. 765, pointing out without such personal
service, any judgment on a non-appearing defendant would be violative of due process.
In the aforecited case this Court, through Justice Roberto Concepción, now Chief
Justice, ruled as follows:
jgc:chanrob les.com. ph
"Apart from the foregoing, it is well-settled principle of Constitutional Law that, in an

action strictly in personam, like the one at bar, personal service of summons, within the
forum. is essential to the acquisition of jurisdiction over the person of the defendant,
who does not voluntarily submit himself to the authority of the court. In other words,
summons by publication cannot — consistently with the due process clause in the Bill of
Rights — confer upon the court jurisdiction over said defendants.
‘Due process of law requires personal service to support a personal judgment, and.
when the proceeding is strictly in personam brought to determine the personal rights
and obligations of the parties, personal service within the state or a voluntary
appearance in the case is essential to the acquisition of jurisdiction so as to constitute
compliance with the constitutional requirement of due process. . . .
‘Although a state legislature has more control over the form of service on its own
residents than nonresidents, it has been held that in actions in personam . . . service by
publication on resident defendants, who are personally within the state and can be
found therein is not "due process of law," and a statute allowing it is unconstitutional.’
(16A C.J.S., pp. 786, 789; Emphasis ours.)"
The proper recourse for a creditor in the same situation as petitioner is to locate
properties, real or personal, of the resident defendant debtor with unknown address
and cause them to be attached under Rule 57, section 1(f), in which case, the
attachment converts the action into a proceeding in rem or quasi in rem and the
summons by publication may then accordingly be deemed valid and effective.
But because debtors who abscond and conceal themselves are also quite adept at
concealing their properties, the dismissal of the case below by respondent Judge should
be set aside and the case held pending in the court’s archives, until petitioner as
plaintiff succeeds in determining the whereabouts of the defendants’ person or
properties and causes valid summons to be served personally or by publication as the
case may be. In this manner, the tolling of the period of prescription for as long as the
debtor remains in hiding would properly be a matter of court records and he can not
emerge after a sufficient lapse of time from the dismissal of the case to profit from his
own misdeed and claim prescription of his just debt.
WHEREFORE, the order of dismissal of the case issued by the Court below is hereby set
aside, and in the interest of justice, the proceedings are ordered suspended, to be held
pending until the plaintiff petitioner succeeds in ascertaining the whereabouts of the
defendants and/or locating properties of the same, to enable proper summons to be
issued conformably to this Opinion. No costs.
Concepcion, C.J., Makalintal, Zaldivar, Fernando, Teehankee, Barredo, Villamor and

Makasiar, JJ., concur.
Dizon and Castro, JJ., reserve their votes.

G.R. No. L-45350 May 29, 1939
BACHRACH MOTOR CO., INC., Plaintiff-Appellant, vs. ESTEBAN

ICARA�GAL and ORIENTAL COMMERCIAL CO.,
INC., Defendants-Appellees.
B. Francisco for appellant.

Matias P. Perez for appellees.
MORAN, J.: chanrobles vi rtua l law lib ra ry
On June 11 , 1930, defendant herein, Esteban Icara�gal, with one

Jacinto Figueroa, for value received, executed in favor of the
plaintiff, Bachrach Motor Co., Inc., a promissory note for one
thousand six hundred fourteen pesos (P1,614), and in security for
its payment, said Esteban Icara�gal executed a real estate
mortgage on a parcel of land in Pa�gil, Laguna, which was duly
registered on August 5, 1931, in the registry of deeds of the
Province of Laguna. Thereafter, promissors defaulted in the
payment of the agreed monthly installments; wherefore, plaintiff
instituted in the Court of First Instance of Manila an action for the
collection of the amount due on the note. Judgment was there
rendered for the plaintiff. A writ of execution was subsequently
issued and, in pursuance thereof, the provincial sheriff of Laguna, at
the indication of the plaintiff, levied on the properties of the
defendants, including that which has been mortgaged by Esteban
Icara�gal in favor of the plaintiff. The other defendant herein,
Oriental Commercial Co., Inc., interposed a third-party claim,
alleging that by virtue of a writ of execution issued in civil case No.
88253 of the municipal court of the City of Manila, the property
which was the subject of the mortgage and which has been levied
upon by the sheriff, had already been acquired by it at the public
auction on May 12, 1933. By reason of this third-party claim, the
sheriff desisted from the sale of the property and, in consequence
thereof, the judgment rendered in favor of the plaintiff remained
unsatisfied. Whereupon, plaintiff instituted an action to foreclose the
mortgage. The trial court dismissed the complaint and, from the
judgment thus rendered plaintiff took the present appeal. chan roble svi rtualaw lib rary cha nrob les vi rtual law lib rary
The sole question before us is whether or not plaintiff-appellant is
barred from foreclosing the real estate mortgage after it has elected
to sue and obtain a personal judgment against the defendant-
appellee on the promissory note for the payment of which the
mortgage was constituted as a security. chanroblesvi rt ualawlib ra ry chanrobles vi rt ual law li bra ry
In Hijos de I. de la Rama vs. Sajo (45 Phil., 703), the mortgage

creditor, instead of instituting proceedings for the foreclosure of his
mortgage, filed a personal action for the recovery of the debt. The
mortgage debtor objected to the action, alleging that, if it be
allowed, he would be subjected to two suits, one personal and
another for the foreclosure of the mortgage. We answered this
objection, laying down the rule that "in the absence of statutory
provisions, the mortgagee may waive the right to foreclose his
mortgage and maintain a personal action for the recovery of the
indebtedness." And we emphasized the doctrine in the later part of
our decision by saying that "the rule is well established that the
creditor may waive whatever security he has and maintain a
personal action, in the absence of statutory provisions to the
contrary." (P. 705.) chanrobles vi rt ual law li bra ry
It is true that Matienzo vs. San Jose (G.R. No. 39510, June 16,
1934), a decision of three justices of this court ruled that "apart
from special proceedings regulated by statute, an unsatisfied
personal judgment for a debt is no bar to an action to enforce a
mortgage or other lien given as security for such debt." But this
decision cannot be made to prevail over a decision given by this
court in banc. Besides, the rule laid down in the De la Rama case is
more in harmony with the principles underlying our procedural
system. chanroblesvi rtualaw lib rary cha nrob les vi rtual law lib rary
Most of the provisions of our Code of Civil Procedure are taken from
that of California, and in that jurisdiction the rule has always been,
and still is, that a party who sues and obtains a personal judgment
against a defendant upon a note, waives thereby his right to
foreclose the mortgage securing it. (Ould vs. Stoddard, 54 Cal.,
613; Felton vs. West, 102 Cal., 266; Craiglow vs. Williams, 514 Cal.
App., 45; 188 Pac., 76, following doctrine in Biddel vs. Brizzolara,
64 Cal., 354; 30 Pac., 609; Brown vs. Willis, 67 Cal., 235; 7 Pac.,
682; Barbieri vs. Ramelli, 84 Cal., 134; 23 Pac., 1086;
Toby vs. Oregon Pac. R. Co., 98 Cal., 490; 33 Pac., 550;
McKean vs. German-American Sav. Bank., 118 Cal., 334; 50 Pac.,
656; Woodward vs. Brown, 119 Cal., 283; 63Am. St. Rep., 108; 51
Pac., 2, 542; Meyer vs. Weber, 133 Cal., 681; 65 Pac., 1110;
Crisman vs. Lanterman, 149 Cal., 647, 651; 117 Am. St. Rep.,
167;87 Pac., 89; Gnarin vs. Swiss American Bank, 162 Cal., 181;
121 Pac., 726.) The same rule obtains in the states of Idaho,
Montana, Nevada and Utah. ( See Johns on Mortgages, 986, 1015,
1019, 1046.) It is true that this rule is founded on express statutory
provisions to that effect. We have here, however, section 708 of our
Code of Civil Procedure which provides that a creditor holding a
claim against the deceased, secured by a mortgage or other
collateral security, has to elect between enforcing such security or
abandoning it by presenting his claim before the committee and
share it in the general assets of the estate. Under this provision, It
has been uniformly held by this court that, if the plaintiff elects one
of the two remedies thus provided, he waives the other, and if he
fails, he fails utterly. (Veloso vs. Heredia, 33 Phil., 306; Cf.
Osorio vs. San Agustin, 25 Phil., 404.) The same rule applies under
the Insolvency Law. (Sec. 59, Act No. 1956; Unson and
Lacson vs. Central Capiz, 47 Phil., 42; Chartered Bank of India,
Australia and China vs. Imperial, 48 Phil., 931; O'Brien vs. Del
Rosario and Bank of the Philippine Islands, 49 Phil., 657.) There is
indeed no valid reason for not following the same principle of
procedure in ordinary civil actions. With the substitution of the
administrator or executor in place of the deceased, or of the
assignee or receiver in place of the insolvent debtor, the position of
the parties plaintiff and defendant in the litigation is exactly the
same in special or insolvency proceedings as in ordinary civil
actions.chanroble svirtualawl ibra ry chan rob les vi rtual law lib rary
But, even if we have no such section 708 of our Code of Civil

