Professional Documents
Culture Documents
AIRLINES,
INC. petitioner,
C.F.
&
SHARP
COMPANY
jurisdiction upon the Tokyo District Court over the person of SHARP;
hence, its decision was void.
Unable to obtain a reconsideration of the decision, NORTHWEST elevated
the case to this Court contending that the respondent court erred in
holding that SHARP was not a resident of Japan and that summons on
SHARP could only be validly served within that country.
A foreign judgment is presumed to be valid and binding in the country
from which it comes, until the contrary is shown. It is also proper to
presume the regularity of the proceedings and the giving of due notice
therein. 6
Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in
personam of a tribunal of a foreign country having jurisdiction to
pronounce the same is presumptive evidence of a right as between the
parties and their successors-in-interest by a subsequent title. The
judgment may, however, be assailed by evidence of want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or fact.
Also, under Section 3 of Rule 131, a court, whether of the Philippines or
elsewhere, enjoys the presumption that it was acting in the lawful exercise
of jurisdiction and has regularly performed its official duty.
Consequently, the party attacking a foreign judgment has the burden of
overcoming the presumption of its validity. 7Being the party challenging
the judgment rendered by the Japanese court, SHARP had the duty to
demonstrate the invalidity of such judgment. In an attempt to discharge
that burden, it contends that the extraterritorial service of summons
effected at its home office in the Philippines was not only ineffectual but
also void, and the Japanese Court did not, therefore acquire jurisdiction
over it.
It is settled that matters of remedy and procedure such as those relating to
the service of process upon a defendant are governed by the lex fori or the
internal law of the forum. 8 In this case, it is the procedural law of Japan
where the judgment was rendered that determines the validity of the
extraterritorial service of process on SHARP. As to what this law is is a
question of fact, not of law. It may not be taken judicial notice of and must
be pleaded and proved like any other fact. 9Sections 24 and 25, Rule 132 of
the Rules of Court provide that it may be evidenced by an official
publication or by a duly attested or authenticated copy thereof. It was then
incumbent upon SHARP to present evidence as to what that Japanese
procedural law is and to show that under it, the assailed extraterritorial
service is invalid. It did not. Accordingly, the presumption of validity and
regularity of the service of summons and the decision thereafter rendered
by the Japanese court must stand.
Alternatively in the light of the absence of proof regarding Japanese
law, the presumption of identity or similarity or the so-called processual
presumption 10 may be invoked. Applying it, the Japanese law on the
matter is presumed to be similar with the Philippine law on service of
summons on a private foreign corporation doing business in the
Philippines. Section 14, Rule 14 of the Rules of Court provides that if the
defendant is a foreign corporation doing business in the Philippines,
service may be made: (1) on its resident agent designated in accordance
with law for that purpose, or, (2) if there is no such resident agent, on the
government official designated by law to that effect; or (3) on any of its
officers or agents within the Philippines.
If the foreign corporation has designated an agent to receive summons, the
designation is exclusive, and service of summons is without force and gives
the court no jurisdiction unless made upon him. 11
Where the corporation has no such agent, service shall be made on the
government official designated by law, to wit: (a) the Insurance
Commissioner in the case of a foreign insurance company; (b) the
Superintendent of Banks, in the case of a foreign banking corporation; and
(c) the Securities and Exchange Commission, in the case of other foreign
corporations duly licensed to do business in the Philippines. Whenever
service of process is so made, the government office or official served shall
transmit by mail a copy of the summons or other legal proccess to the
corporation at its home or principal office. The sending of such copy is a
necessary part of the service. 12
SHARP contends that the laws authorizing service of process upon the
Securities and Exchange Commission, the Superintendent of Banks, and
the Insurance Commissioner, as the case may be, presuppose a situation
wherein the foreign corporation doing business in the country no longer
has any branches or offices within the Philippines. Such contention is
belied by the pertinent provisions of the said laws. Thus, Section 128 of the
Corporation Code 13and Section 190 of the Insurance Code 14 clearly
contemplate two situations: (1) if the corporation had left the Philippines
or had ceased to transact business therein, and (2) if the corporation has
no designated agent. Section 17 of the General Banking Act 15 does not even
speak a corporation which had ceased to transact business in the
Philippines.
Nowhere in its pleadings did SHARP profess to having had a resident
agent authorized to receive court processes in Japan. This silence could
only mean, or least create an impression, that it had none. Hence, service
on the designated government official or on any of SHARP's officers or
agents in Japan could be availed of. The respondent, however, insists that
only service of any of its officers or employees in its branches in Japan
could be resorted to. We do not agree. As found by the respondent court,
two attempts at service were made at SHARP's Yokohama branch. Both
were unsuccessful. On the first attempt, Mr. Dinozo, who was believed to
be the person authorized to accept court process, was in Manila. On the
second, Mr. Dinozo was present, but to accept the summons because,
according to him, he was no longer an employee of SHARP. While it may
be true that service could have been made upon any of the officers or
agents of SHARP at its three other branches in Japan, the availability of
such a recourse would not preclude service upon the proper government
official, as stated above.
As found by the Court of Appeals, it was the Tokyo District Court which
ordered that summons for SHARP be served at its head office in the
Philippine's after the two attempts of service had failed. 16 The Tokyo
District Court requested the Supreme Court of Japan to cause the delivery
of the summons and other legal documents to the Philippines. Acting on
that request, the Supreme Court of Japan sent the summons together with
It
further
availed
of
the
ruling
in Magdalena
Estate,
Inc. vs. Nieto 19 and Dial Corp. vs. Soriano, 20 as well as the principle laid
down by the Iowa Supreme Court in the 1911 case of Raher vs. Raher. 21
The first three cases are, however, inapplicable. Boudard involved the
enforcement of a judgment of the civil division of the Court of First
Instance of Hanoi, French Indo-China. The trial court dismissed the case
because the Hanoi court never acquired jurisdiction over the person of the
defendant considering that "[t]he, evidence adduced at the trial
conclusively proves that neither the appellee [the defendant] nor his agent
or employees were ever in Hanoi, French Indo-China; and that the
deceased Marie Theodore Jerome Boudard had never, at any time, been
his employee." In Magdalena Estate, what was declared invalid resulting
in the failure of the court to acquire jurisdiction over the person of the
defendants in an action in personam was the service of summons through
publication against non-appearing resident defendants. It was claimed that
the latter concealed themselves to avoid personal service of summons upon
them. In Dial, the defendants were foreign corporations which were not,
domiciled and licensed to engage in business in the Philippines and which
did not have officers or agents, places of business, or properties here. On
the other hand, in the instant case, SHARP was doing business in Japan
and was maintaining four branches therein.
Insofar as to the Philippines is concerned, Raher is a thing of the past. In
that case, a divided Supreme Court of Iowa declared that the principle that
there can be no jurisdiction in a court of a territory to render a personal
judgment against anyone upon service made outside its limits was
applicable alike to cases of residents and non-residents. The principle was
put at rest by the United States Supreme Court when it ruled in the 1940
case ofMilliken vs. Meyer 22 that domicile in the state is alone sufficient to
bring an absent defendant within the reach of the state's jurisdiction for
purposes of a personal judgment by means of appropriate substituted
service or personal service without the state. This principle is embodied in
section 18, Rule 14 of the Rules of Court which allows service of summons
on residents temporarily out of the Philippines to be made out of the
country. The rationale for this rule was explained in Milliken as follows:
of the courts therein and may be deemed to have assented to the said
courts' lawful methods of serving process. 27
Accordingly, the extraterritorial service of summons on it by the Japanese
Court was valid not only under the processual presumption but also
because of the presumption of regularity of performance of official duty.
We find NORTHWEST's claim for attorney's fees, litigation expenses, and
exemplary damages to be without merit. We find no evidence that would
justify an award for attorney's fees and litigation expenses under Article
2208 of the Civil Code of the Philippines. Nor is an award for exemplary
damages warranted. Under Article 2234 of the Civil Code, before the court
may consider the question of whether or not exemplary damages should be
awarded, the plaintiff must show that he is entitled to moral, temperate, or
compensatory damaged. There being no such proof presented by
NORTHWEST, no exemplary damages may be adjudged in its favor.
WHEREFORE, the instant petition is partly GRANTED, and the
challenged decision is AFFIRMED insofar as it denied NORTHWEST's
claims for attorneys fees, litigation expenses, and exemplary damages but
REVERSED insofar as in sustained the trial court's dismissal of
NORTHWEST's complaint in Civil Case No. 83-17637 of Branch 54 of the
Regional Trial Court of Manila, and another in its stead is hereby rendered
ORDERING private respondent C.F. SHARP L COMPANY, INC. to pay to
NORTHWEST the amounts adjudged in the foreign judgment subject of
said case, with interest thereon at the legal rate from the filing of the
complaint therein until the said foreign judgment is fully satisfied.