Procedure, or section 59 of the Insolvency Law, we have still the
rule against splitting a single cause of action. This rule, though not
contained in any statutory provision, has been applied by this court
in all appropriate cases. Thus, in Santos vs. Moir (36 Phil., 350,
359), we said: "It is well recognized that a party cannot split a
single cause of action into parts and sue on each part separately. A
complaint for the recovery of personal property with damages for
detention states a single cause of action which cannot be divided
into an action for possession and one for damages; and if suit is
brought for possession only a subsequent action cannot be
maintained to recover the damages resulting from the unlawful
detention." In Rubio de Larena vs. Villanueva (53 Phil., 923, 927),
we reiterated the rule by stating that" . . . a party will not be
permitted to split up a single cause of action and make it the basis
of several suits" and that when a lease provides for the payment of
the rent in separate installments, each installment constitutes an
independent cause of action, but when, at the time of the complaint
is filed, there are several installments due, all of them constitute a
single cause of action and should be included in a single complaint,
and if some of them are not included, they are barred. The same
doctrine is stated in Lavarro vs. Labitoria (54 Phil., 788), wherein
we said that "a party will not be permitted to split up a single cause
of action and make it a basis for several suits" and that a claim for
partition of real property as well as improvements constitutes a
single cause of action, and a complaint for partition alone bars a
subsequent complaint for the improvements. And in Blossom & Co.
vs. Manila Gas Corporation (55 Phil., 226, 240), we held that "as a
general rule a contract to do several things at several times is
divisible in its nature, so as to authorize successive actions; and a
judgment recovered for a single breach of a continuing contract or
covenant is no bar to a suit for a subsequent breach thereof. But
where the covenant or contract is entire, and the breach total, there
can be only one action, and plaintiff must therein recover all his
damages." chanrobles vi rt ual law li bra ry
The rule against splitting a single cause of action is intended "to

prevent repeated litigation between the same parties in regard to
the same subject of controversy; to protect defendant from
unnecessary vexation; and to avoid the costs and expenses incident
to numerous suits." (1 C.J., 1107) It comes from that old
maxim nemo bedet bis vexare pro una et eadem cause (no man
shall be twice vexed for one and the same cause). ( Ex parte Lange,
18 Wall., 163, 168; 21 Law. ed., 872; also U.S. vs. Throckmorton,
98 U.S., 61; 25 Law. ed., 93.) And it developed, certainly not as an
original legal right of the defendant, but as an interposition of courts
upon principles of public policy to prevent inconvenience and
hardship incident to repeated and unnecessary litigations (1 C.J.,
1107.) chanrobles v irt ual law l ibra ry
For non-payment of a note secured by mortgage, the creditor has a

single cause of action against the debtor. This single cause of action
consists in the recovery of the credit with execution of the security.
In other words, the creditor in his action may make two demands,
the payment of the debt and the foreclosure of his mortgage. But
both demands arise from the same cause, the non-payment of the
debt, and, for that reason, they constitute a single cause of action.
Though the debt and the mortgage constitute separate agreements,
the latter is subsidiary to the former, and both refer to one and the
same obligation. Consequently, there exists only one cause of action
for a single breach of that obligation. Plaintiff, then, by applying the
rule above stated, cannot split up his single cause of action by filing
a complaint for payment of the debt, and thereafter another
complaint for foreclosure of the mortgage. If he does so, the filing
of the first complaint will bar the subsequent complaint. By allowing
the creditor to file two separate complaints simultaneously or
successively, one to recover his credit and another to foreclose his
mortgage, we will, in effect, be authorizing him plural redress for a
single breach of contract at so much cost to the courts and with so
much vexation and oppression to the debtor. chanroblesvi rtualaw lib rary cha nrob les vi rtua l law lib rary
We hold, therefore, that, in the absence of express statutory

provisions, a mortgage creditor may institute against the mortgage
debtor either a personal action for debt or real action to foreclose
the mortgage. In other words, he may pursue either of the two
remedies, but not both. By such election, his cause of action can by
no means be impaired, for each of the two remedies is complete in
itself. Thus, an election to bring personal action will leave open to
him all the properties of the debtor for attachment and execution,
even including the mortgaged property itself. And, if he waives such
personal action and pursues his remedy against the mortgaged
property, an unsatisfied judgment thereon would still give him the
right to sue for a deficiency judgment, in which case, all the
properties of the defendant, other than the mortgaged property, are
again open to him for the satisfaction of the deficiency. In either
case, his remedy is complete, his cause of action undiminished, and
any advantages attendant to the pursuit of one or the other remedy
are purely accidental and are all under his right of election. On the
other hand, a rule that would authorize the plaintiff to bring a
personal action against the debtor and simultaneously or
successively another action against the mortgaged property, would
result not only in multiplicity of suits so offensive to justice
(Soriano vs. Enriquez, 24 Phil., 584) and obnoxious to law and
equity (Osorio vs. San Agustin, 25 Phil., 404), but also in subjecting
the defendant to the vexation of being sued in the place of his
residence of the plaintiff, and then again in the place where the
property lies.
chan roble svirtualawl ibra ry chan roble s virtual law lib rary
In arriving at the foregoing conclusion, we are not unaware of the

rule prevailing in certain States of the American Union, to the effect
that, in cases like the one at bar, the creditor can pursue his
remedies against the note and against the security concurrently or
successively. The reason given for the rule seems to be that the
causes of action in the two instances are not the same, one being
personal and the other, real. But, as we have heretofore stated, the
creditor's cause of action is not only single but indivisible, although
the agreements of the parties, evidenced by the note and the deed
of mortgage, may give rise to different remedies. (Frost vs. Witter,
132 Cal., 421.) The cause of action should not be confused with the
remedy created for its enforcement. And considering, as we have
shown, that one of the two remedies available to the creditor is as
complete as the other, he cannot be allowed to pursue both in
violation of those principles of procedure intended to secure simple,
speedy and unexpensive administration of justice. chanrob lesvi rtualaw lib rary chanrob les vi rtual law lib rary
Judgment is affirmed, with costs against the appellant.
Avance�a, C.J., Villa-Real, and Concepcion, JJ., concur.