Costs against the private respondent.
SO ORDERED.
G.R. No. 163584
REMELITA
M.
vs.
CELITA B. MIRALLES, respondent.
ROBINSON, petitioner,
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is the instant petition for review on certiorari assailing the
Resolutions dated February 111 and May 11, 20042 of the Regional Trial
Court (RTC), Branch 274, Paraaque City, in Civil Case No. 00-0372.
On August 25, 2000, Celita Miralles, respondent, filed with the said court a
complaint for sum of money against Remelita Robinson, petitioner,
docketed as Civil Case No. 00-0372. Respondent alleged that petitioner
borrowed from her US$20,054.00 as shown by a Memorandum of
Agreement they both executed on January 12, 2000.
Summons was served on petitioner at her given address. However, per
return of service of Sheriff Maximo Potente dated March 5, 2001,
petitioner no longer resides at such address.
On July 20, 2001, the trial court issued an alias summons to be served at
No. 19 Baguio St., Alabang Hills, Muntinlupa City, petitioners new
address.
Again, the summons could not be served on petitioner. Sheriff Potente
explained that:
The Security Guard assigned at the gate of Alabang Hills refused to
let me go inside the subdivision so that I could effect the service of
the summons to the defendant in this case. The security guard
alleged that the defendant had given them instructions not to let
anybody proceed to her house if she is not around. I explained to
the Security Guard that I am a sheriff serving the summons to the
defendant, and if the defendant is not around, summons can be
A copy of the Order was sent to petitioner by registered mail at her new
address.
On September 26, 2003, petitioner filed with the trial court a petition for
relief from the judgment by default. She claimed that summons was
improperly served upon her, thus, the trial court never acquired
jurisdiction over her and that all its proceedings are void.
On February 11, 2004, the trial court issued a Resolution denying the
petition for relief. Petitioner filed a motion for reconsideration, but it was
denied by the trial court in a Resolution dated May 11, 2004.
On June 20, 2003, the trial court issued an Order, the dispositive portion
of which reads:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against defendant ordering the defendant to pay the
plaintiff as follows:
1. The sum of US$20,054.00 as the unpaid obligation, plus the
stipulated interest of 3% a month from May 2000 (date of default)
until fully paid;
2. Php100,000.00 for moral damages;
3. Php50,000.00 plus Php1,500.00 per appearance as attorneys
fees;
4. Costs of suit.
SO ORDERED.
The sole issue for our resolution is whether the trial court correctly ruled
that a substituted service of summons upon petitioner has been validly
effected.
Summons is a writ by which the defendant is notified of the action brought
against him or her.3 In a civil action, service of summons is the means by
which the court acquires jurisdiction over the person of the
defendant.4 Any judgment without such service, in the absence of a valid
waiver, is null and void.5 Where the action is in personamand the
defendant is in the Philippines, the service of summons may be made
through personal or substituted service in the manner provided for in
Sections 6 and 7, Rule 14 of the 1997 Rules of Procedure, as
amended,6 thus:
SEC. 6. Service in person on defendant. Whenever practicable,
the summons shall be served by handing a copy thereof to the
defendant in person, or if he refuses to receive and sign for it, by
tendering it to him.
PERKIN
ELMER
SINGAPORE PTE LTD.,
Petitioner,
- versus -
DAKILA
TRADING
Promulgated:
CORPORATION,
Respondent.
August 14, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CHICO-NAZARIO, J.:
The
case
before
this
Court
is
a
Petition
for
Review[1] on Certiorari under Rule 45 of the 1997 Revised Rules of Civil
Procedure seeking to annul and set aside the Decision, [2] dated 4 April
2006, of the Court of Appeals in CA-G.R. SP No. 78981, which affirmed the
Orders, dated 4 November 2002[3] and 20 June 2003,[4]of the
Mandaluyong City Regional Trial Court (RTC), Branch 212, in Civil Case
No. MC99-605, which, in turn, denied the Motion to Dismiss and
subsequent Motion for Reconsideration of herein petitioner Perkin
Elmer Singapore Pte Ltd.
Petitioner is a corporation duly organized and existing under the
laws of Singapore. It is not considered as a foreign corporation doing
business in thePhilippines. Herein respondent Dakila Trading
Corporation is a corporation organized and existing under Philippine
laws, and engaged in the business of selling and leasing out laboratory
instrumentation and process control instrumentation, and trading of
laboratory chemicals and supplies.
The antecedents of the present case are as follows:
Respondent entered into a Distribution Agreement [5] on 1 June
1990 with Perkin-Elmer Instruments Asia Pte Ltd. (PEIA), a
corporation duly organized and existing under the laws of Singapore and
engaged in the business of manufacturing, producing, selling or
distributing various laboratory/analytical instruments. By virtue of the
said agreement, PEIA appointed the respondent as the sole distributor of
its products in the Philippines. The respondent was likewise granted the
right to purchase and sell the products of PEIA subject to the terms and
conditions set forth in the Distribution Agreement. PEIA, on the other
hand, shall give respondent a commission for the sale of its products in
the Philippines.
within the Philippines itself, and such was not the situation in this
case. Likewise, the prayer in respondents Amended Complaint for the
issuance of a writ of attachment over the personal property of PEIP, which
is 99% owned by petitioner (as the supposed successor of PEIA), did not
convert the action from one in personam to one that is quasi in rem. Also,
the petitioner points out that since the respondents prayer for the issuance
of a writ of attachment was denied by the RTC in its Order, dated 26 March
1999, then the nature of Civil Case No. MC99-605 remains in personam,
contrary to the ruling of the Court of Appeals that by the attachment of the
petitioners interest in PEIP the action in personam was converted to an
action quasi in rem. Resultantly, the extraterritorial service of summons
on the petitioner was not validly effected, and did not give the RTC
jurisdiction over the petitioner.
Petitioner further argues that the appellate court should have
granted its Petition for Certiorari on the ground that the RTC committed
grave abuse of discretion amounting to lack or excess of jurisdiction in
refusing to dismiss respondents Amended Complaint for failure to state a
cause of action against petitioner which was not the real party-in-interest
in Civil Case No. MC99-605. Petitioner claims that it had never used the
name PEIA as its corporate name, and neither did it change its name from
that of PEIA. Petitioner stresses that PEIA is an entirely different
corporate entity that is not connected in whatever manner to the
petitioner. Even assuming arguendo that petitioner is the real party-ininterest in Civil Case No. MC99-605 or that petitioner and PEIA are one
and the same entity, petitioner still avows that the respondent failed to
state a cause of action against it because the Distribution Agreement
expressly grants PEIA the right to terminate the said contract at any time.
Lastly, it is the contention of the petitioner that the appellate court
should have granted its Petition for Certiorari because the RTC committed
grave abuse of discretion amounting to lack or excess of jurisdiction in
refusing to dismiss Civil Case No. MC99-605 for having been filed in an
improper venue. Petitioner asserts that in the Distribution Agreement
entered into between the respondent and PEIA, both had mutually agreed
to the exclusive jurisdiction of the courts of Singapore or of
the Philippines as elected by PEIA. Absent any waiver by PEIA of its right
to choose the venue of the dispute, the Complaint filed by the respondent
before the RTC in the Philippines should have been dismissed on the
ground of improper venue.
The Petition is meritorious.
Jurisdiction is the power with which courts are invested for
administering justice; that is, for hearing and deciding cases. In order for
the court to have authority to dispose of the case on the merits, it must
acquire jurisdiction over the subject matter and the parties.[22]
Jurisdiction of the court over the subject matter is conferred only
by the Constitution or by law. It is determinable on the basis of allegations
in the complaint.[23]
Courts acquire jurisdiction over the plaintiffs upon the filing of the
complaint, while jurisdiction over the defendants in a civil case is acquired
either through the service of summons upon them in the manner required
by law or through their voluntary appearance in court and their
submission to its authority. If the defendants have not been summoned,
unless they voluntarily appear in court, the court acquires no jurisdiction
over their persons and a judgment rendered against them is null and
void. To be bound by a decision, a party should first be subjected to the
courts jurisdiction.[24]
Thus, one of the modes of acquiring jurisdiction over the person of
the defendant or respondent in a civil case is through service of
summons. It is intended to give notice to the defendant or respondent that
a civil action has been commenced against him. The defendant or
respondent is thus put on guard as to the demands of the plaintiff or the
petitioner.[25]
The proper service of summons differs depending on the nature of
the civil case instituted by the plaintiff or petitioner: whether it is in
personam, in rem, orquasi in rem. Actions in personam, are those actions
take steps to protect his interest if he is so minded. [29] On the other hand,
when the defendant or respondent does not reside and is not found in
the Philippines,[30] and the action involved is in personam, Philippine
courts cannot try any case against him because of the impossibility of
acquiring jurisdiction over his person unless he voluntarily appears in
court.[31]
In the case at bar, this Court sustains the contention of the
petitioner that there can never be a valid extraterritorial service of
summons upon it, because the case before the court a quo involving
collection of a sum of money and damages is, indeed, an action in
personam, as it deals with the personal liability of the petitioner to the
respondent by reason of the alleged unilateral termination by the former of
the Distribution Agreement. Even the Court of Appeals, in its Decision
dated 4 April 2004, upheld the nature of the instant case as an action in
personam. In the said Decision the appellate court ruled that:
In the instant petition, [respondents] cause of
action in Civil Case No. MC99-605 is anchored on the
claim that petitioner unilaterally terminated the
Distribution Agreement. Thus, [respondent] prays in its
[C]omplaint that Upon the filing of the Complaint, issue
an Order fixing the amount of the bond and issue a writ
of attachment requiring the sheriff to attach the
properties of [Perkin-Elmer Philippines], which are not
exempt from execution, and as much as may be sufficient
to satisfy [respondents] demands.
The action instituted by [respondent] affects the
parties alone, not the whole world. Hence, it is an
action in personam, i.e., any judgment therein is binding
only upon the parties properly impleaded.
xxxx
The
objective
sought
in
[respondents]
[C]omplaint was to establish a claim against petitioner for
its alleged unilateral termination of [D]istribution
[A]greement. Hence, to repeat, Civil Case No.
MC99-605 is an action in personam because it is
an action against persons, namely, herein
petitioner, on the basis of its personal liability. As
such, personal service of summons upon the
[petitioner] is essential in order for the court to
acquire of (sic) jurisdiction over [its person].
[32]
(Emphasis supplied.)
Thus, being an action in personam, personal service of summons within
the Philippines is necessary in order for the RTC to validly acquire
jurisdiction over the person of the petitioner, and this is not possible in the
present case because the petitioner is a non-resident and is not found
within the Philippines. Respondents allegation in its Amended Complaint
that petitioner had personal property within the Philippines in the form of
shares of stock in PEIP did not make Civil Case No. MC99-605 fall under
any of the four instances mentioned in Section 15, Rule 14 of the Rules of
Court, as to convert the action in personam to an action in rem orquasi in
rem and, subsequently, make the extraterritorial service of summons upon
the petitioner valid.
It is incorrect for the RTC to have ruled that the allegations made
by the respondent in its Amended Complaint, which is primarily for
collection of a sum of money and damages, that the petitioner owns shares
of stock within the Philippines to which the petitioner claims interest, or
an actual or contingent lien, would make the case fall under one of the
aforesaid instances wherein extraterritorial service of summons under
Section 15, Rule 14 of the 1997 Revised Rules of Civil Procedure, would be
valid. The RTC in arriving at such conclusions relied on the second
instance, mentioned under Section 15, Rule 14 of the 1997 Revised Rules of
Civil Procedure (i.e., when the action relates to, or the subject of which is
property, within the Philippines, in which the defendant claims a lien or
respondent against it, it has long been settled that the same truly falls
under the classification of compulsory counterclaim and it must be
pleaded in the same action, otherwise, it is barred. [49] In the case at bar,
this Court orders the dismissal of the Complaint filed by the
respondent against the petitioner because the court a quo failed to
acquire jurisdiction over the person of the latter. Since the
Complaint of the respondent was dismissed, what will happen then to the
counterclaim of the petitioner? Does the dismissal of the complaint carry
with it the dismissal of the counterclaim?
In the cases of Metal Engineering Resources Corp. v. Court of
Appeals,[50] International Container Terminal Services, Inc. v. Court of
Appeals,[51] and BA Finance Corporation v. Co.,[52] the Court ruled that if
the court does not have jurisdiction to entertain the main action of the case
and dismisses the same, then the compulsory counterclaim, being ancillary
to the principal controversy, must likewise be dismissed since no
jurisdiction remained for any grant of relief under the counterclaim. [53] If
we follow the aforesaid pronouncement of the Court in the cases
mentioned above, the counterclaim of the herein petitioner being
compulsory in nature must also be dismissed together with the
Complaint. However, in the case of Pinga vs. Heirs of German Santiago,
[54]
the Court explicitly expressed that:
Similarly, Justice Feria notes that the present
rule reaffirms the right of the defendant to move for the
dismissal of the complaint and to prosecute his
counterclaim, as stated in the separate opinion [of Justice
Regalado in BA Finance]. Retired Court of Appeals
Justice Hererra pronounces that the amendment to
Section 3, Rule 17 [of the 1997 Revised Rules of
Civil Procedure] settles that nagging question
whether the dismissal of the complaint carries
with it the dismissal of the counterclaim, and
opines thatby reason of the amendments, the
rulings
in Metals
Engineering, International
Container, and BA
abandoned. x x x.
Finance may
be
deemed
- versus -
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
For review on certiorari are the Decision [1] dated February 17, 2004
and Resolution[2] dated April 22, 2004 of the Court of Appeals in CA-G.R.
CV No. 70565, which reversed the Decision[3] dated March 15, 2000 of the
Regional Trial Court of Quezon City, Branch 215, in Civil Case No. Q-9732024.
The facts, borne by the records, are as follows:
Petitioner Orion Security Corporation is a domestic private
corporation engaged in the business of providing security services. One of
its clients is respondent Kalfam Enterprises, Inc.
Respondent was not able to pay petitioner for services rendered.
Petitioner thus filed a complaint [4] against respondent for collection of sum
of money. The sheriff tried to serve the summons and a copy of the
complaint on the secretary of respondents manager. However,
respondents representatives allegedly refused to acknowledge their
receipt. The summons and the copy of the complaint were left at
respondents office.[5]
When respondent failed to file an Answer, petitioner filed a motion
to declare respondent in default.[6] The trial court, however, denied the
motion on the ground that there was no proper service of summons on
G.R. No. 163287
respondent.[7]
Petitioner then filed a motion for alias summons, which the trial
Present:
court granted.[8] The process server again left the summons and a copy of
the complaint at respondents office through respondents security guard,
QUISUMBING, J., Chairperson,
who allegedly refused to acknowledge their receipt.[9]
CARPIO,
Simply put, the sole issue is whether the trial court acquired
jurisdiction over respondent either by (1) valid substituted service of
summons on respondent; or (2) respondents voluntary appearance in the
trial court and submission to its authority.
Petitioner contends that the Court of Appeals completely brushed
aside respondents voluntary appearance in the proceedings of the trial
court. According to petitioner, the trial court acquired jurisdiction over
respondent due to the latters voluntary appearance in the proceedings
before the said court. Petitioner insists substituted service of summons on
respondents security guard is substantial compliance with the rule on
service of summons, in view of the exceptional circumstances in the
present case.
Respondent, however, counters that the special appearance of its
counsel does not constitute voluntary appearance. Respondent maintains
that its filing of an opposition to petitioners motion to declare respondent
in default and other subsequent pleadings questioning the trial courts
jurisdiction over it does not amount to voluntary appearance. Respondent
stresses it was not properly served with summons via substituted service
since the security guard on whom it was purportedly served was not the
competent person contemplated by Section 7, Rule 14 of the Rules of
Court.
We find the petition without merit.
Courts acquire jurisdiction over the plaintiffs upon the filing of the
complaint. On the other hand, jurisdiction over the defendants in a civil
case is acquired either through the service of summons upon them or
through their voluntary appearance in court and their submission to its
authority.[17]
In case of domestic private juridical entities such as respondent in
the instant case, Section 11 of Rule 14 states:
SEC. 11. Service upon domestic private juridical
entity. When the defendant is a corporation, partnership
or association organized under the laws of the Philippines
with a juridical personality, service may be made on the
president, managing partner, general manager, corporate
secretary, treasurer, or in-house counsel.