G.R. No. L-35453 September 15, 1989
INDUSTRIAL FINANCE CORPORATION, petitioner,

vs.
HON. SERGIO A.F. APOSTOL, Judge of the Court of First Instance of Rizal, Branch XVI,
Quezon City, JUAN DELMENDO and HONORATA DELMENDO and JOAQUIN PADILLA and
SOCORRO PADILLA, respondents.
Santos S. Carlos for petitioner.
Elizardo Delmendo for private respondents.
FERNAN, C.J.:
The present petition is a direct appeal from the summary judgment dated March 15, 1972 of the then
Court of First Instance of Rizal, Branch 16 (Quezon City) in Civil Case No. Q-15942 entitled "Juan A.
Delmendo and Honorata Delmendo v. Joaquin Padilla and Socorro Padilla and Industrial Finance
Corporation" as well as the order of said court dated July 7, 1972 denying petitioner's motion for
reconsideration of said judgment.
As gathered from the records, the facts are as follows:
In 1968, spouses Joaquin Padilla and Socorro Padilla bought on credit three units of Isuzu trucks
from the Industrial Transport and Equipment, Inc. They executed a promissory note for P159,600,
the balance of the purchase price, securing payment thereof by a chattel mortgage of said trucks
and, as additional collateral, a real estate mortgage on their property covered by Transfer Certificate
of Title No. T-133625 in favor of the seller. 1 Subsequently, Industrial Transport and Equipment, Inc.
indorsed the note and assigned the real estate mortgage to petitioner Industrial Finance Corporation
(IFC), which assignment was duly registered in the Registry of Deeds of Quezon City and annotated
on the title of the mortgaged realty.
On May 15, 1970, in view of the failure of the Padillas to pay several installments on the note, the
assignee IFC sued Joaquin Padilla in the Court of First Instance of Rizal (Quezon City) for the
recovery of the unpaid balance on the note including attorney's fees. 2 In due time, decision was
rendered on April 16, 1975, the dispositive portion of which reads :
WHEREFORE, premises considered judgment is hereby rendered in favor of plaintiff

(IFC) and against defendant (Joaquin Padilla) to pay plaintiff.
A. the sum of P82,996.75 with twelve (12 %) percent interest per annum from the
date of the filing of the complaint until fully paid;
B. to pay attomey's fees in the amount of P20,749.93 equivalent to 25% of the whole
amount due; and
C. to pay the costs of this suit. 3

On appeal to the Court of Appeals, the trial court was sustained except for the modification that the
attorney's fees were reduced to 12 % of the balance . 4 As no appeal was brought by either of the
parties, the appellate court decision became final and executory.
Meanwhile, on September 9, 1971, private respondents Juan Delmendo and Honorata Delmendo
filed a complaint against petitioner IFC, as principal party, and the Padilla spouses, as formal parties,
in respondent Court of First Instance (Civil Case No. Q-15942). The Delmendos alleged that they
were the transferees of the real property covered by Transfer Certificate of Title No. T-133625 of the
Quezon City Register of Deeds which was mortgaged earlier by the Padillas to the Industrial
Transport and Equipment, Inc. to secure the payment of a promissory note in the sum of P 159,600
and then assigned to petitioner IFC. The Delmendos prayed for the cancellation of the mortgage lien
annotated on Transfer Certificate of Title No. T-133625 and the delivery to them by petitioner of the
owner's copy of said title with damages and attorney's fees, considering that petitioner IFC had
waived its rights over the mortgage when it instituted a personal action against the Padillas in Civil
Case No. Q-14417 for collection of a sum of money.
Petitioner IFC moved for the dismissal of the complaint, contending that it had not waived its right
over the mortgage lien.
The Delmendos filed a motion for summary judgment which respondent trial court granted. Thus:
WHEREFORE, for being meritorious, the same is hereby granted. Judgment is

rendered, as prayed for in the Complaint.
a) declaring the real estate mortgage in favor of the Industrial Transport and
Equipment Corporation and the assignment thereof in favor of the Industrial Finance
Corporation forfeited, waived and abandoned, and therefore released pursuant to law
and jurisprudence;
b) ordering the Register of Deeds of Quezon City to remove and cancel from
Transfer Certificate of Title No. 133625, Book T-672, Page 25, the annotations of the
real estate mortgage (PE-8612/T- 133625 and of the assignment of mortgage (PE-
8768/T-133265);
c) ordering the defendant Industrial Finance Corporation to surrender to the Register

of Deeds of Quezon City the owner's copy of TCT No. T-133626 upon receipt of this
order; and
d) with costs against the defendants.
SO ORDERED. 5
Upon denial of its motion for reconsideration, petitioner IFC came to this Court raising the issue of
whether, by filing a personal action for the recovery of a debt secured by a real estate mortgage,
petitioner is deemed to have abandoned, ipso jure, its mortgage lien on the property in question.
The above question is certainly far from novel. In a host of decided cases, the most recent of which
is Danao v. Court of Appeals, 6 this Court has resolved this issue in the affirmative In Manila Trading
and Supply Co. v. Co Kim and So Tek, 7 we declared:
The rule is now settled that a mortgage creditor may elect to waive his security and
bring, instead, an ordinary action to recover the indebtedness with the right to
execute a judgment thereon on all the properties of the debtor, including the subject-
matter of the mortgage, subject to the qualification that if he fails in the remedy by
him elected, he cannot pursue further the remedy he has waived.
The case of Bachrach Motor Co., Inc. v. Icarangal and Oriental Commercial Co., Inc., 8 which
similarly involves a promissory note secured by a real estate mortgage, gives us an extensive
discussion on the rule, to wit:
For non-payment of a note secured by mortgage, the creditor has a single cause of
action against the debtor. This single cause of action consists in the recovery of the
credit with execution of the security. In other words, the creditor in his action may
make two demands, the payment of the debt and the foreclosure of his mortgage.
But both demands arise from the same cause, the non-payment of the debt, and, for
that reason, they constitute a single cause of action. Though the debt and the
mortgage constitute separate agreements, the latter is subsidiary to the former, and
both refer to one and the same obligation. Consequently, there exists only one cause
of action for a single breach of that obligation. Plaintiff, then, by applying the rule
above stated, cannot split up his single cause of action by filing a complaint for
foreclosure of the mortgage. If he does so, the filing of the first complaint will bar the
subsequent complaint. By allowing the creditor to file two separate complaints
simultaneously or successively, one to recover his credit and another to foreclose his
mortgage, we will, in effect, be authorizing him plural redress for a single breach of
contract at so much cost to the courts and with so much vexation and oppression to
the debtor.
We hold, therefore, that, in the absence of express statutory provisions, a mortgage

creditor may institute against the mortgage debtor either a personal action for debt or
a real action to foreclose the mortgage. In other words, he may pursue either of the
two remedies, but not both. By such election, his cause of action can by no means
be impaired, for each of the two remedies is complete in itself. Thus, an election to
bring a personal action will leave open to him all the properties of the debtor for
attachment and execution, even including the mortgaged property itself. And, if he
waives such personal action and pursues his remedy against the mortgaged
property, an unsatisfied judgment thereon would still give him the right to sue for a
deficiency judgment, in which case, all the properties of the defendant, other than the
mortgaged property, are again open to him for the satisfaction of the deficiency. In
either case, his remedy is complete, his cause of action undiminished, and any
advantages attendant to the pursuit of one or the other remedy are purely accidental
and are all under his right of election.
We likewise held in Movido v. RFC and the Provincial Sheriff of Samar, 9 that "a mortgagee who
sues and obtains a personal judgment against a mortgagor upon his credit waives thereby his right
to enforce the mortgage securing it."
Therefore, by instituting Civil Case No. Q-14417 in the Court of First Instance of Rizal (Quezon City)
to recover the unpaid balance on the promissory note from the Padilla spouses and by subsequently
obtaining a judgment in its favor, petitioner IFC is considered to have abandoned its mortgage lien
on the subject property covered by Transfer Certificate of Title No. T-133625.
The end result is the discharge of the real estate mortgage and the Delmendos, having purchased
the mortgaged property, automatically step into the shoes of the original mortgagors with every right
to have the title delivered to them free from said encumbrance.
WHEREFORE, finding no error in the summary judgment under appeal, the same is hereby affirmed
in toto.
Considering the length of time that this case has been pending, this decision is declared immediately
executory.
SO ORDERED.
Gutierrez, Jr., Bidin and Cortes, JJ., concur.
Feliciano, J., on leave.
Footnotes
1 Rollo, pp. 31-32, 37.
2 Civil Case No. Q-14417.
3 See certified xerox copy of the decision of the Court of Appeals in CA-G.R. CV No.
59391 in "Industrial Finance Corp. v. Joaquin Padilla," promulgated on March 8,
1983.
4 supra.
5 Rollo, pp., 87-88.
6 No. 48276, September 30, 1987,154 SCRA 446.
7 71 Phil. 448, 449 (1941).
8 68 Phil. 287, 293-294 (1939).
9 105 Phil. 886 (1959).