These principles were used by this Court in resolving this Petition for
Review on Certiorari before us, assailing the July 19, 1993 Decision [1] and
the August 15, 1995 Resolution, [2] both promulgated by the Court of
Appeals. The assailed Decision disposed as follows:[3]
Poro Point Shipping Services, then acting as the local agent of Omega
Sea Transport Company of Honduras & Panama, a Panamanian company,
(hereafter referred to as Omega), requested permission for its vessel M/V
Star Ace, which had engine trouble, to unload its cargo and to store it at
the Philippine Ports Authority (PPA) compound in San Fernando, La
Union while awaiting transhipment to Hongkong. The request was
approved by the Bureau of Customs.[4] Despite the approval, the customs
personnel boarded the vessel when it docked on January 7, 1989, on
suspicion that it was the hijacked M/V Silver Med owned by Med Line
Philippines Co., and that its cargo would be smuggled into the country.
[5]
The district customs collector seized said vessel and its cargo pursuant to
Section 2301, Tariff and Customs Code. A notice of hearing of SFLU
Seizure Identification No. 3-89 was served on its consignee, Singkong
Trading Co. of Hongkong, and its shipper, Dusit International Co., Ltd. of
Thailand.
While seizure proceedings were ongoing, La Union was hit by three
typhoons, and the vessel ran aground and was abandoned. On June 8,
1989, its authorized representative, Frank Cadacio, entered into a salvage
agreement with private respondent to secure and repair the vessel at the
agreed consideration of $1 million and fifty percent (50%) [of] the cargo
after all expenses, cost and taxes.[6]
Finding that no fraud was committed, the District Collector of
Customs, Aurelio M. Quiray, lifted the warrant of seizure on July 16, 1989.
[7]
However, in a Second Indorsement dated November 11, 1989, then
Customs Commissioner Salvador M. Mison declined to issue a clearance
for Quirays Decision; instead, he forfeited the vessel and its cargo in
accordance with Section 2530 of the Tariff and Customs Code.
[8]
Accordingly, acting District Collector of Customs John S. Sy issued a
Decision decreeing the forfeiture and the sale of the cargo in favor of the
government.[9]
to amend the petition,[21] alleging that its counsel failed to include the
following necessary and/or indispensable parties: Omega represented by
Cadacio; and M/V Star Ace represented by Capt. Nahon Rada, relief
captain. Aside from impleading these additional respondents, private
respondent also alleged in the Second (actually, third) Amended
Petition[22] that the owners of the vessel intended to transfer and alienate
their rights and interests over the vessel and its cargo, to the detriment of
the private respondent.
The trial court granted leave to private respondent to amend its
Petition, but only to exclude the customs commissioner and the district
collector.[23] Instead, private respondent filed the Second Amended
Petition with Supplemental Petition against Singkong Trading Company;
and Omega and M/V Star Ace,[24] to which Cadacio and Rada filed a Joint
Answer.[25]
Declared in default in an Order issued by the trial court on January
23, 1991, were the following: Singkong Trading Co., Commissioner
Mison, M/V Star Ace and Omega.[26] Private respondent filed, and the trial
court granted, an ex parte Motion to present evidence against the
defaulting respondents.[27] Only private respondent, Atty. Tamondong,
Commissioner Mison, Omega and M/V Star Ace appeared in the next
pretrial hearing; thus, the trial court declared the other respondents in
default and allowed private respondent to present evidence against them.
[28]
Cesar Urbino, general manager of private respondent, testified and
adduced evidence against the other respondents, including herein
petitioner. As regards petitioner, he declared: Vlason Enterprises
represented by Atty. Sy and Vicente Angliongto thru constant intimidation
and harassment of utilizing the PPA Management of San Fernando, La
Union x x x further delayed, and [private respondent] incurred heavy
overhead expenses due to direct and incidental expenses xxx causing
irreparable damages of about P3,000,000 worth of ship tackles, rigs, and
appurtenances including radar antennas and apparatuses, which were
taken surreptitiously by persons working for Vlason Enterprises or its
agents[.][29]
On December 29, 1990, private respondent and Rada, representing
Omega, entered into a Memorandum of Agreement stipulating that Rada
would write and notify Omega regarding the demand for salvage fees of
private respondent; and that if Rada did not receive any instruction from
his principal, he would assign the vessel in favor of the salvor.[30]
On February 18, 1991, the trial court disposed as follows:
WHEREFORE, IN VIEW OF THE FOREGOING, based on the allegations,
prayer and evidence adduced, both testimonial and documentary, the
Court is convinced, that, indeed, defendants/respondents are liable to
[private respondent] in the amount as prayed for in the petition for which
it renders judgment as follows:
1.
Respondent M/V Star Ace, represented by Capt. Nahum Rada,
[r]elief [c]aptain of the vessel and Omega Sea Transport Company, Inc.,
represented by Frank Cadacio[,] is ordered to refrain from alienating or
[transferring] the vessel M/V Star Ace to any third parties;
2.
a.
b.
Salvage fees on the vessel in the amount of $1,000,000.00 based
on xxx Lloyds Standard Form of Salvage Agreement;
c.
Preservation, securing and guarding fees on the vessel in the
amount of $225,000.00;
d.
e.
Salaries of the crew from August 16, 1989 to December 1989 in the
amount of $43,000.00 and unpaid salaries from January 1990 up to the
present;
f.
3.
[Vlason] Enterprises to pay [private respondent] in the amount
of P3,000,000.00 for damages;
4.
Banco [Du] Brazil to pay [private respondent] in the amount of
$300,000.00 in damages; and finally,
5.
Costs of [s]uit.
35.67 ms.
Depth:
3.15 ms.
Breadth:
Gross Tons:
7.33 ms.
205.71
Material: Steel
Class License:
CWL
Length:
34.15 ms.
Depth:
2.77 m.s.
Breadth:
15.85 m.s.
Gross Tons:
491.70
Material: Steel
66.92 ms.
Depth:
4.52 m.s.
Breadth:
11.28 ms.
Gross Tons:
1,029.56
Coastwise
Confirming the order in open court on October 5, 1992, the Court hereby
RESOLVES to:
On June 26, 1992, then Executive Judge Bernardo P. Pardo [48] of the
Regional Trial Court of Manila issued an Order [49] annulling the Sheriffs
Report/Return dated April 1, 1991, and all proceedings taken by
Camagon.
The CA granted private respondents Motion to file a Supplemental
Petition impleading petitioner in CA-GR 24669. [50] In view of the rampant
pilferage of the cargo deposited at the PPA compound, private respondent
obtained from the appellate court a Writ of Preliminary Injunction dated
March 6, 1992. The Writ reads:[51]
ACCORDINGLY, in view of the foregoing disquisitions, the urgent verified
motion for preliminary injunction dated February 11, 1992 is hereby
GRANTED. Therefore, let a writ of preliminary injunction forthwith issue
against the respondents and all persons or agents acting in their behalf,
enjoining them not to interfere in the transferring of the aforementioned
vessel and its cargoes, or in removing said cargoes xxx from [the] PPA
compound.
On September 15, 1992, Sheriff Amado Sevilla seized petitioners
motor tugboat Den Den by virtue of the Order[52] dated April 3, 1992,
issued by the RTC of Manila, Branch 26.[53]
On August 6, 1992, the CA consolidated CA-GR SP No. 28387 [54] with
CA-GR SP No. 24669.[55] The Court of Tax Appeals issued on October 5,
1992, a Resolution in CTA Case Nos. 4492, 4494 and 4500, which disposed
as follows:
To enjoin the CTA from enforcing said Order, private respondent filed
before the Court of Appeals another Petition for Certiorari,[56] which was
later also consolidated with CA-GR SP No. 24669.
On July 19, 1993, the CA rendered the assailed Decision. Petitioner
filed (1) a Motion for Clarification, praying for a declaration that the trial
court Decision against it was not valid; and (2) a partial Motion for
Reconsideration, seeking to set aside the assailed Decision insofar as the
latter affected it.
On July 5, 1995, the Court of Appeals issued the following Resolution:
[57]
motions. While the proper remedy is appeal, the action for certiorari will
not be entertained. Indeed, certiorari is not a substitute for lapsed appeal.
(ii)
The trial court never authorized ex-parte presentation of evidence
against VEC.
At any rate, the decision dated July 19, 1993 of this Court on the main
petition for certiorari is not yet final (except with respect to respondent
PPA), the Bureau of Customs having filed a petition for certiorari and
prohibition, under Rule 65 of the Rules of Court, with the Supreme Court,
necessitating prudence on Our part to await its final verdict.[60]
3.
Assignment of Errors
(i)
No filing fee was paid by [private respondent] for the staggering
amount of damages awarded by the trial court.
(ii)
The 18 February 1991 decision violates the Revised Rules of Court,
which prescribe that a judgment by default cannot decree a relief not
prayed for.
II
Since the 18 February 1991 Decision in Civil Case No. 89-51451 is void as
against VEC, the recall of the writ of execution was valid, as far as VEC is
concerned.
The Court believes that the issues can be simplified and restated as
follows:
1. Has the February 18, 1991 RTC Decision become final and
executory in regard to petitioner?
2. Did the trial court acquire jurisdiction over the petitioner?
3. Was the RTC default judgment binding on petitioner?
4. Was the grant of damages against petitioner procedurally
proper?
5. Was private respondent entitled to a writ of execution?
This Courts Ruling
(i)
51451;
(ii)
Petitioner claims that the trial court did not acquire jurisdiction over
it, because the former had not been served summons anew for the Second
Amended Petition or for the Second Amended Petition with Supplemental
Petition. In the records, it appears that only Atty. Tamondong, counsel for
Singkong Trading, was furnished a copy of the Second Amended Petition.
[82]
The corresponding sheriffs return indicates that only Omega, M/V Star
Ace and Capt. Rada were served summons and copies of said Petition.[83]
We disagree. Although it is well-settled that an amended pleading
supersedes the original one, which is thus deemed withdrawn and no
longer considered part of the record, it does not follow ipso facto that the
service of a new summons for amended petitions or complaints is
required. Where the defendants have already appeared before the trial
court by virtue of a summons on the original complaint, the amended
complaint may be served upon them without need of another summons,
even if new causes of action are alleged. [84] After it is acquired, a courts
jurisdiction continues until the case is finally terminated. Conversely,
when defendants have not yet appeared in court and no summons has been
validly served, new summons for the amended complaint must be served
on them.[85] It is not the change of cause of action that gives rise to the need
to serve another summons for the amended complaint, but rather the
acquisition of jurisdiction over the persons of the defendants. If the trial
court has not yet acquired jurisdiction over them, a new service of
summons for the amended complaint is required.
In this case, the trial court obviously labored under the erroneous
impression that petitioner had already been placed under its jurisdiction
since it had been served summons through the secretary of its
president. Thus, it dispensed with the service on petitioner of new
summons for the subsequent amendments of the Petition. We have
already ruled, however, that the first service of summons on petitioner was
invalid. Therefore, the trial court never acquired jurisdiction, and the said
court should have required a new service of summons for the amended
Petitions.
Impleading a Party in the Title of the Complaint
defendant, in violation of Rule 7; and (2) the Petitions failed to state any
allegation of ultimate facts constituting a cause of action against petitioner.
We disagree with petitioner on the first ground. The judicial attitude
has always been favorable and liberal in allowing amendments to
pleadings. Pleadings shall be construed liberally so as to render
substantial justice to the parties and to determine speedily and
inexpensively the actual merits of the controversy with the least regard to
technicalities.[86]
The inclusion of the names of all the parties in the title of a complaint
is a formal requirement under Section 3, Rule 7. However, the rules of
pleadings require courts to pierce the form and go into the substance, and
not to be misled by a false or wrong name given to a pleading. The
averments in the complaint, not the title, are controlling. Although the
general rule requires the inclusion of the names of all the parties in the title
of a complaint, the non-inclusion of one or some of them is not fatal to the
cause of action of a plaintiff, provided there is a statement in the body of
the petition indicating that a defendant was made a party to such action.
Private respondent claims that petitioner has always been included in
the caption of all the Petitions it filed, which included Antonio Sy, field
manager of petitioner. We checked and noted that in the caption and the
body of the Amended Petition and Second Amended Petition with
Supplemental Petition, Antonio Sy was alleged to be representing Med
Line Philippines, not petitioner. Because it was private respondent who
was responsible for the errors, the Court cannot excuse it from compliance,
for such action will prejudice petitioner, who had no hand in the
preparation of these pleadings. In any event, we reiterate that, as a general
rule, mere failure to include the name of a party in the title of a complaint
is not fatal by itself.
Stating a Cause of Action in the Complaint
In the case at bar, the liability of petitioner was based not on any
allegation in the four Petitions filed with the trial court, but on the
evidence presented ex parte by the private respondent. Since the trial court
had not validly acquired jurisdiction over the person of petitioner, there
was no way for the latter to have validly and knowingly waived its objection
to the private respondents presentation of evidence against it.
has come to the considered conclusion that the questioned defaultjudgment has been improvidently issued. [Based on] the records, the
claim of [private respondent] that [its] January 29, 1990 Ex-Parte Motion
to Declare Defendants In Default (pp. 174-177, records, Vol. 1) including
VEC had been granted is belied by the February 23, 1990 Order (pp. 214215, records, ibid) par. 2, thereof, xxx
xxx
xxx
xxx
Not even petitioners November 23, 1990 Ex-Parte Motion To Present
Evidence Against Defaulting Defendants (page 489, records, Vol. 2) [can]
be deemed as a remedy [for] the fact that there never was issued an order
of default against respondents including [petitioner] VEC. Having thus
established that there ha[d] been no order of default against VEC as
contemplated by Sec. 1, Rule 18, in relation to Sec. 9, Rule 13, Revised
Rules of Court, there could not have been any valid default-judgment
rendered against it. The issuance of an order [o]f default is a condition
sine qua non in order [that] a judgment by default be clothed with
validity. Further, records show that this [c]ourt never had authorized
[private respondent] to adduce evidence ex-parte against [Petitioner]
VEC. In sum, the February 18, 1991 decision by default is null and void as
against [Petitioner] VEC. xxxx.
The aforementioned default judgment refers to the February 18, 1989
Decision, not to the Order finding petitioner in default as contended by
private respondent. Furthermore, it is a legal impossibility to declare a
party-defendant to be in default before it was validly served summons.
Trial Court Did Not Allow Presentation of Evidence Ex Parte Against Petitioner
final termination of the case.[94] Thus, the trial court proceeds with the
reception of the plaintiffs evidence upon which a default judgment is
rendered.
Section 1 of Rule 18 provides that after the defendant has been
declared in default, the court shall proceed to receive the plaintiffs
evidence and render judgment granting him such relief as the complaint
and the facts proven may warrant. The reliefs that may be granted,
however, are restricted by Section 5, which provides that a judgment
entered against a party in default shall not exceed the amount or be
different in kind from that prayed for.
In other words, under Section 1, a declaration of default is not an
admission of the truth or the validity of the plaintiffs claims. [95] The
claimant must still prove his claim and present evidence. In this sense the
law gives defaulting parties some measure of protection because plaintiffs,
despite the default of defendants, are still required to substantiate their
allegations in the complaint. The judgment of default against defendants
who have not appeared or filed their answers does not imply a waiver of all
their rights, except their right to be heard and to present evidence in their
favor. Their failure to answer does not imply their admission of the facts
and the causes of action of the plaintiffs, because the latter are required to
adduce evidence to support their allegations.
Moreover, the trial court is not allowed by the Rules to receive
evidence that tends to show a relief not sought or specified in the
pleadings.[96] The plaintiff cannot be granted an award greater than or
different in kind from that specified in the complaint.[97]
This case should be distinguished, however, from that of defendants,
who filed an answer but were absent during trial. In that case, they can be
held liable for an amount greater than or different from that originally
prayed for, provided that the award is warranted by the proven facts. This
rule is premised on the theory that the adverse party failed to object to
evidence relating to an issue not raised in the pleadings.
The latter rule, however, is not applicable to the instant
case. Admittedly, private respondent presented evidence that would have
been sufficient to hold petitioner liable for damages. However, it did not
include in its amended Petitions any prayer for damages against
petitioner. Therefore, the trial court could not have validly held the latter
liable for damages even if it were in default.
DECISION
- versus -
FAR
EAST
BANK
&
TRUST
COMPANY[1] and
PRIVATEDEVELOPMENT CORPORATION
OF THE PHILIPPINES,
Respondents.
Present:
The loan agreement provided, among other things, that DATICOR
QUISUMBING, J., Chairperson,
shall pay: (1) a service fee of one percent (1%) per annum (later increased
to six percent [6%] per annum) on the outstanding balance of the peso
CARPIO,
loan; (2) 12 percent (12%) per annum interest on the peso loan; and (3)
CARPIO MORALES,
penalty charges of two percent (2%) per month in case of default.
TINGA, and
VELASCO, JR., JJ.
The loans were secured by real estate mortgages over six parcels of
land one situated in Manila (the Otis property) which was registered in
the name of petitioner Ernesto C. Del Rosario, and five in Mati, Davao
Oriental and chattel mortgages over pieces of machinery and equipment.