FIRST DIVISION
G.R. No. L-46000 March 18, 1985
GLICERIO AGUSTIN (Deceased) as Administrator of the

Intestate Estate of Susana Agustin, petitioner-plaintiff-
appellant, vs. LAUREANO BACALAN and the PROVINCIAL
SHERIFF OF CEBU, respondents-defendants-appellees. chanrob les vi rtual law lib rary
GUTIERREZ, JR., J.:
The precursor of this case was a complaint for ejectment with

damages filed by plaintiff-appellant Agustin, as adininistrator of the
Intestate Estate of Susana Agustin, against defendant-appellee
Bacalan, before the City Court of Cebu. chanroble svirtualawl ibra rycha nro bles vi rtua l law lib ra ry
Bacalan is a lessee of a one-door ground floor space in a building

owned by the late Susana Agustin. Due to nonpayment of rentals
despite repeated demands an action to eject him was filed. chan rob lesvi rtualaw lib raryc han robles v irt ual law li bra ry
In his complaint, the plaintiff-appellant prayed that the defendant-

appellee be ordered to immediately vacate the place in question, to
pay plaintiff-appellant the sum of P2,300.00 representing
arrearages in rentals plus the corresponding rentals until he actually
vacates the place, attorney's fees, expenses, and costs. chanroble svi rtualaw lib raryc han robles v irt ual law li bra ry
In his answer, the defendant-appellee included a counter-claim

alleging that the present action was "clearly unfounded and devoid
of merits, as it is tainted with malice and bad faith on the part of
the plaintiff for the obvious reason that plaintiff pretty well knows
that defendant does not have any rentals in arrears due to the
estate of Susana Agustin, but notwithstanding this knowledge,
plaintiff filed the present action merely to annoy, vex, embarrass
and inconvenience the defendant." He stated, "That by virtue of the
unwarranted and malicious filing of this action by the plaintiff
against the defendant, the latter suffered, and will continue to
suffer, actual and moral damages in the amount of no less than
P50,000.00; P10,000.00 in concept of exemplary damages. In
addition, defendant has been compelled to retain the services of
undersigned counsel to resist plaintiffs' reckless, malicious and
frivolous claim and to protect and enforce his rights for which he
obligated himself to pay the further sum of P3,500.00 as attorney's
fees."chanrobles vi rtua l law lib rary
The City Court of Cebu subsequently rendered judgment dismissing

the counterclaim and ordering the defendant to vacate the premises
in question and to pay the plaintiff the sum of P3,887.10 as unpaid
back rentals and the sum of P150.00 as attorney's fees' From this
decision, the defendant filed an appeal with Branch Ill of the Court
of First Instance of Cebu. The case was designated as Civil Case No.
R-12430. chanroblesvi rt ualawlib ra rychan roble s virtual law lib rary
Availing of Republic Act 6031 which does away with trials de novo in
appeals before it, the Court of First Instance rendered a decision,
the dispositive portion of which reads:
WHEREFORE, based on all the foregoing considerations, the

appealed judgment is hereby set aside. Judgment is hereby required
in favor of the defendant- chanroble s vi rtual law lib rary
1. Ordering the plaintiff to pay.
a) P10,000.00 as moral damages; chanroble s virtual law l ibra ry
b) P5,000.00 as exemplary damages; chanroble s virtual law l ibra ry
c) P1,000.00 as attorney's fees; and
2. With costs against plaintiff. chanroblesvi rtualaw lib raryc han robles v irt ual law l ibra ry
JUDGMENT REVERSED.
No appeal was taken by the plaintiff-appellant. The decision lapsed

into finality and became executory. A writ of execution was issued
by virtue of which a notice to sell at public auction real properties
belonging to the estate of Susana Agustin was issued by the Deputy
Sheriff to satisfy judgment in the case. Plaintiff's counsel filed a
motion for reconsideration, confessing his fault and giving the
reason why he failed to perfect the appeal on time. The motion was
denied. chan roble svirtualawl ibra rycha nro bles vi rtua l law lib ra ry
Thereafter, with the aid of new counsel, the plaintiff-appellant filed
a complaint with Branch V, Court of First Instance of Cebu, against
the defendant and the Deputy Sheriff of Cebu for the declaration of
the nullity of the above-cited decision of Branch III, Court of First
Instance of Cebu in the ejectment case on the ground that the
exercise of its appellate jurisdiction was null and void from the
beginning for the following reasons:
(a) It grants relief in the total sum of P16,000.00 (exclusive of

costs) distributed thus:
P10,000.00 as moral damages chanroble s virtual law l ibra ry
P5,000.00 as exemplary damages chanrobles vi rtual l aw libra ry
P1,000.00 as attorney's fees
which is clearly beyond the jurisdiction of the City Court of Cebu;

Section 88 of the Judiciary Act of 1948, as amended by Rep. Acts
Nos. 2613 and 3828, limits the jurisdiction of the city courts in civil
cases to P10,000.00 as the maximum amount of the demand
(exclusive of interest and costs); chanrob les vi rtual law lib rary
(b) Moreover, said Decision (Annex "G") grants moral damages to

the defendant in the sum of P10,000.00 which constitutes a grave
abuse of discretion amounting to lack of jurisdiction, there being no
evidence to support it and the subject matter of the suit in Civil
Case No. R-13504 being purely contractual where moral damages
are not recoverable.
A motion to dismiss was filed by the defendant on the grounds that

the plaintiff has no cause of action and that the court lacks
jurisdiction to declare the nullity of a decision of another branch of
the Court of First Instance of Cebu. chanroblesv irt ualawli bra rycha nrob les vi rtua l law lib rary
While rejecting the second ground for the motion to dismiss, the
court sustained the defendant and ruled:
Clearly from a reading of the complaint, the plaintiff seeks the

annulment of the decision rendered by the Third Branch of this
Court because the award exceeded the jurisdiction amount
cognizable by the City Court of Cebu and the said Branch III of this
Court has no jurisdiction to award the defendants herein (plaintiff in
Civil Case No. 12430) an amount more than P10,000.00; chanrobles vi rtual law lib rary
It is the considered opinion of this Court that this allegation of the

herein plaintiff cannot be availed of as a ground for annulment of a
judgment. It may perhaps, or at most, be a ground for a petition for
certiorari. But then, the remedy should be availed of within the
reglementary period to appeal. Nevertheless, even if the plaintiff did
take his cause by certiorari, just the same, it would have been
futile....
chan rob lesvi rtualaw lib raryc han robles v irt ual law l ibra ry
xxx xxx xxx chanroble s virtual law l ibrary
In fine, this Court believes that the present complaint fails to allege
a valid cause of action as the same is only a clear attempt at
utilizing the remedy for the annulment of the judgment rendered by
this Court in Civil Case No. 12430 to offset the adverse effects of
failure to appeal.
Plaintiff-appellant's motion for reconsideration was denied,

prompting him to file an appeal before the Court of Appeals, which,
in a resolution, certified the same to us on the ground that it
involves pure questions of law. chanroble svirtualawl ibra rycha nro bles vi rtua l law lib ra ry
We ruled in Macabingkil v. People's Homesite and Housing

Corporation (72 SCRA 326, citing Reyes v. Barretto-Datu, 94 Phil.
446, 448-449)-
Under our rules of procedure, the validity of a judgment or order of

the court, which has become final and executory, may he attacked
only by a direct action or proceeding to annul the same, or by
motion in another case if, in the latter case, the court had no
jurisdiction to enter the order or pronounce the judgment (section
44, Rule 39 of the Rules of Court). The first proceeding is a direct
attack against the order or judgment, because it is not incidental to,
but is the main object of, the proceeding. The other one is the
collateral attack, in which the purpose of the proceedings is to
obtain some relief, other than the vacation or setting aside of the
judgment, and the attack is only an incident. (I Freeman on
Judgments, sec. 306, pages 607-608.) A third manner is by a
petition for relief from the judgment order as authorized by the
statutes or by the rules, such as those expressly provided in Rule 38
of the Rules of Court, but in this case it is to be noted that the relief
is granted by express statutory authority in the same action or
proceeding in which the judgment or order was entered ...
The question is thus poised, whether or not the present action for
the annulment of the judgment in the ejectment case is the proper
remedy after it has become final and executory. chanroble svi rtualawl ib raryc hanrobles vi rt ual law li bra ry
To this procedural dilemma, the solution lies in the determination of

the validity of the judgment sought to be annulled, for against a
void judgment, plaintiff-appellant's recourse would be proper. chanroblesv irt ualawli bra rychan rob les vi rtual law lib rary
There is no question as to the validity of the court's decision with

respect to the issue of physical possession of property, the
defendant-appellee's right to the same having been upheld.
However, the plaintiff-appellant assails the money judgment handed
down by the court which granted damages to the defendant-
appellee. By reason thereof, he seeks the declaration of the nullity
of the entire judgment. chanroblesvi rt ualawlib ra rychan roble s virtual law lib rary
It is the plaintiff-appellant's contention that moral damages may not

properly be awarded in ejectment cases, the only recoverable
damages therein being the reasonable compensation for use and
occupancy of the premises and the legal measure of damages being
the fair rental value of the property. chanroble svi rtualaw lib raryc han robles v irt ual law li bra ry
Plaintiff-appellant loses sight of the fact that the money judgment

was awarded the defendant-appellee in the concept of a
counterclaim. A defending party may set up a claim for money or
any other relief which he may have against the opposing party in a
counterclaim (Section 6, Rule 6, Revised Rules of Court). And the
court may, if warranted, grant actual, moral, or exemplary damages
as prayed for. The grant of moral damages, in the case at bar, as a
counterclaim, and not as damages for the unlawful detention of
property must be upheld. However, the amount thereof is another
matter.chanroblesvi rtua lawlib rary chan robles v irt ual law l ibra ry
Plaintiff-appellant raises the issue of whether or not the Court of
First Instance may, in an appeal, award the defendant-appellee's
counterclaim in an amount exceeding or beyond the jurisdiction of
the court of origin. chanro blesvi rt ualawlib ra rychan roble s virtual law lib rary
It is well-settled that a court has no jurisdiction to hear and

determine a set-off or counterclaim in excess of its jurisdiction
(Section 5, Rule 5, Revised Rules of Court; Ago v. Buslon, 10 SCRA
202). A counterclaim beyond the court's jurisdiction may only be
pleaded by way of defense, the purpose of which, however, is only
to defeat or weaken plaintiff's claim, but not to obtain affirmative
relief (Section 5, Rule 5, Revised Rules of Court). Nevertheless, the
defendant-appellee, in the case at bar, set up his claim in excess of
the jurisdiction of the city court as a compulsory counterclaim. What
is the legal effect of such a move? chanroble s virtual law l ibra ry
Pertinent to our disposition of this question is our pronouncement in

the case of Hyson Tan, et al. v. Filipinas Compania de Seguros, et
al., (G.R. No. L-10096, March 23, 1956) later adopted in Pindangan
Agricultural Co., Inc. v. Dans (6 SCRA 14) and the later case of
One Heart Club, Inc. v. Court of Appeals (108 SCRA 416) to wit:
xxx xxx xxx chanroble s virtual law l ibrary
... An appellant who files his brief and submits his case to the Court
of Appeals for decision, without questioning the latter's jurisdiction
until decision is rendered therein, should be considered as having
voluntarily waives so much of his claim as would exceed the
jurisdiction of said Appellate Court; for the reason that a contrary
rule would encourage the undesirable practice of appellants
submitting their cases for decision to the Court of Appeals in
expectation of favorable judgment, but with intent of attacking its
jurisdiction should the decision be unfavorable. ...
Thus, by presenting his claim voluntarily before the City Court of

Cebu, the defendant-appellee submitted the same to the jurisdiction
of the court. He became bound thereby. The amount of P10,000.00
being the jurisdictional amount assigned the City Court of Cebu,
whose jurisdiction the defendant-appellee has invoked, he is
thereby deemed to have waived the excess of his claim beyond
P10,000.00. It is as though the defendant-appellee had set up a
counterclaim in the amount of P10,000.00 only. May the Court of
First Instance then, on appeal, award defendant-appellee's
counterclaim beyond that amount? chanroble s virtual law l ib rary
The rule is that a counterclaim not presented in the inferior court

cannot be entertained in the Court of First Instance on appeal
(Francisco, The Revised Rules of Court in the Philippines, Vol. III, p.
26, citing the cases of Bernardo v. Genato, 11 Phil. 603 and Yu Lay
v. Galmes, 40 Phil. 651). As explained in Yu Lay v. Galmes- "Upon
an appeal to a court of first instance from the judgment of a justice
of the peace, it is not possible, without changing the purpose of the
appeal, to alter the nature of the question raised by the complaint
and the answer in the original action. There can be no doubt,
therefore, of the scope of the doctrine laid down in the several
decisions of the Court. Consequently, We hold that, upon an appeal
to the Court of First Instance, the plaintiff as well as the defendant
cannot file any pleading or allegation which raises a question
essentially distinct from that raised and decided in the justice of the
peace court. "This rule was reiterated in cases from Ng Cho Cio v.
Ng Diong (1 SCRA 275) to Development Bank of the Philippines v.
Court of Appeals (116 SCRA 636). chanroblesvi rt ualawlib rary chan roble s virt ual law l ibra ry
Thus, the defendant-appellee's counterclaim beyond P10,000.00,

the jurisdictional amount of the city Court of Cebu, should be
treated as having been deemed waived. It is as though it has never
been brought before trial court. It may not be entertained on
appeal.chan roblesv irtualawli bra rycha nrob les vi rtua l law lib rary
The amount of judgment, therefore, obtained by the defendant-

appellee on appeal, cannot exceed the jurisdiction of the court in
which the action began. Since the trial court did not acquire
jurisdiction over the defendant's counterclaim in excess of the
jurisdictional amount, the appellate court, likewise, acquired no
jurisdiction over the same by its decisions or otherwise. Appellate
jurisdiction being not only a continuation of the exercise of the same
judicial power which has been executed in the court of original
jurisdiction, also presupposes that the original and appellate courts
are capable of participating in the exercise of the same judicial
power (See 2 Am. Jur. 850; Stacey Cheese Company v. R.E. Pipkin,
Appt. 155 NC 394, 71 S.E. 442, 37 LRA 606) It is the essential
criterion of appellate jurisdiction that it revises and corrects the
proceedings in a cause already instituted, and does not create that
cause (See 2 Am. Jur 850 citing Marbury v. Madison, 1 Cranch US,
137, 2 L. ed. 60). chanroblesv irt ualawli bra rycha nrob les vi rtua l law lib rary
It is, of course, a well-settled rule that when court transcends the

limits prescribed for it by law and assumes to act where it has no
jurisdiction, its adjudications will be utterly void and of no effect
either as an estoppel or otherwise (Planas v. Collector of Internal
Revenue, 3 SCRA 395; Parades v. Moya, 61 SCRA 526). The Court
of First Instance, in the case at bar, having awarded judgment in
favor of the defendant-appellee in excess of its appellate jurisdiction
to the extent of P6,000.00 over the maximum allowable award of
P10,000.00, the excess is null and void and of no effect. Such being
the case, an action to declare the nullity of the award as brought by
the plaintiff-appellant before the Court of First Instance of Cebu,
Branch V is a proper remedy. chanroblesvi rtua lawlib rary chan roble s virtual law l ibrary
The nullity of such portion of the decision in question, however, is

not such as to affect the conclusions reached by the court in the
main case for ejectment. As held in Vda. de Pamintuan v. Tiglao (53
Phil. 1) where the amount set up by the defendant was not proper
as a defense and it exceeded the inferior court's jurisdiction, it
cannot be entertained therein, but the court's jurisdiction over the
main action will remain unaffected. Consequently, the decision over
the main action, in the case at bar, must stand, best remembering
that a counter-claim, by its very nature, is a cause of action
separate and independent from the plaintiff's claim against the
defendant. chanroblesv irt ualawli bra rychan rob les vi rtual law lib rary
WHEREFORE, the decision of the Court of First Instance of Cebu,

Branch III in Civil Case No. R-12430 for ejectment is hereby
DECLARED NULL AND VOID insofar as it awards damages on the
defendant-appellee's counterclaim in excess of P6,000.00 beyond its
appellate jurisdiction. The decision in all other respects is
AFFIRMED. The order of the Court of First Instance of Cebu, Branch
V dismissing Civil Case No. R-13462 for declaration of nullity of
judgment with preliminary injunction is hereby MODIFIED, Civil
Case No. R-13462 is ordered DISMISSED insofar as the decision
sought to be annulled upholds the defendant's right to possession of
the disputed property. The defendant's counterclaim for damages is
GRANTED to the extent of TEN THOUSAND (P10,000.00) PESOS.
The grant of SIX THOUSAND (P6,000.00) PESOS in excess of such
amount is hereby declared NULL and VOID, for having been
awarded beyond the jurisdiction of the court.
chanroble svi rtualaw lib raryc hanrobles vi rt ual law li bra ry
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Relova, De la