PROMULGATED:
October 31, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
million[10] P4.335 million from PDCP, and P965,000 from FEBTC. The
case, Civil Case No. 94-1610, was raffled to Branch 132 of the Makati RTC.
overpayment; and that FEBTC could recover from PDCP the amount
of P4.035 million representing its overpayment for the assigned
receivables based on the terms of the Deed of Assignment or on the general
principle of equity.
Noting, however, that DATICOR claimed in its complaint only the
amount of P965,000 from FEBTC, the CA held that it could not grant a
relief different from or in excess of that prayed for.
Finally, the CA held that the claim of PDCP against DATICOR for
the payment of P1.4 million had no basis, DATICORs obligation having
already been paid in full, overpaid in fact, when it paid assignee FEBTC the
amount of P6.4 million.
complaint in Civil Case No. 94-1610 as they were merely claiming the
amount of P965,000 from it, they were barred from claiming it.
FEBTC later filed a Third Party Complaint[20] against PDCP
praying that the latter be made to pay the P965,000 and the interests
adjudged by the CA in favor of petitioners, as well as the P4.335 million
and interests that petitioners were claiming from it. It posited that PDCP
should be held liable because it received a consideration of P5.435 million
when it assigned the receivables.
Answering[21] the Third Party Complaint, PDCP contended that
since petitioners were not seeking the recovery of the amount of P965,000,
the same cannot be recovered via the third party complaint.
against it for the refund of any part of the excess payment, FEBTC can no
longer re-litigate the same issue.
By Order of March 5, 2001, the trial court denied the motion for
summary judgment for lack of merit.[25]
On July 10, 2001, the trial court issued the assailed Decision
dismissing petitioners complaint on the ground of res judicata and
splitting of cause of action. It recalled that petitioners had filed Civil Case
No. 94-1610 to recover the alleged overpayment both from PDCP and
FEBTC and to secure the cancellation and release of their mortgages on
real properties, machinery and equipment; that when said case was
appealed, the CA, in its Decision, ordered PDCP to release and cancel the
mortgages and FEBTC to pay P965,000 with interest, which Decision
became final and executory on November 23, 1999; and that a Notice of
Satisfaction of Judgment between petitioners and FEBTC was in fact
submitted on August 8, 2000, hence, the issue between them was finally
settled under the doctrine of resjudicata.
The trial court moreover noted that the MOA between petitioners
and FEBTC clearly stated that the pending litigation before the Supreme
Court of the Philippines with respect to the Loan exclusive of the
Receivables assigned to FEBTC shall prevail up to the extent not covered
by this Agreement. That statement in the MOA, the trial court ruled,
categorically made only the loan subject to this Courts Decision in G.R.
No. 73198, hence, it was with the parties full knowledge and consent that
petitioners agreed to pay P6.4 million to FEBTC as consideration for the
settlement. The parties cannot thus be allowed to welsh on their
contractual obligations, the trial court concluded.
Respecting the third party claim of FEBTC, the trial court held
that FEBTCs payment of the amount of P1,224,906.67 (P965,000 plus
interest) to petitioners was in compliance with the final judgment of the
CA, hence, it could not entertain such claim because the Complaint filed by
petitioners merely sought to recover from FEBTC the alleged overpayment
of P4.335 million and attorneys fees of P200,000.
(b)
In other cases, the judgment or final order
is, with respect to the matter directly adjudged or as to any
other matter that could have been raised in relation
thereto, conclusive between the parties and their
successors in interest by title subsequent to the
commencement of the action or special proceeding,
litigating for the same thing and under the same title and
in the same capacity; and
(c)
In any other litigation between the same
parties or their successors in interest, that only is deemed
to have been adjudged in a former judgment or final order
whichappears upon its face to have been so adjudged, or
which was actually and necessarily included therein or
necessary thereto. (Underscoring supplied)
(b)
(c)
(d)
million; (2) FEBTC was bound to refund the excess payment but because
DATICORs claim against FEBTC was only P965,000, the court could only
grant so much as the relief prayed for; and (3) PDCP has no further
claim against DATICOR because its obligation had already been
paid in full.
Right or wrong, that judgment bars another case based upon the same
cause of action.[37]
As to the requisite of identity of parties, subject matter and causes
of action, it cannot be gainsaid that the first case, Civil Case No. 94-1610,
was brought by petitioners to recover an alleged overpayment of P5.3
million P965,000 from FEBTC and P4.335 million from PDCP.
On the other hand, Civil Case No. 00-540, filed by the same
petitioners, was for the recovery of P4.335 million which is admittedly part
of the P5.3 million earlier sought to be recovered in Civil Case No. 941610. This time, the action was brought solely against FEBTC which in
turn impleaded PDCP as a third party defendant.
In determining whether causes of action are identical to warrant
the application of the rule of res judicata, the test is to ascertain whether
the same evidence which is necessary to sustain the second action would
suffice to authorize a recovery in the first even in cases in which the forms
or nature of the two actions are different. [38] Simply stated, if the same
facts or evidence would sustain both, the two actions are considered the
same within the rule that the judgment in the former is a bar to the
subsequent action.
It bears remembering that a cause of action is the delict or the
wrongful act or omission committed by the defendant in violation of the
primary rights of the plaintiff.[39]
In the two cases, petitioners imputed to FEBTC the same alleged
wrongful act of mistakenly receiving and refusing to return an amount in
excess of what was due it in violation of their right to a refund. The same
facts and evidence presented in the first case, Civil Case No. 94-1610, were
the very same facts and evidence that petitioners presented in Civil Case
No. 00-540.
Thus, the same Deed of Assignment between PDCP and FEBTC,
the first and second supplements to the Deed, the MOA between
petitioners and FEBTC, and this Courts Decision in G.R. No. 73198 were
submitted in Civil Case No. 00-540.
Notably, the same facts were also pleaded by the parties in support
of their allegations for, and defenses against, the recovery of the P4.335
million. Petitioners, of course, plead the CA Decision as basis for their
subsequent claim for the remainder of their overpayment. It is well
established, however, that a party cannot, by varying the form of action or
adopting a different method of presenting his case, or by pleading
justifiable circumstances as herein petitioners are doing, escape the
operation of the principle that one and the same cause of action shall not
be twice litigated.[40]
In fact, authorities tend to widen rather than restrict the doctrine
of res judicata on the ground that public as well as private
interest demands the ending of suits by requiring the parties to sue once
and for all in the same case all the special proceedings and remedies to
which they are entitled.[41]
This Court finds well-taken then the pronouncement of the
court a quo that to allow the re-litigation of an issue that was finally settled
as between petitioners and FEBTC in the prior case is to allow the splitting
of a cause of action, a ground for dismissal under Section 4 of Rule 2 of the
Rules of Court reading:
SEC. 4. Splitting of a single cause of action; effect
of. If two or more suits are instituted on the basis of the
same cause of action, the filing of one or a judgment
upon the merits in any one is available as a
MENDOZA, J.:
This is a complaint for disbarment against Attorneys Daniel
Villanueva and Inocencio Ferrer, Jr., for serious misconduct.
The complaint originated from a letter dated April 14, 1992 which
complainant Reynaldo Halimao wrote to the Chief Justice, alleging that
respondents, without lawful authority and armed with armalites and
handguns, forcibly entered the Oo Kian Tiok Compound in Cainta, Rizal, of
which complainant was caretaker, on April 4, 1992 at 11:00 A.M.
Complainant prayed that an investigation be conducted and respondents
disbarred. To the complaint were attached the affidavits of alleged
witnesses, including that of Danilo Hemandez, a security guard at the
compound, who had also filed a similar complaint against herein
respondents.
In its resolution dated July 1, 1992, the Court required respondents to
comment.
On August 14, 1992, respondents filed a comment in which they
claimed that the complaint is a mere duplication of the complaint filed by
Danilo Hernandez in Administrative Case No. 3835, which this Court had
already dismissed on August 5, 1992 for lack of merit. They pointed out
that both complaints arose from the same incident and the same acts
complained of and that Danilo Hernandez, who filed the prior case, is the
same person whose affidavit is attached to the complaint in this case.
Respondent Ferrer claimed that he was nowhere near the compound
when the incident took place. He submitted affidavits attesting to the fact
that he had spent the whole day of April 4, 1992 in Makati with his family.
Additionally, Ferrer claimed that the two complaints were filed for the
purpose of harassing him because he was the principal lawyer of Atty.