Fuente and Alampay, JJ., concur.
G.R. No. 83545 August 11, 1989
ADELFO MACEDA, petitioner,

vs.
HON. COURT OF APPEALS AND CEMENT CENTER, INC., respondents.
Charles S. Anastacio for petitioner.
F.M. Carpio & Associates for private respondent.
GRIÑ;O-AQUINO, J.:
The issue raised in this case is the jurisdiction of the metropolitan trial court, in an ejectment case,
over the lessee's counterclaim for the value of improvements exceeding the court's jurisdictional limit
of P20,000. The Court of Appeals dismissed the counterclaim for lack of jurisdiction, hence, this
petition for review by the lessee, Adelfo Maceda.
The leased property originally belonged to the spouses Arturo Victoria and Maxima Monserrat, a
maternal aunt of the petitioner. After the spouses emigrated to the U.S. in 1970, they leased their
house and lot in San Juan, Metro Manila, to the petitioner for P200 per month in 1970. As the house
was old and run down, petitioner proposed to have it repaired and renovated subject to
reimbursement of his expenses. The lessors allowed him to do so (Exh. 3) and requested him to
send them pictures of the work accomplished (Exh. 3-a). He made extensive repairs, tearing down
rotten parts of the house, rebuilding and extending it up to the garage which he converted into a
dining room. He also moved the bathrooms around. The remodelling job cost P40,000. His aunt and
uncle were pleased with the pictures of the remodelled house and made plans to reimburse him for
his expenditures. But Maceda did not stop there. In what appears to be an orgy of building, he
introduced more improvements. He constructed a new driveway, a basketball court and raised the
ground level near the creek, elevated the fence, remodelled the gate, and landscaped the lawn.
In 1972, Arturo Victoria passed away in the United States. In 1973, his aunt's attorney-in-fact, Atty.
Rustico Zapata, Sr., promised to sell the property to him for P125,000 after the title should have
been transferred to his widowed aunt. On February 12, 1974, Atty. Zapata and a Mr. Gomez visited
the place and informed him that his aunt had sold the property to Mrs. Gomez so he should vacate it.
He refused to leave. As a result, Atty. Zapata filed an ejectment case against him on April 4, 1974, in
the Municipal Court of San Juan, Rizal (Civil Case No. 3773). It was dismissed on the plaintiffs own
lâwphî1.ñèt
motion.
In November 1974, Atty. Zapata informed the petitioner that the property had been sold to Pablo
Zubiri for P145,000. He was asked to vacate it. Again, he refused. Zubiri filed an ejectment case
against am (Civil Case No. 37781) in the Municipal Court of San Juan, Rizal. Petitioner insisted that
he was entitled to retain possession of the premises until his expenses were duly reimbursed to him.
The complaint was dismissed for failure to prosecute.
In 1978 Maxima Monserrat died in the United States.
On December 4, 1981, the property was sold by Zubiri to Cement Center, Inc. which obtained TCT
Nos. 30844 to 30845 for the property. The president of the company inspected the premises.
Maceda was asked to vacate the property because the company would build a housing project on it
for its employees. Maceda insisted on being reimbursed for his improvements as the original owners
had promised to do. Formal demands to vacate and for payment of P4,000 monthly rental from April
15, 1982 were sent to him by the company. On January 17, 1984, another ejectment suit was filed
against him in the Metropolitan Trial Court of San Juan, Metro Manila.
In his answer to the complaint, Maceda set up a counterclaim for P240,000, the alleged value of his
improvements.
In its decision, the Metropolitan Trial Court ordered him to vacate the premises and pay the plaintiff
P2,000 per month as reasonable compensation for his use of the premises until he actually vacates,
and P5,000 as attorney's fees. It ordered the plaintiff to pay the defendant P158,000 as the value of
his improvements and repairs, less his accrued rentals of P64,000 as of December 1985 and the
sum of P12,000 which he had earlier received as partial reimbursement.
Both parties appealed to the Regional Trial Court. The Regional Trial Court set aside the inferior
court's decision. On May 19, 1987, it dismissed the ejectment complaint, and ordered Cement
Center to pay Maceda P182,000 for as necessary and useful improvements (pp. 31-49, Rollo of CA-
G.R. No. 12536).
Cement Center filed a petition for review in the Court of Appeals (CA-G.R. SP No. 12536). On
February 17, 1988, the Court of Appeals rendered a decision, modifying the appealed decision, the
dispositive part of which leads thus:
PREMISES CONSIDERED, the decision appealed from is hereby AFFIRMED insofar

as it dismissed the complaint for ejectment filed by petitioner against private
respondent. However, the, portions of the decision declaring petitioner (plaintiff)
under obligation to pay private respondent the sum of P182,200.00 corresponding to
the value of the supposed necessary and useful improvement as well as the
pronouncement therein regarding private respondent's right of retention hereby SET
ASIDE. With costs against petitioner. (p. 35, Rollo.)
The reason for the Court of Appeals' denial of Maceda's claim for reimbursement of the cost
of his improvements was that the MTC lacked jurisdiction over the claim which exceeds
P20,000. The Court of Appeals said:
The Regional Trial Court, however, erred in declaring that petitioner is under
obligation to pay private respondents the sum of P182,200.00 supposedly
corresponding to the value of the necessary and useful improvements he had
introduced on the leased premises, with the right of retention until he shall have been
fully reimbursed therefor. The claim for reimbursement in the total amount of
P240,000.00 was alleged by private respondent by way of counterclaim in his answer
(pp. 40-41, Records). It is clear that the amount of counterclaim, is beyond the
jurisdiction of the Metropolitan Trial Court. Under Section 33, B.P. Blg. 129, the
Metropolitan Trial Court shall have exclusive original jurisdiction over civil actions
where the amount of the demand does not exceed P20,000.00 exclusive of interest
and costs but inclusive of damages of whatever kind. It goes without saying that the
Regional Trial Court has no authority to entertain the counterclaim because it took
cognizance of the case by virtue of its appellate jurisdiction.
Considering that the Metropolitan Trial Court did not have jurisdiction to adjudicate
the counterclaim, the decision of the Regional Trial Court on appeal giving private
respondent the right of retention is without legal basis. Besides, the right of retention
applies only to a possessor in good faith under Article 546 of the Civil Code. In lease,
the lessee knows that his occupancy of the premises continues only during the
lifetime of the lease contract. If he introduces improvements thereon, he does so at
his own risk (Imperial Insurance vs. Simon, 14 SCRA 855). The rights of a lessee in
lâwphî1.ñèt
good faith, which do not include the right of retention, are defined in Article 1678, . . .
(pp. 34-35, Rollo.)
In his petition for review of that decision in this Court, Maceda assails the setting aside of the money
judgment or award for his improvements in the sum of P182,200, and the rejection of his claim to a
right of retention over the leased premises.
Maceda's petition for review (G.R. No. 83545) has no merit. The Court of Appeals correctly
ruled that the municipal trial court did not have original jurisdiction over his counterclaim as
it exceeds P20,000. Correspondingly, the regional trial court did not have appellate jurisdiction over
the claim. The decision of the Municipal Trial Court of San Juan awarding him P158,000 on his
counterclaim, and that of the Regional Trial Court raising the award to P182,200, were invalid for
lack of jurisdiction. The jurisdiction of the Metropolitan Trial Court in a civil action for sum of money
(Maceda's counterclaim for the value of his improvements is one such action) is limited to a demand
that "does not exceed twenty thousand pesos exclusive of interest and costs but inclusive of
damages of whatever kind." (Sec. 33, subpar. 1, B.P. Blg. 129.) A counterclaim in the municipal or
city court beyond that jurisdictional limit may be pleaded only by way of defense to weaken the
plaintiffs claim, but not to obtain affirmative relief. (Agustin vs. Bacalan, 135 SCRA 340).
Maceda was not a possessor in good faith, i.e., one who possesses in concept of an owner, hence
he had no right to retain possession of the leased premises pending reimbursement of his
improvements thereon. No mere lessee can claim to be a possessor in good faith. (Art. 546, Civil
Code; Eusebio vs. IAC, 144 SCRA 154; Laureano vs. Adil, 72 SCRA 148.)
The promise of the now deceased spouses Arturo Victoria and Maxima Monserrat, to reimburse
Maceda for his improvements was limited only to the initial remodelling job which cost P40,000,
pictures of which he sent to the Victorias and which they approved and promised to reimburse. No
similar promise to pay may be implied with regard to the additional improvements which he made
without their approval and which were evidently intended to improve them out of their property.
In any event, since the undertaking of the Victorias to reimburse Maceda for the P40,000 worth of
improvements which he introduced on their property was not recorded on their title, that promise did
not encumber the property nor bind the purchaser thereof or the successor-in-interest of the
Victorias (Mun. of Victorias vs. CA, 149 SCRA 32). lâwphî1.ñèt
While it is true that under B.P. Blg. 877 a lessee may not be ejected on account of the sale or
mortgage of the leased premises, the new owner's need of the premises for the construction of
dwellings for its employees, coupled with the lessee's failure to pay the rentals since December
1981, are, to our mind, a legitimate ground for the judicial ejectment of the lessee.
Maceda's original rental of P200 per month could not be increased by the new owner, Cement
Center, when it acquired the property on December 5, 1981 until B.P. Blg. 25 allowed a cumulative
and compounded 10% yearly increase effective April 15,1982, and a 20% increase effective April 15,
1985, pursuant to B.P. Blg. 867 and 887 and R.A. 6643. Based on those guidelines, the rentals due
from Maceda from December 4, 1981 were as follows:
Per Month Total
December 4, 1981 to April 14, 1982 P 200.00 P 900.00
+10%- April 15, 1982 to April 14, 1983 220.00 2,640.00
April 15, 1983 to April 14, 1984 242.00 2,904.00
Per Month Total
April 15, 1984 to April 14, 1985 P 266.20 P 3,194.40
+20%- April 15, 1985 to April 14, 1986 319.44 3,833.28
April 15, 1986 to April 14, 1987 383.32 4,599.84
April 15, 1987 to April 14, 1988 459.98 5,519.75
April 15, 1988 to April 14, 1989 551.97 6,623.64
April 15, 1989 to August 14, 1989 662.36 2,649.44
P32,864.36
WHEREFORE, the petition for review is granted with respect to the computation of the rentals due
from the petitioner. He is ordered to pay the unpaid rentals of P32,864.36 for his occupancy of the
private respondent's property from December 1981 to August 14, 1989 plus P662.36 monthly
thereafter until he vacates the premises. The dismissal of his counterclaim for the value of his
improvements is affirmed. No pronouncement as to costs.
SO ORDERED.
Narvasa, Cruz, Gancayno, and Medialdea, JJ., concur.

G.R. No. L-53564 February 27, 1987
JUAN BAYANG, petitioner,

vs.
HON. COURT OF APPEALS and BENIGNO BIONG, respondents.
Rodrigo Matutina for petitioner.
Luceniano E. Lancin for private respondent.
CRUZ, J.:
Sometime in November 1969, Juan Bayang filed a complaint for quieting of title with damages
against Benigno Biong in the Court of First Instance of Surigao del Norte, Branch 1, docketed as
Civil Case No. 1892. 1 In 1970, while the case was pending, Biong succeeded in dispossessing the
plaintiff of the land in question and remained there until January 25, 1978. 2 On February 21, 1972,
the case was decided in favor of Biong, but the Court of Appeals on December 8, 1977, reversed the
trial court, declaring in the dispositive portion of its decision:
WHEREFORE, the judgment appealed from is reversed and appellants are hereby
declared owner of the property in litigation, and defendant-appellee are (sic) hereby
ordered to pay appellant the sum of P56.40 as the latter's share in the proceeds from
the sale of the copra derived from the third harvest of coconuts from the same land,
and P1,000.00 as attorney's fees, and costs of Litigation. 3
This decision became final on February 2, 1978.
On February 6, 1978, Bayang filed a second case, docketed as Civil Case No. 2589, with the CFI of
Surigao del Norte, Branch II, seeking to recover from Biong the incomes earned from the same land
from 1970 up to the quarterly incomes from 1978 until the said land was delivered to the plaintiff. 4 At
the pre-trial conference held on July 10, 1978, the counsel for Bayang admitted that as of January
25, 1978, Biong had already surrendered possession of the land in question to Bayang. 5 On August
16, 1978, Biong filed a motion for summary judgment, reiterating the affirmative defense of res
judicata raised in his answer dated April 12, 1978, insofar as it related to the incidents concerning
the case prior to January 25, 1978. 6 An opposition to this motion was duly filed by Bayang. 7
The trial court, after considering the arguments of the parties, granted the motion and rendered a
summary judgment on October 30, 1978. 8 The said decision was sustained by the Court of Appeals,
and Bayang is now before us in this petition for review by certiorari under Rule 45 of the Rules of
Court.
His assignment of errors raises two basic submissions, to wit:
1. Civil Case No. 2589 should not have been decided by summary judgment.
2. The judgment in CA-G.R. No. 54720-R (appeal from judgment in Civil Case No. 1892) did not
constitute res judicata as to bar Civil Case No. 2589.
Both contentions are incorrect. We rule for the respondents.

In its decision, the Court of Appeals quoted the following excerpt from Singleton v. Philippine Trust
Co. 9 on the nature and functions of the summary judgment:
Summary judgment is one of the methods sanctioned in the present Rules of Court
for a prompt disposition of civil actions wherein there exists no serious controversy.
The procedure may be availed of not only by claimants, but also by defending parties
who may be the object of unfounded claims. A motion for summary judgment
assumes that scrutinizing of the facts will disclose that the issues presented by the
pleadings need not be tried because they are so patently unsubstantial as not to be
genuine issues, or that there is no genuine issue as to any material facts or where
the facts appear undisputed and certain from the pleadings, depositions, admissions
and affidavits.
We hold that there was no genuine or triable issue of fact raised by the parties, in view particularly of
the affirmative defense of res judicata invoked by the private respondent. That defense is sustained.
A long line of decisions has consistently held that for res judicata to apply: a) the former judgment
must be final; b) it must have been rendered by a court having jurisdiction over the subject matter
and the parties; c) it must be a judgment on the merits; and d) there must be between the first case
and the second case identity of parties, identity of subject matter and Identity of cause of action. 10
The decision in Civil Case No. 1892 became final and executory on February 2, 1978. There is no
dispute that the trial court which rendered that decision had jurisdiction over the subject-matter and
the parties to the proceeding. The case was tried on the merits. The parties to Civil Case No. 1892
and the subsequent Civil Case No. 2589 are the same petitioner and private respondent now before
us.
The petitioner would draw a distinction between the land in dispute in Civil Case No. 1892
and the income from that land being claimed in Civil Case No. 2589. But that is in our view
splitting hairs to split a cause of action. The subject-matter is essentially the same in both cases
as the income is only a consequence or accessory of the disputed property. We cannot agree that
there are involved here two causes of action calling for two separate cases. The claim for the income
from the land was incidental to, and should have been raised by Bayang in his earlier claim for,
ownership of the land.
We note that while the first case was pending, the private respondent, by the petitioner's own
account, "succeeded in dispossessing" him of the disputed land 11 and that at the pretrial conference
on Civil Case No. 2589, Bayang's counsel admitted that Biong had vacated the said property as of
January 25, 1978. 12 This means that from 1970 to the date the respondent surrendered the property
in 1978, Biong was presumably collecting and enjoying the income therefrom to the exclusion of the
petitioner.
Civil Case No. 1892 was commenced in November 1969 and was finally decided only on February
2, 1978. The private respondent entered the disputed property in 1970 and left it only in 1978. For
about seven years, therefore, the petitioner made no move at all to amend his complaint to include a
claim for the income supposedly received by the private respondent during that period.
Under Rule 10, Section 6, of the Rules of Court.
Sec. 6. Matters subject of supplemental pleadings. — Upon motion of a party the