Daniel Villanueva in two cases before the Securities and Exchange
Commission. The cases involved the ownership and control of Filipinas
Textile Mills (Filtex), which is owned by Villanuevas family and whose
premises are the Oo Kian Tiok compound.
facts alleged in the complaint which relate to and are necessary for the
resolution of these grounds as preliminary matters involving substantive
or procedural laws, but not to the other facts of the case.
On the other hand, when a motion to dismiss is based on payment,
waiver, abandonment, release, compromise, or other form of
extinguishment, the motion to dismiss does not hypothetically, but
actually, admits the facts alleged in the complaint, i.e., the existence of the
obligation or debt, only that the plaintiff claims that the obligation has
been satisfied. So that when a motion to dismiss on these grounds is
denied, what is left to be proven in the trial is no longer the existence of the
debt but the fact vel non of payment by the defendant.
The Investigating Commissioner properly dismissed the complaint in
this case on the ground of res judicata, it appearing that it involves the
same incident and the same cause of action as Administrative Case No.
3825. Indeed, it appears that on August 5, 1995, the First Division of the
Court dismissed a similar complaint filed in Administrative Case No. 3835.
The resolution reads:
Adm. Case No. 3835 (Danilo Hernandez v. Attys. Daniel Villanueva and
Inocencio Pefianco Ferrer, Jr.). - This administrative complaint against
Attorneys Daniel Villanueva and Inocencio P. Ferrer, Jr. is the offshoot of a
family feud involving the ownership and possession of the Filipinas Textile
Mills (Filtex). The contest between Bernardino Villanueva and Daniel
Villanueva (probably relatives) for the control of the corporation has
escalated into a three-cornered fight when Oo Kian Tiok joined the fray,
claiming ownership of the same property by purchase from the Equitable
Banking Corporation, mortgage creditor and highest bidder thereof at the
mortgage foreclosure sale.
Respondent Daniel Villanueva believes that Bernardino Villanueva is the
evil genius behind this complaint for his disbarment filed by a certain
Daniel Hernandez. On the other hand, Hernandez claims to be one of
several security guards placed by Oo Kian Tiok on the Filtex property. His
allegation that the respondents drove him and the other security guards
out of the Filtex premises at gun point was denied by the respondents and
is not substantiated by independent evidence.
For want of a prima facie showing of professional misconduct on the part
of the respondents, the complaint must be dismissed. The three-cornered
dispute among respondent Daniel Villanueva, Bernardino Villanueva and
Oo Kian Tok [sic] over the possession and ownership of the Filtex property
should be litigated and determined in an appropriate judicial action, not in
administrative proceedings to disbar Attorney Daniel Villanueva and his
counsel, Attorney Inocencio P. Ferrer, Jr.
WHEREFORE, the complaint against respondents Attys. Daniel Villanueva
and Inocencio P. Ferrer, Jr. is DISMISSED for lack of merit.
Two motions for reconsideration of this resolution were filed by the
complainant therein, both of which were denied, the first one on
September 23, 1992 and the second one on November 9, 1992.
While the complainant (Danilo Hernandez) in Administrative Case
No. 3835 is different from the complainant in the present case, the fact is
that they have an identity of interest, as the Investigating Commissioner
ruled. Both complainants were employed at the Oo Kian Tiok Compound
at the time of the alleged incident. Both complain of the same act allegedly
committed by respondents. The resolution of this Court in Administrative
Case No. 3835 is thus conclusive in this case, it appearing that the
complaint in this case is nothing but a duplication of the complaint of
Danilo Hernandez in the prior case. In dismissing the complaint brought
by Danilo Hernandez in the prior case, this Court categorically found
want of a prima facie showing of professional misconduct on the part of
the respondents [Attorneys Daniel Villanueva and Inocencio Ferrer, Jr.].
WHEREFORE, the resolution of the Board of Governors of the
Integrated Bar of the Philippines, approving and adopting the report and
recommendation of the Investigating Commissioner, is AFFIRMED and
the complaint against respondents is DISMISSED.
SO ORDERED.
the national electrification policy, CEPALCO filed Civil Case No. Q-35945,
a petition for prohibition, mandamus and injunction before the Regional
Trial Court of Quezon City against the NPC. Notwithstanding NPC's claim
that it was authorized by its Charter to sell electric power "in bulk" to
industrial enterprises, the lower court rendered a decision on May 2, 1984,
restraining the NPC from supplying power directly to FPI upon the ground
that such direct sale, supply and delivery of electric power by the NPC to
FPI was violative of the rights of CEPALCO under its legislative
franchise. Hence, the lower court ordered the NPC to "permanently desist"
from effecting direct supply of power to the FPI and "from entering into
and/or implementing any agreement or arrangement for such direct power
connection, unless coursed through the power line" of CEPALCO.
Eventually, the case reached this Court through G.R. No. 72085.
[8]
On December 28, 1989, the Court denied the appeal interposed by NPC
on the ground that the statutory authority given to the NPC as regards
direct supply of power to BOI-registered enterprises "should always be
subordinate to the 'total-electrification-of-the-entire-country-on-an-areacoverage basis policy' enunciated in P. D. No. 40."[9] We held further that:
"Nor should we lose sight of the factual findings of the
court a quo that petitioner-appellee CEPALCO had not only been
authorized by the Phividec Industrial Authority to provide
electrical power to the Phividec Industrial Estate within which
the FPI plant is located, but that petitioner-appellee CEPALCO
had in fact, supplied the latter's power requirements for the
construction of its plant, upon FPI's application therefor as early
as October 17, 1980.
It bears emphasis then that 'it is only after a hearing (or an
opportunity for such a hearing) where it is established that the
affected private franchise holder is incapable or unwilling to
match the reliability and rates of NPC that a direct connection
with NPC may be granted.' Here, petitioner-appellee's reliability
as a power supplier and ability to match the NPC rates were
never put in issue.
It is immaterial that petitioner-appellee's franchise was not
exclusive. A privilege to sell within specified territory, even if not
direct supply, sale and delivery of electricity from its power line
to the plant of Ferrochrome Philippines, Inc., and from entering
into and/or implementing any agreement or arrangement for
such direct power connection, unless coursed through the power
line of petitioner." (Underscoring supplied.)
Meanwhile, the NPC Hearing Committee [12] proceeded with its
hearings. CEPALCO was duly notified thereof but it opted to question the
committee's jurisdiction. It did not submit any evidence. Consequently, in
its Report and Recommendation dated September 27, 1991, the committee
gave weight to the evidence presented by FPI that CEPALCO charged
higher rates than what the NPC would if allowed to supply power directly
to FPI. Although the committee considered as unfounded FPI's claim of
CEPALCO's unreliability as a power supplier,[13] it nonetheless held that:
"Form (sic) the foregoing and on the basis of the decision of the
Supreme Court in the case of National Power Corporation and
Fine Chemicals (Phils.) Inc. v. The Court of Appeals and the
Manila Electric Company, G.R. No. 84695, May 8, 1990, FPI is
entitled to a direct connection to NPC as applied for considering
that CEPALCO is unwilling to match the rates of NPC for directly
serving FPI and that FPI is a duly registered BOI registered
enterprises (sic). The Supreme Court in the aforestated case has
ruled as follows:
'As consistently ruled by the Court pursuant to P.D. No.
380 as amended by P.D. No. 395, NPC is statutorily
empowered to directly service all the requirements of a
BOI registered enterprise provided that, first, any
affected private franchise holder is afforded an
opportunity to be heard on the application therefor and
second, from such a hearing, it is established that said
private franchise holder is incapable or unwilling to
match the reliability and rates of NPC for directly
serving
the
latter
(National
Power
Corporation v.Jacinto, 134 SCRA 435 [1985]. National
Power Corporation v. Court of Appeals, 161 SCRA 103
[1988]).'"[14]
However, considering the "better and priority right" of PIA, the committee
recommended that instead of a direct power connection by the NPC to FPI,
the connection should be made to PIA "as a utility user for its industrial
Estate at Tagoloan, Misamis Oriental."[15]
For its part, on November 3, 1989, CEPALCO filed with the Energy
Regulatory Board (ERB) a petition praying that the ERB "order the
discontinuance of all existing direct supply of power by the NPC within
petitioner's franchise area" (ERB Case No. 89-430). On July 17, 1992, the
ERB ruled that CEPALCO "is relatively efficient and reliable as manifested
by its very low system losses (far from the 14% standard) and very high
power factors" and therefore CEPALCO is technically capable "to distribute
power to its consumers within its franchise area, particularly the industrial
customers." It disposed of the petition as follows:
"WHEREFORE, in view of the foregoing premises, when the petitioner has
been proven to be capable of distributing power to its industrial consumers
and having passed the secondary considerations with a passing mark of
85%, judgment is hereby rendered granting the relief prayed for.
Accordingly, it is hereby declared that all direct connection of industries to
NPC within the franchise area of CEPALCO is no longer
necessary. Therefore, all existing NPC direct supply of power to industrial
consumers within the franchise area of CEPALCO is hereby ordered
discontinued. x x x."[16]
However, during the pendency of the Aboitiz case in this Court or on
August 3, 1992, PIA contracted the NPC for the construction of a 138
kilovolt (KV) transmission line from Namutulan substation to the receiving
and/or substation of PIA.[17]
As expected, on February 17, 1993, CEPALCO filed in the Regional
Trial Court of Pasig (Branch 68), a petition for certiorari, prohibition,
mandamus and injunction against the NPC and some officials of both the
NPC and PIA.[18] Docketed as SCA No. 290, the petition specifically sought
the issuance of a temporary restraining order. However, after hearing, the
prayer for the temporary restraining order was denied by the court in its
order of March 12, 1993.[19] CEPALCO filed a motion for the
reconsideration of said order while NPC and PIA moved for the dismissal
of the petition.[20]
On June 23, 1993, noting the cases filed by CEPALCO all seeking
exclusivity in the distribution of electric power to areas covered by its
franchise, the court[21] ruled that "the right of petitioner to supply electric
power in the aforesaid area to the exclusion of other entities had been
settled once and for all by the Regional Trial Court of Quezon City wherein
petitioner obtained a favorable judgment." Hence, the petition was
dismissed on the ground of res judicata.[22]
Forthwith, CEPALCO elevated the case to this Court through a
petition for certiorari, prohibition and injunction with prayer for the
issuance of a preliminary injunction or a temporary restraining order. The
petition was docketed as G.R. No. 110686 but on August 18, 1993, the
Court referred it to the Court of Appeals pursuant to Sec. 9, paragraph 1 of
B.P. Blg. 129 conferring upon the appellate court original jurisdiction to
issue writs of prohibition and certiorari and auxiliary writs.[23] In the Court
of Appeals, the petition was docketed as CA-G.R. No. 31935-SP.
On September 10, 1993, the Fifteenth Division of the Court of Appeals
issued a resolution[24] denying the prayer for the issuance of a temporary
restraining order on the strength of Sec. 1 of P.D. No. 1818. It ruled that
since the NPC is a public utility, it "enjoys the protective mantle" of said
decree prohibiting courts from issuing restraining orders or preliminary
injunctions in cases involving infrastructure and natural resource
development projects of, and operated by, the government.[25]
However, on September 17, 1993, upon a motion for reconsideration
filed by CEPALCO and a re-evaluation of the provisions of P.D. No. 1818,
the Court of Appeals set aside its resolution of September 10, 1993 and
held that:
"x x x the project intended by respondent NPC, which is the
construction, completion and operation of the 138-kv line, is not
in consonance with the intendment of said Decree which is to
protect public utilities and their projects and activities intended
for public convenience and necessity. The project of respondent
NPC is intended to serve exclusively the needs of private entities,
Metal Alloys Corporation and Ferrochrome Philippine in
Tagoloan, Misamis Oriental."
Accordingly, the Court of Appeals issued a temporary restraining
order directing the private respondents therein "to immediately cease and
adhere to and apply the principle to all future cases where the facts are
substantially the same.[35] Hence, PIA filed a petition for review
on certiorari which was docketed as G.R. No. 113613.
G.R. Nos. 112702 and 113613 were consolidated on June 15, 1994.
[36]
effects of litis pendentia could not have resulted in the dismissal of SCA
No. 290 because Civil Case No. Q-35945 which becameG.R. No. 72085 was
based on facts totally different from that of SCA No. 290.
In invoking litis pendentia, however, petitioner NPC refers to this
case, SCA No. 290, and Civil Case No. 93-14597. SCA No. 290 and Civil
Case No. 93-14597 may both have the same objective, the restoration of
CEPALCO's right to distribute power to PIE-MO areas under its franchise
aside from the fact that the cases involve practically the same
parties. However, litis pendentia may not be successfully invoked to cause
the dismissal of SCA No. 290.
In order to constitute a ground for the abatement or dismissal of an
action, litis pendentia must exhibit the concurrence of the following
requisites: (a) identity of parties, or at least such as representing the same
interest in both actions; (b) identity of rights asserted and relief prayed for,
the relief being founded on the same facts, and (c) identity in the two (2)
cases should be such that the judgment that may be rendered in the
pending case would, regardless of which party is successful, amount
to res judicata in the other.[41]As a rule, the second case filed should be
abated under the maxim qui prior est tempore, potior est jure. However,
this rule is not a hard and fast one. The "priority-in-time rule" may give
way to the criterion of "more appropriate action." More recently, the
criterion used was the "interest of justice rule."[42]
We hold that the last criterion should be the basis for resolving this
case, although it was filed later than Civil Case No. 62490 which, upon its
transfer, became Civil Case No. 93-14795. In so doing, we shall avoid
multiplicity of suits which is the matrix upon which litis pendentia is
anchored and eventually bring about the final settlement of the recurring
issue of whether or not the NPC may supply power directly to the
industries within PIE-MO, notwithstanding the operation of franchisee
CEPALCO in the same area.
It should be noted that there is yet pending another case, namely,
Civil Case No. 91-383, instituted by PIA against CEPALCO in the Regional
Trial Court of Misamis Oriental which apparently deals with a related issue
- PIA's franchise or authority to provide power to enterprises within the
PIE-MO.[43] Hence, the principle of litis pendentia which ordinarily
demands the dismissal of an action filed later than another, should be
xxx
x x x.
a) Contracts for the purchase of public utilities and/or services
shall be subject to the prior approval of the
Authority; Provided, however, that similar contract(s)
existing prior to the effectivity of this Rules and Regulations
shall continue to be in full force and effect.
xxx
(Underscoring supplied.)
xxx
x x x.
It should be noted that the Rules and Regulations took effect thirty
(30) days after its publication in the Official Gazette on September 24,
1979 or more than three (3) months after the July 6, 1979 contract between
PIA and CEPALCO was entered into. As such, the Rules and Regulations
itself allowed the continuance of the supply of electric power to PIE-MO by
CEPALCO.
That the contract of July 6, 1979 was not renewed by the parties after
the expiration of the five-year period stipulated therein did not change the
fact that within that five-year period, in violation of both the contract and
its Rules and Regulations, PIA applied with the NPC for direct power
connection. The matter was aggravated by NPC's favorable action on the
application, totally unmindful of the extent of its powers under the law
which, in National Power Corporation v. Court of Appeals,[49] the Court
delimits as follows:
(a)
The Board shall, upon prior notice and hearing, exercise the
following, among other powers and functions:
Fix and regulate the prices of petroleum products;
(b)
Fix and regulate the rate schedule or prices of piped gas to be
charged by duly franchised gas companies which distribute gas by means
of underground pipe system;
(c)
Fix and regulate the rates of pipeline concessionaires under the
provisions of Republic Act No. 387, as amended, otherwise known as the
'Petroleum Act of 1949,' as amended by Presidential Decree No. 1700;
(d)
Regulate the capacities of new refineries or additional capacities
of existing refineries and license refineries that may be organized after the
issuance of this Executive Order, under such terms and conditions as are
consistent with the national interest;
(e)
Whenever the Board has determined that there is a shortage or
any petroleum product, or when public interest so requires, it may take
such steps as it may consider necessary, including the temporary
adjustment of the levels of prices of petroleum products and the payment
to the Oil Price Stabilization Fund created under Presidential Decree No.
1956 by persons or entities engaged in the petroleum industry of such
amounts as may be determined by the Board, which will enable the
importer to recover its cost of importation."
As may be gleaned from said provisions, the ERB is basically a price
or rate-fixing agency. Apparently recognizing this basic function, Republic
Act No. 7638 (An Act Creating the Department of Energy, Rationalizing
the Organization and Functions of Government Agencies Related to
Energy, and for Other Purposes),[51] which was approved on December 9,
1992 and which took effect fifteen days after its complete publication in at
least two (2) national newspapers of general circulation, specifically
provides as follows:
"SEC. 18. Rationalization or Transfer of Functions of Attached or
Related Agencies.- The non-price regulatory jurisdiction, powers,
and functions of the Energy Regulatory Board as provided for in