court may, upon reasonable notice and upon such terms as are just, permit him to
serve a supplemental pleading setting forth transactions, occurrence or events which
have happened since the date of the pleading sought to be supplemented. If the
court deems it advisable that the adverse party should plead thereto, it shall so order,
specifying the time therefor.
In the case of Jalandoni v. Martin-Guanzon, 13 this Court declared through Justice J.B.L. Reyes:
As to the value of the plaintiff's share in the products of the land during the time that
the former action was pending (which are the damages claimed under the second
cause of action), their recovery is now barred by the previous judgment. These
damages are but the result of the original cause of action, viz., the continuing refusal
by defendants in 1941 to recognize the plaintiff's right to an interest in the property.
In the same way that plaintiffs claimed for their share of the produce from 1941 to
1947, these later damages could have been claimed in the first action, either in the
original camplaint (for their existence could be anticipated when the first complaint
was filed) or else by supplemental pleading. To allow them to be recovered by
subsequent suit would be a violation of the rule against multiplicity of suits, and
specifically of sections 3 and 4 of Rules 2 of the Rules of Court, against the splitting
of causes of action, since these damages spring from the same cause of action that
was pleading (sic) in the former case No. 573 between the same parties (Blossom &
Co., Inc. v. Manila Gas Corporation, 55 Phil. 226; Santos v. Moir, 36 Phil. 350;
Pascua v. Sideco 24 Phil. 26; Bachrach Motor Co. v. Icarangal 68 Phil. 287).
And in another case, 14 the same jurist declared:
Urtula, as defendant in the expropriation case, could have raised the matter of
interest before the trial court even if there had been no actual taking yet by the
Republic and the said court could have included the payment of interest in its
judgment but conditioned upon the actual taking, because the rate of interest upon
the amount of just compensation (6%) is a known factor, and it can reasonably be
expected that at some future time, the expropriator would take possession of the
property, though the date be not fixed. In this way, multiple suits would be avoided.
Moreover, nothing prevented appellee from calling the attention of the appellate
courts (even by motion to reconsider before judgment became final) to the
subsequent taking of possession by the condemnor, and asking for allowance of
interest on the indemnity since that followed the taking as a matter of course, and
raised no issue requiring remand of the records to the Court of origin.
As the issue of interest could have been raised in the former case but was not
raised, res judicata blocks the recovery of interest in the present case. (Tejedor vs.
Palet, 61 Phil. 494; Phil. Engineering Corp., et al. vs. Ceniza, etc., et al., L-17834, 29
Sept. 1962). It is settled that a former judgment constitutes a bar, as between the
parties, not only as to matters expressly adjudged, but all matters that could have
been adjudged at the time (Rule 39, sec. 49; Corda vs. Maglinti L-17476, November
30, 1961; Rodriguez vs. Tan, 48 Off. Gaz. 3330).
Clearly, then, Civil Case No. 2589 is barred by the previous judgment in Civil Case No. 1892. This
being so, it should follow that the trial judge committed no grave abuse of discretion in deciding the
latter case by summary judgment.
We are not unmindful of the argument that affirmance of the challenged decision of the respondent
court will result in the unjust enrichment of Biong at the expense of Bayang. This assumes, of
course, that the petitioner could have proved his right to the income he now claims belatedly. The
point is that he did not make the proper claim at the proper time and in the proper
proceedings, and he cannot do it now. Whatever right he might have had is now deemed
waived because of his neglect.
Nemo debet bis vexare pro una et eadem causa. This has to be so if litigants are to be spared the
annoyance, anxiety and expense that could otherwise be inflicted upon them endlessly by
capricious, malicious or vindictive suitors.
WHEREFORE, the petition is dismiss and the appealed decision is affirmed. Costs against the
petitioner.
SO ORDERED.
Yap (Chairman), Narvasa, Melencio-Herrera, Feliciano, Gancayco and Sarmiento JJ., concur.
Footnotes
1 Rollo, p. 33.
2 Ibid, pp. 9,33.
3 Id, pp. 24,33.
4 Annex A, Petition; Rollo, p. 33.
5 Rollo, pp. 33, 83.
6 Ibid; Annex E, Petition.
7 Rollo, pp. 7, 33; Annex F, petition.
8 Rollo, pp. 34,83.
9 52 O.G. 3948.
10 San Diego v. Cardona, 70 Phil. 281; Valdez v. Pineda, 89 Phil. 547; Lapid v.
Lawan, 101 Phil. 1243; Nater v. CIR, 4 SCRA 727; Malvar v. Pallingayan, 18 SCRA
121; Yusingco v. Ong Hing Lian, 42 SCRA 589; Santos v. Gabriel 45 SCRA 488;
Aroc v. PHHC, 81 SCRA 350,
11 Annex A, Petition.
12 Rollo, pp. 33, 83.
13 102 Phil. 859.
14 Urtula vs. Republic, 22 SCRA 481

Batch 2 (Full Text)

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Batch 2 (Full Text)

Hochgeladen von

Copyright:

Verfügbare Formate

G.R. No.

104796 March 6, 1998

SPOUSES ROSALINA S. DE LEON and ALEJANDRO L. DE LEON, petitioners,

The facts are as follows:

1. Ordering the nullification or rescission of the Contract of Conditional Sale (Supplementary

3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in

P450.00 — Docket fee for the Judicial Development Fund under

Rule 141 of the Rules of Court provides:

1. Not more than P20,000.00 P120.00

2. More than P20,000.00 but less than P40,000.00 150.00

3. P40,000.00 or more but less than P60,000.00 200.00

4. P60,000.00 or more but less than P80,000.00 250.00

5. P80,000.00 or more but less than P100,000.00 400.00

6. P100,000.00 or more but less than P150,000.00 600.00

7. For each P1,000.00 in excess of P150,000.00 5.00

(b) For filing:

1. Actions where the value of the subject matter

3. All other actions not involving property 400.00

Actions for specific performance of contracts have been expressly pronounced to be

WHEREFORE, the decision of the Court of Appeals is AFFIRMED.

1 Petition, Annex C, Rollo, pp. 39-40.

3 Petition, Annex D, Rollo, p. 47.

4 Petition, Annex E, Rollo, p. 51-52.

5 Per Judge Teodoro P. Regino.

7 24 SCRA 479 (1968).

8 88 SCRA 479 (1979).

JOSEFINA POTESTAS CABRERA and CRESENCIA POTESTAS OMULON, plaintiffs-appellees,

Pablito C. Pielago for plaintiffs-appellees.

xxx xxx xxx

The Lawphil Project - Arellano Law Foundation

WHEREFORE, judgment is hereby rendered:

(a) denying petitioners' motion to dismiss the complaint, as amended, and

Hence, the instant petition.

However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an

Thus, the Court rules as follows:

1 Annexes 1, 1-A, 1-B of Comment of private respondent.

2 Page 34, Decision of the Court of Appeals; p. 57 Rollo.

3 Annex 2 to Memorandum of private respondent.

4 149 SCRA 562 (1987).

5 115 SCRA 193, 204 (1982).

7 57 Phil. 552 (1932).

9 12 SCRA 450 (1964).

10 Section 173, Revised Election Code.

11 28 SCRA 3301 (1969).

13 Supra, pp. 567-568.

MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,

Tanjuatco, Oreta and Tanjuatco for petitioners.

Pecabar Law Offices for private respondents.

WHEREFORE, the motion for reconsideration is denied for lack of merit.

Paras, J., took no part.

1 115 SCRA 193.

4 Magaspi vs. Ramolete, supra, pp. 114-115.

5 Pp. 65-66, Rollo.

6 Magaspi case, supra, p. 194. Pp.

8 Magaspi vs. Ramolete, supra, pp. 199-200.

9 Pp. 201-202, Rollo.

10 Supra, 115 SCRA 204-205.

11 Supra, 115 SCRA 205.

[G.R. No. L-32170. March 31, 1971.]

CITIZENS’ SURETY & INSURANCE COMPANY, INC., Petitioner, v. HON. JUDGE

Dayos, Tesoro & Gloria, Jr. for Petitioner.

Respondent Judge for and in his own behalf.

1. REMEDIAL LAW; JURISDICTION; ACTION IN PERSONAM; PERSONAL SERVICE OF